Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-01-07163/USCOURTS-caDC-01-07163-0/pdf.json

Parties Involved:
Lorazepam & Clorazepate Antitrust Litigation

Document Text:

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued March 12, 2002 Decided May 14, 2002

No. 01-7163

In Re: Lorazepam & Clorazepate Antitrust Litigation

Appeal from the United States District Court

for the District of Columbia

(No. 99ms00276)

John G. Roberts, Jr. argued the cause for petitioners.

With him on the briefs were Catherine E. Stetson, Michael R.

Grynberg, Christopher K. Tahbaz, Irving Scher and David A.

Hickerson. James B. Weidner entered an appearance.

Michael D. Hausfeld argued the cause for respondents.

With him on the brief were Arthur M. Kaplan and Thomas

Campbell.

Before: Ginsburg, Chief Judge, Rogers and Garland,

Circuit Judges.

Opinion for the Court filed by Circuit Judge Rogers.

Rogers, Circuit Judge: This appeal presents for the first

time in this circuit the threshold question of when interlocuUSCA Case #01-7163 Document #677398 Filed: 05/14/2002 Page 1 of 18
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tory review of a class certification decision is appropriate

under Federal Rule of Civil Procedure 23(f). We take the

opportunity to offer general guidance on the scope of our

discretion under Rule 23(f) in considering the petition for

Rule 23(f) review by Mylan Laboratories, Inc., Mylan Pharmaceuticals, Inc., UDL Laboratories, Inc., Profarmaco S.r.l.,

Cambrex Corporation, and GYMA Laboratories of America,

Inc. (collectively "Mylan"), of the district court's certification

of a class of direct purchasers of the generic anti-anxiety

drugs lorazepam and clorazepate from Mylan or UDL. Mylan contends that the district court erred in ruling that

despite the Federal Trade Commission's ("FTC") procurement of a settlement against Mylan on behalf of a class of

indirect purchasers, a class of direct purchasers had antitrust

standing under Illinois Brick Co. v. Illinois, 431 U.S. 720

(1977), and, in the alternative that the certified class consists

of both direct and indirect purchasers in violation of Illinois

Brick. We conclude that interlocutory appeal pursuant to

Rule 23(f) typically is appropriate in three circumstances: (1)

when there is a death-knell situation for either the plaintiff or

defendant that is independent of the merits of the underlying

claims, coupled with a class certification decision by the

district court that is questionable, taking into account the

district court's discretion over class certification; (2) when the

certification decision presents an unsettled and fundamental

issue of law relating to class actions, important both to the

specific litigation and generally, that is likely to evade end-ofthe-case review; and (3) when the district court's class certification decision is manifestly erroneous. Applying these standards we deny Mylan's petition for interlocutory review.

I.

The class action now pending in the district court was

preceded by two lawsuits brought by the FTC and several

States' Attorneys General against Mylan that were ultimately

consolidated and ended in a settlement. On December 21,

1998, the FTC filed suit, pursuant to ss 5 and 13(b) of the

Federal Trade Commission Act ("FTC Act"), 15 U.S.C. ss 45,

53(b), against Mylan, Cambrex, Profarmaco, and GYMA LabUSCA Case #01-7163 Document #677398 Filed: 05/14/2002 Page 2 of 18
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oratories, seeking injunctive and equitable relief, including

disgorgement of $120 million plus interest. FTC v. Mylan

Labs., Inc., 62 F. Supp. 2d 25, 32, 34 (D.D.C. 1999). The

amended complaint alleged that the defendants had engaged

in unfair methods of competition in violation of s 5(a) of the

FTC Act, 15 U.S.C. s 45(a), by Mylan's entering into exclusive licensing agreements with the other defendants, allowing

Mylan to control the supply of the active pharmaceutical

ingredients ("API") for generic lorazepam and clorazepate

tablets so that Mylan could increase the price of these generic

drugs. On December 22, 1998, the Attorneys General of ten

States, later joined by an additional 22 States and the District

of Columbia, brought suit against the same defendants and

SST Corporation, seeking equitable relief and treble damages

for violations of ss 1 and 2 of the Sherman Act, 15 U.S.C.

ss 1, 2, and various State antitrust laws. Mylan, 62 F. Supp.

