Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_14-md-02521/USCOURTS-cand-3_14-md-02521-13/pdf.json

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

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UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

UNITED FOOD AND COMMERCIAL 

WORKERS LOCAL 1776 & 

PARTICIPATING EMPLOYERS HEALTH 

AND WELFARE FUND, et al.,

Plaintiffs,

v.

TEIKOKU PHARMA USA, INC., et al.,

Defendants.

Case No. 14-md-02521-WHO 

ORDER ON DEFENDANTS' JOINT 

MOTION TO DISMISS OR STAY 

PLAINTIFFS' AMENDED COMPLAINT

Re: Dkt. Nos. 183, 184, 188, 190, 203, 204

A group of indirect purchaser plaintiffs composed of retail establishments (collectively, 

“Walgreen Plaintiffs”) brought a First Amended Complaint against defendants Endo 

Pharmaceuticals Inc., Teikoku Pharma USA, Teikoku Seiyaku Co., Watson Pharmaceuticals, Inc., 

Actavis, plc, formerly known as Watson Pharmaceuticals, Inc., and Watson Laboratories, Inc. 

(collectively “defendants”) in this multidistrict antitrust litigation relating to a settlement 

agreement entered into by defendants that resolved a patent dispute over the drug Lidoderm (the 

“Lidoderm Settlement”). Defendants move to dismiss, arguing that (i) the Walgreen Plaintiffs 

lack statutory standing as indirect purchasers of Lidoderm, (ii) the assignments of claims from 

Lidoderm wholesalers are invalid and fail for lack of Article III standing, and (iii) any valid 

assignments of claims should be joined with those of the group of direct purchaser plaintiffs. 

The Walgreen Plaintiffs do not have standing to bring claims on their own behalf as 

indirect purchasers and have not adequately pleaded that they are entitled to injunctive relief. That 

portion of their claims is STRUCK. The remainder of defendants’ motion is DENIED. The 

assignments of the right to bring antitrust claims are valid and the partial assignment of claims 

does not require me to dismiss or stay the Walgreen Plaintiffs’ claims at this stage of the litigation. 

Case 3:14-md-02521-WHO Document 231 Filed 07/17/15 Page 1 of 12
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BACKGROUND

The facts relating to the underlying suit are recited in my prior orders and incorporated by 

reference. See, e.g., Dkt. No. 117. The Lidoderm Settlement allegedly violated federal antitrust 

laws, in part because defendants agreed to delay the release of a generic equivalent of Lidoderm 

into the market. FAC ¶¶ 146-171 (Dkt. No. 166). 

On April 22, 2015, the Walgreen Plaintiffs filed an Amended Complaint (“FAC”) against 

defendants. The FAC asserts that: (i) the Lidoderm Settlement is an unreasonable restraint on 

trade that violates Section 1 of the Sherman Act, see FAC ¶¶ 146-152; (ii) by entering into the 

Lidoderm Settlement, defendants conspired to expand monopoly power by intentionally 

forestalling the introduction of generic Lidoderm in violation of Section 2 of the Sherman Act, see 

id. ¶¶ 153-160; (iii) defendant Endo exercised monopoly power over the relevant market by 

intentionally excluding competitors and charging artificially high prices for Lidoderm, see id. ¶¶ 

161-166; and (iv) defendant Endo attempted to monopolize the relevant market by entering into 

the Lidoderm Settlement with the other defendants, see id. ¶¶ 167-171. 

On May 8, 2015, defendants collectively moved to dismiss the Walgreen Plaintiffs’ FAC 

for lack of Article III and statutory standing. Mot. (Dkt. No. 183). I heard argument on July 8, 

2015. 

LEGAL STANDARDS

I. RULE 12(b)(1) 

Defendants move to dismiss for lack of standing under Article III and Federal Rule of Civil 

Procedure 12(b)(1). The burden of proving standing rests with the party invoking federal subject 

matter jurisdiction. Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992). 

