`
`
`Case No. 0:20-cv-02071-SRN-ECW
`
`HON. SUSAN RICHARD NELSON
`HON. ELIZABETH COWAN WRIGHT
`
`
`
`Plaintiffs,
`
`Defendants.
`
`
`
`
`
`
`DEFENDANTS’ OPPOSITION TO
`PLAINTIFFS’ MOTION TO REMAND
`
`CASE 0:20-cv-02071-SRN-ECW Doc. 51 Filed 01/06/21 Page 1 of 51
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`
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF MINNESOTA
`
`
`
`BCBSM, Inc., Health Care Service
`Corporation, Molina Healthcare, Inc., and
`Blue Cross and Blue Shield of Florida, Inc.,
`
`
`
`v.
`
`Celgene Corporation and Bristol-Myers
`Squibb Company,
`
`
`
`
`
`
`
`
`
`
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`

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`CASE 0:20-cv-02071-SRN-ECW Doc. 51 Filed 01/06/21 Page 2 of 51
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`
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`TABLE OF CONTENTS
`
`II. 
`
`TABLE OF CONTENTS ..................................................................................................... i 
`TABLE OF AUTHORITIES ............................................................................................... ii 
`INTRODUCTION ............................................................................................................... 1 
`BACKGROUND ................................................................................................................. 4 
`ARGUMENT ..................................................................................................................... 10 
`I. 
`THE COURT CAN (AND SHOULD) EVALUATE PERSONAL
`JURISDICTION BEFORE TURNING TO THIS MOTION. ............................... 10 
`THE COURT HAS DIVERSITY JURISDICTION. ............................................. 13 
`A. 
`Complete Diversity Exists on the Face of the Complaint. .......................... 13 
`B.  Molina’s Purported Assignments Are Invalid. ............................................ 17 
`C. 
`Plaintiffs Also Cannot Defeat Diversity Through Molina’s Fraudulent
`Misjoinder. .................................................................................................. 20 
`THE COMPLAINT NECESSARILY RAISES SUBSTANTIAL
`QUESTIONS OF FEDERAL LAW. ...................................................................... 24 
`A.  Wullschleger Is Dispositive—Plaintiffs’ Injunctive Relief “Necessarily
`Requires the Interpretation and Application of Federal Law.” ................... 25 
`Plaintiffs’ Theory Necessarily Raises Substantial Issues of Federal Law. . 30 
`B. 
`CONCLUSION ................................................................................................................. 41 
`
`
`III. 
`
`
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`
`
`i
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`

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`CASE 0:20-cv-02071-SRN-ECW Doc. 51 Filed 01/06/21 Page 3 of 51
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`
`
`TABLE OF AUTHORITIES
`
`CASES
`
`Addelson v. Sanofi S.A., 2016 WL 6216124 (E.D. Mo. Oct. 25, 2016) ...................................12, 13
`
`Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 573 U.S. 208 (2014) .................................................36, 37
`
`Anderson v. Home Ins. Co., 724 F.2d 82 (8th Cir. 1983) ..................................................15, 16, 17
`
`Andrea Theatres, Inc. v. Theatre Confections, Inc., 787 F.2d 59 (2d Cir. 1986) ..........................29
`
`Archie v. Shell Oil Co., 110 F. Supp. 542 (E.D. La. 1953), aff’d, 210 F.2d 653 (5th Cir.
`1954) ........................................................................................................................................18
`
`Associated Ins. Mgmt. Corp. v. Ark. Gen. Agency, 149 F.3d 794 (8th Cir. 1998) .......13, 17, 18, 20
`
`Ass’n of Mill & Elevator Mut. Ins. Co. v. Barzen Int’l, Inc., 553 N.W.2d 446, 449 (Minn.