2d at 32; see also In re Lorazepam & Clorazepate Antitrust

Litig., 205 F.R.D. 369, 373 (D.D.C. 2002). As to the FTC, the

district court denied the defendants' 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. Mylan, 62 F. Supp. 2d at 35-37. As to the States, the

district court partially granted the defendants' motion to

dismiss, inter alia, narrowing the States' federal claims to

claims under s 4 of the Clayton Act for direct purchases and

limiting restitution and disgorgement on behalf of indirect

purchasers on a State-by-State basis. Id. at 37-53; see also

FTC v. Mylan Labs., Inc., 99 F. Supp. 2d 1, 4-10 (D.D.C.

1999). Subsequently, the parties entered into a settlement

agreement, which the district court approved on February 1,

2002. Mylan, 205 F.R.D. at 402. The settlement agreement

provided, in part, that Mylan 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

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exclude themselves from the settlement, would release their

claims against the defendants.

On August 16, 1999, the Judicial Panel on Multidistrict

Litigation transferred to the United States District Court for

the District of Columbia a Northern District of Illinois lawsuit

pending against Mylan. This lawsuit was consolidated, on

March 9, 2000, with a lawsuit brought by St. Charles Rehabilitation Center against Mylan. The named plaintiffs in the

consolidated action were Advocate Health Care, St. Charles

Hospital and Rehabilitation Center, Dik Drug Company, and

Harvard Pilgrim Health Care, and they sought class certification as direct purchasers of lorazepam and clorazepate. The

amended complaint alleged that Mylan had engaged in price

fixing and monopolization in violation of ss 1 and 2 of the

Sherman Act, and the plaintiffs sought treble damages pursuant to s 4 of the Clayton Act. Mylan moved to dismiss the

complaint pursuant to Federal Rules of Civil Procedure

12(b)(1) and 12(b)(6), on the ground that the plaintiffs' proposed class of direct purchasers lacked antitrust standing to

assert their claims. In Illinois Brick, the Supreme Court

held that, with narrow exceptions, only direct purchasers may

recover damages for illegal overcharges under s 4 of the

Clayton Act. Illinois Brick, 431 U.S. at 746-47. Essentially,

Mylan argued that the usual direct purchaser rule of Illinois

Brick should not apply because the FTC had won a monetary

recovery for the benefit of a class of indirect consumer

purchasers pursuant to s 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. In the alternative, Mylan opposed the class

certification arguing, inter alia, that the class consisted of

direct and indirect purchasers in violation of Illinois Brick's

direct purchaser rule. On July 2, 2001, the district court

denied the motion to dismiss, and, in accord with the plaintiffs' request, certified the following class:

All persons and entities in the United Sates who purchased generic lorazepam tablets and/or generic clorazepate tablets directly from Defendants Mylan and UDL

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during the period January 12, 1998 through the present,

excluding Defendants, their respective parents, subsidiaries and affiliates, any co-conspirators of Defendants,

and all governmental entities.

In re Lorazepam & Clorazepate Antitrust Litig., 202 F.R.D.

12, 21 (D.D.C. 2001). The district court appointed Advocate

Health Care, St. Charles Hospital, Dik Drug, and Harvard

Pilgrim as class representatives.

Mylan now petitions for interlocutory review of the district

court's denial of its Rule 12(b)(6) motion to dismiss and the

district court's certification of a class of direct purchasers.

Asserting that "[t]his is not the typical case," Petitioners' Br.

at 16, Mylan contends that, in light of the flexible standards

for review developed in the circuits, appellate review of its

petition under Rule 23(f) is warranted: not only does Mylan's

petition raise the novel issue of law of "how properly to

calibrate antitrust standing where two antitrust cases collide,"

id. at 20, the outcome of which is potentially dispositive of the

case, but also the district court's decision is particularly

susceptible to challenge and there may be no further opportunity to review its decision. Reviving its Rule 12(b)(6) contention, Mylan challenges the district court's certification decision by contending first that under Illinois Brick, the FTC's

s 13(b) enforcement action on behalf of the ultimate consumers of lorazepam and clorazepate precludes suit by a direct