“Rule 12(b)(1) jurisdictional attacks can be either facial or factual.” White v. Lee, 227 F.3d 

1214, 1242 (9th Cir. 2000). A factual attack “disputes the truth of the allegations that, by 

themselves, would otherwise invoke federal jurisdiction.” Safe Air for Everyone v. Meyer, 373 

F.3d 1035, 1039 (9th Cir. 2004). When a factual attack is raised, the plaintiff must support the 

jurisdictional allegations with “competent proof[] under the same evidentiary standard that 

governs in the summary judgment context.” Leite v. Crane Co., 749 F.3d 1117, 1121 (9th Cir. 

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2014) (internal citations omitted). “If the moving party converts the motion to dismiss into a 

factual motion by presenting affidavits and other evidence properly brought before the court, the 

party opposing the motion must furnish affidavits or other evidence necessary to satisfy its burden 

of establishing subject matter jurisdiction.” Wolfe v. Strankman, 392 F.3d 358, 362 (9th Cir. 

2004) (internal quotations omitted).

Here, defendants bring a factual attack because they challenge the validity of the 

wholesalers’ assignments of their claims to the Walgreen Plaintiffs. See Mot. 4. Accordingly, “no 

presumptive truthfulness attaches to plaintiff’s allegations, and the existence of disputed material 

facts will not preclude the trial court from evaluating for itself the merits of jurisdictional claims.” 

Doe v. Holy See, 557 F.3d 1066, 1073 (9th Cir. 2009) (internal quotations omitted).

II. RULE 12(b)(6) 

Defendants also challenge the Walgreen Plaintiffs’ standing under the Sherman Act by 

moving to dismiss for failure to state a claim pursuant to Rule 12(b)(6). See Mot. 4. A Rule 

12(b)(6) motion “tests the legal sufficiency of a claim.” Conservation Force v. Salazar, 646 F.3d 

1240, 1241-42 (9th Cir. 2011) (internal quotations omitted). “To survive a motion to dismiss, a 

complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is 

plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal quotations omitted). 

A claim is plausible “when the plaintiff pleads factual content that allows the court to draw the 

reasonable inference that the defendant is liable for the misconduct alleged.” Id. The court should 

dismiss “if there is a lack of a cognizable legal theory or the absence of sufficient facts alleged 

under a cognizable legal theory.” Salazar, 646 F.3d at 1242. 

In the private antitrust context, plaintiffs must establish “antitrust standing” to survive a 

motion to dismiss. Knevelbaard Dairies v. Kraft Foods, Inc., 232 F.3d 979, 987 (9th Cir. 2000); 

Los Gatos Mercantile, Inc. v. E.I. DuPont De Nemours & Co., No. 13-CV-01180-BLF, 2014 WL 

4774611, at *5 (N.D. Cal. Sept. 22, 2014). “To determine whether [antitrust standing] is met, the 

court must evaluate the plaintiff’s harm, the alleged wrongdoing by the defendants, and the 

relationship between them.” Knevelbaard, 232 F.3d at 987 (internal quotations omitted). “[A]

showing of antitrust injury is necessary, but not always sufficient, to establish standing under § 4.”

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Am. Ad Mgmt., Inc. v. Gen. Tel. Co. of Cal., 190 F.3d 1051, 1055 (9th Cir. 1999) (internal 

quotations omitted).

DISCUSSION

I. THE WALGREEN PLAINTIFFS’ CLAIMS BROUGHT ON THEIR OWN BEHALF

Defendants argue that as indirect purchasers of Lidoderm, the Walgreen Plaintiffs lack 

standing under section 4 of the Clayton Act. Mot. 5-6. The Walgreen Plaintiffs do not contend 

that they are entitled to treble damages under Section 4 as indirect purchasers. Oppo. 9-10. 

Instead, they assert standing as indirect purchasers under section 16 of the Clayton Act, requesting 

injunctive relief for violations of sections 1 and 2 of the Sherman Act. Id. 

