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Allergan USA, Inc. v. Prescribers Choice, Inc.

Citation: 364 F. Supp. 3d 1089Docket: Case No.: 8:17-cv-01550-DOC-JDE

Court: District Court, C.D. California; January 10, 2019; Federal District Court

Narrative Opinion Summary

The case involves a legal dispute between Allergan USA, Inc. and Defendants, including Prescriber's Choice, Inc. and Sincerus Florida, LLC, over allegations of false advertising, unfair competition, and the unlawful sale of unapproved drugs. Allergan sought partial summary judgment, claiming Defendants violated the Lanham Act, California's Unfair Competition Law (UCL), and Florida's Deceptive and Unfair Trade Practices Act (FDUTPA) by marketing compounded drugs without proper FDA approval. Defendants countered with claims against Allergan, alleging misleading representations and unfair competition. The court evaluated whether Allergan maintained standing to pursue relief given its sale of certain dermatology assets but concluded that Allergan retained standing due to ongoing economic interests and distribution agreements. The court denied Defendants' motion for partial summary judgment, finding sufficient grounds for Allergan's claims under the Lanham Act and UCL, while identifying factual disputes regarding compliance with FDA regulations. The court also addressed issues of false advertising, focusing on whether Defendants' claims of FDA approval were misleading. Ultimately, the court preserved several disputed issues for trial, emphasizing the need to evaluate the legality and impact of Defendants' promotional practices.

Legal Issues Addressed

Compliance with FDA Regulations for 503B Outsourcing Facilities

Application: While Sincerus may operate in line with the FDA’s Interim Policy, it has used drugs not listed in the FDA's Category 1, and compliance with the Interim Policy does not equate to FDA approval.

Reasoning: Sincerus accurately identifies itself as a 503B facility, but there is a critical distinction between explaining the 503B exception and claiming compliance or FDA approval. While Sincerus may operate in line with the FDA’s Interim Policy, it has used drugs not listed in the FDA's Category 1, and compliance with the Interim Policy does not equate to FDA approval.

False Advertising and the Lanham Act

Application: To establish a false advertising claim under the Lanham Act, a plaintiff must demonstrate that the defendant made a false statement in a commercial advertisement that deceives or tends to deceive, is material, was entered into interstate commerce, and caused or is likely to cause injury to the plaintiff.

Reasoning: To establish a false advertising claim under the Lanham Act, a plaintiff must demonstrate that the defendant made a false statement in a commercial advertisement that deceives or tends to deceive, is material, was entered into interstate commerce, and caused or is likely to cause injury to the plaintiff.

Judicial Notice and Admissibility of Public Records

Application: The court can take judicial notice of public records and government website information, but it will not acknowledge facts within these documents that are reasonably disputed.

Reasoning: Judicial notice allows a court to recognize the existence of a fact without formal proof, applicable to public records and government website information. However, the Court will not acknowledge facts within judicially noticed documents that are reasonably disputed.

Standing to Seek Declaratory and Injunctive Relief

Application: Allergan maintains standing to seek declaratory and injunctive relief due to its distribution role under the Supply Agreement and the indirect benefits from earnouts associated with the sale of Rhofade and the other drugs.

Reasoning: The central issue is whether Allergan retains standing to seek declaratory and injunctive relief following the sale of certain assets. The court concludes that Allergan maintains standing due to its distribution role under the Supply Agreement and the indirect benefits from earnouts associated with the sale of Rhofade and the other drugs.

Unfair Competition and the California Unfair Competition Law

Application: Allergan alleges that Defendants engage in unlawful mass manufacturing and marketing of unapproved drugs, constituting an unlawful business practice under the UCL.

Reasoning: Allergan argues that Defendants violate the California Sherman Law by selling unapproved drugs, constituting an unlawful business practice under the UCL.