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Arbor Pharmaceuticals, LLC v. ANI Pharmaceuticals, Inc.

United States District Court, D. Minnesota

August 2, 2018

Arbor Pharmaceuticals, LLC, Plaintiff,
v.
ANI Pharmaceuticals, Inc. Defendant.

          Andre T. Hanson, Esq., Katharyn Ann Grant, Esq., and Saul H. Perloff, Esq., Norton Rose Fulbright U.S. LLP, counsel for Plaintiff.

          Adam Edward Szymanski, Esq., Erin H. Chadwick, Esq., and Sarah M. Stensland, Esq., Patterson Thuente Pederson, PA; and James Thomas Wilcox, Esq., and Scott Lloyd Smith, Esq., Buchanan Ingersoll & Rooney PC, counsel for Defendant.

          MEMORANDUM OPINION AND ORDER

          DONOVAN W. FRANK UNITED STATES DISTRICT JUDGE

         INTRODUCTION

         This matter is before the Court on a Motion to Dismiss brought by Defendant ANI Pharmaceuticals, Inc. (Doc. No. 14.) For the reasons set forth below, the Court grants the motion insofar as Defendant seeks dismissal of Plaintiff's common law unfair competition claim and denies the motion in all other respects.

         BACKGROUND

         Plaintiff Arbor Pharmaceuticals, LLC, researches, develops, and manufactures prescription drug products. In particular, Plaintiff markets prescription erythromycin ethylsuccinate for oral suspension under the brand names EryPed® and E.E.S.® Granules, both of which are approved by the U.S. Food and Drug Administration (“FDA”). (Doc. No. 1, Compl. ¶ 2.) EryPed® and E.E.S.® Granules are prescription-only antibiotics. (Id. ¶ 11.) According to the Complaint, these products are the only FDA-approved products of their kind on the market. (Id. ¶ 14.)

         On or around September 2016, Defendant announced the launch of its own Erythromycin Ethylsuccinate for Oral Suspension product (the “Product” or “Defendant's Product”), claiming it to be a generic version of EryPed® and E.E.S.®. (Id. ¶¶ 17-18.) Plaintiff alleges that Defendant promotes its Product as FDA-approved and AB-rated pursuant to an approved Abbreviated New Drug Application (“ANDA”). (Id. ¶ 27.) Plaintiff further alleges that these promotions are false and misleading because Defendant's Product is not FDA-approved, does not have an AB-rating, and that Defendant does not have a current, approved ANDA for its Product. (Id. ¶¶ 29, 30.) Instead, Plaintiff alleges, on information and belief, that Defendant acquired an ANDA from another pharmaceutical company for a discontinued product that had been manufactured using a process that differs from that used by Defendant. (Id. ¶ 30.) Plaintiff further alleges that the FDA considers this ANDA to be discontinued and that in December 2016, notified Defendant that its application in connection with its Product was not approvable. (Id. ¶ 32.)

         Defendant acknowledges that it purchased the ANDA and took steps to market its Product as a generic to EryPed® and E.E.S.® Granules. Defendant submits that the relevant ANDA was originally approved in 1978 for Barr Pharmaceuticals, that Barr stopped marketing the approved product in 2003, and that the ANDA was discontinued. (Doc. No. 16 at 3.) Defendant also represents that on August 26, 2016, it filed a supplement to the ANDA with the FDA, detailing changes it made to the manufacturing process of the Product. Defendant indicated its intent to market the Product if the FDA did not advise otherwise within 30 days. Having not received an objection from the FDA within that period, Defendant now contends that the FDA is aware that it is distributing its Product and has not asked Defendant to stop. (Doc. No. 16 at 5.)[1]

         In this action, Plaintiff asserts the following claims: False Advertising in Violation of the Lanham Act (Count I); Unfair Competition in Violation of the Lanham Act (Count II); Common Law Unfair Competition (Count III); Violation of the Minnesota Unfair Trade Practices Act (Count IV); Violation of the Minnesota Uniform Deceptive Trade Practices Act (Count V); and Violation of the Minnesota False Advertising Act (Count VI). (Compl.) At the heart of all of Plaintiff's claims is the assertion that Defendant is falsely advertising its Product as an FDA-approved, AB-rated, generic substitute for EryPed® and E.E.S.® Granules. Defendant moves to dismiss all of Plaintiff's claims with prejudice.

         DISCUSSION

         I. Legal Standard

         In deciding a motion to dismiss under Rule 12(b)(6), a court assumes all facts in the complaint to be true and construes all reasonable inferences from those facts in the light most favorable to the complainant. Morton v. Becker, 793 F.2d 185, 187 (8th Cir. 1986). In doing so, however, a court need not accept as true wholly conclusory allegations, Hanten v. Sch. Dist. of Riverview Gardens, 183 F.3d 799, 805 (8th Cir. 1999), or legal conclusions drawn by the pleader from the facts alleged, Westcott v. City of Omaha, 901 F.2d 1486, 1488 (8th Cir. 1990). A court deciding a motion to dismiss may consider the complaint, matters of public record, orders, materials embraced by the complaint, and exhibits attached to the complaint. See Porous Media Corp. v. Pall Corp., 186 F.3d 1077, 1079 (8th Cir. 1999).

         To survive a motion to dismiss, a complaint must contain “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). Although a complaint need not contain “detailed factual allegations, ” it must contain facts with enough specificity “to raise a right to relief above the speculative level.” Id. at 555. As the Supreme Court reiterated, “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, ” will not pass muster under Twombly. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at ...


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