Section 4 of the Clayton Act provides a private right of action for those injured as a result 

of antitrust violations and entitles them to treble damages. 15 U.S.C. § 15; see also In re Lithium 

Ion Batteries Antitrust Litig., No. 13-MD-2420 YGR, 2014 WL 4955377, at *5 (N.D. Cal. Oct. 2, 

2014). Only direct purchasers, and not indirect purchasers, may bring claims under section 4. See 

Illinois Brick Co. v. Illinois, 431 U.S. 720, 744-47 (1977); see also Del. Valley Surgical Supply 

Inc. v. Johnson & Johnson, 523 F.3d 1116, 1120-21 (9th Cir. 2008) (“[A] bright line rule emerged 

from Illinois Brick: only direct purchasers have standing under § 4 of the Clayton Act to seek 

damages for antitrust violations.”). 

Section 16 of the Clayton Act provides a private right of action for injunctive relief based 

upon violations of antitrust law. It states that “[a]ny person, firm, corporation, or association shall 

be entitled to sue for and have injunctive relief . . . against threatened loss or damage by violation 

of the antitrust laws . . .” 15 U.S.C. § 26. In order to obtain injunctive relief, a plaintiff “must 

allege facts showing that the remedy she seeks is needed to prevent a threatened antitrust injury, 

meaning an injury of the type the antitrust laws were intended to prevent − i.e., an injury to 

competition.” Somers v. Apple, Inc. 729 F.3d 953, 967 (9th Cir. 2013) (internal quotations 

omitted). 

Unlike section 4, under section 16 “indirect purchasers are not barred from bringing an 

antitrust claim for injunctive relief against manufacturers.” Lucas Automotive Engineering, Inc. v. 

Bridgestone/Firestone, Inc., 140 F.3d 1228, 1235 (9th Cir. 1998); see also Sundance Land Corp. 

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v. Community First Federal Savings & Loan Association, 840 F.2d 653, 661 (9th Cir. 1988) (“The 

standing requirements under section 16 of the Clayton Act are ‘less stringent’ than those under 

section 4. Parties who cannot recover damages may nevertheless obtain injunctive relief.”)

(internal citations omitted). Therefore, the Walgreen Plaintiffs would not be barred from bringing 

claims for injunctive relief as indirect purchasers. 

That said, the Walgreen Plaintiffs have failed to show a “threatened loss or injury 

cognizable in equity proximately resulting from the alleged antitrust violation.” Sundance Land, 

840 F.2d at 661 (internal quotations omitted). Defendants’ anticompetitive conduct ended on 

September 15, 2013, when generic drug competitors were able to enter the market. FAC ¶¶ 122, 

135. There are no other allegations of anticompetitive conduct that would be subject to an 

injunction or that designate conduct to be enjoined; the FAC only mentions injunctive relief in the 

demand for judgment in a cursory manner. The Walgreen Plaintiffs argue that they have 

demonstrated “monetary harm” that will continue in the future, see Oppo. 9, and argued at the 

hearing that harm is ongoing because it takes time for prices to reach an equilibrium. These facts 

were not alleged in the FAC. The Walgreen Plaintiffs also argue that the injunctive relief is a 

prayer for damages and should not be resolved on a motion to dismiss, but provide no support for 

this argument.1 

In short, the Walgreen Plaintiffs have alleged past injuries that they suffered, but have not 

stated with sufficient particularity any ongoing or future harm caused by the alleged Sherman Act 

violations. See San Diego Cnty. Gun Rights Comm. v. Reno, 98 F.3d 1121, 1126 (9th Cir. 1996) 

(“it is insufficient for [plaintiffs] to demonstrate only a past injury”); Kamakahi v. Am. Soc’y for 

Reprod. Med., 305 F.R.D. 164, 195 (N.D. Cal. 2015), leave to appeal denied (May 12, 2015). 

Therefore, to the extent that the Walgreen Plaintiffs bring claims under the Sherman Act on their 

own behalf, such claims are STRUCK with leave to amend.

 

 

1

In fact, courts may strike prayers for relief in resolving a motion to dismiss. See, e.g., Lang v. 