`Ct. App. 1996)..........................................................................................................................16
`
`Bank of Montreal v. Avalon Cap. Grp., 743 F. Supp. 2d 1021 (D. Minn. 2010) ..........................16
`
`Blue Cross and Blue Shield Ass’n v. Celgene Corp., No. 20-cv-01980 (D.D.C.) ...........................9
`
`Brady ex rel. C.J. v. Truman Medical Center, Inc., 2020 WL 3473651 (W.D. Mo. June
`25, 2020) ..................................................................................................................................27
`
`Bristol-Myers Squibb Co. v. Superior Court, 137 S. Ct. 1773 (2017) ...........................................12
`
`Cascades Dev. of Minn., LLC v. Nat’l Specialty Ins., 675 F.3d 1095 (8th Cir. 2012) ............14, 20
`
`Celgene Corp. v. Natco Pharma Ltd., No. 10-5197 (D.N.J.) ........................................................27
`
`Celgene Corp. v. Barr Lab’ys, No. 07-cv-00286 (D.N.J.) .............................................................35
`
`Chaney v. Gate Pharms. (In re Diet Drugs), 1999 WL 554584 (E.D. Pa. July 16, 1999) ............21
`
`Christianson v. Colt Industries Operating Corp., 486 U.S. 800 (1988) ........................................28
`
`ClearPlay, Inc. v. Abecassis, 602 F.3d 1364 (Fed. Cir. 2010) ......................................................32
`
`Cooper Clinic, P.A. v. Mercy Clinic Fort Smith Cmtys., 2015 WL 437571 (W.D. Ark.
`Feb. 3, 2015) ............................................................................................................................37
`
`Delsing v. Starbucks Coffee Corp., 2010 WL 1507642 (D. Minn. Apr. 14, 2010) .......................13
`
`Donovan v. City of Dallas, 377 U.S. 408 (1964) ...........................................................................28
`
`Edmondson v. Pfizer, Inc., 2017 WL 492829 (E.D. Mo. Feb. 7, 2017) ........................................12
`
`ii
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`

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`
`
`Farmington Village Corp. v. Pillsbury, 114 U.S. 138, 146 (1885) ...............................................18
`
`Filla v. Norfolk & Southern Ry., 336 F.3d 806, 810 (8th Cir. 2003) .............................................17
`
`Grable & Sons Metal Prods. v. Darue Eng’g & Mfg., 545 U.S. 308 (2005).................................35
`
`Great Lakes Gas Transmission LP v. Essar Steel Minn. LLC, 843 F.3d 325 (8th Cir.
`2016) ..................................................................................................................................39, 40
`
`Guar. State Bank of St. Paul v. Lindquist, 304 N.W.2d 278 (Minn. 1980) ...................................20
`
`Gunn v. Minton, 568 U.S. 251 (2013) ................................................................................25, 37, 39
`
`Hagstrom v. Am. Circuit Breaker Corp., 518 N.W.2d 46 (Minn. Ct. App. 1994) ........................17
`
`Halva v. Minn. State Colleges & Univs., 937 N.W.2d 471 (Minn. Ct. App. 2019), review
`granted (Minn. Mar. 17, 2020) ................................................................................................34
`
`Hayday v. Hammermill Paper Co., 223 N.W. 614 (Minn. 1929) ..................................................20
`
`Howell v. Grant Holding, Inc., 2004 WL 1166955 (D. Minn. May 12, 2004) ..............................32
`
`Humana Inc. v. Celgene Corp., No. 19-cv-07532 (D.N.J.) .......................................................9, 11
`
`Humana, Inc. v. Celgene Corp., 2019 WL 1421151 (E.D. Ky.) ...................................................40
`
`In re Prempro Prods. Liab. Litig., 591 F.3d 613 (8th Cir. 2010) ............................................21, 23
`
`In re Silica Prods. Liab. Litig., 398 F. Supp. 2d 563 (S.D. Tex. 2005) .........................................21
`
`In re Thalomid & Revlimid Antitrust Litig., No. 14-cv-06997 (D.N.J.) ......................................8, 9
`
`Jordan v. Bayer Corp., 2017 WL 3006993 (E.D. Mo. July 14, 2017) ....................................12, 13
`
`Kostuch v. Gen. Mills, 2020 WL 3637922 (Minn. Ct. App. July 6, 2020) (unpublished) .............33
`
`Kramer v. Caribbean Mills, Inc., 394 U.S. 823 (1969) .................................................................18
`
`Lund Indus., Inc. v. Westin, Inc., 764 F. Supp. 1342 (D. Minn. 1990) ..........................................31
`
`Martinson v. Mahube-Otwa Cmty. Action P’ship, Inc., 371 F. Supp. 3d 568 (D. Minn.
