Golden Gate Pharmacy Services, Inc. v. Pfizer, Inc.

NOT FOR PUBLICATION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.
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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
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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.
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