Case 1:18-cv-04361-AKH Document 588 Filed 12/28/22 Page 1 of 48
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`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF NEW YORK
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`In re Novartis and Par Antitrust Litigation
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`1:18-cv-04361-AKH
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`DIRECT PURCHASER CLASS PLAINTIFFS’ MEMORANDUM OF LAW IN
`SUPPORT OF UNOPPOSED MOTION FOR CERTIFICATION OF A SETTLEMENT
`CLASS, APPOINTMENT OF CLASS COUNSEL, PRELIMINARY APPROVAL OF
`PROPOSED SETTLEMENT, APPROVAL OF THE FORM AND MANNER OF NOTICE
`TO THE CLASS AND PROPOSED SCHEDULE FOR A FAIRNESS HEARING
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`
`This Document Relates to:
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`All Direct Purchaser Actions
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`Case 1:18-cv-04361-AKH Document 588 Filed 12/28/22 Page 2 of 48
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`I.
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`TABLE OF CONTENTS
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`INTRODUCTION ................................................................................................................. 1
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`II. BACKGROUND .................................................................................................................... 2
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`A. Plaintiffs’ Claims and Procedural Background .............................................................. 2
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`B. Settlement Negotiations and the Proposed Settlement ................................................... 4
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`III. ARGUMENT ......................................................................................................................... 4
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`A. THE REQUIREMENTS FOR CERTIFICATION OF A SETTLEMENT CLASS
`HAVE BEEN MET .................................................................................................................... 4
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`1. Rule 23 Requirements ..................................................................................................... 7
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`2. All Requirements of Rule 23(b)(3) Are Satisfied .......................................................... 11
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`B. THE PROPOSED SETTLEMENT MEETS THE STANDARD FOR
`PRELIMINARY APPROVAL ............................................................................................... 18
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`1. The Settlement Is Procedurally Fair .............................................................................. 20
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`2. The Settlement is Substantively Fair ............................................................................. 22
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`3. The Plan of Allocation Treats Class Members Equitably ............................................. 29
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`4. The Proposed Settlement Satisfies Other Relevant Factors .......................................... 29
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`C. THE PROPOSED FORM AND MANNER OF NOTICE ARE APPROPRIATE ... 31
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`1. Form of Notice .............................................................................................................. 31
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`2. Manner of Notice ........................................................................................................... 32
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`D. RG/2 IS AN APPROPRIATE SETTLEMENT ADMINISTRATOR ........................ 33
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`E. FIRST STATE TRUST COMPANY IS AN APPROPRIATE ESCROW AGENT .. 33
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`F. THE PROPOSED SCHEDULE IS FAIR AND SHOULD BE APPROVED ............ 33
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`IV. CONCLUSION .................................................................................................................... 35
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`Case 1:18-cv-04361-AKH Document 588 Filed 12/28/22 Page 3 of 48
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`TABLE OF AUTHORITIES
`
`Cases
`Am. Sales Co. Inc. v. SmithKline Beecham Corp.,
`274 F.R.D. 127 (E.D. Pa. 2010) ................................................................................... 6, 15, 16
`Am. Sales Co., LLC v. Pfizer, Inc.,
`2017 WL 3669604 (E.D. Va. July 28, 2017) ..................................................................... 6, 15
`Am. Sales Co., LLC v. Pfizer, Inc.,