purchaser class. Allowing a direct purchaser class to sue the

same defendants for antitrust damages following the FTC's

suit and settlement would, in Mylan's view, "topple every

rationale" supporting Illinois Brick's rule confining potential

antitrust plaintiffs to one level of purchasers. Id. at 17. In

"these uncommon circumstances," Mylan concludes, "the direct purchaser class should be denied recovery." Id. Second, as to the certified class, Mylan maintains that, even if

direct purchasers may sue for antitrust damages in addition

to the consumer class, the district court erred in ruling that

the class had antitrust standing under the direct purchaser

rule and its narrow exceptions. According to Mylan, many

members of the class, including three of the four class

representatives, bought lorazepam and clorazepate, not from

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Mylan, but from pharmaceutical wholesalers, who also purport to be members of the direct purchaser class. Mylan

asserts that this purchasing chain makes these class members

who purchased from intermediaries "quintessential indirect

purchasers," who, under Illinois Brick, cannot sue for antitrust damages. Hence, Mylan maintains, the district court

erred in not determining, prior to certifying the class, whether the class and its representatives had antitrust standing

under Illinois Brick.

We first set forth the standards that we will ordinarily

apply in exercising our discretion under Rule 23(f), and then

we address the contentions in Mylan's petition.

II.

Rule 23(f), added by amendment in 1998, provides that "[a]

court of appeals may in its discretion permit an appeal from

an order of a district court granting or denying class action

certification under this rule if application is made to it within

ten days after entry of the order." Fed. R. Civ. P. 23(f).

Although other circuit courts of appeals have addressed the

scope of Rule 23(f) review, this is a question of first impression for this court. The advisory committee's note to Rule

23(f) states that "[a]ppeal from an order granting or denying

class certification is permitted in the sole discretion of the

court of appeals" and is "akin to the discretion exercised by

the Supreme Court in acting on a petition for certiorari."

Fed. R. Civ. P. 23(f) advisory committee's note. The advisory

committee's note also indicates that not all class certification

issues warrant review, noting that "many suits with classaction allegations present familiar and almost routine issues

that are no more worthy of immediate appeal than many

other interlocutory rulings" and accordingly directs the

"courts of appeals [to] develop standards for granting review

that reflect the changing areas of uncertainty in class litigation." Id. The advisory committee's note offers this further

guidance:

Permission to appeal may be granted or denied on the

basis of any consideration that the court of appeals finds

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persuasive. Permission is most likely to be granted

when the certification decision turns on a novel or unsettled question of law, or when, as a practical matter, the

decision on certification is likely dispositive of the litigation.

Id. Thus, the advisory committee's note identifies two instances in which Rule 23(f) review would likely be appropriate: (1) when a class certification decision as a practical

matter terminates the litigation; and (2) when a class certification decision raises a novel issue of law. Relying on this

guidance, other circuits have examined the appropriate scope

of Rule 23(f).

First among the circuits to address the scope of appellate

review pursuant to Rule 23(f), was the Seventh Circuit in

Blair v. Equifax Check Services, Inc., 181 F.3d 832 (7th Cir.

1999). In Blair, the Seventh Circuit rejected the adoption of

a bright-line rule as imprudent and, looking to the reasons for

the addition of Rule 23(f), identified three categories of cases

in which appellate review would be appropriate. Id. at 834.

First, for some cases, denial of class status would sound the

"death knell" of the litigation because the "representative

plaintiff's claim is too small to justify the expense of litigation." Id. Second, the grant of class status can put substantial pressure on the defendant to settle independent of the

merits of the plaintiffs' claims. Id. Third, an appeal may

facilitate the development of the law of class actions. Id. at

835. Regarding the first two categories, the Seventh Circuit

added that the petitioner must demonstrate that the district

court's certification decision was "questionable" and "must do

this taking into account the discretion the district judge

possesses in implementing Rule 23, and the correspondingly

deferential standard of appellate review." Id. It explained,

if the district court's decision is "impervious to revision,"

there is no point to an interlocutory appeal no matter how

"dramatic the effect of the grant or denial of class status [is]

in undercutting the plaintiff's claim or inducing the defendant

to capitulate." Id. Regarding the third category of cases,

which it noted is likely to include fundamental issues about

class actions that have been poorly developed because so

many class actions settle or are resolved in a manner that

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overtakes procedural matters, id., the Seventh Circuit observed that it is less important to show that the district

court's certification decision is questionable, explaining that

law can be advanced through affirmances as well as reversals;

rather, the more important the question under the second

factor is and the "greater the likelihood that it will escape

effective disposition at the end of the case," the more appropriate the appeal. Id.

