In Re Flonase Antitrust Litigation

PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
_____________
Nos. 16-1124 & 16-3019
_____________
IN RE: FLONASE ANTITRUST LITIGATION
Smithkline Beecham Corporation, d/b/a GlaxoSmithKline;
n/k/a GlaxoSmithKline LLC, including GlaxoSmithKline,
PLC,
Appellant
________
On Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D.C. Civ. No. 2-08-cv-03301)
District Judge: Honorable Anita B. Brody
____________
Argued June 7, 2017
Before: CHAGARES, GREENAWAY, JR., and
VANASKIE, Circuit Judges.
(Opinion Filed: December 22, 2017)
Lisa S. Blatt [ARGUED]
R. Stanton Jones
Sarah M. Harris
Robert Leider
Sally L. Pei
Arnold & Porter LLP
601 Massachusetts Ave., NW
Washington, DC 20001
Stephen J. Kastenberg
Burt M. Rublin
Jessica M. Anthony
Ballard Spahr LLP
1735 Market St., 51st Fl.
Philadelphia, PA 19103
Counsel for Appellant
Richard A. Samp
Mark S. Chenoweth
Washington Legal Foundation
2009 Massachusetts Ave., NW
Washington, DC 20036
Counsel for Amicus Appellants National
Association of Manufacturers and Washington
Legal Foundation
2
William S. Consovoy
Thomas R. McCarthy
Carmeron T. Norris
Consovoy McCarthy Park
3033 Wilson Blvd, Suite 700
Arlington, VA 22201
Kate Comerford Todd
Steven P. Lehotsky
Janet Galeria
U.S. Chamber Litigation Center
1615 H Street, NW
Washington, DC 20062
Counsel for Amicus Appellant Chamber of
Commerce of the United States of America
Cary Silverman
Shook Hardy & Bacon
1155 F Street, NW, Suite 200
Washington, DC 20004
H. Sherman Joyce
Lauren Sheets Jarrell
American Tort Reform Association
1101 Connecticut Ave., NW Suite 400
Washington, DC 20036
Counsel for Amicus Appellant American Tort
Reform Association
3
Bart D. Cohen
Nussbaum Law Group PC
570 Lexington Ave., 19th Floor
New York, NY 10022
John Alden Meade [ARGUED]
Young Cotter & Meade
909 Poydras St., Suite 1600
New Orleans, LA 70112
Counsel for Appellee
_______________
OPINION
_______________
GREENAWAY, JR., Circuit Judge.
In this case, SmithKline Beecham Corporation, doing
business as GlaxoSmithKline (“GSK”), seeks to enforce a
court-approved settlement agreement and enjoin the State of
Louisiana, through its Attorney General, from bringing
allegedly released claims against GSK in the Louisiana state
courts. Louisiana protests this enforcement action on the
theory that the Eleventh Amendment to the Constitution of the
United States bars its involuntary inclusion in the settlement
agreement.
To resolve this dispute, we must answer two questions:
First, does a motion for approval of a class action settlement
qualify as a suit against a state for Eleventh Amendment
purposes if the requested settlement agreement enjoins a state
4
from suing in a state court? Second, if the Eleventh
Amendment does cover this motion for settlement approval,
may GSK avoid the Eleventh Amendment’s prohibition by
showing that Louisiana waived its sovereign immunity? We
find that the Eleventh Amendment covers this motion and that
GSK may not avoid its bar.
In addition to this claim, GSK asserts that the District
Court abused its discretion in denying Rule 60(b) relief from a
final judgment. We find this argument unavailing. On these
two grounds, we will affirm.
I.
On July 14, 2008, private indirect purchasers of
Flonase, a brand-name prescription drug, sued GSK in the
United States District Court for the Eastern District of
Pennsylvania. They alleged that: (a) GSK had filed sham
citizen petitions with the Food and Drug Administration to
delay the introduction of a generic version of Flonase, and (b)
this delay forced the private indirect purchasers to pay more
for Flonase than they would have if the generic version were
available. The private indirect purchasers sued on behalf of
themselves and a class of other indirect purchasers. For the
purpose of the case at bar, two motions matter.