`2017 WL 3669097 (E.D. Va. Aug. 24, 2017) ......................................................................... 6
`Am. Sales Co., LLC v. Pfizer, Inc.,
`14-cv-361 (E.D. Va. Apr. 18, 2018) .................................................................................... 28
`Amchem Prods., Inc. v. Windsor,
`521 U.S. 591 (1997) ........................................................................................................... 5, 17
`Banyai v. Mazur,
`205 F.R.D. 160 (S.D.N.Y. 2002) ............................................................................................. 7
`Beach v. JPMorgan Chase Bank, Nat’l Ass’n,
`2019 WL 2428631 (S.D.N.Y. June 11, 2019) .......................................................................... 8
`Beneli v. BCA Fin. Servs., Inc.,
`324 F.R.D. 89 (D.N.J. 2018) .................................................................................................. 28
`Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc.,
`429 U.S. 477 (1977) ............................................................................................................... 12
`Bryant v. Potbelly Sandwich Works, LLC,
`2020 WL 563804 (S.D.N.Y. Feb. 4, 2020) ............................................................................ 33
`Buffalo Laborer Sec. Fund v. J.P. Jeanneret Assocs.,
`2012 WL 1569827 (S.D.N.Y. May 3, 2012) ............................................................................ 7
`Buffington v. Progressive Advanced Ins. Co.,
`342 F.R.D. 66 (S.D.N.Y. 2022) ............................................................................................... 9
`Caruso Mgmt. Co. v. Int’l Council of Shopping Ctrs.,
`403 F. Supp. 3d 191 (S.D.N.Y. 2019) .................................................................................... 24
`Cent. States Se. & Sw. Areas Health & Welfare Fund v. Merck-Medco Managed Care, L.L.C.,
`504 F.3d 229 (2d Cir. 2007) ..................................................................................................... 7
`Charron v. Pinnacle Grp. N.Y. LLC,
`874 F. Supp. 2d 179 (S.D.N.Y. 2012) .................................................................................... 27
`Christine Asia Co. v. Yun Ma,
`2019 WL 5257534 (S.D.N.Y. Oct. 16, 2019) ............................................................ 18, 19, 20
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`Comcast Corp. v. Behrend,
`569 U.S. 27 (2013) ........................................................................................................... 16, 17
`Consol. Rail Corp. v. Hyde Park,
`47 F.3d 473 (2d Cir. 1995) ....................................................................................................... 7
`Cordes & Co. Fin. Servs., Inc. v. A.G. Edwards & Sons, Inc.,
`502 F.3d 91 (2d Cir. 2007) ....................................................................... 10, 11, 12, 13, 14, 20
`Dial Corp. v. News Corp.,
`314 F.R.D. 108 (S.D.N.Y. 2015) ........................................................................................... 12
`D’Amato v. Deutsche Bank,
`236 F.3d 78 (2d Cir. 2001) ..................................................................................................... 21
`Feliciano v. Corelogic Rental Prop. Sols., LLC,
`332 F.R.D. 98 (S.D.N.Y. 2019) ............................................................................................... 7
`Fleisher v. Phx. Life Ins. Co.,
`2015 WL 10847814 (S.D.N.Y. Sep. 9, 2015) ................................................ 22, 23, 25, 26, 30
`FTC v. Actavis, Inc.,
`570 U.S. 136 (2013) ........................................................................................................... 3, 23
`Geiss v. Weinstein Co. Holdings LLC,
`474 F. Supp. 3d 628 (S.D.N.Y. 2020) .................................................................................... 20
`Hanover Shoe, Inc. v. United Shoe Mach. Corp.,
`392 U.S. 481 (1968) ............................................................................................................... 12
`Howard Hess Dental Laboratories Inc. v. Dentsply International, Inc.,
`424 F.3d 363 (3d Cir. 2005) ................................................................................................... 15
`In re Aggrenox Antitrust Litig.,
`2017 WL 4278788 (D. Conn. Sept. 19, 2017) ......................................................................... 6
`In re Aggrenox Antitrust Litig.,
`14-md-02516 (D. Conn. June 6, 2014) .................................................................................. 11
`In re Air Cargo Shipping Servs. Antitrust Litig.,
`2009 WL 3077396 (E.D.N.Y. Sept. 25, 2009) ....................................................................... 26
`In re Air Cargo Shipping Servs. Antitrust Litig.,
`2014 WL 7882100 (E.D.N.Y. Oct. 15, 2014) .......................................................................... 9
`In re Air Cargo Shipping Servs. Antitrust Litig.,
`2015 WL 5093503 (E.D.N.Y. July 10, 2015) .......................................................................... 9
`In re Am. Int’l Grp. Secs. Litig.,
`689 F.3d 229 (2d Cir. 2012) ..................................................................................................... 5
