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Lupin Pharmaceuticals, Inc. v. Richards

United States District Court, D. Maryland

July 2, 2015

LUPIN PHARMACEUTICALS, INC., et al., Plaintiffs,
v.
CRAIG RICHARDS, Defendant.

MEMORANDUM OPINION

Richard D. Bennett United States District Judge

In this case, Plaintiffs Lupin Pharmaceuticals, Inc.[1] (“Lupin Pharmaceuticals”) and Lupin, Ltd. (“Lupin India”) (collectively, “the Lupin Plaintiffs”) seek to enjoin Defendant Craig Richards, the Attorney General of Alaska, (“the Attorney General”) from issuing a civil investigative demand (“CID”) to the Lupin Plaintiffs and from applying Alaskan antitrust law to the Lupin Plaintiffs. The Attorney General has moved to dismiss this action, arguing that this Court should abstain from exercising its jurisdiction under the abstention doctrine established in Younger v. Harris, 401 U.S. 37 (1971). The parties’ submissions have been reviewed, and this Court held a hearing on June 26, 2015 on the Motion. See Local Rule 105.6 (D. Md. 2014). For the reasons that follow, Defendants Craig Richards’ Motion to Dismiss (ECF No. 23) is GRANTED, and this case is DISMISSED.

BACKGROUND

This Court accepts as true the facts alleged in plaintiff’s complaint. See Aziz v. Alcolac, Inc., 658 F.3d 388, 390 (4th Cir. 2011). This dispute arose out of issues pertaining to two drugs, Loestrin FE 24 and Effexor XR. These drugs are manufactured and sold by Warner-Chilcott and Wyeth, respectively, and those companies hold patents on the drugs. See Compl., ¶ 16. The Lupin Plaintiffs allege that neither Lupin Pharmaceuticals, Inc. nor Lupin, Ltd.[2] (“Lupin India”) had rights to sell the drugs or approval to sell generic versions. Id. The Lupin Plaintiffs had filed applications with the Food & Drug Administration (“FDA”) in 2006 and 2009 to sell generic versions of the respective drugs, but the brand manufacturers sued the Lupin Plaintiffs for declaratory judgments stating that the sale of such generics would violate their patents.[3] Id. at ¶ 17. The Lupin Plaintiffs settled the patent claims in 2009 and 2010 respectively. Id. at ¶¶ 17-18.

On February 3, 2015, pursuant to Alaska Stats. §§45.50.592[4] and 45.50.495, Attorney General Richards issued separate civil investigative demands (CIDs) to Lupin Pharmaceuticals, Inc., and Lupin, Ltd., demanding production of three categories of documents related to the two drugs. Id. at ¶ 21. The CIDs state that “[t]he Attorney General seeks to determine whether the pharmaceutical manufacturers subject to [the CID] violated Alaska state law by entering into a settlement agreement that terminated ongoing patent litigation regarding the brand name drug listed herein, and thereby delaying generic entry into the marketplace, ” in potential violation of Alaska antitrust and consumer protection statutes. See Mem. Supp. Mot. Dismiss 1-2, ECF No. 23-1. The CIDs originally required production of responsive documents within sixty days. Id. at 2. The Lupin Plaintiffs allege that the scope of the CIDs included filings with the Federal Trade Commission (“FTC”) and Department of Justice (“DOJ”), documents produced in the patent litigations, documents discussing the validity of the patents, and agreements between Lupin and the branded manufacturers. Pls.’ Compl. ¶ 21.

Alaska law provides that the subject of a CID may within 20 days of service file a petition in Alaska Superior Court stating good cause why the CID should be modified or set aside. Alaska Stat. §45.50.592(f). The Lupin Plaintiffs declined to file any petition requesting modification of the CID. It is undisputed, however, that the Lupin Plaintiffs requested to extend the time for compliance with the CIDs; the Attorney General granted those requests. Thus, the deadline to produce documents responsive to the CIDs was May 4, 2015. Pls.’ Compl. ¶23.

Instead of complying with or objecting to the CIDs, the Lupin Plaintiffs filed the present action on the May 4 deadline, and filed the Motion for Preliminary Injunction (ECF No. 4) on the following day. The Complaint requests that this Court immediately issue a permanent injunction restraining Defendant from issuing civil investigative demands (CIDs) to Plaintiffs in connection with the Attorney General’s investigation of Plaintiffs’ compliance with Alaskan Antitrust laws, and from applying those state laws to Plaintiffs. Plaintiffs also request a declaratory judgment that Defendant’s issuance of CIDs to Plaintiffs in connection with the Attorney General’s investigation of Plaintiffs’ compliance with Alaskan antitrust laws regarding the drugs was unconstitutional. The Plaintiffs also seek attorneys’ fees and damages.

On May 22, 2015, the Attorney General filed a motion for extension of time to respond, noting that the assistant attorney general assigned to the case (Clyde Sniffen, Jr.) was on vacation when this case was filed and that an extension was needed to allow time for Sniffen to “return from vacation on May 27, 2015 to review the pleadings in this case, confer with Attorney General Richards, and prepare a response to the motion for preliminary injunction.” The motion was opposed by the Plaintiffs but was granted by this Court.

On June 1, 2015, the Attorney General filed a petition in Alaska Superior Court for an order to show cause why the Lupin Plaintiffs should not be held in contempt for failure to respond to the CIDs pursuant to Alaska Stat. § 45.50.592(g).[5] On June 1, 2015, the Attorney General also filed the subject Motion to Dismiss (ECF No. 23) and a Motion to Stay the Motion for Preliminary Injunction (ECF No. 24) in this Court.

This Court held a teleconference on June 3, 2015. As a result of that call, the Motion to Stay the Motion for Preliminary Injunction was granted, and this Court established a briefing schedule for the motion to dismiss. This Court held a hearing on the Motion to Dismiss on June 26, 2015.

STANDARD OF REVIEW

A motion to dismiss under Rule 12(b)(1) of the Federal Rules of Civil Procedure for lack of subject matter jurisdiction challenges a court’s authority to hear the matter brought by a complaint. See Davis v. Thompson, 367 F.Supp.2d 792, 799 (D. Md. 2005). This challenge under Rule 12(b)(1) may proceed either as a facial challenge, asserting that the allegations in the complaint are insufficient to establish subject matter jurisdiction, or a factual challenge, asserting “that the jurisdictional allegations of the complaint [are] not true.” Kerns v. United States, 585 F.3d 187, 192 (4th Cir. 2009) (citation omitted). With respect to a facial challenge, a court will grant a motion to dismiss for lack of subject matter jurisdiction “where a claim fails to allege facts upon which the court may base jurisdiction.” Davis, 367 F.Supp.2d at 799.

Where the challenge is factual, “the district court is entitled to decide disputed issues of fact with respect to subject matter jurisdiction.” Kerns, 585 F.3d at 192. “[T]he court may look beyond the pleadings and ‘the jurisdictional allegations of the complaint and view whatever evidence has been submitted on the issue to determine whether in fact subject matter jurisdiction exists.’” Khoury v. Meserve, 268 F.Supp.2d 600, 606 (D. Md. 2003) (citation omitted). The court “may regard the pleadings as mere evidence on the issue and may consider evidence outside the pleadings without converting the proceeding to one for summary judgment.” Velasco v. Gov’t of Indon., 370 F.3d 392, 398 (4th Cir. 2004); see also Sharafeldin v. Md. Dep’t ...


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