The First Circuit in Waste Management Holdings, Inc. v.

Mowbray, 208 F.3d 288 (1st Cir. 2000), agreed that Blair

"captured the essential principles on which Rule 23(f) rests."

Id. at 293. However, because of the ease with which issues of

law can be characterized as "fundamental," id. at 294, and

because so many class certification decisions turn on "familiar

and almost routine issues," id. (quoting Fed. R. Civ. P. 23(f)

advisory committee's note), the First Circuit narrowed the

third category to include only "those instances in which an

appeal will permit the resolution of an unsettled legal issue

that is important to the particular litigation as well as important in itself and likely to escape effective review if left

hanging until the end of the case." Id. At the same time,

however, the First Circuit duly noted the broad discretion

ceded to the appellate courts by the rule, and cautioned that:

While we hope that these general comments will be

helpful to parties deciding whether to pursue applications

under Rule 23(f), we do not foreclose the possibility that

special circumstances may lead us either to deny leave to

appeal in cases that seem superficially to fit into one of

these three pigeonholes, or conversely, to grant leave to

appeal in cases that do not match any of the three

described categories.

Id. Stating as well that it "intend[s] to exercise [its] discretion judiciously," however, the First Circuit observed that

"[b]y their nature, interlocutory appeals are disruptive, timeconsuming, and expensive," and that notwithstanding the

access to the appellate courts provided by Rule 23(f), the

court "should err, if at all, on the side of allowing the district

court an opportunity to fine-tune its class certification order,

rather than opening the door too widely to interlocutory

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appellate review." Id. (citing Fed. R. Civ. P. 23(c)(1)). The

Second Circuit, in In re Sumitomo Copper Litigation, 262

F.3d 134 (2d Cir. 2001), appears to have adopted the approach

set forth in Mowbray. Id. at 139-40. It stated that Rule

23(f) petitioners ordinarily must show either that the certification order (1) "will effectively terminate the litigation and

there has been a substantial showing that the district court's

decision is questionable," or (2) "implicates a legal question

about which there is a compelling need for immediate resolution." Id. at 139.

Other circuits have elaborated on the Mowbray approach.

The Eleventh Circuit, in Prado-Steiman v. Bush, 221 F.3d

1266 (11th Cir. 2000), adopted five guideposts for Rule 23(f)

review: (1) whether the certification ruling is likely to sound

the death knell of the litigation; (2) whether the district

court's certification decision contains a substantial weakness,

such that it likely was an abuse of discretion; (3) whether the

appeal presents an unsettled legal question that is of specific

and general importance, e.g., issues likely to evade review,

issues that are involved in related actions, and interests that

affect the public interest; (4) the nature and status of the

litigation before the district court, e.g., the status of discovery, the pendency of relevant motions, and how long the

matter has been pending; and (5) the likelihood that future

events will make immediate appellate review more appropriate, e.g., a change in financial status of a party or ongoing

settlement negotiations. Id. at 1274-76. The second factor

serves as a sliding scale: the more questionable the district

court's decision, the less the remaining four factors need

weigh in. Id. at 1274-75 & n.10. The Eleventh Circuit

recognized the possibility that when the district court's certification decision is clearly wrong, Rule 23(f) review "may be

warranted even if none of the other factors supports granting

the Rule 23(f) petition." Id. at 1275. The Fourth Circuit, in

Lienhart v. Dryvit Systems, Inc., 255 F.3d 138 (4th Cir.

