AAI Continues to Challenge Heightened Pay-For-Delay Pleading Standards (In re Lipitor Antitrust Litig.)

In an amicus brief filed with 48 law, economics, and business professors, the American Antitrust Institute (AAI) has asked the Third Circuit Court of Appeals to reverse a district court’s dismissal of a direct-purchaser class action challenging a brand drug manufacturer’s reverse payment for delayed generic entry where the payment consisted primarily of the forgiveness of damages in separate patent litigation over a different drug.

The district court held that the plaintiffs had failed to demonstrate “the reliable foundation showing a reliable cash value of the non-monetary payment.”

The amicus brief argues that the district court erred in requiring plaintiffs, at the motion-to-dismiss stage, to provide evidentiary support typically considered at summary judgment or even trial.   Under ordinary pleading standards, the brief argues, the complaint plausibly alleges that the forgiveness of damages was worth hundreds of millions of dollars.  The professors and the AAI cautioned that the “Supreme Court’s landmark decision in Actavis would be undermined if courts were to impose newfound excessive standards at the motion-to-dismiss stage that effectively make it all but impossible for plaintiffs to succeed.”

The appeal has been consolidated with the appeal in In Re Effexor XR Antitrust Litigation, which raises similar issues of heightened pleading standards.

The brief was written by AAI Advisory Board Members Michael Carrier and Steve Shadowen.