EDPA Judge Allows FTC to Seek Disgorgement in Cephalon Pay-for-delay Case | Practical Law

EDPA Judge Allows FTC to Seek Disgorgement in Cephalon Pay-for-delay Case | Practical Law

Judge Mitchell Goldberg of the US District Court for the Eastern District of Pennsylvania held that the Federal Trade Commission (FTC) Act does not preclude the FTC from seeking monetary damages in its pay-for-delay case against Cephalon, Inc.

EDPA Judge Allows FTC to Seek Disgorgement in Cephalon Pay-for-delay Case

Practical Law Legal Update 1-609-2125 (Approx. 3 pages)

EDPA Judge Allows FTC to Seek Disgorgement in Cephalon Pay-for-delay Case

by Practical Law Antitrust
Published on 16 Apr 2015 • USA (National/Federal)
Judge Mitchell Goldberg of the US District Court for the Eastern District of Pennsylvania held that the Federal Trade Commission (FTC) Act does not preclude the FTC from seeking monetary damages in its pay-for-delay case against Cephalon, Inc.
On April 15, 2015, Judge Mitchell Goldberg of the US District Court for the Eastern District of Pennsylvania held that the FTC Act did not preclude the FTC from seeking monetary relief in its pay-for-delay case against Cephalon, Inc. (FTC v. Cephalon, Inc., No. 2:08-cv-02141-MSG (E.D. Pa. Apr. 15, 2015)). In its January, 2015 motion to preclude the FTC from seeking disgorgement, Cephalon argued that:
  • Section 13(b) of the FTC Act, the basis for the FTC's case, does not permit the FTC to seek equitable monetary relief.
  • Even if disgorgement is allowed by statute, disgorgement in this case would be duplicative to relief granted to consumers in private actions.
Judge Mitchell disagreed with both of Cephalon's arguments. In holding that the FTC is permitted to seek monetary relief against Cephalon, Judge Mitchell reasoned that:
  • Circuit courts have uniformly concluded that district courts may order monetary equitable relief under Section 13(b) unless there is a necessary and inescapable inference that a district court's equitable power is statutorily limited.
  • Nothing in the FTC Act limits a district court's equitable power under Section 13(b).
  • Monetary relief would not be duplicative, as any disgorgement remedy would be placed in a consumer relief fund to help satisfy private plaintiff claims.
For more information on the antitrust issues surrounding reverse payment settlement agreements and the status of pay-for-delay litigation, see Practice Note, Reverse Payment Settlement Agreements and Actavis Case Tracker.