Cnty. of Sonoma, No. C12-0983 TEH, 2012 WL 4674527, at *6 (N.D. Cal. Oct. 2, 2012); Grohal 

v. Stauffer Chem. Co., 385 F. Supp. 1267, 1269 (N.D. Cal. 1974). 

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II. PLAINTIFFS’ ASSIGNMENTS OF THE WHOLESALERS’ CLAIMS ARE VALID 

Because the Walgreen Plaintiffs may not bring claims under section 4 of the Clayton Act 

as indirect purchasers, they must establish standing based upon the assignments of antitrust claims 

from the direct purchaser wholesalers that entered into a distribution service agreement (“DSA”) 

with defendant Endo.

2

 See FAC ¶¶ 8-12. The Walgreen Plaintiffs have obtained assignments of

the wholesalers’ claims against Lidoderm arising from the direct purchases. Id. The DSAs 

contain non-assignment clauses that (generally) prohibit the wholesalers from assigning their 

claims against Endo. Defendants point to these non-assignment clauses to argue that the 

assignments of the wholesaler’s rights under the DSAs to the Walgreen Plaintiffs are invalid and 

that the Walgreen Plaintiffs lack standing. Mot. 8-10. 

The DSAs govern Endo’s sale of Lidoderm to the wholesalers, and include general 

provisions for product distribution, inventory management services, and distribution channel 

information, among other services. See, e.g., Dkt. No. 188-1. Each DSA contains essentially the

same non-assignment clause: neither party to the DSA is permitted to assign “this Agreement” or 

any of its “duties or responsibilities” without the other party’s consent. See Dkt. Nos. 188-1, 188-

2, 188-3, 188-4; Mot. 8. In addition, the DSAs all contain language requiring that each party 

“comply with all applicable federal, state, and local laws involving the purchase, handling, sale, 

marketing and distribution of Products purchased under the Agreement.” See Dkt. No. 188-1 at 9. 

Defendants’ argument rests primarily on In re Ditropan XL Antitrust Litigation, No. M:06-

CV-01761-JSW, 2007 WL 2978329 (N.D. Cal. Oct. 11, 2007). In that case, the Hon. Jeffrey S.

White addressed various antitrust claims brought by a plaintiff who, as here, was the purported

assignee of a direct purchaser wholesaler. Judge White found that the assignment of rights to the 

plaintiff under a Distribution Performance Agreement between the drug manufacturer defendant 

and the wholesaler was invalid due to a non-assignment clause. Id. at *2. He determined that 

 

2 Defendants request that I take judicial notice of the DSAs and the Agreements for Assignment of 

Claims between Endo and the wholesalers, and between the wholesalers and the Walgreen 

Plaintiffs, respectively. Dkt. Nos. 184, 204. These agreements are incorporated into the FAC by 

reference and plaintiffs do not dispute their authenticity. See Knievel v. ESPN, 393 F.3d 1068, 

1076 (9th Cir. 2005). To the extent that I rely on these documents, defendants’ requests are 

GRANTED. 

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because the distribution agreement discussed price control protection, it could “not be construed 

accurately as merely an inventory replenishment agreement.” Id. Because it encompassed 

antitrust claims, he dismissed the complaint for lack of standing. Defendants argue that this case 

raises precisely the same issue and urge me to adopt the same analysis. Mot. 9. 

I decline that invitation. First, I note that the reasoning that defendants rely on in Ditropan 

XL is dicta, because the court concluded that the plaintiff lacked standing on other grounds. See 

2007 WL 2978329, at *2 (plaintiff lacked standing because the assignment occurred after the 

plaintiff filed its amended complaint). Second, other courts that have recently addressed similar 

questions relating to the validity of assignment of antitrust claims have come to different

conclusions. 