First, in the primary suit, the private indirect purchasers
moved for final approval of settlement on April 1, 2013, after
the District Court had certified the class, and had approved of
the notice to settlement class members. The State of Louisiana,
an indirect Flonase purchaser, qualified as a potential class
member but did not receive the approved notice. Instead, it
only received a Class Action Fairness Act (“CAFA”) Notice.
This notice, “serve[d] upon the appropriate State official of
5
each State in which a class member resides,” included: (1) “a
copy of the complaint,” (2) “notice of any scheduled judicial
hearing in the class action,” (3) “any proposed or final
notification to class members,” (4) “any proposed . . . class
action settlement,” and (5) an estimate of the number of class
members in each state. 28 U.S.C. § 1715(b) (2012). The notice
includes this information because Congress “designed [this
notice requirement] to ensure that a responsible state and/or
federal official receives information about proposed class
action settlements and is in a position to react if the settlement
appears unfair to some or all class members or inconsistent
with applicable regulatory policies.” S. Rep. No. 109–14, at
31 (2005), as reprinted in 2005 U.S.C.C.A.N. 3, 32. It made
clear, however, that state officials “will not be required” to “get
involved.” Id. at 33.
The requested court order “permanently enjoined” all
members of the settlement class, including Louisiana, from
bringing released claims against GSK, even in Louisiana’s
state court. Pls.’ Mot. Final Approval Settlement and Plan
Allocation, Award Att’ys’ Fees, Reimbursement Expenses and
Incentive Awards Named Pls. at 9-10, In re Flonase Antitrust
Litig., No. CV 08-3301, 2015 WL 9273274 (E.D. Pa. Dec. 21,
2015), ECF No. 574 [hereinafter Motion for Final Approval of
Settlement Plan]. The proposed settlement agreement, among
other things, provided compensation to the plaintiffs and class
members, released the plaintiffs’ and class members’ claims,
“reserv[ed] exclusive and continuing jurisdiction over the
Settlement and this Settlement Agreement” for the District
Court, and gave GSK the power to enforce the settlement.
App. 98–107. On June 19, 2013, the District Court approved
the final settlement.
6
Second, in the ancillary suit, GSK filed a motion to
enforce the settlement agreement against the Louisiana
Attorney General because, according to GSK, Louisiana
violated the settlement agreement. In its motion, GSK argued
that “Louisiana did not opt-out of the Settlement Class, and
thus is bound by the release and covenant not to sue provisions
in the Settlement Agreement and Final Order and Judgment.”
App. 314. As a result, GSK “respectfully submit[ted] that this
Court should enjoin the Louisiana Attorney General from
further pursuit of claims that were encompassed by the
settlement in this litigation.” App. 315.
On December 21, 2015, the District Court for the
Eastern District of Pennsylvania denied this request and
dismissed the case. It held that the Eleventh Amendment
covered this enforcement action because, pursuant to the
Eleventh Amendment, “a State retains the autonomy to choose
‘not merely whether it may be sued, but where it may be
sued.’” App. 12 (citing Pennhurst State Sch. & Hosp. v.
Halderman, 465 U.S. 89, 99 (1984)). See also App. 14 (“Even
though some of Louisiana’s claims fall within the Settlement
Agreement, I cannot enjoin Louisiana unless the State has
waived its sovereign immunity and consented to this Court’s
jurisdiction.”). It then held that “Louisiana’s receipt of the
CAFA Notice is insufficient to unequivocally demonstrate that
the State was aware that it was a class member and voluntarily
chose to have its claims resolved by the Settlement
Agreement.” App. 17.