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`
`
`In re AOL Time Warner, Inc.,
`2006 WL 903236 (S.D.N.Y. Apr. 6, 2006) ........................................................................ 29-30
`In re Asacol Antitrust Litig.,
`2017 WL 4118967 (D. Mass. Sept. 14, 2017) ......................................................................... 6
`In re Buspirone Antitrust Litig.,
`2003 U.S. Dist. LEXIS 26538 (S.D.N.Y. April 11, 2003) ..................................................... 29
`In re Buspirone Patent Litig.,
`210 F.R.D. 43 (S.D.N.Y. 2002) ................................................................... 6, 9, 10, 14, 15, 17
`In re Carbon Black Antitrust Litig.,
`2005 WL 102966 (D. Mass. Jan. 18, 2005) ........................................................................... 10
`In re Cardizem CD Antitrust Litig.,
`200 F.R.D. 297 (E.D. Mich. 2001) ..................................................................................... 6, 15
`In re Cardizem CD Antitrust Litig.,
`218 F.R.D. 508 (E.D. Mich. 2003) ................................................................................... 22, 23
`In re Currency Conversion Fee Antitrust Litig.,
`263 F.R.D. 110 (S.D.N.Y. 2009) ........................................................................................... 22
`In re Currency Conversion Fee Antitrust Litig.,
`2006 WL 3247396 (S.D.N.Y. Nov. 8, 2006) ......................................................................... 26
`In re DDAVP Direct Purchaser Antitrust Litig.,
`2011 WL 13318188 (S.D.N.Y. Aug. 16, 2011) ............................................................. 6, 8, 10
`In re Dynex Capital Sec. Litig.,
`2011 WL 781215 (S.D.N.Y. Mar. 7, 2011) ............................................................................. 8
`In re EVCI Career Colls. Holding Corp. Sec. Litig.,
`2007 WL 2230177 (S.D.N.Y. July 27, 2007) ........................................................................ 18
`In re Flonase Antitrust Litig.,
`No. 08-cv-3149 (E.D. Pa. June 14, 2013) ............................................................................. 28
`In re Global Crossing Secs. & ERISA Litig.,
`225 F.R.D. 436 (S.D.N.Y. 2004) ................................................................................ 21, 22, 33
`In re Glumetza Antitrust Litig.,
`336 F.R.D. 468 (N.D. Cal. 2020) ....................................................................................... 6, 11
`In re Hi- Crush Partners L.P. Sec. Litig.,
`2014 WL 7323417 (S.D.N.Y. Dec. 19, 2014) ........................................................................ 27
`In re K-Dur Antitrust Litig.,
`2008 WL 2699390 (D.N.J. Apr. 14, 2008) .................................................................. 6, 15, 16
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`
`In re K-Dur Antitrust Litig.,
`686 F.3d 197 (3d Cir. 2012) ............................................................................................... 6, 10
`In re Lidoderm Antitrust Litig.,
`2017 WL 679367 (N.D. Cal. Feb. 21, 2017) ................................................................ 6, 11, 15
`In re Lidoderm Antitrust Litig.,
`3:14-md-02521 (N.D. Cal.) ............................................................................................... 28, 31
`In re Loestrin 24 Fe Antitrust Litig.,
`2019 WL 3214257 (D.R.I. July 2, 2019) ........................................................................... 6, 15
`In re Metoprolol Succinate Direct Purchaser Antitrust Litig.,
`2011 WL 13097266 (D. Del. Nov. 16, 2011) .......................................................................... 6
`In re Modafinil Antitrust Litig.,
`No. 07-1979 (E.D. Pa. Oct. 16, 2015) ................................................................................... 28
`In re Namenda Direct Purchaser Antitrust Litig.,
`331 F. Supp. 3d 152 (S.D.N.Y. 2018) ...................................................... 6, 8, 9, 11, 14, 15, 16
`In re Namenda Direct Purchaser Antitrust Litig.,
`462 F. Supp. 3d 307 (S.D.N.Y. 2020) .................................................................................... 28
`In re Namenda Direct Purchaser Antitrust Litig.,
`2017 WL 2693713 (S.D.N.Y. June 21, 2017) .................................................................. 12, 15
`In re Namenda Direct Purchaser Antitrust Litig.,
`2020 U.S. Dist. LEXIS 93189 (S.D.N.Y. May 27, 2020) ...................................................... 33
`In re NASDAQ Mkt.-Makers Antitrust Litig.,
`169 F.R.D. 493 (S.D.N.Y. 1996) ........................................................................................... 10
`In re Neurontin Antitrust Litig.,
`2011 WL 286118 (D.N.J. Jan. 25, 2011) ........................................................................... 6, 15
`In re Neurontin Antitrust Litig.,
`No. 02-1830 (D.N.J. Aug. 6, 2014) ......................................................................................... 28
`In re Nexium (Esomeprazole) Antitrust Litig.,
`296 F.R.D. 47 (D. Mass. 2013) ................................................................................................ 6
