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Amerisource Corp. v. Rx USA

September 26, 2007


The opinion of the court was delivered by: Dora L. Irizarry, United States District Judge


Plaintiff Amerisource Corporation ("Plaintiff" or "Amerisource"), a wholesaler of pharmaceutical products, brought this action to collect on a debt allegedly owed them by defendants Rx USA, International, Inc., Parsons Medical Center Pharmacy, Inc. (II), and Parsons Medical Center Pharmacy, Inc. (collectively, "Defendants" or "RXUSA"). Defendants, in turn, brought certain counterclaims, including, inter alia, an antitrust claim pursuant to the Sherman Antitrust Act, 15 U.S.C. §§ 1-7 (2007) (the "Sherman Act"), and breach of contract and tortious interference claims. In the instant motion, Plaintiff moves this court for summary judgment on Defendants' antitrust, breach of contract, and tortious interference counterclaims.

For the reasons stated more fully below, Amerisource's motion for summary judgment is granted in part and denied in part. Amerisource's motion is granted with respect to the Sherman Act claim because RXUSA has failed to provide any evidence of actual adverse effect on competition in the relevant market. RXUSA has, however, raised an issue of fact concerning the breach of contract claims and the tortious interference claim, which, accordingly, withstand summary judgment.

I. Background

Plaintiff, a Delaware corporation, is a wholesale distributor of pharmaceutical products. (Carter Dep. 25:25-26:2.) Defendants are New York corporations in the business of purchasing pharmaceutical products in order to resell them to other wholesalers, retailers, and individual customers. (Scovotti*fn1 Dep. 25:8-27:23.)

From 1999 to 2000, RXUSA purchased over $3 million worth of products from Amerisource. (Drucker Aff. ¶ 3.) RXUSA claims that Amerisource agreed to provide certain discounts on the products RXUSA purchased from it, but never provided the promised discounts. (Defs.' Br. 4-5.) Amerisource denies the existence of any agreements to provide discounts beyond the prices it actually charged for the products, as reflected in the invoices. (See Pl.'s 56.1 ¶ 6.)

Under RXUSA's version of the facts, in 1999, Wilfredo LaFontaine, Amerisource's marketing manager and/or salesperson at the time, visited RXUSA's business premises in order to solicit its business. (Drucker Aff. ¶ 7.) In speaking with Robert Drucker, the president of the defendant companies, LaFontaine discussed certain available discounts on Amerisource's products in order to gain RXUSA's business. (Drucker Aff. ¶ 7.) After several meetings, in the spring of 1999, LaFontaine allegedly offered RXUSA the following markdowns: (1) a 15% discount off the wholesale acquisition cost ("WAC") (or the price offered to pharmaceutical group purchasing organizations ("GPOs")*fn2 ), if applicable) for insulin products, as well as certain other pharmaceutical products (the "WAC-15% Discount"); (2) an additional 1% discount from the WAC price (or the GPO price, if applicable) for the top forty items RXUSA purchased from Amerisource (the "Top 40 Discount"); and (3) an additional 1.5% discount from the WAC price (or the GPO price, if applicable) for all products purchased in any month in which RXUSA's purchases exceeded $200,000 and RXUSA paid in a timely manner [(the "Volume Discount")]. (Drucker Aff. ¶¶ 8-9.)

LaFontaine asserts that he had the authority to grant some or all of the aforementioned discounts on behalf of Amerisource, but he states that he also sought and obtained approval from a supervisor, Anthony Capone, for each of the discounted terms. (See LaFontaine Dep. 265-274; 304.) Under the alleged offer, the discounts would not be applied as markdowns of the purchase price, which price would be reflected on the invoices; instead, they would appear as credits on future purchases, or be issued as rebate checks. (Drucker Dep. 120:9-121:17.) RXUSA claims it accepted Amerisource's offer and, in reliance on the promised discounts, began purchasing products from Amerisource. (Drucker Aff. ¶ 10.)

Amerisource never applied any credits to RXUSA's purchases, nor issued any rebates. (Defs.' Br. 6.) Nevertheless, RXUSA did not terminate its accounts with Amerisource right away because Drucker said he "was hearing the right things from [LaFontaine's] mouth, and if [LaFontaine] had problems getting [the credits] started and getting all of his paperwork in order I didn't want to kill what was turning out to be a highly successful, at least on the appearance, if they would have paid the money, relationship." (Drucker Dep. 231:3-11.) When, many months later, the discounts still were not applied despite Drucker's complaints, Drucker met with Capone, LaFontaine, and Joe Falletta, LaFontaine's direct supervisor, on January 19, 2000, to discuss Drucker's complaints and other issues. (See Drucker Dep. 231:12-232:9; LaFontaine Dep. 296:19-297:9.) The dispute was not resolved at the meeting. (See LaFontaine Dep. 297-299.)

On or about April 26, 2000, Amerisource fired LaFontaine. (Capone Dep. 206:5-14.) According to LaFontaine, he was fired, in part, because he insisted that Amerisource honor its commitments to RXUSA. (LaFontaine Dep. 300:15-301:11.) Amerisource's explanation for LaFontaine's firing was that he "mishandl[ed]. . . the January 19th meeting with Drucker and other matters." (Pl.'s Mem. 9.)

Prior to the January 19 meeting, in September and October 1999, RXUSA began to seek out alternate sources for the products it was purchasing from Amerisource. (Drucker Dep. 232:14-23.) RXUSA approached other large wholesale businesses, including McKesson, Cardinal, Bellco, BergenBrunswick, and others, to request that they open credit accounts for RXUSA. (Drucker Dep. 232:24-233:3.) In each case, RXUSA states that the wholesaler refused to open the requested account. (Defs.' Br. 11-12.) Each wholesaler allegedly informed RXUSA that Amerisource had told the wholesaler that RXUSA was a bad credit risk and that the wholesaler could not deal with RXUSA without Amerisource's prior approval. (See Scovotti Dep. 106:14-18; 113:14-19; 95:10-21; 122:10-14.)

RXUSA alleges that the wholesalers refused to deal with it because they had conspired to divide up their customers, including RXUSA, and group boycott each others' customers. (Defs.' Br. 22.) Moreover, RXUSA contends that they were unwilling to deal with RXUSA in particular because Amerisource informed the other wholesalers at a monthly group credit meeting involving all of the major wholesalers that they should not deal with RXUSA because it was a bad credit risk. (Defs.' Br. 13-14.) In addition, RXUSA claims that Amerisource discussed at one of the meetings "a contemplated future litigation" involving RXUSA, stating that RXUSA owed it $250,000. (Defs.' Br. 14; see Defs.' Ex. M*fn3 .) At the time of Amerisource's alleged comments, RXUSA's accounts with Amerisource were in good standing. (See Wertz Dep. 58:8-15.)

RXUSA states that it was consequently unable to purchase virtually any insulin the following year. (Drucker Dep. 261:24-262:11.) In addition, although RXUSA was able to purchase non-insulin products from various wholesalers, including McKesson, Cardinal, Bellco, JJ Ballan, and Kinray, the wholesalers allegedly would only agree to unfavorable pricing terms and would not permit RXUSA to purchase on credit, but only through cash on delivery ("COD"). (Drucker Dep. 259:19-260:2; 255:15; 342:10-10-11; 446:9-447:7; 475:23-476-3.)

Following the January 19 meeting, RXUSA ceased paying its accounts with Amerisource, and ...

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