Shortly before the District Court decided GSK’s motion
to enjoin Louisiana’s state court action, GSK moved pursuant
to Rule 60(b)(2) for Relief from a Judgment or Order because
of newly discovered evidence that a third party had allegedly
submitted a settlement claim on behalf of Louisiana. On May
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31, 2016, the District Court denied this motion. GSK appealed
the December 21 and May 31 orders.
II.
Because we review the District Court’s final decisions,
we exercise jurisdiction over this appeal pursuant to 28 U.S.C.
§ 1291. “Dismissal of an action based upon sovereign
immunity is subject to plenary review by this Court.” Blanciak
v. Allegheny Ludlum Corp., 77 F.3d 690, 694 (3d Cir. 1996).
“We review the denial of Rule 60(b) relief for an abuse of
discretion.” Coltec Indus., Inc. v. Hobgood, 280 F.3d 262, 269
(3d Cir. 2002).
III.
The District Court: (a) properly granted Louisiana’s
Motion to Dismiss, (b) appropriately denied GSK’s Motion to
Enforce Class Settlement, and (c) did not abuse its discretion
in denying GSK’s Rule 60(b) motion. As a result, we will
affirm.
This case turns on whether the District Court exercised
jurisdiction over Louisiana in the primary suit. A private party
may bring a suit against a state official to enforce a settlement
agreement despite the Eleventh Amendment. Frew ex rel.
Frew v. Hawkins, 540 U.S. 431, 440 (2004). To enforce a
settlement agreement, a private party must draw upon a federal
court’s ancillary jurisdiction. Kokkonen v. Guardian Life Ins.
Co., 511 U.S. 375, 379–80 (1994). “Ancillary jurisdiction may
extend to claims having a factual and logical dependence on
the primary lawsuit, but that primary lawsuit must contain an
independent basis for federal jurisdiction.” Peacock v.
Thomas, 516 U.S. 349, 355 (1996) (internal quotation marks
8
and citation omitted). As a result, GSK may not draw upon the
District Court’s powers of ancillary jurisdiction unless the
District Court properly exercised jurisdiction over the State in
approving the settlement agreement. In approving the
settlement agreement, the District Court lacked jurisdiction
over the State because the Eleventh Amendment applies to the
primary case and because Louisiana did not waive its sovereign
immunity in that case.
A.
The Eleventh Amendment applies to the primary suit.
The Eleventh Amendment provides that “[t]he Judicial power
of the United States shall not be construed to extend to any suit
in law or equity, commenced or prosecuted against one of the
United States by Citizens of another State, or by Citizens or
Subjects of any Foreign State.” U.S. Const. amend. XI.
The Supreme Court has defined a “suit” as “the
prosecution, or pursuit, of some claim, demand, or request” and
regarded “commenced or prosecuted” as follows: “By a suit
commenced by an individual against a State, we should
understand process sued out by that individual against the
State, for the purpose of establishing some claim against it by
the judgment of a Court; and the prosecution of that suit is its
continuance.” Cohens v. Virginia, 19 U.S. 264, 407–08
(1821). “[A] suit is against the sovereign if the judgment
sought would expend itself on the public treasury or domain,
or interfere with the public administration, or if the effect of
the judgment would be to restrain the Government from acting,
or to compel it to act.” Pennhurst State Sch. & Hosp., 465 U.S.
at 102 n. 11 (1984) (internal quotation marks and citation
omitted) (emphasis added).
9
In Missouri v. Fiske, the Supreme Court found that the
Eleventh Amendment applied to a motion to enjoin a state from
suing in its own court. 290 U.S. 18, 26 (1933). The Supreme
Court came to this conclusion because the Eleventh
Amendment covers claims that seek equitable remedies and
because the private party’s motion to enjoin the State from
suing in its own court qualified as a suit that sought an
equitable remedy. Id. at 27.