In In re TFT-LCD (Flat Panel) Antitrust Litigation, the plaintiff brought antitrust claims 

that were assigned to it by vendors, but that the defendants argued were invalid due to nonassignment clauses in agreements that they had with the vendors.3

 Nos. M 07-1827 SI, C 11-

00711 SI, 2011 WL 3475408, at *3-4 (N.D. Cal. Aug. 9, 2011). The Hon. Susan Illston found 

that the non-assignment clause’s bar on the unilateral assignment of “rights and obligations” under 

the agreement had no bearing on the assignment of legal claims arising from those rights and 

obligations. Id. The court cited the RESTATEMENT (SECOND) OF CONTRACTS § 322 (AM. LAW 

INST. 1981), which states that: “Unless the circumstances indicate the contrary, a contract term 

prohibiting assignment of ‘the contract’ bars only the delegation to an assignee of the performance 

by the assignor of a duty or condition.” Id. at *3. Observing no such circumstances, the court 

concluded that “litigation over antitrust claims cannot be seen as a ‘right or duty’ contemplated by 

the contract.” Id. at *4. Thus, the non-assignment clause did not provide a basis for dismissing 

the plaintiff’s claims. Id. at *3-4; accord In re TFT-LCD (Flat Panel) Antitrust Litig., Nos. M 07-

1827 SI, C 10-3517 SI, 2011 WL 4345316, at *3 (N.D. Cal. Sept. 15, 2011) (adopting the same 

 

3

The language of the non-assignment clauses in the Flat Panel cases was similar to the relevant 

provisions in this case. Compare 2011 WL 3475408, at *4 (“[n]either party will assign their rights 

or delegate or subcontract their duties under this Agreement to third parties or Affiliates”) with

Dkt. No. 188-1 at 13 (“[n]either Party may assign this Agreement or delegate any of its respective 

duties or responsibilities [under] this Agreement without prior written consent . . .”). 

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analysis).

Defendants urge me to disregard the Flat Panel decisions and follow Ditropan XL here. 

Mot. 10. They do so first by distinguishing the facts of a case upon which the Flat Panel

decisions relied: Lutheran Medical Center v. Contractors, Laborers, Teamsters & Engineers 

Health & Welfare Plan, 25 F.3d 616 (8th Cir. 1994) abrogated on other grounds, Martin v. 

Arkansas Blue Cross & Blue Shield, 299 F.3d 966 (2002) (en banc). 

Lutheran Medical involved the assignment of an employee’s rights under a health plan, 

which prohibited employees from assigning their rights or benefits under the plan. 25 F.3d at 619. 

While it did not involve antitrust claims or distribution agreements, this factual distinction is 

largely irrelevant. The Lutheran Medical court concluded that notwithstanding language that 

prohibited the assignment of “rights or benefits,” the assignees were not prevented from bringing 

causes of action arising after the denial of benefits. Id. Because the employees assigned their 

causes of action, not the right to receive benefits under the plan, the assignment was valid. Id. 

As Judge Illston recognized in the Flat Panel cases, the reasoning of Lutheran Medical

applies to contexts in which a vendor assigns antitrust claims. See 2011 WL 3475408, at *4 

(“litigation over antitrust claims cannot be seen as a ‘right or duty’ contemplated by the contract”).

Other courts have come to similar conclusions. See, e.g., Meijer, Inc. v. Barr Pharmaceuticals, 

Inc., 572 F. Supp. 2d 38, 64 (D.D.C. 2008) (finding that a non-assignment clause barring the 

assignment of “this Agreement” could not “be read to prevent the assignment of the parties’ 

statutorily-based antitrust claims.”) (internal citations omitted); Health Alliance Network, Inc. v. 

Cont’l Cas. Co., 354 F. Supp. 2d 411, 417 n.8 (S.D.N.Y. 2005) (“a non-assignment clause does 

not prohibit assignment of a right to damages for breach of the whole contract or a right arising 

out of due performance”). 