`2019) ........................................................................................................................................40
`
`Me. State Ret. Sys. v. Countrywide Fin. Corp., 722 F. Supp. 2d 1157 (C.D. Cal. 2010) ..............34
`
`Mosley v. GM, 497 F.2d 1330 (8th Cir. 1974) ...............................................................................23
`
`Munson v. Eli Lilly & Co., 1987 WL 20383 (D. Minn. Nov. 25, 1987) ..................................13, 14
`
`iii
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`
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`Mylan Pharms., Inc. v. Celgene Corp., No. 14-cv-02094 (D.N.J.) .............................................8, 9
`
`NASDAQ OMX Grp., Inc. v. UBS Sec., LLC, 770 F.3d 1010 (2d Cir. 2014) ..........................28, 30
`
`Nero v. BAE Sys., 2013 WL 6188762 (N.D. Cal. Nov. 25, 2013) .................................................32
`
`Northwood Children’s Home Soc’y, Inc. v. Travelers Cos., 2019 WL 1110803 (D. Minn.
`Mar. 11, 2019)..........................................................................................................................16
`
`Pederson v. Am. Lutheran Church, 404 N.W.2d 887 (Minn. Ct. App. 1987) ...............................34
`
`Perry v. Zurich N. Am., Inc., 2011 WL 68525 (Minn. Ct. App. Jan. 11, 2011)
`(unpublished) ...........................................................................................................................17
`
`Pet Quarters, Inc. v. Depository Tr. & Clearing Corp., 559 F.3d 772 (8th Cir. 2009) .................26
`
`Roller v. Glazer’s Distribs. of Mo., 2016 WL 2609804 (E.D. Mo. May 6, 2016).........................37
`
`Rosecrans v. William S. Lozier, Inc., 142 F.2d 118 (8th Cir. 1944) ..............................................20
`
`Rudder v. Kmart Corp., 1997 WL 907916 (S.D. Ala. Oct. 15, 1997) ...........................................22
`
`Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574 (1999) ...................................................10, 11, 12
`
`Siegfried v. Boehringer Ingelheim Pharms., Inc., 2017 WL 2778107 (E.D. Mo. June 27,
`2017) ............................................................................................................................11, 12, 13
`
`Sinochem Int’l Co. v. Malaysia Int'l Shipping Co., 549 U.S. 422 (2007) ......................................10
`
`Slater v. Republic-Vanguard Ins. Co., 650 F.3d 1132 (8th Cir. 2011) ..........................................18
`
`Sprint Commc’ns Co., L.P. v. APCC Services, Inc., 554 U.S. 269, 284 (2008) ............................19
`
`St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283 (1938) .......................................13, 14
`
`Steel Co. v. Citizens for Better Environment, 523 U.S. 83 (1998)...........................................10, 11
`
`Tapscott v. MS Dealer Serv. Corp., 77 F.3d 1353 (11th Cir. 1996), abrogated on other
`grounds by Cohen v. Office Depot, Inc., 204 F.3d 1069 (11th Cir. 2000) ...............................22
`
`Thompson v. R.J. Reynolds Tobacco Co., 760 F.3d 913 (8th Cir. 2014) .......................................15
`
`Ticket Ctr., Inc. v. Banco Popular de Puerto Rico, 399 F. Supp. 2d 79 (D.P.R. 2005) ................30
`
`Time Ins. Co. v. AstraZeneca AB, 52 F. Supp. 3d 705 (E.D. Pa. 2014) .........................................29
`
`United HealthCare Servs., Inc. v. Celgene Corp., 2020 WL 7074626 (D. Minn. Dec. 3,
`2020) ..............................................................................................................................9, 11, 41
`
`iv
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`
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`W. Va. ex rel. McGraw v. Eli Lilly & Co., 476 F. Supp. 2d 230 (E.D.N.Y. 2007) ........................38
`
`Wullschleger v. Royal Canin U.S.A., Inc., 953 F.3d 519 (8th Cir. 2020) .............................. passim
`
`Xitronix Corp. v. KLA-Tencor Corp., 916 F.3d 429 (5th Cir.), cert. denied, 140 S. Ct. 110
`(2019) .......................................................................................................................................28
`
`OTHER AUTHORITIES
`
`21 C.F.R. § 10.30 .......................................................................................................................8, 31
`
`37 C.F.R. § 1.56 .........................................................................................................................8, 31
`
`21 U.S.C. § 355 ......................................................................................................................7, 8, 31
`
`21 U.S.C. § 355-1 .................................................................................................................. passim
`