Like the private parties in Fiske, the private parties here
sought an equitable remedy against a State. In their motion for
final approval of settlement, the private indirect purchasers
asked the District Court to order that “all members of the
Settlement Class[, including Louisiana,] . . . are hereby
permanently enjoined” from bringing any of the released
claims against GSK “in any state or federal court . . . .” Motion
for Final Approval of Settlement Plan at 9–10. Because Fiske
held that the Eleventh Amendment covers a motion to enjoin a
state from suing in its own court and because the motion for
final settlement approval sought to enjoin Louisiana from
suing in its own court, the Eleventh Amendment covers the
motion for final approval of settlement at issue here.
Procedurally, Fiske differs from the case at bar in two
respects. Neither distinction, however, undermines Fiske’s
utility or applicability. First, the States played a different role
in each claim. In Fiske, the private parties sought an injunction
against a state that acted as an intervening defendant. 290 U.S.
at 23–24. Here, private parties sought an injunction against a
state that acted as an absent class member.
This distinction between the States’ procedural titles
does not make Fiske less useful. The Supreme Court has
instructed us to focus on the nature of the claim’s requested
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relief, as opposed to the “mere names of the titular parties,” In
re New York, 256 U.S. 490, 500 (1921), and, “in the context of
lawsuits against state and federal employees or entities,” the
Supreme Court has ruled that “courts should look to whether
the sovereign is the real party in interest to determine whether
sovereign immunity bars the suit.” Lewis v. Clarke, 137 S. Ct.
1285, 1290 (2017). To make this decision, “courts may not
simply rely on the characterization of the parties in the
complaint, but rather must determine in the first instance
whether the remedy sought is truly against the sovereign.” Id.
at 1290. If we must look beyond “the characterization of the
parties in the complaint” and, instead, scrutinize the requested
remedy’s effects to ensure that it does not infringe upon an
unnamed sovereign’s immunity, we should surely adopt the
same approach here when considering whether a claim
implicates the rights of a state acting as an absent class
member. Id.
Second, the private parties sought equitable relief in
different types of motions. In Fiske, the private parties filed an
“ancillary and supplemental bill of complaint,” Fiske, 290 U.S.
at 24, and requested “the equitable remedy of injunction
against the state.” Id. at 27. Here, the private parties asked for
the approval of a settlement agreement in which the state was
“hereby permanently enjoined . . . .” Motion for Final
Approval of Settlement Plan at 9.
The specific name of the vessel requested to carry the
injunction does not distinguish Fiske from the case at bar. The
Supreme Court has acknowledged a consent decree’s
hybridity. On the one hand, “[a] consent decree no doubt
embodies an agreement of the parties and thus in some respects
is contractual in nature.” Rufo v. Inmates of Suffolk Cty. Jail,
502 U.S. 367, 378 (1992). On the other hand, “it is an
11
agreement that the parties desire and expect will be reflected
in, and be enforceable as, a judicial decree that is subject to the
rules generally applicable to other judgments and decrees.” Id.
Because of this ambiguity, the Supreme Court has established
a rule to determine whether a settlement agreement carries the
force of federal law and has held that a settlement agreement
becomes enforceable federal law when it: (a) receives a federal
court’s approval, (b) “springs from a federal dispute,” and (c)
“furthers the objectives of federal law.” Hawkins, 540 U.S. at
438.
As GSK concedes, this settlement agreement “was
functionally a consent decree” that “federal courts may
enforce.” Appellant’s Br. at 35. As a result, Fiske applies
even though the private parties in Fiske requested an injunction
in the form of a court order—as opposed to in the form of a
court approved settlement agreement.
Another court of appeals has come to a similar
conclusion, albeit in a slightly different situation. In Thomas
v. FAG Bearings Corp., the Eighth Circuit found that “the
Eleventh Amendment bars involuntary joinder of” a state
because “[i]nvoluntary joinder will compel [the state] to act by
forcing it to prosecute [a private party] at a time and place
dictated by the federal courts.” 50 F.3d 502, 505 (8th Cir.
