Yesterday, the NAM filed an amicus brief urging interlocutory review of a district court’s flawed class certification ruling that artificially inflated the size and scope of the putative class by allowing the named plaintiffs to (1) bring antitrust claims under the laws of states where they neither reside nor were injured, and (2) to seek “umbrella damages”—damages for paying for a competitor’s product because a generic drug was unavailable. In this case, In re HIV Antitrust Litigation, the named plaintiffs alleged that defendants engaged in anticompetitive conduct that prevented generic drug companies from selling cheaper HIV drugs. Ignoring the Supreme Court’s and other California district courts’ precedent, the district court here concluded that whether a named plaintiff can bring class claims under the laws of a state where they neither reside nor were injured should be considered under the typicality or adequacy requirements of Rule 23, not as a threshold Article III standing issue. According to the court, the named plaintiffs satisfied those requirements by asserting individual claims sufficiently like the antitrust or consumer protection claims under the laws in states where they neither reside nor were injured. And the damages class could include individuals who purchased competitor HIV drugs, not defendants’ HIV drug, because the alleged anticompetitive conduct could have been the proximate cause for those individuals paying more for competitor HIV drugs.
The NAM filed an amicus brief in support of the pharmaceutical defendants’ petition for interlocutory review emphasizing that plaintiffs seeking to represent a class must have Article III standing to bring each claim asserted. Here, the district court erred by following the minority approach, holding that whether a plaintiff can assert claims under laws of states other than those where the plaintiff resides or was injured is an issue of adequacy or typicality. Further, the district court artificially enlarged the class size by including in the class those who bought products from the defendants’ competitors, not defendants. As we explain in our brief, the 9th Circuit should grant the petition to protect “the courts and defendants from prolonged, expensive litigation, as well as abusive, in terrorem settlements driven by defendants’ risk aversion, not justice.” All manufacturers have an interest in ensuring that class certifications are properly tailored to concrete claims and that aggregating litigation does not distort outcomes that would have resulted had the litigants filed their claims individually.