First Circuit Considers Antitrust Shield Decision

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The First Circuit on Thursday will consider whether a lower court correctly held that drugmaker Momenta was immune from a suit from rival Amphastar over a generic anticoagulant in a case that could redefine the limits of a decades-old doctrine shielding free speech from antitrust claims.

Amphastar Pharmaceuticals Inc. has asked the appeals court to overturn a Massachusetts federal judge’s determination that the Noerr-Pennington doctrine protected Momenta Pharmaceuticals Inc. and Sandoz Inc. from allegations that they conspired to keep Amphastar from selling enoxaparin.

The lower court improperly expanded the reach of the Noerr-Pennington doctrine, which protects private parties from antitrust liability when asking the government to take a certain action, Amphastar has argued. Momenta and Sandoz, meanwhile, maintain that the doctrine was correctly applied. The U.S. Federal Trade Commission has also weighed in, saying in a November amicus brief that the district court decision should be reversed.

Should the First Circuit panel affirm, it would represent an expansion of the Noerr-Pennington doctrine, a mostly uncontroversial area that has been largely settled for some time, according to University of Iowa law professor Herbert Hovenkamp.

“The Noerr-Pennington doctrine is very narrow,” Hovenkamp said. “It protects the right to petition, but it does not protect the result of the petitioning conduct.”

In the case, Amphastar alleges that Momenta deliberately concealed a pending patent from the U.S. Pharmacopeial Convention when the standard-setting body was considering establishing a drug standard to test products containing enoxaparin. The USP then unknowingly adopted a standard that was covered by the pending patent, Amphastar claims.

Amphastar was then granted approval by the U.S. Food and Drug Administration to sell enoxaparin and was instructed by the agency to use the standard adopted by the USP to test the drug, according to court documents. Shortly thereafter, Momenta sued Amphastar, claiming that its U.S. Patent Number 7,575,886 would be infringed.

Amphastar and subsidiary International Medication Systems Ltd. sued Momenta and Sandoz in September 2015, alleging violations of the Sherman Act and California antitrust law and unfair business practice law.

In July, U.S. District Judge Nathaniel M. Gorton held that Momenta and Sandoz were protected from the claims by the Noerr-Pennington doctrine because Amphastar’s asserted injuries arose from the FDA’s adoption of the USP standard, and the doctrine bars antitrust claims related to harms caused by government action. Amphastar appealed the ruling in September.

The Noerr-Pennington doctrine stems from the U.S. Supreme Court’s 1961 decision in Eastern Railroad Presidents Conference v. Noerr Motor Freight Inc., in which the high court held that the railroads and truckers could not be sued under the Sherman Act for trying to persuade lawmakers to adopt legislation that would benefit them and harm rivals as it would infringe on the constitutional right to petition governments. In 1965’s United Mine Workers v. Pennington, the justices said further that concerted efforts to influence public officials do not violate the antitrust laws even if they are intended to eliminate competition.

According to Hovenkamp, the Noerr-Pennington doctrine recognizes a distinction between the act of petitioning the government, which is protected under the doctrine, and actions that result from that petitioning, which are not protected. That nuance may have been lost on Judge Gorton, he said.

“There’s total protection to ask for a standard from a government body, but once the government does something anti-competitive, there can still be liability for that anti-competitive action,” Hovenkamp said.

Another problem with the district court’s ruling is that the USP is a private standard-setting board, and petitioning a private body is not protected under the Noerr-Pennington doctrine, he said.

The FTC made a similar argument in its brief filed with the First Circuit in November. Though Momenta consulted on the adoption of the enoxaparin standard by the USP, there is no evidence the company petitioned the FDA, whose action was the source of Amphastar’s alleged injuries, the agency said.

Judge Gorton may have reasoned that Momenta’s conduct before the USP was a kind of indirect petitioning of the FDA, but that theory would be flawed because the Supreme Court said in 1988’s Allied Tube & Conduit Corp. v. Indian Head Inc. that the Noerr-Pennington doctrine does not apply to unethical practices, and the district court did not take into consideration Amphastar’s allegations that Momenta had deceived the USP by concealing the pending patent, the FTC argued.

Consumer advocacy groups Consumer Action, the National Health Law Program and the U.S. Public Interest Research Group have also asked the First Circuit to reverse Judge Gorton’s ruling, saying if upheld, it would be an unwarranted expansion of Noerr-Pennington.

The Supreme Court and other courts have construed the doctrine narrowly to apply to petitioning for government action that could have anti-competitive effects but not anti-competitive conduct, the groups said. Judge Gorton misapplied Noerr-Pennington when he held that Momenta’s deceptive behavior before the private USP was immunized under the doctrine, they said.

“Courts should uphold the well-reasoned balance the Supreme Court has struck through the Noerr-Pennington line of cases and not needlessly expand the Noerr-Pennington doctrine,” the groups said. “Like any immunity, any expansion in the Noerr-Pennington doctrine would come at the expense of consumers.”

Momenta and Sandoz, for their part, have argued that Judge Gorton correctly applied the doctrine. In a December brief, the companies argued that Amphastar’s alleged injuries were caused by a Noerr-Pennington-protected, court-ordered injunction they were able to obtain preventing Amphastar from selling enoxaparin.

The Supreme Court has also held that the doctrine applies even when the protected petitioning was part of a broader anti-competitive scheme, Momenta and Sandoz said.

“The Supreme Court and courts throughout the country have repeatedly rejected a “broader scheme” exception to the Noerr-Pennington doctrine,” the companies said. “Because Amphastar has identified no injury caused by anything other than the injunction in the Patent Action, Noerr-Pennington applies and the District Court’s decision should be affirmed.”

If the First Circuit agrees, it would represent a departure from the way most courts have interpreted the Noerr-Pennington doctrine, Hovenkamp said.

“I don’t see any Noerr-Pennington protection here,” he said.

Amphastar and International Medication Systems are represented by Alan D. Rose Sr., Meredith W. Doty and Michael L. Chinitz of Rose Chinitz & Rose and Jonathan M. Jacobson, Chul Pak, Jeffrey C. Bank, Daniel P. Weick, Seth C. Silber and Elyse Dorsey of Wilson Sonsini Goodrich & Rosati PC.

Momenta is represented by Julia Jill Bredrup and Michael J. Proctor of Caldwell Leslie & Proctor PC and Daniel C. Winston, Diane Seol, Irene Oberman Khagi, Robert M. Buchanan Jr., John C. Calhoun, Greta Ann Falls, Robert S. Frank Jr. and Sophie F. Wang of Choate Hall & Stewart LLP.

Sandoz is represented by D. Andrew Hatchett, Kimberly Kisabeth Chemerinsky, Matthew D. Kent, Michael P. Kenny and Teresa T. Bonder of Alston & Bird LLP and Melissa Nott Davis and Thomas P. Steindler of McDermott Will & Emery LLP.

The case is Amphastar Pharmaceuticals Inc. et al. v. Momenta Pharmaceuticals Inc. et al., case number 16-2113, in the U.S. Court of Appeals for the First Circuit.

Read the source article at Law 360


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