     18-2474-cv (L)
     In re: Aggrenox Antitrust Litigation


 1
 2
 3
 4                                   UNITED STATES COURT OF APPEALS
 5                                       FOR THE SECOND CIRCUIT
 6
 7                                                SUMMARY ORDER
 8
 9   RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY
10   ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE
11   OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN CITING A
12   SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE
13   FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A
14   PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY
15   COUNSEL.
16
17                   At a stated term of the United States Court of Appeals for the Second Circuit, held
18   at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York,
19   on the 5th day of May, two thousand twenty.
20
21   PRESENT:            BARRINGTON D. PARKER,
22                        DENNY CHIN
23                                  Circuit Judges,
24                        DENISE COTE,
25                                  District Judge.*
26   - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
27   In re: Aggrenox Antitrust Litigation
28   --------------------------------------
29   Blue Cross and Blue Shield of Vermont, Inc., et al.,
30                                                      Interested Party-Appellants,
31
32                             v.                                                       18-2474 (L)
33                                                                                      18-2578 (Con)
34   A.F. of L. – A.G.C. Buildings Trade Welfare Plan,
35   on behalf of itself and all others similarly situated, et al.,
36                                           Plaintiffs-Appellees,
37
38   Pirelli Armstrong Retiree Medical Benefits Trust, on its
39   own behalf and on behalf of all others similarly situated, et al.,
40                                        Plaintiffs,
41
42                             v.
43

     * Judge Denise Cote of the United States District Court for the Southern District of New York,
     sitting by designation.
 1   Barr Pharmaceuticals Inc., a Delaware Corporation,
 2   now known as Barr Pharmaceuticals, LLC, et al.,
 3                                       Defendants-Appellees,
 4
 5   Teva Pharmaceutical Industries, Ltd., an Israeli Corporation,
 6                                                      Defendant.
 7   - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
 8
 9   FOR INTERESTED PARTY-APPELLANTS:                                             Peter D. St. Phillip
10   Blue Cross and Blue Shield of Vermont, Inc.,                                 Uriel Rabinovitz
11   et al.                                                                       LOWEY DANNENBERG, P.C.
12                                                                                44 South Broadway, Suite 1100
13                                                                                White Plains, NY 10601
14
15                                                                                Miguel A. Estrada
16                                                                                Lucas C. Townsend
17                                                                                GIBSON, DUNN & CRUTCHER
18                                                                                LLP
19                                                                                1050 Connecticut Avenue N.W.
20                                                                                Washington, DC 20036-5306
21
22   FOR PLAINTIFFS-APPELLEES:                                                    Renae D. Steiner
23   A.F. OF L. – A.G.C. Buildings                                                HEINS MILLS & OLSON, P.L.C.
24   Trade Welfare Plan et. al.                                                   310 Clifton Avenue
25                                                                                Minneapolis, MN 55403
26
27                                                                                Steve D. Shadowen
28                                                                                Hilliard & Shadowen LLP
29                                                                                1135 W. 6th St., Suite 125
30                                                                                Austin, TX 78703
31
32                                                                                Marvin Alan Miller
33                                                                                MILLER LAW LLC
34                                                                                115 South LaSalle Street, Suite 2910
35                                                                                Chicago, IL 60603
36
37   FOR DEFENDANT-APPELLEES:                                                     Ross E. Elfand
38   Boehringer Ingelheim International                                           Jack E. Pace III
39   Gmbh, Boehringer Ingelheim                                                   WHITE & CASE LLP
40   Pharmaceuticals Inc., and Boehringer                                         1221 Avenue of the Americas
41   Ingelheim Pharma GMBH & Co. KG                                               New York, NY 10020
42
43

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 1                                                                   Peter J. Carney
 2                                                                   Matthew S. Leddicotte
 3                                                                   Kathryn J. Mims
 4                                                                   WHITE & CASE LLP
 5                                                                   701 13th Street, NW
 6                                                                   Washington, DC 20005
 7
 8   FOR DEFENDANT-APPELLEES:                                        Brian T. Burgess
 9   Barr Pharmaceuticals, Inc., Duramed                             GOODWIN PROCTER LLP
10   Pharmaceuticals, Inc., Duramed                                  901 New York Avenue, NW
11   Pharmaceuticals Sales Corp., Teva                               Washington, DC 2000
12   Women’s Health, Inc., and Teva                                                      -and-
13   Pharmaceuticals USA, Inc.                                       Robert D. Carroll
14                                                                   Christopher Holding
15                                                                   GOODWIN PROCTER LLP
16                                                                   100 Northern Avenue
17                                                                   Boston, MA 02210
18
19
20
21                      Appeal from the United States District Court for the District of Connecticut

22   (Underhill, J.).