2001), adopted the Eleventh Circuit's approach with the sliding scale, but firmly stated that when a class certification

decision is manifestly erroneous, review is warranted regardless of the remaining factors. Id. at 145-46. The court

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explained that stringent standards for review are inappropriate as "Rule 23(f)'s purpose [was] to eliminate the unduly

restrictive review practices which obtained when mandamus

was the only available means to review a class certification

prior to final judgment in the absence of a district court's

decision to voluntarily certify the issue for immediate review...." Id. at 145. Hence, the Fourth Circuit observed

that "[i]n addition to addressing 'death knell' situations and

promoting the resolution of legal questions of general importance, a careful and sparing use of Rule 23(f) may promote

judicial economy by enabling the correction of certain manifestly flawed class certifications prior to trial and final judgment." Id. at 145. Following the Eleventh and Fourth

Circuits' decisions, the Third Circuit, in Newton v. Merrill

Lynch, Pierce, Fenner & Smith, 259 F.3d 154 (3d Cir. 2001),

identified four categories of cases in which Rule 23(f) would

be appropriate: the three set forth by the Seventh Circuit in

Blair and the advisory committee's note plus the Eleventh

and Fourth Circuits' inclusion of a category of likely erroneous class certification decisions. Id. at 165.

The differences among the circuits, which are subtle, are of

three types. First, two circuits permit appeal if the district

court's decision is erroneous, regardless whether the other

factors governing appeal under Rule 23(f) are present. Compare Newton, 259 F.3d at 165; and Lienhart, 255 F.3d at

145-46; with Mowbray, 208 F.3d at 293-94; and Blair, 181

F.3d at 834-35. Second, two circuits allow appeal when a

petition raises an unsettled and fundamental question of law,

regardless whether the district court likely erred. See Mowbray, 208 F.3d at 293; Blair, 181 F.3d at 835. Third, those

same circuits caution that interlocutory appeal of an unsettled

question of law is appropriate only when that question may

evade effective appellate review at the end of the trial court

proceedings. See Mowbray, 208 F.3d at 293-94; Blair, 181

F.3d at 835.

In our view, interlocutory appellate review under Rule 23(f)

is properly directed by the guidance set forth in the advisory

committee's note. The note reflects, on balance, a reluctance

to depart from the traditional procedure in which claimed

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errors by the district court are reviewed on appeal only upon

the conclusion of the proceedings in the district court. Although the rule ceded broad discretion to the appellate

courts, it is understood, if not presumed, that appellate courts

will act with cognizance of both the concerns underlying

interlocutory appeals generally and the specific purposes for

the allowance of interlocutory appeals of class certification

decisions in Rule 23(f). Delay caused by interlocutory appeals under Rule 23(f) may be less of a concern because filing

a petition does not automatically stay the litigation, see Blair,

181 F.3d at 835; in the instant case, the docket indicates that

the case proceeded until the district court granted Mylan's

motion for a stay on April 15, 2002. Still, interlocutory

appeals are generally disfavored as "disruptive, timeconsuming, and expensive" for both the parties and the

courts, Mowbray, 208 F.3d at 294, and the more so in a

complex class action where the district court may reconsider

and modify the class as the case progresses. PradoSteiman, 221 F.3d at 1276-77; Fed. R. Civ. P. 23(c)(1). As

the Eleventh Circuit aptly commented, the exception provided

by Rule 23(f) should be exercised in a manner that avoids

both micromanagement of complex class actions as they

evolve in the district court and inhibition of the district

court's willingness to revise the class certification for fear of

triggering another round of appellate review. See PradoSteiman, 221 F.3d at 1273-74. Thus, petitions for Rule 23(f)

review are likely to be granted sparingly in cases that fall

within neither the guidelines in the advisory committee's note

nor the standards we adopt today. Nonetheless, the circuit

courts addressing Rule 23(f) are in agreement that restrictions on review should not preclude review in special circumstances that neither the advisory committee's note nor the

courts foresaw. See, e.g., Mowbray, 208 F.3d at 294; Blair,

181 F.3d at 834.

With these considerations in mind, we offer the following

guidance. Rule 23(f) review will ordinarily be appropriate in

three circumstances: (1) when there is a death-knell situation

for either the plaintiff or defendant that is independent of the

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tion decision by the district court that is questionable, taking

into account the district court's discretion over class certification; (2) when the certification decision presents an unsettled

and fundamental issue of law relating to class actions, important both to the specific litigation and generally, that is likely

to evade end-of-the-case review; and (3) when the district

court's class certification decision is manifestly erroneous.