`In re Nexium (Esomeprazole) Antitrust Litig.,
`842 F.3d 34 (1st Cir. 2016) .................................................................................................... 24
`In re Niaspan Antitrust Litig.,
`397 F. Supp. 3d 668 (E.D. Pa. Aug. 13, 2019) ............................................................ 6, 11, 15
`In re Nifedipine Antitrust Litig.,
`246 F.R.D. 365 (D.D.C. 2007) ........................................................................................... 6, 15
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`In re Opana ER Antitrust Litig.,
`2021 WL 3627733 (N.D. Ill. June 4, 2021) ............................................................................. 6
`In re Opana ER Antitrust Litig.,
`1:14-cv-10150 (N.D. Ill. Nov. 3, 2022) ................................................................................. 28
`In re OxyContin Antitrust Litig.,
`2010 WL 11493630 (S.D.N.Y. Sept. 27, 2010) .................................................... 6, 8-9, 10, 17
`In re Packaged Ice Antitrust Litig.,
`2011 WL 6209188 (E.D. Mich. Dec. 13, 2011) ..................................................................... 28
`In re Payment Card Interchange Fee & Merch. Disc. Antitrust Litig.,
`330 F.R.D. 11 (E.D.N.Y. 2019) ........................................................................... 20, 22, 27, 30
`In re Prandin Direct Purchaser Antitrust Litig.,
`2014 WL 8335997 (E.D. Mich. Oct. 2, 2014) ......................................................................... 6
`In re Prograf Antitrust Litig.,
`2013 WL 2395083 (D. Mass. Apr. 23, 2013) .......................................................................... 6
`In re Prograf Antitrust Litig.,
`11-md-2242 (D. Mass. May 20, 2015) ................................................................................... 28
`In re Publ'n Paper Antitrust Litig.,
`690 F.3d 51 (2d Cir. 2012) ..................................................................................................... 24
`In re Ranbaxy Generic Drug Application Antitrust Litig.,
`338 F.R.D. 294 (D. Mass. 2021) .............................................................................................. 6
`In re Relafen Antitrust Litig.,
`218 F.R.D. 337 (D. Mass. 2003) ........................................................................................ 6, 15
`In re Relafen Antitrust Litig.,
`2004 U.S. Dist. LEXIS 28801 (D. Mass. April 9, 2004) ....................................................... 29
`In re Restasis (Cyclosporine Ophthalmic Emulsion) Antitrust Litig.,
`2020 WL 6193857 (E.D.N.Y. Oct. 6, 2020) .................................................................. 6, 8, 11
`In re Skelaxin (Metaxalone) Antitrust Litig.,
`2014 WL 11669877 (E.D. Tenn. Apr. 30, 2014) ..................................................................... 6
`In re Solodyn (Minocycline Hydrochloride) Antitrust Litig.,
`2017 WL 4621777 (D. Mass. Oct. 16, 2017) ..................................................................... 6, 15
`In re Solodyn (Minocycline Hydrochloride) Antitrust Litig.,
`1:14-md-02503 (D. Mass.) ................................................................................................ 28, 31
`In re Suboxone (Buprenorphine Hydrochloride and Naloxone) Antitrust Litig.,
`421 F. Supp. 3d 12 (E.D. Pa. 2019) ......................................................................................... 6
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`In re Suboxone (Buprenorphine Hydrochloride and Naloxone) Antitrust Litig.,
`967 F.3d 264 (3d Cir. 2020) ............................................................................................... 6, 15
`In re Suboxone (Buprenorphine Hydrochloride and Naloxone) Antitrust Litig.,
`13-md-02445 (E.D. Pa. Sept. 27, 2019) ................................................................................. 11
`In re Sumitomo Copper Litig.,
`189 F.R.D. 274 (S.D.N.Y. 1999) ........................................................................................... 18
`In re Take Two Interactive Sec. Litig.,
`2010 WL 11613684 (S.D.N.Y. June 29, 2010) ...................................................................... 33
`In re Tricor Antitrust Litig.,
`No. 05-cv-340 (D. Del. April 23, 2009) ................................................................................. 29
`In re Visa Check/MasterMoney Antitrust Litig.,
`280 F.3d 124 (2d Cir. 2001) ................................................................................................... 10
`In re Warner Chilcott Ltd. Sec. Litig.,
`2008 WL 5110904 (S.D.N.Y. Nov. 20, 2008) ....................................................................... 20
`In re Wellbutrin SR Direct Purch. Antitrust Litig.,
`2008 WL 1946848 (E.D. Pa. May 2, 2008) ....................................................................... 6, 15
`In re Wellbutrin XL Antitrust Litig.,
`133 F. Supp. 3d 734 (E.D. Pa. 2015) ................................................................................ 24-25
`In re Wellbutrin XL Antitrust Litig.,
`2011 WL 3563385 (E.D. Pa. Aug. 11, 2011) ..................................................................... 6, 15