Even if the DSAs are construed to prohibit the assignment of the right to bring antitrust 

claims, the violation of this provision would not render the assignment of a cause of action, 

instead of the “duty or condition,” invalid. While the legal compliance provisions of the DSAs 

arguably prevent signatories from assigning their duties to comply with applicable law to third 

parties, a duty is not equivalent to a right arising from a breach of that duty. See TransWorld 

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Airlines, Inc. v. Am. Coupon Exch., Inc., 913 F.2d 676, 685 (9th Cir. 1990) (explaining that 

contractual rights “must be distinguished from duties”). Even after the wholesalers assigned their

rights to sue for antitrust violations to the Walgreen Plaintiffs, the duty of legal compliance 

remained with the original parties to the DSAs. 

Defendants argue that like Ditropan XL and unlike the Flat Panel cases, the duty of legal 

compliance outlined in the DSAs encompasses antitrust laws and demonstrates the parties’ intent 

to prevent the assignment of legal claims. Reply 7-8. The court in Flat Panel acknowledged that 

there are some “circumstances [that] indicate that the parties intended the anti-assignment 

provisions to cover territory beyond the rights and obligations set forth in the sales contracts.” 

2011 WL 3475408, at *4 (internal quotation marks and modifications omitted). But here the nonassignment provisions do not clearly prevent the wholesalers from assigning claims arising out of 

antitrust law. Davidowitz v. Delta Dental Plan of Cal., Inc., 946 F.2d 1476, 1478 (9th Cir. 1991) 

(“As a general rule of law, where the parties’ intent is clear, courts will enforce non-assignment 

provisions.”) (emphasis added). 

The existence of a boilerplate duty to abide by “applicable law” does not manifest the 

requisite intent to expand the scope of the non-assignment clauses beyond their ordinary language. 

See Flat Panel, 2011 WL 3475408, at *4; 2011 WL 4345316, at *3; see also TransWorld Airlines,

913 F.2d at 685 (“an explicit contractual provision forbidding assignment of a right created by that 

contract is ordinarily enforceable according to its terms”) (emphasis added). The DSAs do not 

specifically mention antitrust law or the assignment of legal claims. As in Flat Panel and Meijer, 

the non-assignment clause is limited to “this Agreement,” and does not cover unrelated claims 

arising from antitrust law. 

Flat Panel, Lutheran Medical, and Meijer are well-reasoned and factually analogous to 

this case, notwithstanding defendants’ attempts to distinguish them. The DSAs’ non-assignment 

clauses are limited to the assignment of duties and obligations under the DSAs themselves and do 

not include causes of action sounding in antitrust arising from those agreements. Therefore, the 

wholesalers’ assignments of antitrust claims to the Walgreen Plaintiffs are valid and the FAC does 

not fail under Rule 12(b)(1). 

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Defendants also challenge the FAC’s allegations that the individual plaintiff Walgreen Co. 

is “contractually entitled to a second assignment from . . . another pharmaceutical wholesaler, 

which during the relevant period purchased Lidoderm directly from Endo for resale to Walgreen.” 

FAC ¶ 8; Mot. 11. Because all Walgreen Plaintiffs have standing under the assignments, this 

argument is inapposite. See In re SLM Corp. Sec. Litig., 258 F.R.D. 112, 115 (S.D.N.Y. 2009) 

(“To the extent courts allow assignment of a claim after litigation commences, the plaintiff 

generally has Article III standing on at least one other claim at the time the action was filed.”). 

The issue of Walgreen’s future assignment may become relevant in determining damages, but 

need not be considered at this stage. See FAC ¶ 8 (Walgreen “intends to include purchases made 

through ABDC in its damage claim when it obtains that assignment.”). 

III. GRANTING A STAY PENDING CLASS CERTIFICATION IS IMPROPER

Defendants argue that Rule 19 of the Federal Rules of Civil Procedure requires the 

Walgreen Plaintiffs to pursue any legitimately assigned claims as part of the putative class action 

brought by the Direct Purchaser Plaintiffs (“DPPs”) in this litigation, and request a stay in 

anticipation of that group’s Rule 23 motion. Mot. 12. They further assert that because the 

Walgreen Plaintiffs only have partial assignments from the wholesalers, allowing their action to 

continue separately from those of the DPPs would “complicate the administration of the litigation, 

and impermissibly force Defendants to face a multiplicity of suits rather than a single claim.” Id. 

