to notify the plaintiff that she may sell her painting did not constitute compelling circumstances. See id.
In this case, the only acts alleged by Organizational Plaintiffs subsequent to January 1997 are payments from Bayer to the Barr Escrow Account. These payments are contemplated by, and needed to implement, the fixed terms of the challenged agreements. Accordingly, such acts are not sufficient to extend or restart the limitations period because the performance of an allegedly anticompetitive, preexisting contract is not a new predicate act. See Grand Rapids Plastics, Inc. v. Lakian, 188 F.3d 401, 406 (6th Cir. 1999) ("[E]ven if the payment agreement constituted a continuing violation . . . the individual payments to [defendant] were only a manifestation of the previous agreement. The individual payments therefore do not constitute a new and independent act, as required to restart the statute of limitations.") (internal quotation marks and citation omitted); County of Stanislaus v. Pac. Gas & Elec. Co., No. 93 Civ. F-5866, 1995 WL 819150, at *24 (E.D.Cal. Dec. 18, 1995) ("[P]erformance of the alleged anticompetitive contracts during the limitations period is not sufficient to restart the period.") (citation omitted), aff'd, 114 F.3d 858 (9th Cir. 1997). In other words, the payments from Bayer to the Barr Escrow Account are "merely the abatable but unabatable inertial consequences of some prelimitations action," which do not satisfy the requirements for a continuing violation. Al George v. Envirotech Corp., 939 F.2d 1271, 1275 (5th Cir. 1991) (citing Poster Exch., Inc. v. Nat'l Screen Serv. Corp., 517 F.2d 117, 128 (5th Cir. 1975)); see also Lomar Wholesale Grocery, Inc. v. Dieter's Gourmet Foods, Inc., 824 F.2d 582, 586 (8th Cir. 1987) (same); DXS, 100 F.3d at 467 ("For statute of limitations purposes, the focus is on the timing of the causes of action, i.e., the defendant's overt acts, as opposed to the effects of the overt acts."). Moreover, as in Vitale, in this case, Organizational Plaintiffs' allegations are not so compelling as to justify an exception to the statute of limitations.
Lastly, the cases cited by plaintiffs do not compel a different conclusion. Plaintiffs cite Santana Products, Inc. v. Sylvester & Associates, Ltd., 121 F. Supp.2d 729, 734 (E.D.N.Y. 1999), to support their contention that a plaintiff can bring a claim, even if some of the initial anticompetitive events occurred more than four years ago. In Santana, however, the plaintiff alleged that within the limitations period defendants had distributed bulletins and fact sheets while conducting lunch box presentations in which false and misleading statements were made regarding plaintiffs products. See id. at 735. Here, Organizational Plaintiffs do not and cannot allege new, affirmative and independent acts within the limitations period. Consequently, Santana does not support Organizational Plaintiffs' claims. See id. at 734 (noting that although "[a] cause of action is not barred . . . because anti-competitive conduct began outside the statutory period," plaintiff must prove "some overt act injuring plaintiff [that] is committed within the limitations period").
In addition, plaintiffs' reliance on Vermont Home Owners' Association, Inc. v. Lapierre, 87 F. Supp.2d 348 (D.Vt. 1999), is misplaced. Plaintiffs cite Lapierre in support of their proposition that each payment pursuant to the challenged agreements constitutes a continuation of defendants' conspiracy. In Lapierre, the plaintiffs alleged that the defendants were involved in a conspiracy in which the owners of a mobile home park were paid by cooperating mobile home dealers for each home sold in their park as a condition for a loan, and the owners, in return, would pay their creditors against the principal of the loan for each mobile home sold. See id. at 349. The court found that the plaintiffs alleged a continuing violation since a fact-finder could infer that the creditor continued to benefit from the original agreement with the owners of the mobile park "in the form of payments of principal and interest on its loan, derived in part from tied-in mobile home sales." Id. at 351. However, in Lapicrre, there was also evidence that the defendants renegotiated portions of the original agreement, and reached additional agreements to extend new lines of credit, during the limitations period. See id. at 350. in this case, there is no evidence that defendants made any separate or distinct acts during the limitations period other than payments pursuant to the 1997 agreements.
Thus, the payments made pursuant to the challenged agreements in this case do not restart the limitations period where defendants' alleged wrongful conduct — settling the Bayer/Barr patent litigation and the attendant agreements — occurred long beforehand. Consequently, as Organizational Plaintiffs have failed to plead an exception to the four-year statute of limitations, those plaintiffs' claims are dismissed as untimely.
In sum, Bayer and Generic Defendants' motions to dismiss plaintiffs' complaints for failure to state a claim are denied because plaintiffs have alleged one viable theory of injury casually linked to Bayer, Barr, HMR, and Rugby's conduct, namely that but for the challenged agreements, Bayer would have issued a license for generic Cipro to Barr and/or HMR and Rugby at a price that would have resulted in a substantial lower cost to Cipro purchasers. However, plaintiffs have failed to allege a claim against defendant Watson, and, consequently, Watson's motion to dismiss the Indirect Purchaser Plaintiffs' Complaint and the Aston Complaint is granted. Lastly, Organizational Plaintiffs' claims are dismissed as untimely.
