PHILADELPHIA – A pharmaceutical company has asked a federal court here to consider whether the U.S. Federal Trade Commission (FTC) can initiate legal action with it over a pair of prior patent-case settlements it made.

On Oct. 26, Endo Pharmaceuticals, Inc., Endo International and Watson Laboratories, Inc. filed an action seeking a declaratory judgment, in connection to the FTC’s pending anti-trust lawsuit in the same court referencing two past settlements from 2010 and 2012.

In FTC v. Endo Pharmaceuticals, Inc., that anti-trust litigation accuses Endo and other pharmaceutical companies of unlawfully delaying generic-market iterations of medicines Opana ER and Lidoderm through the aforementioned prior settlements. Opana ER is an opioid painkiller, while Lidoderm is a local anesthetic drug.

Endo says the FTC Act and whether it’s allowed to file lawsuits is a contested point in its current anti-trust action. Under the FTC Act, it may only file a federal lawsuit if “there are ongoing or imminent violations of the law.”

However, the FTC’s lawsuit doesn’t allege current violations – it instead points to the past settlements made in 2010 and 2012 which allegedly delayed the market introduction of generic counterparts for Opana ER and Lidoderm, and seeks restitution.

But, Endo feels the FTC is trying to circumvent the issues in this matter.

“In a blatant effort to forum shop, the FTC is now attempting to prevent this Court from deciding the dispositive issues raised in that motion to dismiss by purporting to voluntarily dismiss the original action and threatening to re-file its claims in two different federal courts. Specifically, the FTC has represented that it intends to reassert its claims against Endo and Watson in the Northern District of California,” Endo’s complaint reads.

Endo referred to this legal duplication as “the height of inefficiency.”

“This is a live controversy because the FTC is attempting, in the threatened action, to pursue federal litigation based on the claims in the original action despite the lack of statutory authority to do so,” Endo says.

Endo emphasizes under the FTC Act, the proper place for any dispute in these matters is an administrative proceeding and nothing in the way of “restitution” is covered – only for “injunctive relief.”

“Generic entry on Lidoderm occurred three years ago. There is no conceivable injunctive restraint that could be imposed now as a result of the threatened action that would change when generic entry occurred,” Endo says.

Besides any relief the Court deems just and proper, the plaintiffs request the issuance of “a declaratory judgment of that Section 13(b) of the FTC Act does not authorize the FTC to file an action in federal court against declaratory judgment plaintiffs involving claims based on, or arising from, the Lidoderm Settlement Agreement.”

Or alternatively, “a declaratory judgment that Section 13(b) of the FTC Act does not authorize the FTC to seek disgorgement or restitution against declaratory judgment plaintiffs based on the Lidoderm Settlement Agreement.”

The plaintiffs are represented by George G. Gordon, Christine C. Levin of Dechert LLP and Terry M. Henry of Blank Rome, all in Philadelphia, plus Karen Hoffman Lent, Michael H. Menitove, Steven C. Sunshine and Timothy H. Grayson of Skadden Arps Slate Meagher & Flom, in New York City, Philadelphia and Washington, D.C.

The defendant is represented by Markus H. Meier, Bradley S. Albert, Jamie R. Towey, Synda Mark and Daniel S. Bradley of the Federal Trade Commission.

U.S. District Court for the Eastern District of Pennsylvania 2:16-cv-05599

From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at nickpennrecord@gmail.com

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U.S. District Court for the Eastern District of Pennsylvania
601 Market Street
Philadelphia, PA 19106

Dechert LLP
35 West Wacker Drive
Chicago, IL 60601

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