`In re WorldCom, Inc. Sec. Litig.,
`388 F. Supp. 2d 319 (S.D.N.Y. 2005) .................................................................................... 27
`In re Zetia (Ezetimibe) Antitrust Litig.,
`7 F.4th 227 (4th Cir. 2021) ..................................................................................................... 11
`J M Smith Corp. v. AstraZeneca Pharms. L.P.,
`2020 WL 7867552 (D. Del. Nov. 13, 2020) .......................................................................... 11
`J.B.D.L. Corp. v. Wyeth-Ayerst Lab’ys, Inc.,
`225 F.R.D. 208 (S.D. Ohio 2003) ...................................................................................... 6, 15
`King Drug Co. of Florence v. Cephalon, Inc.,
`309 F.R.D. 195 (E.D. Pa. 2015) ....................................................................................... 16, 17
`La. Wholesale Drug Co. v. Sanofi-Aventis,
`2008 WL 11399716 (S.D.N.Y. Apr. 10, 2008) ..................................................... 6, 8, 9-10, 17
`Leonard v. John Hancock Life Ins. Co. of N.Y.,
`2022 WL 501204 (S.D.N.Y. Jan. 10, 2022) ........................................................................... 20
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`Marisol A. v. Giuliani,
`126 F.3d 372 (2d Cir. 1997) ..................................................................................................... 8
`McReynolds v. Richards–Cantave,
`588 F.3d 790 (2d Cir. 2009) ................................................................................................... 20
`Meijer, Inc. v. Abbott Lab’ys,
`2008 WL 4065839 (N.D. Cal. Aug. 27, 2008) ................................................................... 6, 15
`Meijer, Inc. v. Warner Chilcott Holdings Co.,
`246 F.R.D. 293 (D.D.C. 2007) ....................................................................................... 6, 9, 15
`Mohney v. Shelly’s Prime Steak, Stone Crab & Oyster Bar,
`2009 WL 5851465 (S.D.N.Y. Mar. 31, 2009) ....................................................................... 29
`Mylan Pharm., Inc. v. Warner Chilcott Pub. Co., Inc.,
`2014 WL 631031 (E.D. Pa. Feb. 18, 2014) .............................................................................. 6
`Nichols v. Noom, Inc.,
`2022 WL 2705354 (S.D.N.Y. July 12, 2022) ........................................................................ 17
`Noble v. 93 Univ. Place Corp.,
`224 F.R.D. 330 (S.D.N.Y. 2004) ........................................................................................... 18
`City of Detroit v. Grinnell Corporation,
`495 F.2d 448 (2d Cir. 1974) ................................................................................. 19, 25, 26, 30
`Orellana v. One If By Land Rest. LLC,
`2020 WL 5768433 (S.D.N.Y. Sep. 22, 2020) ....................................................................... 7-8
`Puddu v. 6D Glob. Techs.,
`2021 WL 1910656 (S.D.N.Y. May 12, 2021) ......................................................................... 20
`Robidoux v. Celani,
`987 F.2d 931 (2d Cir. 1993) ................................................................................................. 7, 8
`Robinson v. Metro-N. Commuter R.R.,
`267 F.3d 147 (2d Cir. 2001) ..................................................................................................... 9
`Rochester Drug Co-Op., Inc. v. Braintree Lab’ys Inc.,
`2012 WL 12910047 (D. Del. Feb. 6, 2012) ............................................................................. 6
`State of W. Va. v. Chas. Pfizer & Co.,
`314 F. Supp. 710 (S.D.N.Y. 1970) ......................................................................................... 23
`Strougo ex rel. Brazilian Equity Fund, Inc. v. Bassini,
`258 F. Supp. 2d 254 (S.D.N.Y. 2003) .................................................................................... 25
`Teva Pharms. USA, Inc. v. Abbott Lab’ys,
`252 F.R.D. 213 (D. Del. 2008) ........................................................................................... 6, 15
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`Tiro v. Public House Invs., LLC,
`2013 WL 2254551 (S.D.N.Y. May 22, 2013) ........................................................................ 32
`Vida Longevity Fund, LP v. Lincoln Life & Annuity Co. of N.Y.,
`2022 WL 986071 (S.D.N.Y. Mar. 31, 2022) ........................................................................... 7
`Wal-Mart Stores, Inc. v. Visa U.S.A. Inc.,
`396 F.3d 96 (2d Cir. 2005) .......................................................................................... 18, 30-31
`
`Statutes
`28 U.S.C. § 1715 ......................................................................................................................... 34
`Fed. R. Civ. P. 23 ................................................................................................................. passim
`
`Other
`Newberg on Class Actions ...................................................................................................... 21, 28
`Manual for Complex Litigation .............................................................................................. 31, 33