`28 U.S.C. § 1295 ............................................................................................................................28
`
`28 U.S.C. § 1331 ............................................................................................................................28
`
`28 U.S.C. § 1332(a)(1) .............................................................................................................13, 15
`
`28 U.S.C. § 1338 ............................................................................................................................28
`
`28 U.S.C. § 1404(a) ...................................................................................................................1, 10
`
`35 U.S.C. § 101 ..............................................................................................................................36
`
`35 U.S.C. § 102 ........................................................................................................................31, 36
`
`35 U.S.C. § 103 ..............................................................................................................................36
`
`35 U.S.C. § 112 ..............................................................................................................................36
`
`Drug Price Competition and Patent Term Restoration Act (“Hatch-Waxman”), Pub. L.
`No. 98-417, 98 Stat. 1585 (1984) .................................................................................... passim
`
`6A Fed. Prac. & Proc. Civ. § 1545 (3d ed.) ...................................................................................19
`
`Fed. R. Civ. P. 12(b) ......................................................................................................1, 10, 11, 13
`
`Fed. R. Civ. P. 20(a) ................................................................................................................20, 22
`
`Fed. R. Civ. P. 21 ...........................................................................................................................24
`
`Federal Food, Drug and Cosmetics Act (“FDCA”), 21 U.S.C. §§ 301-392 .......................... passim
`
`v
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`

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`CASE 0:20-cv-02071-SRN-ECW Doc. 51 Filed 01/06/21 Page 7 of 51
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`Food and Drug Administration Amendments Act (“FDAAA”), Pub. L. No. 110-85, 121
`Stat. 823 (2007) ................................................................................................................ passim
`
`Manual of Patent Examining Procedure § 2000 ............................................................................31
`
`Restatement (First) of Contracts § 547 (1932) ........................................................................19, 20
`
`
`vi
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`

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`CASE 0:20-cv-02071-SRN-ECW Doc. 51 Filed 01/06/21 Page 8 of 51
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`INTRODUCTION
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`This is an antitrust case, in which Plaintiffs—three affiliated health insurers and a
`
`fourth, unrelated company—claim that Defendant Celgene Corporation overcharged for
`
`its medications Thalomid® and Revlimid®. Plaintiffs’ central allegations are that Celgene
`
`violated federal food and drug law and filed sham federal patent infringement lawsuits to
`
`delay the development of cheaper generic products. Plaintiffs all opted out of a class
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`action in the District of New Jersey advancing those same theories, and this Complaint
`
`tracks those earlier allegations near-verbatim. Among other relief, Plaintiffs request an
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`order enjoining Celgene’s allegedly unlawful conduct—i.e., Celgene’s alleged violations
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`of federal law, and its allegedly unlawful ongoing federal patent litigations. Plaintiffs
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`filed this suit in Dakota County District Court. Defendants removed on federal question
`
`and diversity grounds. Plaintiffs now seek remand, while Defendants have moved to
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`dismiss under Rule 12(b)(2) for lack of personal jurisdiction, or in the alternative to
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`transfer this action pursuant to 28 U.S.C. § 1404(a). Dkt. 41.
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`Before the Court examines Plaintiffs’ arguments for remand, it should determine
`
`whether it possesses personal jurisdiction over Defendants on Plaintiffs’ claims.
