Antitrust Law Daily Wrap Up, ANTITRUST—D. Conn.: Generic drugmakers unable to toss claims under Tennessee law, (Apr 28, 2025)

By Patricia K. Ruiz, J.D.

Tennessee law in effect when state attorneys general complaint filed allows parens patriae damages.

The U.S. District Court for the District of Connecticut denied a motion to dismiss by drug manufacturer defendants in a lawsuit alleging price-fixing, market allocation, and mid rigging in the sale of generic drugs for skin ailments. The court found that the amended version of the Tennessee Trade Practices Act (TTPA) did not apply retroactively and that the version of the TTPA in effect when the time the complaint and the motion to dismiss were filed did not foreclose parens patriae damages (State of Connecticut v. Sandoz, Inc., No. 3:20-cv-00802-MPS (D. Conn. Apr. 25, 2025)).

Background. After the “Venue Act” expanded the government antitrust exception to encompass state plaintiff cases in late 2022, the Multidistrict Litigation Panel (MDL panel) transferred three actions involving the State of Connecticut as plaintiff, to the Eastern District of Pennsylvania, where other generic pharmaceutical price fixing cases had already been consolidated for pre-trial proceedings. State attorneys general moved to remand the three actions back to the District of Connecticut, and the MDL panel granted their motion.

The thirty-six drug manufacturer defendants in the instant dermatology action then moved to dismiss the state-law claims under Fed. R. Civ. P. 12(b)(6). The court said the motion was unusual for a Rule 12(b)(6) in that it asked the court to foreclose the states from pursuing certain kinds of relief under state law (e.g., parens patriae damages and disgorgement). The court noted the relief to apply usually turns on a determination of liability. The District of Connecticut court partly granted and partly denied dismissal.

TTPA claims. Now before the court, the defendants sought to dismiss Tennessee’s claims for monetary relief, which includes damages for purchase of the affected generic drugs and equitable relief including disgorgement and injunctive relief under the state’s antitrust statute. The defendants argued that the TTPA as amended does not authorize the attorney general to seek actions for monetary relief, as the statute cannot be retroactively applied to complaint and motion to dismiss filed before the statute went into effect.

Tennessee’s constitution prohibits retrospective laws. As such, statutes are presumed to operate prospectively absent clear indication from the legislature that the law is intended to apply retrospectively. The state’s courts, however, recognize an exception for remedial and procedural laws. The instant court found the legislature did not clearly provide that the amendment to the TTPA be retroactive; thus, the amendment is presumed to operate prospectively. The court agreed that the TTPA does not apply retroactively and that the previous version of the TTPA did not foreclose in clear terms the attorney general’s authority to pursue claims for monetary relief as parens patriae. The court denied the motion to dismiss.

The Case is No. 3:20-cv-00802-MPS.

Judge: Shea, M.

Attorneys: Allison Frisbee, Office of the Attorney General, for State of Connecticut. Robert Bernheim, Office of the Attorney General, State of Arizona. Ian L. Papendick, Office of the Colorado Attorney General, State of Colorado. Ada Anon (Arnold & Porter Kaye Scholer LLP) for Sandoz, Inc.

Companies: Sandoz, Inc.

Cases: Antitrust StateUnfairTradePractices ConnecticutNews