Walgreen Co. v. Astrazeneca Pharmaceuticals L.P.

Background

The opinion addresses three related cases: CVS Pharmacy, Inc., Rite Aid Corporation, and Rite Aid Hdqtrs. Corp. v. AstraZeneca Pharmaceuticals L.P. et al., No. 19-cv-9999 (CM); Walgreen Co., The Kroger Co., Albertsons Companies, Inc., and H-E-B, L.P. v. AstraZeneca Pharmaceuticals L.P. et al., No. 19-cv-10049 (CM); and Hy-Vee Inc. v. AstraZeneca Pharmaceuticals L.P. et al., No. 20-cv-4483 (CM). The cases are member cases of a related direct-purchaser class action and arise from the same facts.

The retailers asserted claims under Sections 1 and 2 of the Sherman Act. They alleged that AstraZeneca, Handa Pharmaceuticals, LLC, Par Pharmaceutical, Inc., and Accord Healthcare, Inc. entered into patent-settlement agreements that delayed generic versions of Seroquel XR. The retailers brought the claims as assignees of wholesalers that had purchased Seroquel XR directly from defendants and then assigned their claims.

The wholesalers’ agreements with AstraZeneca included forum-selection clauses requiring actions arising from or relating to those agreements to be brought exclusively in state or federal courts in Delaware. The agreements also included provisions concerning the wholesalers’ purchasing and inventory levels for Seroquel XR.

Motions and Issue Before the Court

AstraZeneca Pharmaceuticals L.P., AstraZeneca L.P., AstraZeneca UK Limited, Handa, and Par moved to dismiss for lack of personal jurisdiction or improper venue, or alternatively to transfer the cases. Accord filed a separate motion raising similar arguments. The court decided to address transfer before personal jurisdiction because transfer could make the personal-jurisdiction issue in the Southern District of New York irrelevant.

The issue was whether the three cases should be transferred to the District of Delaware under 28 U.S.C. § 1404(a), which permits transfer for the convenience of the parties and witnesses and in the interest of justice.

Forum-Selection Clauses

The court held that the retailers, as assignees, were subject to the same limitations as the wholesalers that assigned their claims. The wholesalers assigned claims, not the underlying contracts, so the retailers could not obtain greater rights than the wholesalers had. The court therefore concluded that the forum-selection clauses reached claims arising from purchases governed by the wholesaler agreements.

The court rejected the retailers’ argument that the clauses did not reach their antitrust claims. It found the clauses broad enough to cover antitrust claims arising from the relevant Seroquel XR purchases. The court also rejected the argument that the clauses reached only some claims or only claims against AstraZeneca. Even claims not covered by the clauses should be transferred because they were factually related.

Section 1404(a) Factors

The retailers did not dispute that the cases could have been brought in Delaware. The court found that AstraZeneca, Par, and Handa were subject to personal jurisdiction there because they were incorporated in Delaware, while AstraZeneca UK Limited and Accord had consented to jurisdiction in Delaware for these cases.

The court gave the retailers’ choice of the Southern District of New York substantially less weight because none of the retailers was located in that district and the district had only a minimal connection to the operative facts. The court found that the convenience of witnesses favored transfer because many witnesses would likely testify in both these cases and the related case already transferred to Delaware. The convenience of the parties also favored transfer because most retailers’ headquarters were at least as close to Delaware as to New York, and a common forum would reduce defendants’ burden.

The court gave particular weight to trial efficiency and the interest of justice. It found that keeping the cases in New York while the related case proceeded in Delaware would risk duplicative discovery, duplicated trials, and inconsistent results. Transfer would allow the related claims to be litigated together in Delaware. The court also noted that Accord’s involvement supported transfer because all defendants were incorporated in Delaware or had submitted to Delaware jurisdiction for these cases.

Disposition

The court found that transfer was warranted under Section 1404(a) as to all claims against all defendants. It granted defendants’ motions to transfer and directed the Clerk to transfer all three cases to the United States District Court for the District of Delaware. The opinion did not decide the alternative motions to dismiss, the personal-jurisdiction issues in New York, or the merits of the antitrust claims.