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People v. Actavis, PLC

United States District Court, S.D. New York

October 21, 2014


Elinor R. Hoffmann, Esq., NEW YORK STATE OFFICE OF THE ATTORNEY GENERAL, New York, NY, Attorneys for Plaintiff.

Jack Pace, Esq., Martin Michael Toto, Esq., Peter J. Carney, Esq., WHITE & CASE LLP, New York, NY, Attorneys for Defendants.


ROBERT W. SWEET, District Judge.

Defendants Forest Laboratories, LLC ("Forest") and Actavis, PLC ("Actavis") (collectively, the "Defendants") have moved to maintain under seal, as confidential, cornrnercially-sensitive information, portions of the Complaint filed by the People of the State of New York (the "State" or the "Plaintiff"). Based on the conclusions set forth below, the motion is granted in part and denied in part.

Prior Proceedings

On February 28, 2014, the Antitrust Bureau of the Office of the Attorney General of the State of New York (the "Bureau") opened an investigation into Forest's business plans regarding the pharmaceutical product Namenda, an FDA-approved therapy to treat Alzheimer's disease. Forest produced over 1.7 million pages of documents (pursuant to three subpoenas), three executives to provide investigational testimony, written interrogatory responses, and additional items that the Bureau requested informally. Forest produced this information designated as "Highly Confidential" and requested that any of the produced information used in any proceeding be filed under seal.

On September 15, 2014, the State filed its Complaint relating to the Bureau's investigation, referencing documents and testimony provided by Forest during the investigation. Counsel for Defendants immediately notified the Bureau of the Defendants' confidentiality concerns and requested that the Complaint be refiled with the proposed redactions.

The State agreed to file its Complaint on September 19 with the redactions requested by the Defendants.

The Complaint alleges that Defendants violated federal and state antitrust laws by attempting to improperly maintain and extend a monopoly over the drug they developed to treat Alzheimer's disease. The Complaint seeks injunctive relief requiring Defendants to keep the original form of the drug, Namenda lR, on the market and to prevent the Defendants from seeking to switch patients to a new patent-protected form, Namenda XR.

The Complaint describes: the parties (Compl. ¶¶ 12-15); the regulatory framework and relevant federal regulations, including the Food Drug and Cosmetic Act, 21 USC § 301 et seq., the Drug Price Competition and Patent Term Restoration Act of 1984, Pub. L. No. 98-417, 98 Stat. 1585, the Food and Drug Administration Modernization Act of 1997, Pub. L. No. 105-115, 111 Stat. 2296 (Compl. ¶¶ 16-20); the State Generic Substitution Laws (Compl. ¶¶ 21-27); and the effect of generic competition and brand name manufacturers' tactics to evade them (Compl. ¶¶ 28-43), including the practice of "product hopping, " which the Defendants are alleged to be contemplating in order to avoid the "patent cliff."

The Complaint also describes: Alzheimer's disease and the relevant products (Compl. ¶¶ 44-45); and the relevant market (Compl. ¶¶ 46-63) including Memantine that is branded and marketed as Namenda by Defendants, Namenda's recent sales of $1.5 billion in the United States, the extension of the Namenda patents, and the anticipated entry of generic competition in July 2015. The Complaint further alleges that the Defendants have made efforts to stall the effects of generic entry in the market (Compl. ¶¶ 64-97), including the launch of Namenda XR in June 2013 and the effort to convert patients from Namenda IR to Namenda XR and the plan to force switches. The Complaint alleges the anticompetitive effect of the conduct of the Defendants (Compl. ]] 98-104) and their conduct in exaggerating the imminence of the plan to force switches (Compl. ¶¶ 105-117).

Five causes of action are alleged: (1) monopolization in violation of Section 2 of the Sherman Act; (2) attempted monopolization in violation of Section 2 of the Sherman Act; (3) violation of the Donnelly Act, New York General Business Law Section 340 et seq.; (4)repeated or persistent illegality in violation of Section 63(12) of the New York Executive Law; and (5) repeated or persistent fraud, in violation of Section 63(12) of New York Executive Law.

The Defendants' motion to maintain the sealed portions of the Complaint was heard and marked fully submitted on September 24, 2014.

The Standard for Sealing

In re James, Hoyer, Newcomer, Smiljanich and Yanchunis, P.A., illustrates the policy considerations at the heart of this motion:

[A producing party ("Party")] requested at the time the documents were produced to the [Office of the Attorney General ("OAG") ], that all the documents be maintained as confidential and exempt from disclosure under FOIL. [The Party's] expectation of confidentiality was specifically discussed with the OAG at the time. This expectation of confidentiality for these documents was very important in the [Party's] decision to cooperate with the OAG's investigation. It would violate that expectation, and probably deter future cooperation by [the Party] and other affected entities, if any of [the Party's] documents were now released.... [But in] today's era... free access to information is even more critical as a fundamental step in protecting consumers.

Index No. 114184/09, 2010 WL 1949120, at *1, *6 (N.Y. Sup.Ct. Mar. 31, 2010).

On the one hand, as the court in In re Crowley Food, Inc. noted:

There is a sound rationale for the requirement of confidentiality. If there were no confidentiality in antitrust investigations, those who were the subjects of an investigation would be tarred with the taint' of having violated the antitrust laws even though that may not be the case. It would be analogous to announcing the empaneling of a grand jury to investigate one's activities. It implies a suspicion of guilt. Index No. 119316, 1979 WL 18648, at *6 (N.Y. Sup.Ct. Mar. 10, 1979).

Similarly, in federal antitrust cases, the government regularly filed documents under seal or with confidential information redacted. See, e.g., Br. for Appellant United States of America (Redacted), United States v. AMR Corp. , 335 F.3d 1109 (2002) (No. 01-3202) (available at; Pl.'s Mot. for Permission to File Competitively Sensitive Information under Seal and for an Interim Protective Order, United States v. Sungard Data Sys., Inc. , 172 F.Supp.2d 172 (2001) (No. 01-02196) (available at; ...

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