Lorazepam & Clorazepate Antitrust Litigation

289 F.3d 98 (2002)

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Nature of the Case

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Facts

Two lawsuits were brought by the FTC and several States' Attorneys General against D that were ultimately consolidated and ended in a settlement. The FTC filed suit, pursuant to §§ 5 and 13(b) of the Federal Trade Commission Act (FTC Act), 15 U.S.C. §§ 45, 53(b) seeking injunctive and equitable relief, including disgorgement of $120 million plus interest. The complaint alleged that Ds had engaged in unfair methods of competition in violation of § 5(a) of the FTC Act. The Attorneys General of ten States, later joined by an additional 22 States and the District of Columbia, brought suit seeking equitable relief and treble damages for violations of §§ 1 and 2 of the Sherman Act. As to the FTC, the district court denied Ds' motion to dismiss, which argued that the district court lacked subject matter jurisdiction because the FTC was not authorized to seek either monetary relief or a permanent injunction in an antitrust case. As to the States, the district court partially granted Ds' motion to dismiss the claims under § 4 of the Clayton Act for direct purchases and limiting restitution and disgorgement on behalf of indirect purchasers on a State-by-State basis. Everyone entered into a settlement agreement. D would pay disgorgement in the amount of $71,782,017 to satisfy the consumer claims in the States' lawsuit and $28,217,983 to satisfy the States' agency claims. The settlement agreement also provided that the FTC, States, State agencies, and consumers who did not exclude themselves from the settlement, would release their claims against Ds. A large group of direct purchasers (Ps) now sought class certification as direct purchasers of lorazepam and clorazepate. They alleged that D had engaged in price fixing and monopolization in violation of §§ 1 and 2 of the Sherman Act, and the plaintiffs sought treble damages pursuant to § 4 of the Clayton Act. D moved to dismiss the complaint under 12(b)(1) and 12(b)(6), on the ground that Ps' proposed class of direct purchasers lacked antitrust standing to assert their claims. D argued that the usual direct purchaser rule should not apply because the FTC had won a monetary recovery for the benefit of a class of indirect consumer purchasers pursuant to § 13(b) of the FTC Act for alleged antitrust violations, and to allow both purchaser classes to obtain relief would undermine the policy rationales behind Illinois Brick. D also opposed the class certification arguing because the class consisted of direct and indirect purchasers in violation of Illinois Brick's direct purchaser rule. The district court denied the motion to dismiss and certified the class. D petitioned for interlocutory review of the denial of its Rule 12(b)(6) motion to dismiss and the district court's certification of a class of direct purchasers. D contends that a review of its petition under Rule 23(f) is warranted.