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`Direct Purchaser Class Plaintiffs Drogueria Betances, LLC (“Betances”), Rochester Drug
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`Co-Operative, Inc. (“RDC”), FWK Holdings, LLC (“FWK”) and KPH Healthcare Services, Inc.,
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`a/k/a Kinney Drugs, Inc. (“KPH”) (“Named Plaintiffs,” “Direct Purchaser Class Plaintiffs,” or
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`“Plaintiffs”), respectfully submit this Memorandum of Law in Support of their Unopposed Motion
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`for Certification of a Settlement Class, Appointment of Class Counsel, Preliminary Approval of
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`Proposed Settlement, Approval of the Form and Manner of Notice to the Class and Proposed
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`Schedule for a Fairness Hearing.
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`I.
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`INTRODUCTION
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`Plaintiffs and Novartis Pharmaceuticals Corporation and Novartis AG (“Novartis”) have
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`reached a settlement by which Novartis will pay $126,850,000.00 (one hundred twenty-six million,
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`eight hundred fifty thousand dollars) in cash into an escrow fund for the benefit of all members of
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`the Class (the “Class”) as defined infra at 5, in exchange for dismissal of the litigation between
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`Plaintiffs and Novartis with prejudice and certain releases (the “Settlement”). All the terms of the
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`Settlement are set forth in the Settlement Agreement dated December 23, 2022 (“Settlement
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`Agreement”) (annexed as Exhibit 1 to the Declaration of Bruce E. Gerstein (the “Gerstein Decl.”)).
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`Preliminary approval of the proposed Settlement is appropriate. Plaintiffs and Novartis
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`entered into the Settlement after close to five years of intense, well-developed litigation and
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`extensive mediation. Counsel for both sides are experienced in class actions and pharmaceutical
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`antitrust litigation and are well-positioned to assess the risks and merits of this case. The Settlement
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`assures that all Class members will receive a cash settlement payment now. The Settlement also
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`assures that the litigation against Novartis will end, while avoiding continued litigation and
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`potential appeals.
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`Accordingly, Plaintiffs respectfully request that the Court enter the proposed order
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`preliminarily approving the Settlement (Exhibit A to the Settlement Agreement) which provides
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`for the following:
`
`1.
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`2.
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`3.
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`4.
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`Preliminary approval of the proposed Settlement Agreement and the documents
`necessary to effectuate the Settlement, including a proposed notice plan and form
`of notice to the Class (Exhibit B to the Settlement Agreement) and a proposed plan
`of allocation (attached as Exhibit 2 to the Gerstein Decl.) for settlement funds as
`described in the proposed form of notice;
`Certification of the Class for purposes of settlement (Novartis does not oppose
`certification of a direct purchaser class under Federal Rule of Civil Procedure 23
`for purposes of the Settlement);
`Pursuant to Federal Rule of Civil Procedure 23(c)(1)(B) and 23(g), appointment of
`Garwin Gerstein & Fisher LLP as Lead Counsel for purposes of the Settlement;
`Appointment of RG/2 Claims Administration LLC (“RG/2”) as settlement
`administrator;
`Appointment of First State Trust Company as escrow agent for the settlement funds
`(the Escrow Agreement is annexed as Exhibit D to the Settlement Agreement); and
`A proposed settlement schedule, including the scheduling of a Fairness Hearing to
`consider: (a) Plaintiffs’ request for final approval of the Settlement and entry of a
`proposed order and final judgment (Exhibit C to the Settlement Agreement); (b)
`Class Counsel’s1 application for an award of attorneys’ fees and reimbursement of
`expenses, payment of administrative costs, and service awards to the Named
`Plaintiffs; and (c) Plaintiffs’ request for dismissal of this action against Novartis
`with prejudice.