Availability of Partial Summary
Plaintiffs contend that Bayer's agreement to pay cash in exchange for the commitment of Barr, HMR and Rugby not to enter the Cipro market is a per se illegal market allocation agreement that violates Section 1 of the Sherman Act. As an initial matter, Bayer asserts that plaintiffs' motion is procedurally improper because it seeks "partial summary judgment on an element of a claim and not on the entire claim." Bayer's Summ. J. Mem. at 48. To recover under the Sherman Act, plaintiffs must establish three elements: (1) anticompetitive conduct; (2) injury-infact; and (3) antitrust injury, i.e., "`injury of the type the antitrust laws were intended to prevent and that flows from that which makes defendants' act unlawful.'" Balaklaw, 14 F.3d at 797 (quoting Brunswick, 429 U.S. at 489, 97 S.Ct. at 697). If the Settlement Agreements and the Supply Agreement were found to constitute "anticompetitive conduct," Bayer argues that such a conclusion would impermissibly establish only one of at least three elements of a private antitrust claim. See Bayer's Summ. J. Mem. at 48. This assertion is incorrect, and the cases cited by Bayer do not support its argument as they fail to address the current issue, namely whether it is proper for a court to issue an order declaring that defendants' express agreements constitute a per se violation of the Sherman Act and similar state antitrust laws.*fn47
In fact, Federal Rule of Civil Procedure 56 authorizes partial summary judgment that falls short of a final determination to limit the issues to be determined at trial. See Fed.R.Civ.P. 56(d); see also Fed.R.Civ.P. 56, Advisory Committee's Note ("The partial summary judgment is merely a pretrial adjudication that certain issues shall be deemed established for the trial of the case. This adjudication . . . serves the purpose of speeding up litigation by eliminating before trial matters wherein there is no genuine issue of fact."). Moreover, the Second Circuit has recognized the value of summary judgment in antitrust cases, noting that summary judgment is a "vital procedural tool to avoid wasteful trials and may be particularly important in antitrust litigation to prevent lengthy and drawn-out litigation that has a chilling effect on competitive market forces." Capital Imaging, 996 F.2d at 541. Lastly, courts have awarded plaintiffs partial summary judgment on the issue of per se liability, reserving for trial the issues of causation and damages. See, e.g., Palmer v. BRG of Ga., Inc., 498 U.S. 46, 49, 111 S.Ct. 401, 402, 112 L.Ed.2d 349 (1990); Arizona v. Maricopa County Med. Soc'y, 457 U.S. 332, 344, 102 S.Ct. 2466, 2473, 73 L.Ed.2d 48 (1982); In re Terazosin Hydrochloride Antitrust Litig., 164 F. Supp.2d 1340, 1348-50 (S.D.Fla. 2000); In re Cardizem CD Antitrust Litig., 105 F. Supp.2d 682, 692 (E.D.Mich. 2000). Therefore, Bayer's argument that partial summary judgement is improper in this case is rejected.
The Per Se Rule and the
Rule of Reason
Section 1 of the Sherman Act makes unlawful "every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States. . . ." 15 U.S.C. § 1. Although this provision literally bans every agreement involving interstate commerce, the Supreme Court has interpreted it to prohibit only those contracts that "unreasonably" restrain competition. E.g., United States v. Topco Assocs., Inc., 405 U.S. 596, 606-08, 92 S.Ct. 1126, 1133-34, 31 L.Ed.2d 515 (1972); Standard Oil Co. v. United States, 221 U.S. 1, 55-60, 31 S.Ct. 502, 513-16, 55 L.Ed. 619 (1911).
To establish a Section 1 violation, plaintiffs must therefore show "`a combination or some form of concerted action between at least two legally distinct economic entities'" that "`constituted an unreasonable restraint of trade either per se or under the rule of reason.'" Primetime 24 Joint Venture v. Nat'l Broad. Co., 219 F.3d 92, 103 (2d Cir. 2000) (quoting Capital Imaging, 996 F.2d at 542). A court decides which antitrust analysis to apply by first determining whether the challenged agreement falls into a category of conduct that the Supreme Court has found likely to have predominately anticompetitive effects and therefore to be illegal per se. See Maricopa, 457 U.S. at 344-45, 351, 102 S.Ct. at 2473-74, 2476; Bogan v. Hodgkins, 166 F.3d 509, 515 (2d Cir. 1999) (citing Northwest Wholesale Stationers, Inc. v. Pac. Stationery & Printing Co., 472 U.S. 284, 298, 105 S.Ct. 2613, 2621, 86 L.Ed.2d 202 (1985)). The Supreme Court has long recognized that a limited class of restraints are so manifestly anticompetitive that they are per se violations of the antitrust laws. The judicial rationale for this per se rule is best summarized by Justice Black in the seminal case, Northern Pacific Railway Co. v. United States, 356 U.S. 1, 78 S.Ct. 514, 2 L.Ed.2d 545 (1958):
[T]here are certain agreements or practices which
because of their pernicious effect on competition and
lack of any redeeming virtue are conclusively
presumed to be unreasonable and therefore illegal
without elaborate inquiry as to the precise harm they
have caused or the business excuse for their use.
This principal of per se unreasonableness not only
makes the type of restraints which are proscribed by
the Sherman Act more certain to the benefit of
everyone concerned, but it also avoids the necessity
for an incredibly complicated and prolonged economic
investigation into the entire history of the industry
involved, as well as related industries, in an effort
to determine at large whether a particular restraint
has been unreasonable — an inquiry so often
wholly fruitless when undertaken.