1995). The Eighth Circuit supported its conclusion by noting
that “[p]ermitting coercive joinder also undermines the two
aims of the Eleventh Amendment: protection for a state’s
autonomy and protection for its pocketbook.” Id. at 506.
According to our sister circuit, a contrary ruling would
undermine the Amendment’s aims by: (a) allowing a private
party to waive a state’s sovereign immunity, and (b)
compelling “[p]remature litigation [that] potentially limits the
12
costs [the state] can recover.” Id. These same concerns
motivate our decision today.
GSK preemptively questions our holding by citing three
Supreme Court cases that held that the Eleventh Amendment
did not cover a private party’s suit involving a state. In the first
case, Cohens, the Supreme Court held that the Eleventh
Amendment did not cover a criminal defendant’s appeal from
a state court to the Supreme Court of the United States on a
writ of error. 19 U.S. at 407–08. In the second case, California
v. Deep Sea Research, Inc., the Supreme Court found that the
Eleventh Amendment did not apply to an in rem complaint
over a sunken ship that the State of California claimed as its
own after the private party filed the in rem suit. 523 U.S. 491,
496 (1998). In the third case, Tennessee Student Assistance
Corp. v. Hood, the Supreme Court held that the Eleventh
Amendment did not apply to discharge orders in in rem
bankruptcy proceedings even though a state agency had
guaranteed the allegedly dischargeable loan. 541 U.S. 440,
449 (2004).
In addition to these Supreme Court cases, GSK relies on
three sister circuit cases that held that motions to remove or
transfer did not implicate the Eleventh Amendment. Cal. ex
rel. Lockyer v. Dynegy, Inc., 375 F.3d 831, 845, 848 (9th Cir.
2004) (observing that “Cohens counsels strongly that removal
does not constitute the commencement or prosecution of a suit”
and holding that “a state that voluntarily brings suit as a
plaintiff in state court cannot invoke the Eleventh Amendment
when the defendant seeks removal to a federal court of
competent jurisdiction”); Okla. ex rel. Edmondson v. Magnolia
Marine Transp. Co., 359 F.3d 1237, 1240 (10th Cir. 2004)
(“We hold that the State may not assert its Eleventh
Amendment immunity to preclude defendants’ removal of the
13
tort action it brought against them in its own courts.”); Regents
of the Univ. of Cal. v. Eli Lilly & Co., 119 F.3d 1559, 1565
(Fed. Cir. 1997) (finding “that the Eleventh Amendment does
not deprive the Indiana district court of jurisdiction in this
case” because “it does not involve any claim or counterclaim
against [the state] that places [the state] in the position of a
defendant”).
We distinguish these Supreme Court and sister circuit
cases from the case at bar because none of the private parties
in the cases cited by GSK sought legal or equitable remedies
against the State. Indeed they sought a writ of jurisdiction that
“acts only on the record,” Cohens, 19 U.S. at 410, a removal
notice that was not “dissimilar” from a writ of jurisdiction,
Dynegy, 375 F.3d at 845,1 a transfer motion that “does not
involve any claim or counterclaim against” the State, Eli Lilly
& Co., 119 F.3d at 1565,2 an in rem admiralty action where the
“the possession of the” sovereign was not “invaded under
process of the court,” Deep Sea Research, 523 U.S. at 507, and
an in rem bankruptcy determination not “seeking to recover
1
GSK unsuccessfully sought to remove Louisiana’s state court
case to the United States District Court for the Middle District
of Louisiana. Ruling and Order, Louisiana v. SmithKline
Beecham Corp., No. 15-cv-00055 (M.D. La. Feb. 4, 2015),
ECF No. 38. As GSK’s counsel conceded at Oral Argument,
this issue is not before us.
2
While the removal notice was pending in the Middle District
of Louisiana, GSK futilely tried to transfer the case from the
Middle District of Louisiana to the Eastern District of
Pennsylvania. Louisiana v. SmithKline Beecham Corp., No.