Whether the district court's decision is questionable need not

affect the appropriateness of Rule 23(f) review in the second

category, as issues of law can be advanced through affirmances as well as reversals. Blair, 181 F.3d at 835. But we

conclude, unlike Mowbray and Blair, that error in certifying

a class should not entirely be ignored outside the first category. Where a district court class certification decision is

manifestly erroneous, for example, Rule 23(f) review would be

warranted even in the absence of a death-knell situation if for

no other reason than to avoid a lengthy and costly trial that is

for naught once the final judgment is appealed. Although

these standards are meant as guidance on when Rule 23(f)

review ordinarily will be granted, we caution that the standards represent guidance, not a rigid test.

As is true for all the circuits, we are of the view that Rule

23(f) review should be granted rarely where a case does not

fall within one of these three categories. The sheer number

of class actions, the district court's authority to modify its

class certification decision, see Fed. R. Civ. P. 23(c)(1), and

the ease with which litigants can characterize legal issues as

novel, all militate in favor of narrowing the scope of Rule 23(f)

review. See Prado-Steiman, 221 F.3d at 1273-74; see also

Mowbray, 208 F.3d at 294. At the same time, there necessarily should be some hesitancy in creating a rigid test for the

exercise of an appellate court's discretion to grant a Rule

23(f) petition for review because circumstances may arise that

cannot now be anticipated in which review would be appropriate, and conversely, in which review would be inappropriate

notwithstanding the fact that a petition falls within the categories of cases in which review would ordinarily be appropriate. As the advisory committee's note indicates, the circuit

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tainty in class litigation." Fed. R. Civ. P. 23(f) advisory

committee's note. Each circuit, thus, has reserved some

leeway in its standards. See, e.g., Newton, 259 F.3d at 165;

Prado-Steinman, 221 F.3d at 1276; Mowbray, 208 F.3d at

294; Blair, 181 F.3d at 834. So do we. That said, we

nevertheless conclude that, absent special circumstances, this

court's consideration of petitions for interlocutory review

under Rule 23(f) should ordinarily fall within the three circumstances that we have identified.

III.

Mylan contends in its Rule 23(f) petition for review that,

although certification of a class of direct purchasers is consistent with the direct purchaser rule of Illinois Brick, it

conflicts with what Mylan regards as the underlying policy of

Illinois Brick--that only one purchaser class has antitrust

standing to sue under s 4 of the Clayton Act--when, as here,

the FTC has brought suit and obtained a settlement on behalf

of a class of consumer indirect purchasers. Mylan also

contends that the certified class consists of both direct and

indirect purchasers in contravention of Illinois Brick and

Rule 23's class certification requirements. Seeking to bring

itself within the flexible standards for Rule 23(f) adopted by

the circuit courts, Mylan maintains that its petition for review

should be granted because "important issues of antitrust

standing [are] raised by the District Court's class certification

ruling" that are novel, significant, and potentially dispositive,

and because the class as certified is particularly suspect and

may avoid later review given the potential liability Mylan

faces. We conclude that Rule 23(f) review is inappropriate

because Mylan's arguments in support of its Rule 12(b)(6)

motion to dismiss are unrelated to class certification, and

because Mylan's only challenge to the class certification decision falls outside the categories for Rule 23(f) review set forth

in Part II.

A.

Rule 23(f) interlocutory review is limited to issues that

relate to class certification. See Fed. R. Civ. P. 23(f); BertulUSCA Case #01-7163 Document #677398 Filed: 05/14/2002 Page 13 of 18
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li v. Indep. Ass'n of Cont'l Pilots, 242 F.3d 290, 294 (5th Cir.

2001); Carter v. W. Publ'g Co., 225 F.3d 1258, 1262 (11th Cir.

2000). Thus, under Rule 23(f), this court can review the

merits of an appeal only insofar as they bear upon the

propriety of class certification, that is, whether the proposed

class satisfies the prerequisites of Rule 23. The threshold

requirements of class certification under Rule 23(a) are: (1)

numerosity (a large enough class such that "joinder of all

members is impractical"); (2) commonality ("questions of law

or fact common to the class"); (3) typicality ("claims or

defenses of the representative parties are typical of the

claims or defenses of the class"); and (4) adequacy of representation ("representative parties will fairly and adequately

protect the interests of the class"). Fed. R. Civ. P. 23(a);

Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 613 (1997).