23           UPON DUE CONDISERATION, IT IS HEREBY ORDERED, ADJUDGED, AND

24   DECREED that the order of the district court is AFFIRMED.

25           This appeal involves a challenge to a settlement of class action claims asserted against

26   pharmaceutical manufacturers who are alleged to have unlawfully delayed the availability of less

27   expensive generic versions of the prescription drug Aggrenox. The Claims-Administrator

28   Appellants appeal from a decision by the district court approving settlement of the class action

29   litigation. The district court did so over objections by certain Claims-Administrators to the opt-

30   out procedures established by the court. We assume the parties’ familiarity with the underlying

31   facts, the record, and the issues presented on this appeal.

32           Rule 23 authorizes district courts to exclude from a class “any member who requests

33   exclusion.” Fed. R. Civ. P. 23(c)(2)(B)(v). We review a district court’s opt-out procedures for

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 1   abuse of discretion. See Masters v. Wilhelmina Model Agency, Inc., 473 F.3d 423, 438 (2d Cir.

 2   2007). “[A] district court’s decision regarding the form and content of notices sent to class

 3   members is reviewed only for an abuse of discretion.” Id. (citing In re Agent Orange Prod. Liab.

 4   Litig. V, 818 F.2d 145, 168 (2d Cir. 1987)); see Arbuthnot v. Pierson, 607 Fed. App’x 73, 73-4

 5   (2d Cir. 2015); In re Bank of Am. Corp. Sec., Derivative, and ERISA Litig., 772 F.3d 125, 132-33

 6   (2d Cir. 2014); Cassese v. Williams, 503 Fed. App’x 55, 57 (2d Cir. 2012).

 7           On January 8, 2018, the class action plaintiffs moved for preliminary approval of their

 8   settlement with the pharmaceutical manufacturers. The amount to be paid in settlement was

 9   dependent upon the number of class members who opted out of the class action settlement. That

10   motion included a proposed notice to the class of the settlement. The proposed notice provided

11   that the class included “all health insurance companies . . . that make payments from their own

12   funds . . . and entities with self-funded plans that contract with a health insurer.” App’x at 320.

13   The notice explained that any class member had the ability to opt-out by submitting a request for

14   exclusion from the settlement. It also provided that the Claims-Administrators could opt out of

15   the settlement on behalf of the class members who participate in the employment-based health

16   plans (the “Plans”)1 they administer by submitting individualized proof of their authority to do

17   so. The required proof was a declaration from an authorized representative of the Plan attesting

18   to the administrator’s authority to opt the entity out of the class action settlement.

19          On January 16, 2018, Humana Inc., a third-party administrator that was neither a class

20   member nor an appellant here, filed a letter opposing any preliminary approval of the settlement,




     1
      The Plans are sponsored self-funded and self-insured health benefit plans. Under such Plans,
     employers are responsible for paying for their employees’ benefits, including prescription drugs.
     Employers contract with third-party administrators to provide the Plans’ administrative services.
     The Claims-Administrators that appeal here are third-party administrators.
                                                       4
1    including the opt-out procedures the class action plaintiffs proposed for any Plans. Unlike

2    Humana, however, the Claims-Administrators never objected to the class action plaintiffs’

3    proposed notice.

4           On March 6, 2018, the district court preliminarily approved the settlement agreement

5    which included the class notice and opt-out procedures proposed by the class action plaintiffs on

 6   January 8. The district court instructed that any objection or notice of intention to appear at a

 7   hearing to consider approval of the settlement be submitted no later than May 11, 2018. The

 8   Claims-Administrators did not object to either the settlement or the opt-out procedures by that

9    deadline, nor did any of the Plans that the Claims-Administrators contend they represent on

10   appeal. It is undisputed that the Claims-Administrators and each of those Plans received notice of

11   the preliminary approval of the class action settlement and their deadline to object. Indeed,

12   before the May 11 deadline, the Claims-Administrators opted out of the settlement on their own

13   behalf. They also filed exclusion requests that purported to opt out the Plans they administered. It

14   is undisputed that the exclusion requests they submitted purportedly on behalf of the Plans did

15   not contain the individualized proof of authority that the district court required.

