Arbor Pharmaceuticals, LLC v. ANI Pharmaceuticals, Inc.

Background

Arbor researches, develops, and manufactures prescription drugs, including EryPed® and E.E.S.® Granules, which contain erythromycin ethylsuccinate for oral suspension. Arbor alleged that these were the only FDA-approved products of their kind on the market.

Arbor alleged that ANI launched its own erythromycin ethylsuccinate product and promoted it as an FDA-approved, AB-rated generic equivalent of Arbor’s products. According to Arbor, ANI’s product was not FDA-approved, did not have an AB-rating, and was not supported by a current, approved Abbreviated New Drug Application (ANDA). Arbor alleged that the ANDA ANI acquired had been discontinued and that the FDA had notified ANI that its application was not approvable. ANI acknowledged purchasing the ANDA and filing a supplement describing manufacturing changes, but argued that the FDA knew about its distribution and had not ordered it to stop.

Arbor asserted six claims: false advertising and unfair competition under the Lanham Act; common-law unfair competition; and violations of three Minnesota statutes concerning unfair trade practices, deceptive trade practices, and false advertising. ANI moved to dismiss all claims with prejudice.

Rule 12(b)(6) Standard

The court analyzed the motion under Federal Rule of Civil Procedure 12(b)(6), which tests whether a complaint states a legally sufficient claim. At this stage, the court accepts well-pleaded factual allegations as true and draws reasonable inferences for the plaintiff, but it does not accept bare legal conclusions. A complaint must contain enough factual matter to make relief plausible rather than merely speculative.

Lanham Act Claims

The court found that Arbor sufficiently pleaded its Lanham Act false-advertising claims. Arbor alleged that ANI made three literally false commercial statements: that its product was a generic equivalent of Arbor’s products, that it was AB-rated, and that it was FDA-approved. Arbor also alleged that the statements were deceptive and material, entered interstate commerce, and threatened Arbor with lost sales.

The court rejected ANI’s argument that the claims were precluded by the Federal Food, Drug, and Cosmetic Act (FDCA). The FDCA is the federal law regulating drugs and FDA approval. The court explained that Arbor was seeking to enforce the Lanham Act’s private false-advertising remedy, not the FDCA. Based on the allegations and the FDA information considered by the court, deciding whether ANI’s advertising was false did not require the court to interpret or apply the FDCA. The court therefore allowed the Lanham Act claims to proceed past the pleading stage.

Primary Jurisdiction

ANI also argued that the court should defer to the FDA under the primary-jurisdiction doctrine. That doctrine can apply when a court claim depends on an issue placed within an agency’s special expertise. The court rejected the argument because, in its view, determining whether the FDA had approved ANI’s product did not require special FDA expertise in the circumstances alleged, and the claims did not require interpretation or application of the FDCA.

Minnesota Claims

The court held that Arbor sufficiently pleaded its claims under the Minnesota Unfair Trade Practices Act, Minnesota Uniform Deceptive Trade Practices Act, and Minnesota False Advertising Act. It also rejected ANI’s argument that those claims were preempted by the FDCA, reasoning that the court could determine whether ANI’s statements were false without interpreting or applying the federal drug law or FDA regulations.

Common-Law Unfair Competition Claim

The court dismissed Count III, Arbor’s common-law unfair-competition claim. It explained that “unfair competition” is a general category rather than a tort with its own specific elements, so a viable claim must identify the separate underlying tort on which it is based. Arbor argued that its alleged injury included reputational harm in addition to lost sales, but it did not identify a tort separate from its false-advertising claims. The court therefore determined that the claim was properly dismissed without prejudice.

Disposition

The order states that ANI’s motion to dismiss was GRANTED IN PART and DENIED IN PART. Count III was DISMISSED WITHOUT PREJUDICE. The motion was denied in all other respects, leaving Arbor’s other claims sufficiently pleaded at this stage.