The rule also limits class actions to cases where: (1) separate

actions would risk "establish[ing] incompatible standards of

conduct for the party opposing the class" or individual adjudications "which would as a practical matter be dispositive of

the interests" of nonparty members or "substantially impair

or impede their ability to protect their interests"; (2) injunctive or declaratory relief is sought and "the party opposing

the class has acted or refused to act on grounds generally

applicable to the class"; or (3) "the court finds that the

questions of law or fact common to the members of the class

predominate over any questions affecting only individual

members, and that a class action is superior to other available

methods for the fair and efficient adjudication of the controversy." Fed. R. Civ. P. 23(b)(1), (2), & (3); Amchem, 521

U.S. at 614-16.

Although Mylan is correct that whether a class of direct

purchasers has antitrust standing under the particular circumstances at issue is a novel question of law, the question is

unrelated to class certification under Rule 23. As Mylan

styled its filing in the district court, its novel question of law

is properly raised in a Rule 12(b)(6) motion to dismiss; the

denial of a motion to dismiss is generally not subject to

interlocutory review under Rule 23(f) because whether the

plaintiffs state a cause of action is only relevant to class

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certification to the extent the inquiry relates to the requirements of Rule 23. See Gen. Tel. Co. of the Southwest v.

Falcon, 457 U.S. 147, 160 (1982); Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 177-78 (1974). Mylan's effort to recast its

Rule 12(b)(6) arguments as a challenge to class certification

on the ground that a class of direct purchasers lacks antitrust

standing, is to no avail. That Mylan's argument as to antitrust standing may dispose of the class as a whole and

thereby preclude a lawsuit by direct purchasers goes well

beyond the purpose of Rule 23(f) review because it is unrelated to the Rule 23 requirements. The fact that Mylan's

challenge would be dispositive of the class action is not unlike

a variety of issues of law on the merits of a class action

because of the very nature of commonality, see Fed. R. Civ. P.

23(a)(2); review of such issues would expand Rule 23(f)

interlocutory review to include review of any question raised

in a motion to dismiss that may potentially dispose of a

lawsuit as to the class as a whole. This result would inappropriately mix the issue of class certification with the merits of

a case, which do not warrant interlocutory review pursuant to

Rule 23(f). What matters for purposes of Rule 23(f) is

whether the issue is related to class certification itself, and

Mylan makes no showing that its antitrust standing claim is

so related.

The cases on which Mylan relies do not advance its cause.

To the extent that appellate courts have considered constitutional standing pursuant to Rule 23(f), the inquiry has been

limited to whether the court has subject matter jurisdiction to

review the class certification issue, or whether the claims of

the representatives of the class have the requisite typicality.

Neither inquiry is applicable to the antitrust standing issue

that Mylan presents. In the first category of cases cited by

Mylan is Bertulli v. Independent Association of Continental

Pilots, 242 F.3d 290 (5th Cir. 2001), in which the Fifth Circuit

explained that, because Article III standing is one element of

the court's subject matter jurisdiction, this requirement must

be met before the court can even examine whether the class

has met the Rule 23 requirements. Id. at 294; see also

Rivera v. Wyeth-Ayerst Labs., 283 F.3d 315, 319 (5th Cir.

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2002); Isaacs v. Sprint Corp., 261 F.3d 679, 682-83 (7th Cir.

2001). Unlike constitutional standing, this court's jurisdiction

does not turn on antitrust standing. See Associated Gen.

Contractors of Cal., Inc. v. Cal. State Council of Carpenters,

459 U.S. 519, 535 n.31 (1983). The question of constitutional

standing, which is a prerequisite to Rule 23 class certification

because it goes to the court's jurisdiction, is not at issue here.

In the second category of cases cited by Mylan is PradoSteiman, in which the Eleventh Circuit considered, pursuant

to Rule 23(f), whether the named representatives had constitutional standing, explaining that the question of standing was

appropriate for review under Rule 23(f) only to the extent it

was relevant to Rule 23's typicality requirement for "[w]ithout individual standing to raise a legal claim, a named representative does not have the requisite typicality to raise the

same claim on behalf of a class." Prado-Steiman, 221 F.3d at

1279-80; see also Piazza v. EBSCO Indus., Inc., 273 F.3d

1341, 1346-55 (11th Cir. 2001); Carter, 225 F.3d at 1262-63.

