For several years, Troutman Pepper has defended a global pharmaceutical company as lead counsel in a series of cases challenging a patent litigation settlement with a generic drug manufacturer in the U.S. District Court for the District of New Jersey. Direct and wholesale purchasers of the brand-name and generic versions of the product at issue claimed the patent litigation settlement was an improper “reverse payment” settlement to delay entry of the generic product into the market.

In April 2020, after granting our client’s petition seeking review of the district court’s class certification decision, the Third Circuit issued a significant precedential opinion confirming that plaintiffs must prove all facts supporting Rule 23’s findings by a preponderance of the evidence and that averages are insufficient if those averages mask individualized injury. In April 2021, the district court denied plaintiffs’ renewed class certification motion, holding that plaintiffs’ evidence of averages was incapable of showing class-wide injury for certain purchasers. Plaintiffs then moved to certify a smaller class.

In February 2023, the district court denied that motion, holding that plaintiffs failed to satisfy Rule 23’s numerosity requirement. Some previously unnamed class members then filed individual copycat suits in the Eastern District of Pennsylvania. The court granted defendants’ motions to transfer those cases to the District of New Jersey in May 2023, finding that transfer was appropriate under the first-to-file rule and 28 U.S.C § 1404(a). In the District of New Jersey, the court agreed with defendants that robust discovery of the new plaintiffs is appropriate given the individualized issues identified at the class certification stage. Discovery of the individual plaintiffs is underway.