`BACKGROUND
`
`5.
`
`6.
`
`II.
`
`A.
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` Plaintiffs’ Claims and Procedural Background
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`On May 16, 2018, Named Plaintiff Drogueria Betances, LLC filed the first antitrust lawsuit
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`on behalf of all direct purchasers challenging Novartis’s conduct regarding the prescription
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`pharmaceutical Exforge. See ECF No. 1. Plaintiffs alleged that Novartis and generic drug maker
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`Par Pharmaceutical, Inc. (“Par”) had unlawfully delayed the availability of less expensive, generic
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`
`1 Class Counsel are Garwin Gerstein & Fisher LLP; Smith Segura Raphael & Leger, LLP; Faruqi
`& Faruqi, LLP; Odom & Des Roches, LLC; Berger Montague PC; Heim Payne & Chorush LLP;
`Kaplan Fox & Kilsheimer, LLP; Roberts Law Firm, P.A.; and Sperling & Slater, P.C.
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`2
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`Case 1:18-cv-04361-AKH Document 588 Filed 12/28/22 Page 13 of 48
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`versions of Exforge through an unlawful “reverse payment” agreement. See FTC v. Actavis, Inc.,
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`570 U.S. 136 (2013). After the resolution of Novartis’s and Par’s 12(b)(6) motions, the case
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`proceeded through intensive discovery, including production and review of millions of pages of
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`documents, and numerous fact depositions.
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`In prosecuting this action, Plaintiffs prevailed on several discovery-related disputes (e.g.,
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`ECF Nos. 167, 253), reviewed Novartis’s, Par’s, and third-parties’ document productions
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`comprising millions of pages of documents, took nineteen fact and five expert depositions, and
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`defended four fact and ten expert depositions (38 depositions overall). Between January 11 and
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`February 1, 2022, Plaintiffs submitted Daubert motions on four narrowly-tailored subjects and
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`opposed six of Novartis’s Daubert motions. Plaintiffs filed their motion for class certification and
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`class certification reply brief on March 15, 2022 and April 29, 2022 respectively. ECF Nos. 493
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`and 510. Plaintiffs next opposed Novartis’s two extensive motions for summary judgment on
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`causation and the statute of limitations on June 23, 2022. ECF Nos. 550 and 551. At the Court’s
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`suggestion (Aug. 4, 2021 Hearing Tr. at 63:25-64:2), Plaintiffs submitted a privilege
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`waiver/preclusion motion, arguing that Novartis placed legal advice “at issue” by asserting
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`defenses that relied on subjective beliefs implicating legal advice. ECF No. 357. This motion,
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`which was fully briefed at the time of settlement, had the potential, if granted, to substantially
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`narrow Novartis’s available defenses.
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`Following summary judgment briefing, Plaintiffs began preparing for trial that was
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`scheduled for January 9, 2023. ECF No. 379. To that end, Plaintiffs served on Novartis proposed
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`jury instructions, a proposed verdict sheet, proposed fact stipulations, a proposed voir dire, and a
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`draft joint final pretrial order. Plaintiffs also began drafting and compiling trial exhibit lists,
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`deposition designations, and motions in limine.
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`3
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`Case 1:18-cv-04361-AKH Document 588 Filed 12/28/22 Page 14 of 48
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`B.
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`Settlement Negotiations and the Proposed Settlement
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`After summary judgment briefing and the start of significant trial preparations, Plaintiffs
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`and Novartis agreed to mediation with Eric D. Green of Resolutions, LLC. The mediation lasted a
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`full day, and the settlement negotiations between Class Counsel and attorneys for Novartis were
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`hard fought and at arm’s-length. In conducting negotiations, Class Counsel assessed this action in
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`light of their extensive experience litigating similar delayed generic entry cases, the Supreme
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`Court’s decision in Actavis and its progeny, and the opinions issued by this Court over the course
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`of the litigation.
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`Under the proposed Settlement, Novartis will pay $126,850,000.00 (one hundred twenty-
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`six million, eight hundred fifty thousand dollars) in cash for the benefit of all Class members in
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`exchange for dismissal of the litigation between Plaintiffs and Novartis and certain releases.
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`Plaintiffs have proposed the form and manner of notice of the proposed Settlement
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`Agreement to the Class, and the procedures by which Class members may: (a) receive their share
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`of settlement funds; (b) seek exclusion from the Class or object to the proposed Settlement