Golden Gate Pharmacy Services, Inc. v. Pfizer, Inc. ( 2011 )


Menu:
  •                            NOT FOR PUBLICATION
    UNITED STATES COURT OF APPEALS                            FILED
    FOR THE NINTH CIRCUIT                             MAY 19 2011
    MOLLY C. DWYER, CLERK
    U.S. COURT OF APPEALS
    GOLDEN GATE PHARMACY                             No. 10-15978
    SERVICES, INC., et al.
    D.C. No. 3:09-cv-3854-MMC
    Plaintiffs - Appellants,
    v.                                             MEMORANDUM*
    PFIZER, INC. and WYETH,
    Defendants - Appellees.
    Appeal from the United States District Court
    for the Northern District of California
    Maxine Chesney, District Judge, Presiding
    Argued and Submitted May 10, 2011
    San Francisco, California
    Before: D. W. NELSON and W. FLETCHER, Circuit Judges, and DUFFY,
    District Judge.**
    Appellants, seven independent retail pharmacies (the “Pharmacies”), appeal
    *
    This disposition is not appropriate for publication and is not precedent
    except as provided by 9th Cir. R. 36-3.
    **
    The Honorable Kevin Thomas Duffy, United States District Judge for
    the Southern District of New York, sitting by designation.
    1
    the dismissal of their second amended complaint (“SAC”) alleging that the merger
    of Appellees Pfizer and Wyeth violated Section 7 of the Clayton Act and Section 1
    of the Sherman Act. The district court dismissed the complaint on the basis that it
    failed to sufficiently allege a relevant product market for the antitrust action. We
    have jurisdiction under 
    28 U.S.C. § 1291
    , and we AFFIRM.
    This Court reviews de novo a dismissal for failure to state a claim under
    Federal Rule of Civil Procedure 12(b)(6). Coal. for ICANN Transparency, Inc. v.
    VeriSign, Inc., 
    611 F.3d 495
    , 501 (9th Cir. 2010). In order to state an antitrust
    claim, a plaintiff must identify a relevant market within which the defendant has
    market power. Newcal Indus., Inc. v. Ikon Office Solution, 
    513 F.3d 1038
    , 1044
    (9th Cir. 2008). “‘The outer boundaries of a product market are determined by the
    reasonable interchangeability of use or the cross-elasticity of demand between the
    product itself and substitutes for it.’” 
    Id. at 1045
     (quoting Brown Shoe Co. v.
    United States, 
    370 U.S. 294
    , 325 (1962)). The products alleged in a relevant
    market must be “reasonably interchangeable by consumers for the same purposes.”
    United States v. E. I. du Pont de Nemours & Co., 
    351 U.S. 377
    , 395 (1956)
    (emphasis added).
    The Pharmacies’ SAC stated a relevant product market of “the
    pharmaceutical industry,” including the “manufacture, sale, and innovation of all
    2
    pharmaceutical products, prescription pharmaceutical products, non-prescription
    pharmaceutical products, brand name pharmaceutical products and particular
    pharmaceutical products and therapies specifically noted and identified by Pfizer
    and Wyeth in their annual reports.” While the market definition need not be pled
    with specificity, the SAC fails to state any facts indicating that all pharmaceutical
    products are interchangeable for the same purpose. The failure to allege a product
    market consisting of reasonably interchangeable goods renders the SAC “facially
    unsustainable” and appropriate for dismissal. See Newcal, 
    513 F.3d at 1045
    ; Queen
    City Pizza v. Domino’s Pizza, 
    124 F.3d 430
    , 436 (3d Cir. 1997) (holding that a
    motion to dismiss may be granted “[w]here the plaintiff fails to define its proposed
    relevant market with reference to the rule of reasonable interchangeability and
    cross-elasticity of demand.”).
    AFFIRMED.
    3