The Walgreen Plaintiffs respond that this multidistrict litigation sufficiently consolidates the cases 

to alleviate any of the concerns raised by defendants, and contend that any denial of their rights to 

opt out of any such class violates Rule 23 and raises serious due process concerns. Oppo. 11. 

Defendants rely heavily on In re Fine Paper Litigation State of Washington, 632 F.2d 

1081, 1091 (3d Cir. 1980) and Bailey Lumber & Supply Co. v. Georgia-Pac. Corp., No. 

1:08CV1394 LG-JMR, 2009 WL 2872307, at *1 (S.D. Miss. Aug. 10, 2009). In Fine Paper, the 

court held that a partial assignee in an antitrust class action was precluded from opting out of a

class post-certification. In doing so, the court stated that partial assignment of claims did not pose 

any problems identified in Illinois Brick; namely, that indirect purchasers would bring claims and 

expose defendants to double liability, or that there would be “insurmountable problems of proof 

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and procedure in typical antitrust cases.” 632 F.2d at 1090. Instead, Fine Paper found that the 

partial assignments created potential complications associated with permitting a partial assignee to 

opt out of a class, including defendants’ uncertainty regarding outstanding liability following 

settlement with assignors, protection from “additional litigation,” and Rule 19’s compulsory 

joinder provisions. Id. at 1090-91. 

In Bailey Lumber, the court addressed two sets of partial assignments of antitrust claims. 

The first involved claims with “no prior history,” while the second involved claims assigned from 

a party who had opted out of a prior class action bringing the same claims. 2009 WL 2872307, at 

*7. The court held that the plaintiff could not bring the second set of claims because it “was not 

entitled to opt out of the class action and bring [the claims] in this suit without the Defendants’ 

consent.” Id. Notably, it held that the plaintiff could bring the first set of claims. Id. 

At this stage of the litigation, there is no basis to dismiss or stay the case due to the 

concerns raised in Bailey Lumber or Fine Paper. Unlike here, in those cases the partial assignee 

attempted to opt out of a class that had already been certified, and the assignors were members of 

that class. See Fine Paper, 632 F.2d at 1089. Moreover, all relevant cases, claims, and parties are 

joined in this multidistrict litigation lawsuit, removing many of the problems discussed in those

cases. I see no reason why this case cannot be managed in a way to avoid the problems in 

administration and multiplicity of suits cited by the defendants. 

Finally, Bailey Lumber and Fine Paper stand for the principle that antitrust plaintiffs with 

partially assigned claims may not opt of a class due to concerns that they will circumvent joinder 

rules or interfere with the rights of the defendant to be free of excessive and repeated suits 

growing out of same basic facts. They do not stand for the proposition that partially assigned 

claims must be dismissed or stayed in actions such as this, where there is no “prior history” of 

litigation of these claims in a different court. 

The current status of this litigation makes a decision to dismiss or stay those claims

premature. Although the DPPs have filed a class action complaint, Dkt. No. 70, that group has not 

yet moved for class certification. And interestingly, none of the wholesalers from whom the 

Walgreen Plaintiffs have been assigned claims are named in the DPP complaint. See id. Although 

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defendants raise the issue of partial assignments, it remains unclear whether the wholesalers that 

assigned their claims to the Walgreen Plaintiffs have reserved for themselves any portion of their 

right to sue defendants. Thus, defendants’ argument is not persuasive. The motion to dismiss or 

stay the partial assignment claims is DENIED.

CONCLUSION

For the foregoing reasons, I STRIKE the Walgreen Plaintiffs’ claims insofar as they are 

brought as indirect purchasers, with leave to amend, and DENY the remainder of defendants’ 

motion to dismiss. 

IT IS SO ORDERED.

Dated: July 17, 2015

______________________________________

WILLIAM H. ORRICK

United States District Judge

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