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`Supreme Court precedent expressly authorizes the Court to address threshold questions in
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`the order most appropriate under the circumstances. Here, all claims should be dismissed
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`for lack of personal jurisdiction given Defendants’ lack of contact with Minnesota, but
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`dismissal is particularly warranted for the fourth, unrelated, non-health insurer Plaintiff
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`(Molina Healthcare, Inc.), added solely to defeat diversity and with no connection to
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`Minnesota at all. With Molina’s claims appropriately dismissed for that reason, diversity
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`1
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`

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`CASE 0:20-cv-02071-SRN-ECW Doc. 51 Filed 01/06/21 Page 9 of 51
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`jurisdiction would be indisputable and resolution of Plaintiffs’ motion to remand would
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`be straightforward.
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`Should it decide to examine subject-matter jurisdiction first, the Court should deny
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`remand for several reasons.
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`First, the Court should reject Plaintiffs’ attempt to destroy diversity jurisdiction
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`through invalid assignments introduced for the first time in their motion to remand.
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`Molina does not sell insurance and paid no reimbursements for Celgene’s medications.
`
`On the face of the Complaint (which is how subject-matter jurisdiction is evaluated),
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`Molina has no rights to vindicate in this suit and is not a real party in interest, so its
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`citizenship is irrelevant to diversity jurisdiction. In moving for remand, Plaintiffs purport
`
`to reveal that just before this suit was filed, certain Molina subsidiaries assigned
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`reimbursement claims to Molina. But those purported assignments are invalid, such that
`
`even if Molina’s status as an assignee and thus a real party in interest had been
`
`discernable on the face of the Complaint, that contrivance would not have defeated
`
`diversity jurisdiction.
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`Second, whether or not Molina could be a proper party in some suit against
`
`Celgene, this is not such a suit, and Molina’s presence should be ignored because of
`
`Molina’s fraudulent misjoinder. The assigned claims of Molina’s subsidiaries do not
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`arise out of the same transaction or occurrence as those of the other three Plaintiffs, Blue
`
`Cross affiliates that allege reimbursements through the same affiliated benefits manager.
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`Third, the federal questions presented in this Complaint are apparent on its face.
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`By requesting that the adjudicating court enjoin Celgene “from continuing its unlawful
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`2
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`

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`CASE 0:20-cv-02071-SRN-ECW Doc. 51 Filed 01/06/21 Page 10 of 51
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`conduct,” Compl. at 141, Plaintiffs seek to have the Dakota County District Court enjoin
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`Celgene’s alleged ongoing violation of numerous federal laws and regulations, and to
`
`have that court dictate to the District of New Jersey how and whether pending patent
`
`litigation may proceed. The Eighth Circuit recently found a nearly identical request for
`
`relief sufficient for subject-matter jurisdiction. Wullschleger v. Royal Canin U.S.A., Inc.,
`
`953 F.3d 519, 522 (8th Cir. 2020) (vacating remand order).
`
`At its essence, this case alleges a scheme by Celgene to violate federal law; those
`
`alleged violations of federal law animate Plaintiffs’ state-law antitrust claims. As
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`Plaintiffs themselves describe it, more than 45 pages of the Complaint concern how
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`Celgene allegedly “manipulated the FDA’s safety program,” committed fraud on the U.S.
`
`Patent and Trademark Office (“USPTO”), and “filed baseless citizen petitions with the
`
`FDA,” in alleged violation of federal laws such as the Federal Food, Drug and Cosmetics
`
`Act (“FDCA”) (21 U.S.C. §§ 301-392), the Drug Price Competition and Patent Term
`
`Restoration Act, Pub. L. No. 98-417, 98 Stat. 1585 (1984) (“Hatch-Waxman”), the Food
`
`and Drug Administration Amendments Act, Pub. L. No. 110-85, 121 Stat. 823 (2007)
`
`(“FDAAA”) and various FDA regulations. See Mem. in Supp. of Mot. for Remand, Dkt.
`
`25 at 3-4 (“Mem.”).1 As Plaintiffs further describe it, the Complaint spends another 18
`
`pages on allegations that Celgene furthered its scheme through ongoing “sham” patent
`
`infringement litigation in the federal courts to enforce allegedly invalid patents. Id. at 4.
