Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_06-md-01761/USCOURTS-cand-3_06-md-01761-8/pdf.json

Nature of Suit Code: 410
Nature of Suit: Antitrust
Cause of Action: 28:1331 Fed. Question: Anti-trust

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United States District Court

For the Northern District of California

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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

IN RE: DITROPAN XL ANTITRUST

LITIGATION 

This Order Relates to:

ALL CASES

 /

CASE NO. M:06-CV-01761-JSW

MDL No. 1761

ORDER DIRECTING PARTIES

TO SUBMIT ADDITIONAL

BRIEFING

Defendants Johnson & Johnson and Alza Corporation (“Alza”) (collectively,

“Defendants”) have moved to dismiss the complaint filed by plaintiffs Stephen L. LaFrance

Holdings (“LaFrance”), SAJ Distributors (“SAJ”), and American Sales Company (“ASC”)

(collectively, “Direct Purchaser Plaintiffs”) on several grounds, including the failure of

LaFrance and SAJ to join McKesson Corporation (“McKesson”). Direct Purchaser Plaintiffs

admittedly did not purchase Ditropan XL from Alza or Johnson & Johnson. Rather, Direct

Purchaser Plaintiffs’ claims are premised on the purchases of Ditropan XL made by McKesson

and Cardinal Health, Inc. (“Cardinal”) from Ortho-McNeil Pharmaceutical, Inc. (“OrthoMcNeil”), a wholly owned subsidiary of Johnson & Johnson. Direct Purchaser Plaintiffs bring

Case 3:06-md-01761-JSW Document 58 Filed 03/09/07 Page 1 of 3
United States District Court

For the Northern District of California

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 The Court refers to the assignment as only a “purported” assignment because in the

pending motion to dismiss, Defendants argue that the assignment is invalid because

McKesson did not obtain Ortho-McNeil’s consent. The Court has not yet ruled on the

pending motion to dismiss.

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their claims pursuant to purported assignments1 of their antitrust claims from McKesson to SAJ

and LaFrance and from Cardinal to ASC. 

McKesson only assigned SAJ and LaFrance fifty percent of its claims against

“Defendants ... arising out of or relating to McKesson’s purchase of Ditropan XL.” 

(Declaration of Michael A. Sitzman in support of Defendants’ motion to dismiss Direct

Purchaser Action, Ex. 2.) Federal common law governs the validity of the purported

assignment. In re Fine Paper Litig., 632 F.2d 1081, 1090 (3d Cir. 1980). Defendants do not

argue, and the Court does not find, that the fact that the assignment only purports to provide

fifty percent of McKesson’s claims relating to its purchase of Ditropan invalidates the

assignment. However, due to the fact that the purported assignment was only partial, SAJ and

LaFrance cannot bring their antitrust action against Defendants without McKesson’s joinder. 

See In re Fine Paper Litig., 632 F.2d at 1091. The reason for this rule is that while partial

assignments are recognized, “the rights of the obligor to be free of successive and repeated suits

growing out of the basic same facts are also protected by the prudent use of joinder rules.” Id.

Although it is clear that SAJ and LaFrance cannot maintain their claims against

Defendants without the joinder of McKesson, the Court does not have sufficient information

before it to determine whether the Court should order the joinder of McKesson or dismiss this

action for failure to join an indispensable party. Therefore, the Court directs the parties to file

supplemental briefing to address this issue, including whether this Court would have personal

jurisdiction over McKesson. Direct Purchaser Plaintiffs shall file a supplemental brief no

longer than five pages by no later than March 23, 2007. Defendants shall file a responsive

supplemental brief no longer than five pages by no later than April 6, 2007.

Dated: March 9, 2007 

JEFFREY S. WHITE

UNITED STATES DISTRICT JUDGE

Case 3:06-md-01761-JSW Document 58 Filed 03/09/07 Page 2 of 3
United States District Court

For the Northern District of California

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Case 3:06-md-01761-JSW Document 58 Filed 03/09/07 Page 3 of 3