15-cv-00055, (M.D. La. Feb. 4, 2015), ECF No. 36.
14
property in the State’s hands,” Hood, 541 U.S. at 441–42. As
a result, we conclude that the Eleventh Amendment applies
here.
B.
The Eleventh Amendment prevented the District Court
from issuing an injunction against Louisiana because
Louisiana did not waive its sovereign immunity. A suit may
avoid the Eleventh Amendment’s broad prohibition in three
ways. “First, Congress may authorize such a suit in the
exercise of its power to enforce the Fourteenth Amendment—
an Amendment enacted after the Eleventh Amendment and
specifically designed to alter the federal-state balance. Second,
a State may waive its sovereign immunity by consenting to
suit.” Coll. Sav. Bank v. Fla. Prepaid Postsecondary Educ.
Expense Bd., 527 U.S. 666, 670 (1999) (internal citation
omitted). Third, a private party may sue a state official to
prevent the official from violating federal law. Ex parte Young,
209 U.S. 123, 159–60 (1908). GSK argues that Louisiana
waived its sovereign immunity. We disagree.
The State of Louisiana did not waive its sovereign
immunity by receiving a CAFA notice and by failing to oppose
the settlement based on that notice. A state waives its
immunity “if the State makes a ‘clear declaration’ that it
intends to submit itself to our jurisdiction.” Coll. Sav. Bank,
527 U.S. at 675–76 (citation omitted). The law “requir[es] a
‘clear declaration’ by the State of its waiver” to ensure “that
the State in fact consents to suit” and because “there is little
reason to assume actual consent based upon the State’s mere
presence in a field subject to congressional regulation.” Id. at
680.
15
In College Savings Bank, a private party sued a state for
infringing upon a patent. Id. at 671. The private party argued
that the Eleventh Amendment did not bar the suit because the
State “constructively waived its immunity from suit by
engaging in the voluntary and nonessential activity . . . after
being put on notice by the clear language of the [Act] that it
would be subject to . . . liability for doing so.” Id. at 680. The
Supreme Court rejected this argument and found that the State
did not voluntarily consent to federal jurisdiction by engaging
in “voluntary and nonessential activity” because “[t]here is a
fundamental difference between a State’s expressing
unequivocally that it waives its immunity and Congress’s
expressing unequivocally its intention that if the State takes
certain action it shall be deemed to have waived that
immunity.” Id. at 680–81.
In Lapides v. Board of Regents of University System of
Georgia, the Supreme Court applied this test and came to a
different conclusion. 535 U.S. 613, 620 (2002). In that case,
a private party sued a state official and the State removed the
case to federal court. Id. Once in federal court, the state
claimed sovereign immunity. Id. The Court observed that
College Savings did “require[] a ‘clear’ indication of the
State’s intent to waive its immunity” and held that “[t]he
relevant ‘clarity’ here must focus on the litigation act the State
takes that creates the waiver. And that act—removal—is
clear.” Id.
In light of College Savings Bank and Lapides, Louisiana
did not clearly indicate its intent to waive its sovereign
immunity in the primary suit. It received a CAFA notice. That
notice may not “impose any obligations, duties, or
responsibilities upon . . . State officials.” 28 U.S.C. § 1715(f).
After it received this notice, it did not act, in its capacity either
16
as a litigant, as was the case in Lapides, or as a market
participant, as was the case in College Savings Bank. As a
result, we reject GSK’s argument and hold that Louisiana did
not waive its sovereign immunity in the primary suit by merely
receiving a CAFA notice and failing to act.
GSK attempts to refute this argument in three ways. We
find none of them persuasive. First, it attempts to distinguish
College Savings Bank by arguing that College Savings Bank
announced “the test for whether States consented to federal
jurisdiction by enacting statutes or otherwise engaging in non-
litigation conduct that Congress specified would abrogate
immunity” and that Lapides “governs whether a State’s
litigation conduct waives immunity.” Appellant’s Reply at 18.