`
`
`1 Sixteen further pages of the Complaint describe “The Regulatory Background,”
`outlining and introducing these various federal laws, and another 8 pages describe
`Celgene’s patents. Compl. ¶¶38-101.
`
`3
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`

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`CASE 0:20-cv-02071-SRN-ECW Doc. 51 Filed 01/06/21 Page 11 of 51
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`Resolution of Plaintiffs’ claims necessarily requires the determination of substantial and
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`disputed questions of federal law that should be decided in federal court.
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`Because the parties are diverse, and because of the federal questions presented, the
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`Court should deny remand.
`
`BACKGROUND
`
`The parties. In addition to Celgene, Plaintiffs name Celgene’s parent Bristol
`
`Myers Squibb Company (“BMS”) as a Defendant.2 Celgene is headquartered in New
`
`Jersey and incorporated in Delaware. Compl. ¶26. BMS is headquartered in New York
`
`and incorporated in Delaware. Id. ¶27.
`
`Three of the four Plaintiffs are Blue Cross affiliates: BCBSM, Inc. is incorporated
`
`and headquartered in Minnesota, id. ¶21; Health Care Service Corporation (“HCSC”) is
`
`incorporated and headquartered in Illinois, id. ¶22; and Blue Cross and Blue Shield of
`
`Florida, Inc. is incorporated and headquartered in Florida, id. ¶23. The three Blue Cross
`
`Plaintiffs allege that they use the same pharmacy benefit manager, Prime Therapeutics
`
`Specialty Pharmacy LLC (“Prime”), which is partially owned by HCSC and based in
`
`Minnesota. Id. ¶20. All three Blue Cross Plaintiffs allege having been overcharged in
`
`paying reimbursements for Celgene’s products through Prime. Id. ¶¶20, 468-69.
`
`The fourth Plaintiff, Molina, is headquartered in California and incorporated in
`
`Delaware. Id. ¶24. Molina is not licensed to sell health insurance (in Minnesota or
`
`
`2 BMS acquired Celgene through a merger in 2019. Compl. ¶¶38-101. The Complaint
`exclusively addresses Celgene’s conduct predating the merger.
`
`4
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`

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`anywhere else), and reimbursed no claims for Celgene’s products. The Complaint states,
`
`rather, that Molina’s “local licensed subsidiaries” are authorized to make such
`
`reimbursements. Id. ¶¶24-25. The Complaint says nothing, however, to explain how
`
`Molina had any right to vindicate the claims of those subsidiaries, or how Molina was
`
`injured by Celgene’s conduct.
`
`For this reason, Defendants’ notice of removal noted that Molina was not a real
`
`party in interest. In moving for remand, Plaintiffs attached a set of purported assignment
`
`agreements. See Dkt. 26-1. These eighteen single-page documents, signed by the same
`
`Molina lawyer for both parent and subsidiary, state that each subsidiary assigns to Molina
`
`all claims against Celgene related to reimbursements for Thalomid and Revlimid, that
`
`Molina is empowered to manage litigation on such claims, and that Molina must remit all
`
`net recoveries back to the subsidiary. Id. The assignments purport to have been signed
`
`on August 25, 2020, id.—three days before this case was initiated, Compl. at 142—
`
`although the Complaint does not mention them.
`
`Molina alleges no reimbursements within Minnesota for Thalomid or Revlimid,
`
`even by its subsidiaries, nor any other connection to this forum. Id. ¶24.
`
`Plaintiffs’ Claims. Plaintiffs allege that Celgene violated the FDCA, the Hatch-
`
`Waxman Act, the FDAAA, and related regulations, obtained fraudulent patents from the
`
`USPTO, and engaged in sham federal court litigation, all to delay generic competition for
`
`Thalomid and Revlimid. Thalomid contains the active ingredient thalidomide, which in
`
`the late 1950s was briefly marketed outside the United States (not by Celgene) as an
`
`over-the-counter sedative but was withdrawn from use worldwide after the discovery that
`
`5
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`it causes severe birth defects. Compl. ¶¶93-94. Starting in the 1990s, Celgene sought to
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`develop thalidomide as a treatment for certain rare and serious diseases; the FDA
`
`ultimately approved Celgene to market thalidomide as Thalomid. Id. ¶2. Celgene later
`
`invented and marketed a new compound (lenalidomide) as Revlimid. Id. ¶97. Thalomid
`
`and Revlimid have greatly improved the quality and duration of life for patients suffering
`
`from several diseases, most prominently multiple myeloma, a blood cancer. Id. ¶¶2-3.
