Antitrust Law Daily Wrap Up, ANTITRUST—E.D. Tenn.: Settlement of antitrust claims for delaying generic competition for muscle relaxant gets preliminary approval, (May 2, 2014)

By Linda O’Brien, J.D., LL.M.

The federal district court in Chattanooga, Tennessee has granted class certification and preliminary approval to a proposed settlement of antitrust claims against King Pharmaceuticals by a class of direct purchasers of metaxalone, a prescription muscle relaxant sold under the brand name Skelaxin. The plaintiffs alleged that King, Skelaxin's manufacturer, conspired with Mutual Pharmaceutical Company, Inc. to delay and obstruct generic competition for Skelaxin (In re Skelaxin (Metaxalone) Antitrust Litigation, April 30, 2014, Collier, C.).

The court found that the prerequisites to a class action under Federal Rule of Civil Procedure 23 were satisfied: (1) at least 48 of geographically dispersed class members made joinder of all members impracticable; (2) there were common questions of law and fact that predominated over individual claims; (3) claims or defenses of class plaintiffs were typical of the clams or defenses of the class; (4) the plaintiffs would fairly and adequately protect the interests of the class and have retained experienced counsel; and (5) a class action was superior to other available methods for the fair and efficient adjudication of the action.

For purposes of the settlement, the court certified a direct purchaser settlement class consisting of all persons and entities in the United States and its territories that purchased Skelaxin directly from King at any time during the period of November 4, 2005 through the date on which the court certifies the direct purchaser settlement class. Excluded from the class were the defendants, their officers, directors, management, employees, subsidiaries, affiliates, and all federal governmental entities.

The proposed settlement includes a cash payment of $73 million by the defendants into an escrow account for the benefit of the direct purchaser settlement class in exchange for dismissal of the litigation. According to the court, the agreement was reached by arms-length negotiations by experienced counsel and falls within the range of possibly approvable settlements. Additionally, the proposed form of notice and method of dissemination of the settlement notice was fair and reasonable.

A hearing on the final approval of the settlement was set for September 9, 2014.

The case is No. 1:12-md-02343.

Attorneys: Thomas M. Sobol and Lauren G. Barnes (Hagens Berman) for the plaintiffs. Saul P. Morgenstern (Kaye Scholer LLP) for King Pharmaceuticals, Inc. Jeffrey Weinberger (Munger, Tolles & Olson LLP) for Mutual Pharmaceutical Company, Inc.

Companies: King Pharmaceuticals, Inc.; Mutual Pharmaceutical Company, Inc.

Cases: Antitrust TennesseeNews