United States District Court, M.D. Tennessee, Nashville Division
THE HOSPITAL AUTHORITY OF METROPOLITAN GOVERNMENT OF NASHVILLE AND DAVIDSON COUNTY, TENNESSEE, d/b/a/ NASHVILLE GENERAL HOSPITAL, Plaintiff,
MOMENTA PHARAMCEUTICALS, INC., and SANDOZ, INC. Defendants.
WAVERLY D. CRENSHAW, JR.UNITED STATES DISTRICT JUDGE.
the Court is a Report and Recommendation of the Magistrate
Judge (“R&R”) (Doc. No. 114) recommending
that the Court deny Defendants' joint Motion to Transfer
(Doc. No. 58), Defendant Momenta Pharmaceuticals, Inc.'s
(“Momenta”) Motion to Dismiss or Transfer for
Improper Venue (Doc. No. 62), and Defendants' joint
Motion to Dismiss (Doc. No. 65). Defendants have filed timely
objections to the R&R (Doc. Nos. 117 & 119), and
Plaintiff has responded (Doc. Nos. 123-24). Defendants have
filed two Motions for Leave to File a Reply (Doc. Nos.
125-26), which Plaintiff has opposed (Doc. No. 127). Those
motions for leave to reply are hereby GRANTED. The Court has
reviewed the R&R, the parties' briefs, and conducted
a de novo review of the record. For the following reasons,
the Court ADOPTS in part and DECLINES TO ADOPT in part the
R&R. Momenta's Motion to Dismiss or Transfer and the
joint Motion to Transfer are DENIED. Defendants' joint
Motion to Dismiss is GRANTED in part and DENIED in part, and
Plaintiff's claims for damages are DISMISSED.
is a metropolitan hospital authority that purchases the drugs
it administers, including the anticoagulant enoxaparin, from
the wholesaler McKesson Corporation (“McKesson”).
(Doc. No. 1 at ¶¶ 10-11.) Pursuant to its contract
with McKesson, Plaintiff pays the cost of enoxaparin plus a
percentage adjustment. (Id.) Enoxaparin itself was
formerly subject to a patent held by non-party Sanofi-Aventis
(“Aventis”), but that patent was held to be
unenforceable in 2007. (Id. at ¶ 23.) Defendant
Momenta, however, is the assignee of a patent for a chemical
process used to test the quality of enoxaparin (“Method
<207>”). In 2003, Momenta entered into a
collaboration agreement with Sandoz, whereby Sandoz
eventually began manufacturing and selling generic
enoxaparin. (Id. at ¶¶ 39, 50) In addition
to profit-sharing, the agreement calls for Momenta to receive
several million dollars in “milestone payments”
if Sandoz remains the sole supplier of generic enoxaparin.
(Id. at ¶ 27.) Put simply, the agreement gives
Momenta a powerful incentive to use whatever rights it has to
prevent other parties from entering the generic enoxaparin
United States Pharmacopeial Convention (“USP”) is
a scientific nonprofit organization that sets standards
related to the strength, quality, and purity of medications.
(Id. at ¶ 32.) USP standards are enforceable as
binding by the United States Food and Drug Administration
(“FDA”). 21 U.S.C. § 351(b). As a
“biologic” pharmaceutical-that is to say, a
pharmaceutical produced through an organic process using
animal tissue-with diverse-sized molecules, enoxaparin
presents significant challenges in assuring consistency
between batches produced. (Doc. No. 1 at ¶¶ 37-38.)
In light of those challenges, by 2007, USP was considering
the adoption of mandatory, standardized testing to assure
that enoxaparin produced met the chemical criteria approved
by the FDA. (Id. at ¶ 39.) Aventis-which, at
the time, had its own patent application pending that would
reach Method <207>-proposed that that method be adopted
as the USP-approved test. (Id. at ¶¶
39-42.) Defendants, who participated in the relevant USP
review panel, objected to adopting a method to which Aventis
would have a patent. (Id. at ¶ 42.) After
discussions with USP, Aventis agreed to abandon its patent
application. (Id. at ¶ 44.) Unbeknownst to the
rest of the panel, however, Momenta had its own patent
application pending that, when granted, would give Momenta
patent rights that could arguably be asserted against third
parties that used Method <207>. In December of 2009,
the USP adopted Method <207>. (Id. at ¶
47.) Momenta's patent was issued not long thereafter.
(Id. at ¶ 48.) Plaintiff posits that, if
Momenta had properly disclosed its patent application, USP
would either have required Momenta to abandon the application
as it did with Aventis, or USP would have selected an
alternative test that would not have been subject to patent
protection. (Id. at ¶ 46.)
became the first entities authorized by the FDA to produce
generic enoxaparin. (Id. at ¶ 50.) Amphastar
Pharmaceuticals, Inc. (“Amphastar”), which is not
a party to this case, received FDA approval to sell generic
enoxaparin later, but Defendants promptly sued Amphastar in
the District of Massachusetts to prevent it from using Method
<207>. (Id. at ¶¶ 50-52.) Although
Defendants initially obtained a temporary restraining order
(“TRO”) and preliminary injunction, the
injunction was eventually stayed and Amphastar became able to
manufacture and sell generic enoxaparin-albeit belatedly.
(Id. at ¶¶ 61-63.) Plaintiff alleges that,
between the time the TRO was issued and when the preliminary
injunction was stayed, Defendant enjoyed monopoly power in
the market for generic enoxaparin. (Id. at ¶
64.) Plaintiff claims to have been harmed by the resultant
inflated prices paid for enoxaparin. (Id. at
¶¶ 66-74.) The underlying litigation in the
District of Massachusetts remains ongoing.
brought this case pleading four counts under the Sherman Act
arising out of Defendants' conspiracy to take advantage
of the USP process to secure Sandoz's position as the
sole supplier of generic enoxaparin. (Id. at
¶¶ 81-104.) Plaintiff seeks damages, declaratory
relief, and injunctive relief. (Id. at ¶¶
A-I.) Defendants seek either dismissal or transfer to the
District of Massachusetts based on inappropriate venue or
dismissal on the merits. The R&R recommends that those
requests be denied.
not so numbered by the Defendants, the Court identifies the
following objections to the R&R from Defendants'
1. Venue in this Court is statutorily barred under 28 U.S.C.
§ 1391 and the Clayton Act, 15 U.S.C. § 22 (Doc.
No. 118 at 5-18);
2. If the Court determines that venue is not statutorily
barred, it should nevertheless transfer the case to the
district of Massachusetts as the more convenient forum (Doc.
No. 120 at 15-25);
3. Plaintiff's claims should also be dismissed because
Plaintiff is an indirect purchaser who is not entitled to the
so-called “cost-plus” exception (Id. at
4. Plaintiff's claims should be dismissed as barred by
the Noerr-Pennington doctrine (Id. at
5. Plaintiff's claims should be dismissed because they
are premised on a non-mandatory industry standard
(Id. at 13-15).
Court will not unnecessarily recapitulate the reasoning in
the R&R on issues ...