In its decision, United Food & Commer. Workers Unions & Emplrs. Midwest Health Bens. Fund v. Warner Chilcott Ltd., 2018 U.S. App. LEXIS 28920, issued on October 17, the First Circuit held an antitrust case could not go forward as a class action where it was evident that many class members had not suffered any injury.
The claim at issue arose because the defendant manufacturer pulled a medication from the market shortly before the drug’s patent expired. It then began selling a similar but not identical substitute, effectively extending the patent protection for several more years. The plaintiffs, asserting this was done to maintain control over the market by preventing other manufactures from introducing generic versions of the original drug, brought suit alleging violations of the antitrust laws of twenty-five states and the District of Columbia. The class consisted of people who had purchased the original drug before its patent expired and subsequently purchased the replacement.
The District Court granted certification despite finding that approximately ten percent of the class would have continued to purchase the original “brand name” drug even if a cheaper generic version had become available. These class members who had not suffered any injury were to be weeded out by a claims administrator who would evaluate each claim according to a formula proposed by the plaintiffs and approved by the Court.
In overturning the District Court’s order, the First Circuit noted that the proposed claims process gave the defendant no meaningful opportunity to contest whether an individual would have purchased a generic drug had one been available. The Court emphasized that, under Rule 23(b)(3), a class cannot be certified if common issues predominate over those of individual class members. Because the proof of an injury was a required element of the plaintiffs’ claims, the need to identify the thousands of class members who had suffered no injury would predominate and make adjudication unmanageable unless there was some mechanism that could “manageably remove uninjured persons from the class in a manner that protects the parties’ rights.” Based on a finding that the process adopted by the District Court failed to accomplish this, the First Circuit determined that no class could be certified.
This decision is particularly significant because it appears to conflict with decisions from other Circuits that have signaled a willingness to permit the certification of classes containing some members who have not suffered any harm without there being any process in place to eventually remove the uninjured persons from the class. See Messner v. Northshore Univ. HealthSystem, 669 F.3d 802, (7th Cir. 2012); Torres v. Mercer Canyons Inc., 835 F.3d 1125 (9th Cir. 2016). We will continue to monitor this split in authorities and report new developments as they emerge.