Opinion ID: 782340
Heading Depth: 4
Heading Rank: 3

Heading: Application of Brunswick

Text: 44 The plaintiffs' allegations fall easily within the two critical Brunswick categories. It is clear, and not disputed on appeal, that the plaintiffs have alleged the type of injury the antitrust laws were meant to prevent. The plaintiffs are consumers of the patented drug Cardizem CD, who allege that they were deprived of a less expensive generic product, forcing them to purchase the higher-priced brand name product, because of a per se illegal horizontal market restraint. Preventing that kind of injury was undoubtedly a raison d'etre of the Sherman Act when it was enacted in 1890. See Associated Gen. Contractors v. California State Council, 459 U.S. 519, 538, 103 S.Ct. 897, 74 L.Ed.2d 723 (1983). 45 There remains the issue of whether the alleged injury flows from that which makes defendants' acts unlawful, i.e., its anticompetitive effects. The facts of Brunswick shed light on the meaning and purpose of this requirement. In Brunswick, a bowling alley owner claimed that another competitor's takeover of two failing bowling alleys was an illegal merger. The plaintiff alleged that it was injured by the merger because if the other bowling alleys had simply gone out of business, it would have increased its sales in the bowling alley market. What would have made the acquisition unlawful for antitrust purposes, however, was the risk that increased concentration in the bowling alley market would reduce future competition and cause prices to rise. The plaintiff's injury, on the other hand, flowed from the more immediate competition-enhancing effects of the merger; not its future potential to reduce competition. Accordingly, there was no antitrust injury because the plaintiff's injury did not flow from the anticompetitive effects of the alleged antitrust violation. 46 In the present case, the facts are much more straightforward. As explained above, the alleged antitrust violation, HMR's agreement to pay Andrx $40 million per year not to bring its generic product to market and compete with Cardizem CD, is a naked, horizontal restraint of trade that is per se illegal because it is presumed to have the effect of reducing competition in the market for Cardizem CD and its generic equivalents to the detriment of consumers. Unlike in Brunswick, here there is no question that the alleged injury — paying higher prices for a product due to a lack of competition in the market — is the type of injury that can, and the plaintiffs have alleged did, flow from the anticompetitive effects of the Agreement (a horizontal market allocation agreement). Under these circumstances, dismissal would be appropriate only if the plaintiffs' allegations, taken as true and construed in their favor, somehow precluded the possibility that their injury flowed from the anticompetitive effects of the Agreement and payment. No such conclusion can be reached in this case. To the contrary, the complaint clearly alleges that but for the Agreement, specifically the payment of $40 million per year, the plaintiffs would not have suffered their injury; there is nothing in the complaint that belies this allegation or justifies this Court not accepting it as true. The defendants' argument to the contrary, that Andrx would not have entered the market even if there had been no Agreement and payment because of its fear of damages in the patent infringement litigation, creates a disputed issue of fact, not appropriately resolved on a motion to dismiss. Indeed, a trier of fact may well find that the $89 million payment renders incredible the defendants' claim that Andrx would have refrained from marketing simply because of its fear of infringement damages.