Court Opinion

ID: 4530360
Source: CourtListenerOpinion
Date Created: 2020-04-30 17:00:38.500719+00
Date Added: 2024-06-11T09:26:58.327919
License: Public Domain

NOT PRECEDENTIAL

                       UNITED STATES COURT OF APPEALS
                            FOR THE THIRD CIRCUIT

                                       No. 18-2955
                                   _

             JOSEPH SPIZZIRRI; ABDUL RAHIMAN; KYLE KOBOLD,
                           individually and on behalf of
                        all other persons similarly situated,
                                                            Appellants
                                         v.

                     ZYLA LIFE SCIENCES; ROBERT S. RADIE;
                     STANLEY J. MUSIAL; JEFFREY M. DAYNO
                                 ____________

                       Appeal from the United States District Court
                              for the Eastern District of Pennsylvania
                            (District Court No. 2:17-cv-00390)
                      District Judge: Honorable Michael M. Baylson
                                      ______________

                   Submitted Pursuant to Third Circuit L.A.R. 34.1(a)
                                 September 23, 2019
                                  ______________

                  Before: McKEE, AMBRO and ROTH, Circuit Judges.

                              (Opinion filed: April 30, 2020)

                                        OPINION*

*
 This disposition is not an opinion of the full court and pursuant to I.O.P. 5.7 does not
constitute binding precedent.
McKEE, Circuit Judge.

       Joseph Spizzirri appeals the district court’s grant of Egalet Corporation’s1 motion

to dismiss. At issue in this Securities Exchange Act case is whether the district court

erred in taking judicial notice of FDA’s Center for Drug Evaluation and Research

memorandum and, subsequently, in granting Egalet’s motion to dismiss.

       Our review of a district court’s dismissal under Rule 12(b)(6) is de novo. We must

accept as true all material allegations in the complaint, but “need not accept as true

‘unsupported conclusions and unwarranted inferences.’”2 “To decide a motion to dismiss,

courts generally consider only the allegations contained in the complaint, exhibits

attached to the complaint and matters of public record.”3 However, a court may also

consider matters of public record and documents integral to or explicitly relied upon in

the complaint without converting the motion to dismiss into a motion for summary

judgement.4 The district court’s decision to take judicial notice of certain facts is

reviewed for abuse of discretion.5

       It was not an abuse of discretion to take judicial notice of the CDER memo

because, as the district court explains, the CDER memo is both a matter of public record

1
  After principal briefing was complete, Egalet Corporation changed its name to Zyla Life
Sciences. We hereby grant Appellees’ unopposed motion to amend the caption to reflect
this change. But to be consistent with the district court’s opinion and the parties’
briefing, we continue to use the company’s former name in this opinion.
2
  In re NAHC, Inc. Sec. Litig., 306 F.3d 1314, 1322-23 (3d Cir. 2002) (citation omitted).
3
  Schmidt v. Skolas, 770 F.3d 241, 249 (3d Cir. 2014).
4
  Id.
5
  In re NAHC, Inc. Sec. Litig., 306 F.3d at 1323.
                                              2
and an authentic document “integral to or explicitly relied upon in the complaint.”6 The

public has unqualified access to the CDER memo via the FDA’s website.7 Additionally,

the CDER memo is integral to the complaint because Spizzirri’s claims are based on the

document, even if it is not explicitly cited to.8 Moreover, the complaint contains exact

language found in the CDER memo.9 “Plaintiffs cannot prevent a court from looking at

the texts of the documents on which its claim is based by failing to attach or explicitly

cite them.”10

       Given that the district court did not abuse its discretion in taking notice of the

CDER memo, it follows that the district court did not err in dismissing Spizzirri’s claim

for the failure to state a claim upon which relief could be granted. The CDER memo

makes clear that the FDA did not grant exclusivity to Egalet’s competitor, MorphaBond,

until after the class period ended. As the district court points out, Egalet cannot

knowingly make false and misleading statements about the scope of exclusivity granted

to MorphaBond, when the FDA had not yet made this very decision.11

       The district court’s carefully drafted and thorough opinion adequately addresses

the reason for taking judicial notice of the CDER memo, and why Spizzirri cannot state a

6
  In re Egalet Corp. Sec. Litig., 340 F. Supp. 3d 479, 497 (E.D. Pa. 2018) (citation
omitted).
7
  Id. at 496.
8
  Id. at 497-98.
9
  Id. at 498.
10
   In re Burlington Coat Factory Sec. Litg., 114 F.3d 1410, 1426 (3d Cir. 1997).
11
   In re Egalet Corp. Sec. Litig., 340 F. Supp at 512 (“Given that the scope of
MorphaBond’s exclusivity remained uncertain during the class period, Defendants cannot
be attributed with knowledge that the FDA would eventually preclude ARYMO from
making intranasal abuse deterrence claims.”).
                                              3
claim under the pleading standard of the PSLRA. We will therefore affirm the grant of

the motion to dismiss Spizzirri’s claim against Egalet Corp. substantially on the reasons

set forth by the district court in its comprehensive Memorandum.

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