IN RE: Ampicillin Antitrust Litigation

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JUDICIAL PANEL CN
MULTIDISTRICT LITIGATION _ CL
) FILED wd fn CL- SHES 00
BEFORE THE JUDICIAL PANEL JUL 221970 aa Co	Cn RY
MULTIDISTRICT LITIGATION | oxmco. Howser ESHER i
CLERK OF THE PANEL! man en ASSES
AMPICILLIN ANTITRUST LITIGATION ) DOCKET NO. 50 oe BR
OPINION AND ORDER ETL
BEFORE ALFRED P. MURRAH, CHAIRMAN AND JOHN MINOR WISDOM, ETRE
EDWARD WEINFELD*, EDWIN A. ROBSON, WILLIAM H. BECKER, JOSEPH : oo
S. LORD, III, AND STANLEY A. WEIGEL, JUDGES OF THE PANEL |
DER CURIAM Cole
On March 19, 1970 the United States filed a civil action SEE a
in the United States District Court for the District of EE
Columbia against Bristol-Myers Company, Beecham Group Limited,
and Beecham, Inc. charging them with violations of the } :
Antitrust Laws with respect to ampicillin and other semi- . Co
synthetic penicillin drugs. The Government's complaint EE
alleges that the defendants, in violation of Sections 1 and 2 : iE
of the Sherman Act, combined and conspired in unreasonable CL
restraint of trade in these drugs and monopolized trade IE oo
in ampicillin by fraudulently procuring and enforcing Beecham'"s IRE Lo
patent and by restraining and preventing the sale of drugs in
bulk form or under other than specified trade names. .
—_— :
* Although Judge Weinfeld was not present at the hearing he . Co
has, with the consent of all parties, participated in this - :
decision.

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® The Government seeks: (1) declaratory and injunctive relief
against the alleged antitrust violations, (2) cancellation
of the "ampicillin patent," (3) a declaration of the
invalidity of the "ampicillin patent" and the "ampicillin
trihydrate patent," and (4) damages under Section 4A of the
Clayton Act.
Shortly thereafter, several states, competing drug
manufacturers, and private parties filed actions, many of them
class actions, against these same defendants seeking treble
damages and in some instances, various types of equitable
relief. There is, in addition, one action ~- the Zenith case!
which preceded the Government action. On May 7, 1969 Beecham
® filed suit against Zenith alleging infringement of Beecham'sampicillin patent. Zenith then counterclaimed against
Beecham and brought in Bristol and American Home Products Corp.
as additional defendants on the counterclaim. In its
counterclaim Zenith alleged that the ampicillin and the ampicillin
trihydrate patents were invalid and that the defendants had
engaged in a conspiracy in restraint of trade of ampicillin and
other semisynthetic penicillins and sought treble damages
and a declaration that the ampicillin and the ampicillin
trihydrate patents are invalid and unenforceable. Bristol then
counterclaimed against Zenith and Ankerfarm S.p.A claiming that
they had infringed Bristol's patent rights, engaged in unfair
competition and violated the antitrust laws.
® 1/	Beecham	Group Limited v. Zenith Laboratories, Inc.,
D. N.J., CA No. 526-69

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® On May 26, 1970 we ordered the parties to show cause
why all related actions should not be transferred for
coordinated or consolidated pretrial proceedings under Section
1407, At the same time a hearing was set for June 26, 1970
in Washington, D. C. The Government's request to vacate that
hearing was denied,
With two exceptions to be discussed later, all parties
strongly support transfer of all actions to a single district
for coordinated or consolidated pretrial proceedings. With
the same two exceptions the complaints are virtually identical
and all agree and we think it manifest that there are substantial,
complex common questions of fact, that the convenience of
® parties and witnesses would be served by transfer to a single
district and that the just and efficient conduct of this
litigation compels treatment under Section 1407.
The two exceptions are of course the Government action
and the Zenith case. The Government does not oppose consolidation
of its "Section 4A claim" with the treble damage actions but
urges that any such consolidation be in the District of
Columbia. We of course recognize that the antitrust injunction
aspect of the Government's action is statutorily excluded
from transfer under Section 1407 but we cannot agree that the
patent cancellation and invalidation aspects of its case
should be considered in pari materia with the antitrust-
injunction part of the case. Cf. In re Antibiotic Drug
® Litigation, 309 F.Supp. 155 (JPML 1970). Since these patent
2/ The Zenith case and several other actions which either had not
been filed or had not previously come to our attention were included
in that order by later amendment.

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® issues are at least common to the Zenith case we believe that
the development of the facts relating to these issues can
best be accomplished during coordinated or consolidated pretrial
proceedings.
3/
The defendants oppose inclusion of the Zenith egse in
coordinated and consolidated pretrial proceedings. The basis
for excluding this case is said to be its advance state of
discovery and the unique issues it presents. It is clear
however that the principal questions of fact involved in the
Zenith case are common to the private treble damage actions
and/or to the Government action and that discovery, while more
advanced than in the more recent cases, is far from complete.
Zenith and Ankerfarm S.p.A. both deny that discovery is nearly
® complete and both strongly favor the inclusion of this case
in coordinated or consolidated pretrial proceedings. In short
we see no good reason for excluding the Zenith case from
coordinated or consolidated pretrial proceedings.
This leads us to the major question presented at the
June 26 hearing: the selection of the most appropriate transferee
. . 4 . . .
district.¥ The choice is limited to two districts, the District
of Columbia wherein the Government action and most of the
private treble damage actions have been filed and the District
of New Jersey in which the Zenith case is pending and which
3/ We have collectively referred to Bristol-Myers, Beecham Group
Limited and Beecham Inc., as "the defendants" although they are
of course the plaintiffs in the Zenith case. N
4/ It is not at all uncommon for parties in multidistrict
@o litigation to join in support of transfer under Section 1407	and to disagree only as to the choice of the transferee forum.
See for example In re Silver Bridge Litigation, __ F.Supp. __
(JPML, .April 20, 1970), In re Air Pollution Litigation, ___F.Supp.__
(JPML, April 16, 1970), In re Indianapolis Air Disaster Litigation,
. 309 F.Supp. 621 (JPML 1970) and In re Koratron Patent Litigation,
302 F.Susn. 239 (JPML 1969).

