Court Opinion

ID: 217067
Source: CourtListenerOpinion
Date Created: 2011-05-20 00:01:36+00
Date Added: 2024-06-11T17:28:30.857793
License: Public Domain

NOT FOR PUBLICATION

                    UNITED STATES COURT OF APPEALS                            FILED
                            FOR THE NINTH CIRCUIT                             MAY 19 2011

                                                                          MOLLY C. DWYER, CLERK
                                                                            U.S. COURT OF APPEALS

GOLDEN GATE PHARMACY                             No. 10-15978
SERVICES, INC., et al.
                                                 D.C. No. 3:09-cv-3854-MMC
              Plaintiffs - Appellants,

  v.                                             MEMORANDUM*

PFIZER, INC. and WYETH,

              Defendants - Appellees.

                   Appeal from the United States District Court
                     for the Northern District of California
                    Maxine Chesney, District Judge, Presiding

                       Argued and Submitted May 10, 2011
                            San Francisco, California

Before: D. W. NELSON and W. FLETCHER, Circuit Judges, and DUFFY,
District Judge.**

       Appellants, seven independent retail pharmacies (the “Pharmacies”), appeal

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
       **
            The Honorable Kevin Thomas Duffy, United States District Judge for
the Southern District of New York, sitting by designation.
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the dismissal of their second amended complaint (“SAC”) alleging that the merger

of Appellees Pfizer and Wyeth violated Section 7 of the Clayton Act and Section 1

of the Sherman Act. The district court dismissed the complaint on the basis that it

failed to sufficiently allege a relevant product market for the antitrust action. We

have jurisdiction under 28 U.S.C. § 1291, and we AFFIRM.

      This Court reviews de novo a dismissal for failure to state a claim under

Federal Rule of Civil Procedure 12(b)(6). Coal. for ICANN Transparency, Inc. v.

VeriSign, Inc., 611 F.3d 495, 501 (9th Cir. 2010). In order to state an antitrust

claim, a plaintiff must identify a relevant market within which the defendant has

market power. Newcal Indus., Inc. v. Ikon Office Solution, 513 F.3d 1038, 1044

(9th Cir. 2008). “‘The outer boundaries of a product market are determined by the

reasonable interchangeability of use or the cross-elasticity of demand between the

product itself and substitutes for it.’” Id. at 1045 (quoting Brown Shoe Co. v.

United States, 370 U.S. 294, 325 (1962)). The products alleged in a relevant

market must be “reasonably interchangeable by consumers for the same purposes.”

United States v. E. I. du Pont de Nemours & Co., 351 U.S. 377, 395 (1956)

(emphasis added).

      The Pharmacies’ SAC stated a relevant product market of “the

pharmaceutical industry,” including the “manufacture, sale, and innovation of all

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pharmaceutical products, prescription pharmaceutical products, non-prescription

pharmaceutical products, brand name pharmaceutical products and particular

pharmaceutical products and therapies specifically noted and identified by Pfizer

and Wyeth in their annual reports.” While the market definition need not be pled

with specificity, the SAC fails to state any facts indicating that all pharmaceutical

products are interchangeable for the same purpose. The failure to allege a product

market consisting of reasonably interchangeable goods renders the SAC “facially

unsustainable” and appropriate for dismissal. See Newcal, 513 F.3d at 1045; Queen

City Pizza v. Domino’s Pizza, 124 F.3d 430, 436 (3d Cir. 1997) (holding that a

motion to dismiss may be granted “[w]here the plaintiff fails to define its proposed

relevant market with reference to the rule of reasonable interchangeability and

cross-elasticity of demand.”).

AFFIRMED.

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