16          After the May 11, 2018 deadline, the Claims-Administrators, for the first time, objected

17   to the opt-out procedures. The Claims-Administrators provided the district court eleven heavily-

18   redacted purported “exemplar” contracts that govern a handful of the Plans they administer—

19   each of which was heavily redacted and did not show the names of the countersigned parties—

20   and argued that those contracts authorized them to opt out of the settlement on behalf of the

21   1,237 Plans they administered. They contended that the court should permit them to establish

22   their own authority to opt Plans out based on the redacted “exemplar” contracts, claiming that




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1    these contracts established that they have blanket authority to opt hundreds of Plans out of the

2    settlement.

3           The district court did not allow the Claims-Administrators to establish their own authority

4    to opt out the Plans in this manner. See Fed. R. Civ. P. 23(c)(2)(B)(v). The district court

 5   concluded that the redacted “exemplar” contracts were insufficient demonstrations of the

 6   Claims-Administrators authority. As noted by the district court, four Plans in fact had submitted

 7   claims in the settlement despite putative opt-outs that the Claims-Administrators submitted on

 8   their behalf. The district court then confirmed that the Plans in question, none of which have

 9   joined this appeal, remained in the class and entered final judgment certifying the class and

10   approving the settlement. This appeal followed.

11          The Claims-Administrators, having opted out of the class action, do not have standing to

12   appeal the judgment entered in the class action. Moreover, even if it were possible to overlook

13   that impediment, the Claims-Administrators waived their right to challenge the opt-out

14   procedures when they did not file timely objections in the district court to the opt-out procedures.

15   The district court specifically noted in its Preliminary Approval Order that “[a]ll persons and

16   entities who fail to file an Objection . . . shall be deemed to have waived any such objections by

17   appeal, collateral attack, or otherwise.” Preliminary Approval Order at ¶ 14. Thus, the Claims-

18   Administrators waived any right to appeal on this issue. See Devlin v. Scardelletti, 536 U.S. 1, 14

19   (2002) (stating that untimeliness “implicates basic concerns about waiver that should be easily

20   addressable by a court of appeals”).

21          It should be noted as well that the Claims-Administrators have failed to demonstrate that

22   the district court abused its discretion in applying the opt-out procedures it established. The

23   requirements the court established provided certainty about class membership, thus preserving



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 1   the rights of absent class members and protecting the Defendants from duplicative liability. The

 2   opt-out procedures approved by the district court fell well within its broad discretion to supervise

 3   class actions. Those procedures permitted the Claims-Administrators to opt out on behalf of the

 4   Plans, but the Appellants failed to follow those procedures or object to them in a timely manner.

 5   Importantly, those procedures comported with Rule 23 and with due process. The opt-out

 6   requirements established by the district court were well-grounded in the precedent of this Court

 7   and cannot be distinguished from opt-out requirements applied in other multi-district litigation

 8   class actions. See, e.g., Cent. States Se. & Sw. Areas Health & Welfare Fund v. Merck-Medco

 9   Managed Care, L.L.C., 504 F.3d 229, 243 (2d Cir. 2007); Order at 946, In re Lidoderm Antitrust

10   Litig., No. 14-cv-md-02521 (N.D. Cal. Dec. 28, 2017); Order at 845, In re Skelaxin (Metaxalone)

11   Antitrust Litig., No. 12-md-2343 (E.D. Tenn. Feb. 9, 2015); Motion at 168-8, In re Remeron

12   End-Payor Antitrust Litig., No. 02-cv-2007 (D.N.J. June 1, 2005).

13          We have considered the Appellants’ remaining arguments and conclude that they are

14   either waived or without merit. Accordingly, the judgment of the district court is AFFIRMED.

15                                                 FOR THE COURT:

16                                                 Catherine O=Hagan Wolfe, Clerk of Court
17




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