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® would be more convenient to the defendants and their witnesses
partly because Newark is close to New York City where
Bristol's corporate headquarters are located and where
counsel for all defendants maintain their offices. The
defendants also urge that transfer of all actions to the District
of New Jersey will enable all parties to benefit from the
discovery which has taken place in that district and would
permit their assignment to a judge who is familiar with this
litigation, Judge Lawrence A. Whipple to whom the Zenith case
was assigned nearly a year ago.”
It is true that the availability of an experienced and
capable judge familiar with the litigation is one of the
® more important factors in selecting a transferee forum andwe have no doubt that this litigation would be processed
by Judge Whipple in a most efficient and expeditious manner.
There are however, other factors which mitigate against the
selection of the District of New Jersey not the least of which
is the announced preference of the other parties in the Zenith
case for the District of Columbia as the transferee forum,
The District of Columbia is also the choice of all other
plaintiffs. Perhaps the most important factor is the pendency
of the Government action in the District of Columbia and the
5/ We cannot overlook the apparent inconsistency in the defendants’
position for on one hand they urge transfer of all actions to the
District of New Jersey relying on the pendency of the Zenith case
there, while on the other hand urging that the Zenith case should
PY not be included in coordinated or consolidated pretrial proceedings.

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o . en on 1007.8act that only part of it can be transferred under Section 1407.
If we were to transfer all actions to the District of
New Jersey we would have to split the Government case and leave
part of it in the District of Columbia. This could result in
some duplication of discovery and would be inconsistent with
the goal of conserving judicial energies since the actions would
necessarily be assigned to different judges. While we cannot
transfer the antitrust injunction aspect of the Government case
or order it included in coordinated or consolidated pretrial
proceedings, we think that judicial efficiency would be promoted
by assigning all actions to the same judge especially where,
as here, the Government enforcement action and the private
® ‘actions stand on relatively equal footing.We do not say that the District of New Jersey would be a
totally inappropriate transferee forum but we do believe, on
balance, that transfer of all pending actions to the District
of Columbia would serve the convenience of more parties and
their witnesses and would promote the just and efficient conduct
of all related actions.
IT IS THEREFORE ORDERED that the actions listed on the
attached Schedule A pending in other districts are hereby
transferred to the United States District Court for the District
of Columbia pursuant to 28 U.S.C. §1407. With the written
consent of that court which has been filed with the Clerk of
6/ The defendants have filed a motion in the District of
® Columbia to transfer the Government's case to the District ofNew Jersey under Section 1404 (a). If that motion is granted
and the parties so request, we can reconsider this decision.

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® the Panel, all related actions, with the exception of that part
of the Government action seeking injunctive relief under the
antitrust laws, are hereby assigned to the Honorable John
J. Sirica for coordinated or consolidated pretrial proceedings.
® :
@

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® DOCKET NO. 50 SCHEDULE A
NORTHERN DISTRICT OF ILLINOIS
The State of Indiana, etc., v. Bristol- Civil Action
Myers Co., et al. No. 70 C 896
The State of Connecticut v. Bristol- Civil Action
Myers Co., et al. No. 70 C 931
The State of New Mexico v. Bristol- Civil Action
Myers Co., et al. No. 70 C 932
DISTRICT OF COLUMBIA
United States of America v. Bristol-Myers Civil Action
Co., et al. No. 822-70
Biocraft Laboratories, Inc. v. Bristol- Civil Action
Myers Co., et al. No. 1002-70
The State of Louisiana v. Bristol- Civil Action
Myers Co., et al. No. 1106-70
® Richard Estey d/b/a/ Rex Pharmacy v. Civil Action
Bristol-Myers Co., et al. No. 1159-70
City of New York v. Bristol-Myers Co., Civil Action
et al. No. 1412-70
The State of Vermont v. Bristol-Myers Co., Civil Action
et al. No. 1514-70
The State of Florida v. Bristol-Myers	Co., Civil Action
et al. No. 1536-70
EASTERN DISTRICT OF PENNSYLVANIA
City of Philadelphia v. Bristol-Myers Civil Action
Co., et al. No. 70-824
DISTRICT OF NEW JERSEY
Beecham Group Limited v. Zenith Laboratories, Civil Action
Inc. No. 526-69

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SOUTHERN DISTRICT OF FLORIDA
Lee's Prescription Shops, Inc. v. Civil Action
Bristol-Myers Co., et al. No. 70-~748-Civ.-CF
Hospital Development & Service Corp., et al. Civil Action
v. Beecham, Inc. No. 70-749-Civ.-TC