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`Celgene owns and enforces various patents for Thalomid and Revlimid. Id. ¶101.
`
`Given the tragic history of thalidomide, the FDA conditioned its approval of
`
`Thalomid (in 1998) and Revlimid (in 2005) on successful implementation of Celgene’s
`
`rigorous and comprehensive programs to restrict their distribution (through education,
`
`certifications, pregnancy testing, etc.). See id. ¶¶94, 98. In 2007, the FDAAA codified
`
`the FDA’s risk management program authority under new provisions for Risk Evaluation
`
`and Mitigation Strategies (“REMS”). 21 U.S.C. § 355-1. Celgene also owned and
`
`enforced patents for those programs. Compl. ¶101.
`
`The Complaint alleges that that Celgene obtained various patents for Thalomid
`
`and Revlimid by defrauding the USPTO, pursued “sham” patent lawsuits (four of which
`
`are ongoing in the District of New Jersey) to enforce those fraudulent patents,
`
`manipulated its REMS programs, and otherwise violated federal food and drug law (such
`
`as through filing frivolous citizen petitions with the FDA), all to delay market entry of
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`generic thalidomide and lenalidomide. Compl. ¶¶38-230, 247-441.
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`Fraudulent patents and “sham litigation.” Plaintiffs allege that ten patent
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`infringement suits (four of them active) by Celgene against generic manufacturers
`
`6
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`between 2007 and the present, all in the District of New Jersey, were “shams,” as
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`Celgene’s patents were fraudulently procured and thus unenforceable. Id. ¶¶247-447.3
`
`To give just one example, Plaintiffs allege that Celgene failed to disclose (unspecified)
`
`prior art when filing the ’012 patent (covering certain thalidomide drug compositions), id.
`
`¶253, and the ’217 and ’800 patents (covering crystalline forms of lenalidomide), id.
`
`¶257. In all, Plaintiffs allege that Celgene procured nine patents associated with
`
`Thalomid and Revlimid by defrauding the USPTO. Id. ¶¶251-53, 257, 259.
`
`Although certain of those lawsuits settled on terms favorable to Celgene (facially
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`undermining the notion that Celgene’s patent enforcement is a “sham”), see, e.g., Compl.
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`¶¶370, 414, Plaintiffs allege that these settlements—all of which were
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`contemporaneously submitted to federal antitrust regulators for review, see 21 U.S.C.
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`§ 355, Statutory Notes, § 1112—“may have” or “likely” contained anticompetitive terms.
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`E.g., Compl. ¶¶198, 338, 348, 351. Plaintiffs do not identify any actual allegedly
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`anticompetitive settlement terms.
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`“REMS Abuse.” The Hatch-Waxman Act established certain approval procedures
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`for new generic drugs. 21 U.S.C. § 355. While manufacturers of new medicines
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`ordinarily must establish safety and effectiveness through a New Drug Application, a
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`generic manufacturer may alternatively file an Abbreviated New Drug Application, or
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`“ANDA.” Compl. ¶¶38-41, 141; see also 21 U.S.C. § 355(j). To take advantage of that
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`3 The four active suits are at Paragraphs 392, 420, 427, and 436; the six concluded suits
`are at Paragraphs 343, 353, 361, 372, 398, and 411.
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`streamlined procedure, a generic manufacturer must establish that its proposed
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`formulation is “bioequivalent” to the innovator’s product, and to do that, the applicant
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`must test its formulation against the branded version. Compl. ¶42; see also 21 U.S.C.
