Opinion ID: 6928650
Heading Depth: 2
Heading Rank: 2

Heading: Mail and wire fraud claims as predicate acts for the RICO counts

Text: In its First and Third Amended Complaints, Mylan has alleged as predicate acts for the RICO counts mail and wire fraud claims. On appeal Mylan raises again the question of the sufficiency of those allegations for the purposes of Rule 12(b)(6). In its First Amended Complaint, Mylan set forth at least two theories of mail and wire fraud. First, Mylan primarily contended that the predicate acts of mail and wire fraud were committed when a defendant mailed to the FDA allegedly false ANDAs, and the FDA, relying on the false submissions, then approved the applications. Thus, it was alleged, not only had the FDA been defrauded out of its ANDA approvals, but Mylan, too, had been harmed, in the sense that it had been defrauded out of its rightful ANDA approval and its proper share of the generic drug market. Judge Ramsey dismissed that theory of mail and wire fraud on the grounds that it was legally insufficient. Specifically, he first concluded that ANDAs in the hands of the government and awaiting approval were not “property” within the meaning of the mail fraud statute: “[T]he FDA cannot have been defrauded of its ANDA approvals within the meaning of the federal mail and wire fraud statutes. Accordingly, to the extent that Mylan’s allegations of mail and wire fraud rely on this theory they must be dismissed.” Mylan, 770 F.Supp. at 1073. Second, Judge Ramsey also concluded that the person allegedly deceived by the misrepresentations must be the same party who was injured by the misrepresentations in order to allege sufficiently the predicate acts of mail and wire fraud. Id. (stating that “to the extent that Mylan’s claim of mail and wire fraud rests on the grounds that it was injured by the defendant’s false submissions to the FDA, the claim must fail”). However, in the First Amended Complaint Mylan also alleged as further support for the predicate acts of mail and wire fraud that, in conjunction with improperly approving the corporate defendants’ ANDAs, the FDA defendants also mailed deficiency letters to My-lan requesting unwarranted and unjustifiable data in order to delay approval of Mylan’s ANDAs and also mailed to the corporate defendants confidential information submitted by Mylan in order further to facilitate the approval of their ANDAs. See First Am. Compl. ¶ 103(D) and (E). Judge Ramsey, however, also dismissed those allegations. In short, he found the allegations of fraud to be overbroad and conclusory and struck the applicable portions of the complaint pursuant to Federal Rule of Civil Procedure 9(b), which requires that circumstances constituting fraud shall be stated with particularity. Given the facts as alleged in the instant ease, we affirm a ruling that precludes Mylan from relying on, as its sole basis for the predicate acts in its RICO counts, the theory that the FDA was defrauded out of its ANDA approvals within the meaning of the mail and wire fraud statutes. However, My-lan, in its Third Amended Complaint has altered its allegations of mail and wire fraud. Specifically, the Third Amended Complaint contains new allegations of the fraudulent use of the mails against Mylan by defendants AHP, Quantum, Vitarine, and their employees. The changes were made, Mylan has contended, to comply with all of Judge Ramsey’s rulings with respect to the mail and wire fraud claims and to clarify that it was both deceived and injured by the defendants acts. Thus, Mylan asserts, the Third Amended Complaint no longer seeks to rely solely on the fraudulent submission of AN-DAs to the FDA and states with more particularity the remaining allegations of mail and wire fraud. Because Judge Smalkin dismissed the RICO counts for their continued use of the global conspiracy language, he did not consider the sufficiency of the “new” predicate acts alleged in support of the RICO claims. In light of our decision in Part II to sustain the RICO counts, we decline to address the mail and wire fraud allegations and remit the issue to the district court and also grant to the parties an opportunity to consider further and, perhaps, to flesh out the new allegations on remand.