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Federal Trade Commission v. Shire Viropharma Inc.

United States District Court, D. Delaware

March 20, 2018

FEDERAL TRADE COMMISSION, Plaintiff,
v.
SHIRE VIROPHARMA INC., Defendant.

          MEMORANDUM ORDER

         Presently before the Court is Defendant Shire ViroPharma Inc.'s motion to dismiss pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). (D.I. 19). The matter has been fully briefed. (D.I. 20, 22, 23). The Court heard oral argument on February 2, 2018. (D.I. 45) ("Tr.").

         I. BACKGROUND

         On February 7, 2017, the Federal Trade Commission ("FTC") filed this action against ViroPharma pursuant to Section 13(b) of the FTC Act, 15 U.S.C. § 53(b). (D.I. 2). ViroPharma is a Delaware corporation that develops, manufactures, and markets branded pharmaceuticals. (Id. ¶ 8). The complaint contains one count, alleging that ViroPharma violated Section 5(a) of the Act, 15 U.S.C. § 45(a), by engaging in an unfair method of competition. (Id. ¶ 154).

         The action arises out of ViroPharma's use of the U.S. Food and Drug Administration's ("FDA") citizen petition process.[1] (Id. ¶ 1). More specifically, the FTC alleges that ViroPharma used the FDA's citizen petition process to maintain its monopoly on Vancocin Capsules.[2] (Id.). The FTC maintains that ViroPharma's meritless petitioning activity "harmed competition and consumer welfare by obstructing and delaying the FDA approval process for a generic version of Vancocin." (Id. ¶ 144).

         The complaint alleges that ViroPharma "inundated the FDA with regulatory and court filings-forty-six in all." (Id. ¶ 1). The filings occurred between March 2006 and April 2012.[3](Id. ¶ 49). They are listed at paragraph 118 of the complaint. The filings include twenty-four citizen petition filings, eighteen public comments, a Supplemental New Drug Application, and three lawsuits. (Id.).

         The FTC seeks a permanent injunction and other equitable relief.

         II. LEGAL STANDARDS

         A. Rule 12(b)(1)

         A court must grant a motion to dismiss pursuant to Rule 12(b)(1) if it lacks subject matter jurisdiction to hear a claim. In re Schering Plough Corp. Intron/Temodar Consumer Class Action, 678 F.3d 235, 243 (3d Cir. 2012). "In evaluating a Rule 12(b)(1) motion, a court must first determine whether the movant presents a facial or factual attack." Id. "In reviewing a facial challenge, which contests the sufficiency of the pleadings, the court must only consider the allegations of the complaint and documents referenced therein and attached thereto, in the light most favorable to the plaintiff." Id. In this case, ViroPharma's Rule 12(b)(1) arguments constitute a "facial attack" because ViroPharma contends the complaint lacks sufficient factual allegations to establish jurisdiction. See id.

         "In evaluating whether a complaint adequately pleads the elements of standing, courts apply the standard of reviewing a complaint pursuant to a Rule 12(b)(6) motion . . .." Id; see also Baldwin v. Univ. of Pittsburgh Med. Ctr., 636 F.3d 69, 73 (3d Cir. 2011) ("A dismissal for lack of statutory standing is effectively the same as a dismissal for failure to state a claim."). That standard is set forth below. "With respect to 12(b)(1) motions in particular, [however, ] [t]he plaintiff must assert facts that affirmatively and plausibly suggest that the pleader has the right he claims (here, the right to jurisdiction), rather than facts that are merely consistent with such a right." In re Schering, 678 F.3d at 244 (citation omitted).

         B. Rule 12(b)(6)

         In reviewing a motion to dismiss pursuant to Rule 12(b)(6), the Court must accept the complaint's factual allegations as true. See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555-56 (2007). Rule 8(a) requires "a short and plain statement of the claim showing that the pleader is entitled to relief." Id. at 555. The factual allegations do not have to be detailed, but they must provide more than labels, conclusions, or a "formulaic recitation" of the claim elements. Id. ("Factual allegations must be enough to raise a right to relief above the speculative level... on the assumption that all the allegations in the complaint are true (even if doubtful in fact).").

         Moreover, there must be sufficient factual matter to state a facially plausible claim to relief. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). The facial plausibility standard is satisfied when the complaint's factual content "allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. "In deciding a Rule 12(b)(6) motion, a court must consider only the complaint, exhibits attached to the complaint, matters of public record, as well as undisputedly authentic documents if the complainant's claims are based upon these documents." Mayer v. Belichick, 605 F.3d 223, 230 (3d Cir. 2010).

         III. DISCUSSION

         ViroPharma makes two principal arguments in its motion to dismiss. First, it argues the FTC has failed to plead the facts necessary to invoke its authority under Section 13(b) of the Act. (D.I. 20 at 17). Second, it argues ViroPharma's alleged conduct is immune from challenge under the Noerr-Pennington doctrine. (Id. at 26).

         A. Section 13(b)

         ViroPharma's first argument raises what appear to be novel questions in regard to the proper interpretation of Section 13(b) of the FTC Act. Section 13(b) provides in relevant part: (b) Whenever the Commission has reason to believe-

(1) that any person, partnership, or corporation is violating, or is about to violate, any provision of law enforced by ...

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