This argument lacks merit because the Court decided Lapides
and College Savings Bank under the same rule. Indeed, in
Lapides, the Court observed that College Saving Bank
“required a ‘clear’ indication of the State’s intent to waive its
immunity” and concluded that, in Lapides, “that act—
removal—is clear.” Id. at 620.
Second, GSK argues that “Louisiana cites no authority
suggesting that only affirmative litigation acts can waive
immunity.” Appellant’s Reply at 19. This characterization
misconstrues Louisiana’s argument. Louisiana does not argue
that only affirmative litigation acts can waive immunity.
Instead, it argues that a state cannot waive its immunity merely
by receiving notice and failing to act. Appellee’s Br. at 23
(“Sovereign immunity . . . requires something more than
silence or inaction before a state can be bound by a federal
proceeding.”). This distinction matters because, as explained
above, College Savings supports the State’s actual position.
17
Third, GSK asserts, without citation, that “it does not
follow that sovereign immunity must afford States more
protection against becoming absent class members than what
ordinary litigants receive under Rule 23.” Appellant’s Reply
at 19. It reasons that States should not receive more protection
because “States are far more sophisticated than ordinary
litigants, and understand the significance of litigation conduct
far better.” Id. at 19. This argument misses the point. The
Constitution requires more protections for States than for
ordinary litigants not because of their sophistication but
because of their status as sovereigns. P.R. Aqueduct & Sewer
Auth., v. Metcalf & Eddy, Inc., 506 U.S. 139, 146 (1993) (“The
Amendment is rooted in a recognition that the States, although
a union, maintain certain attributes of sovereignty, including
sovereign immunity.”). Analogizing states to private parties
and comparing their respective sophistication ignores this
justification. As a result, we find that Louisiana did not waive
its sovereign immunity when it received a CAFA notice and
failed to act.
C.
The District Court did not abuse its discretion in
denying GSK’s Rule 60(b) motion. In its briefing before the
District Court, GSK expressed its belief that another
organization could have filed a claim on behalf of the State of
Louisiana. Because of this suspicion, it asked the claims
administrator to inform GSK of any claims submitted on
Louisiana’s behalf. The claims administrator refused and cited
its commitment to confidentiality to justify its decision. After
the District Court had denied GSK’s motion to enforce the
settlement agreement, GSK learned that an organization,
Humana, had submitted a claim on behalf of Louisiana. Based
on this information, GSK then moved pursuant to Rule 60(b)
18
on the theory that it had discovered new evidence. The District
Court denied this motion.
The District Court did not abuse its discretion in
denying this motion. A “court may relieve a party or its legal
representative from a final judgment, order, or proceeding
for . . . (2) newly discovered evidence that, with reasonable
diligence, could not have been discovered in time to move for
a new trial under Rule 59(b).” Fed. R. Civ. P. 60. “That
standard requires that the new evidence (1) be material and not
merely cumulative, (2) could not have been discovered before
trial through the exercise of reasonable diligence and (3) would
probably have changed the outcome of the trial.” Compass
Tech., Inc. v. Tseng Labs., Inc., 71 F.3d 1125, 1130 (3d Cir.
1995).
The District Court found that GSK had not carried its
burden under the second prong because it did not prove that it
could not have discovered this information with reasonable
diligence. It came to this conclusion because GSK did not
draw on the Court’s power to recover the discovered
information and because GSK did not show that it could not
have received this information with a court order. GSK has not
cited a case to support its position that reasonable diligence
requires less than a court order. As a result, the District Court
did not abuse its discretion in denying this motion.
IV.
The Eleventh Amendment applies to the settlement
agreement and the instant enforcement action. GSK may not
avoid the Eleventh Amendment’s prohibition. Additionally,
the District Court did not abuse its discretion in denying GSK’s
19
Rule 60(b) Motion. For the foregoing reasons, we will affirm
the District Court’s orders.
20