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`§ 355(j)(2)(A)(iv). Plaintiffs allege that Celgene improperly refused to sell samples of its
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`products to generic manufacturers for bioequivalence testing. Compl. ¶¶147, 223. They
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`allege that Celgene thereby violated 21 U.S.C. § 355-1(f)(8), which provides that “no
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`holder of [a REMS-covered drug] shall use any element to assure safe use … to block or
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`delay approval of … an [ANDA application].” Compl. ¶¶62, 107.
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`Citizen Petitions. Section 505(j) of the FDCA creates a mechanism—the “citizen
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`petition”—to petition the FDA to take or refrain from taking an administrative action.
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`Compl. ¶70; 21 U.S.C. § 355(q); see also 21 C.F.R. § 10.30 (explaining citizen petition
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`submission process). Plaintiffs contend Celgene has violated the FDCA by
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`“manipulat[ing]” this process, Compl. ¶77, in “serially” filing with FDA regulators
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`“baseless citizen petitions against generic manufacturers,” id. ¶¶250, 331.4
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`New Jersey Lawsuits. The allegations in the Complaint mirror allegations
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`litigated for years in the District of New Jersey, starting with Mylan Pharms., Inc. v.
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`Celgene Corp., No. 14-cv-02094 (D.N.J. Apr. 3, 2014), Dkt. 1, followed by a class
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`action, In re Thalomid & Revlimid Antitrust Litig., No. 14-cv-06997 (D.N.J. Nov. 7,
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`4 HCSC alone also alleges—unrelated to Plaintiffs’ antitrust claims—that Celgene
`improperly marketed Thalomid and Revlimid for “off-label” uses. Compl. ¶¶473-544,
`575-592. Defendants do not argue here that those claims create federal question
`jurisdiction.
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`CASE 0:20-cv-02071-SRN-ECW Doc. 51 Filed 01/06/21 Page 16 of 51
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`2014), Dkt. 1. As here, Mylan concerned Celgene’s alleged refusal to sell samples of its
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`products for bioequivalence testing. The Mylan court issued several substantive rulings,
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`including a 55-page order largely granting Celgene’s motion for summary judgment, No.
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`14-cv-02094 (D.N.J. Oct. 3, 2018), Dkt. 287, before that case settled in 2019.
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`The class action included allegations of Celgene’s refusal to deal with respect to
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`samples of its products, and also (as here) alleged that Celgene pursued “sham” patent
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`litigation, sought to enforce “fraudulent” patents, and entered exclusive supply
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`agreements. That suit settled in August 2020. In re Thalomid, No. 14-cv-06997 (D.N.J.
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`Oct. 2, 2020), Dkt. 325 (approving class settlement). Plaintiffs were among certain
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`putative class members who opted out of the settlement. Other putative class members
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`have filed nearly-identical individual lawsuits in the District of New Jersey, the District
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`of Columbia, and this District. The first such opt-out suit to be filed was Humana Inc. v.
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`Celgene Corp., No. 19-cv-07532 (D.N.J. Mar. 1, 2019), Dkt. 1, filed by counsel to the
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`Plaintiffs in this case. The second was United HealthCare Services, Inc. v. Celgene
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`Corp., which another Court in this District recently transferred to the District of New
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`Jersey, given the “striking similarity” of that case to Humana. See 2020 WL 7074626, at
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`*3 (D. Minn. Dec. 3, 2020). The third is Blue Cross and Blue Shield Ass’n v. Celgene
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`Corp., No. 20-cv-01980 (D.D.C.) (“BCBSA”), also filed by counsel to Plaintiffs here, in
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`which Celgene has a pending motion to transfer. And this suit is the fourth.5
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`5 Notably, this suit and BCBSA were initiated outside the District of New Jersey only
`after that court stayed discovery in Humana in view of Celgene’s “substantial” motion to
`dismiss. See Humana, No. 19-cv-07532, (D.N.J. Sept. 13, 2019), Dkt. 36 at 7-8.
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`ARGUMENT
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`I.
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`THE COURT CAN (AND SHOULD) EVALUATE PERSONAL
`JURISDICTION BEFORE TURNING TO THIS MOTION.
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`The Court has before it both Defendants’ Rule 12(b)(2