The court thus only considered Article III standing to the

extent that it was relevant to Rule 23 class certification.

Unlike constitutional standing, whether the class representatives have antitrust standing because they are direct purchasers does not go to the typicality of the claims of the representatives of the class, which is composed entirely of direct

purchasers. See Fed. R. Civ. P. 23(a)(3); Prado-Steiman,

221 F.3d at 1279 & n.14. Hence, the issue of antitrust

standing is beyond the scope of the court's Rule 23(f) review.

The only case to which Mylan points in which a court considered antitrust standing to be a necessary predicate to certifying the class is In re NASDAQ Market-Makers Antitrust

Litigation, 169 F.R.D. 493 (S.D.N.Y. 1996), but there the

court appears to have viewed antitrust standing as being

relevant to its subject matter jurisdiction; it was only on this

basis that the court considered antitrust standing to be a

prerequisite to class certification. See id. at 504-05.

Although the question of whether a class of direct purchasers has antitrust standing when, in Mylan's terms, "two

antitrust cases collide" relates neither to this court's subject

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matter jurisdiction nor to any aspect of Rule 23 class certification, there may be occasions when threshold issues (e.g.,

statute of limitations), jurisdictional issues (e.g., Article III

constitutional standing), or issues on the merits (e.g., affirmative defenses or the elements of a cause of action, see, e.g.,

West v. Prudential Securities, Inc., 282 F.3d 935, 937 (7th

Cir. 2002); Newton, 259 F.3d at 172; Mowbray, 208 F.3d at

295-99), would be appropriate for interlocutory review pursuant to Rule 23(f). In such circumstances, however, those

issues would relate in some manner to the certification of the

class or the court's jurisdiction. We have no occasion to

describe the precise contours of the relationship, for here

there is no such relation.

B.

Mylan's challenge to the composition of the certified class

as assertedly, and improperly, consisting of both direct and

indirect purchasers also is inappropriate for Rule 23(f) review.

First, Mylan has not shown that certification of the class

would sound the death knell of the litigation. Other than

mere assertions, Mylan makes no showing that it will be

unduly pressured to settle because of the class's certification.

Mylan failed to submit any evidence that the damages

claimed would force a company of its size to settle without

relation to the merits of the class's claims. See PradoSteiman, 221 F.3d at 1274; Mowbray, 208 F.3d at 294-95.

Second, Mylan's challenge presents no unsettled question

of fundamental importance to the law of class actions. Mylan

argues that the district court erred in applying the standards

of Rule 23 to the facts of this case, but Mylan does not aver

that the district court lacked established law to guide it in

that task. Insofar as Mylan's objection is based upon the

district court's conclusion that the class representatives are

direct purchasers, the law guiding that decision also is well

settled. See Illinois Brick, 431 U.S. at 735-36.

Third, Mylan has not made a showing that, in light of the

district court's discretion, see Hartman v. Duffey, 19 F.3d

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1459, 1471 (D.C. Cir. 1994), the class certification was manifestly erroneous. Mylan contends the certified class does not

meet the requirements of Rule 23(a)(2-4), namely, predominance, typicality, and adequacy of representation, because

members of the class occupy different levels of a distribution

relationship with Mylan. Upon the record before us, however, we can not conclude that there is manifest error in the

district court's determination that the class representatives

have standing under Illinois Brick or in the findings of fact

underlying that conclusion. As the district court comes to

know more about the relationships among Mylan, the pharmaceutical wholesalers, and the class plaintiffs, it may further

refine the class, see Fed. R. Civ. P. 23(c)(1)--a possibility that

supports our conclusion that immediate appeal is not warranted here.

Accordingly, we hold, upon applying the standards that we

have outlined in defining when Rule 23(f) review is ordinarily

appropriate, that Mylan's challenges to the class certification

do not warrant interlocutory review pursuant to Rule 23(f).

Although Mylan would nonetheless have the court reach the

merits of the district court's certification decision as well as

the merits of its Rule 12(b)(6) motion to dismiss because the

issues have been carefully briefed, review under Rule 23(f) is

not warranted. Therefore, we deny the petition for review.

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