In re ACTOS Antitrust Litigation

Background

The court considered a motion by Takeda Pharmaceutical Company Limited, Takeda America Holdings, Inc., Takeda Pharmaceuticals U.S.A., Inc., and Takeda Development Center Americas, Inc., collectively called “Takeda,” to stay—that is, pause—all proceedings in two coordinated antitrust actions. The requested stay would last while an appellate court considered Takeda’s petition for an interlocutory appeal, meaning an appeal before the cases were finished, and any later appeal on the merits.

The end-payor case concerns whether Takeda is liable to indirect purchasers of ACTOS for allegedly inflating the drug’s prices in violation of state antitrust laws. The direct-purchaser case concerns whether several pharmaceutical companies, including Takeda, are liable to direct purchasers of ACTOS and ACTOplus met for allegedly inflating those drugs’ prices in violation of federal antitrust laws.

District Judge Ronnie Abrams had previously denied Takeda’s motion to dismiss in the end-payor case. In the direct-purchaser case, she granted defendants’ motions to dismiss Counts II through VIII but denied Takeda’s motion to dismiss Count I, the direct purchasers’ monopolization claim against Takeda. On January 28, 2020, Judge Abrams certified both orders for interlocutory appeal. Takeda filed the motion to stay on February 13, 2020.

Legal standard

The court considered four factors: the applicant’s likelihood of success on appeal, the risk of irreparable injury without a stay, potential injury to the opposing parties, and the public interest. The party seeking a stay bears the burden of showing that the circumstances justify one. The court noted that the first two factors are the most important and that a stay requires more than a negligible chance of success or a mere possibility of irreparable injury.

Court’s analysis

Likelihood of success. The court found that Takeda had shown more than a mere possibility of obtaining relief on appeal. Judge Abrams had identified a lack of controlling authority and the novelty and complexity of a central appellate issue. The court therefore found that this factor favored a stay.

Irreparable injury. The court rejected Takeda’s argument that the ordinary costs and burdens of litigation were enough to establish irreparable injury. But it found that Takeda could be harmed if it had to choose an advice-of-counsel defense and thereby disclose otherwise privileged communications before the appeal was decided. Because that disclosure might become unnecessary if Takeda prevailed on appeal, this factor also favored a stay.

Injury to plaintiffs. The plaintiffs argued that a stay would cause harm because one coordinated case had been filed in 2013 and discovery was only beginning. The court found this factor neutral because the plaintiffs sought only money damages for past injuries and did not allege continuing harm. The court also considered, but rejected as insufficient, the plaintiffs’ argument that witnesses’ memories might fade; it noted that many key events had occurred more than ten years earlier.

Public interest. The court found that the public interest favored a stay. The plaintiffs had served document subpoenas on twenty-one pharmaceutical companies, and Takeda was preparing a subpoena to the Food and Drug Administration. A stay could prevent nonparties from facing discovery obligations that might later prove unnecessary. The court also concluded that allowing discovery to continue could undermine the purpose of certifying the interlocutory appeal: resolving the central issue before the parties incurred potentially unnecessary litigation costs.

Disposition

The court weighed the factors and concluded that a stay was warranted. Magistrate Judge Stewart D. Aaron granted Takeda’s motion to stay all proceedings in the coordinated actions pending appellate consideration of Takeda’s petition for interlocutory appeal and any subsequent appeal on the merits. The court also adjourned the scheduled March 30, 2020 status conference indefinitely. The opinion does not decide the underlying antitrust claims.