PHILADELPHIA – Recently, the United States Court of Appeals
for the Third Circuit made a surprising decision to decertify a class action lawsuit regarding the drug Modafinil.
court found the number of members in the class was not enough to constitute class action status.
years ago, Cephalon, a drug manufacturer, allegedly paid several generic drug
manufacturers to not make generic versions of the drug Modafinil.
20 direct pharmaceutical purchasers came together to form a class-action
lawsuit against the branded and generic manufacturers. They claimed the
manufacturers were keeping the prices high for Modafinil by preventing generic
versions from being made.
July, the motion for class action was granted by Judge Mitchell S. Goldberg of the U.S.
District Court for the Eastern District of Pennsylvania. He granted class certification on grounds that the plaintiffs' claim satisfied the numerosity and predominance
requirements of Rule 23 of Federal Rules of Civil Practice.
in the ‘90s, people have voiced skepticism about whether Rule 23 and class actions suits are doing what they’re intended to do,” Lindsay Breedlove, an
associate with Pepper Hamilton, told the Pennsylvania
numerosity requirement states, “The class is so numerous that joinder of class
members is impracticable.” The predominance requirement states, “There are
common questions of law or fact that predominate over any individual class
member’s questions and that a class action is superior to other methods of
Goldberg said the case was so far along, it's more economical to certify the
class at this stage,” Robin Sumner, a partner at Pepper Hamilton, said.
The Third Circuit found
issue with Goldberg’s decision and decided 2-1 to decertify the class.
The Third Circuit did not believe this class action satisfied the
numerosity requirement. Although a specific number requirement has not been
set, traditionally classes have 20 or more members.
The court will also look at
the judicial economy, geography, financial resources of the members, their
ability to sue separately, and requests for injunctive reliefs from the
class does have at least 22 members; however, three of the members make up 97
percent of the market. This does not satisfy the requirements regarding judicial economy, financial resources
of the members and their ability to sue separately, the Third Circuit ruled.
make millions of dollars each,” Sumner said. “They certainly could’ve brought
an individual case. These are not small consumer claims.”
respondents have until Oct. 14 to file a petition to have the whole court
vote to rehear the case. It is rare for the court to grant a rehearing, but
Sumner believes it might in this case.
significant decision that surprised a lot of people and got a lot of attention,”