Civil Procedure

Federal judge chastises FTC for threatening to 'pick up its marbles' and play in other venues

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FTC seal.

A federal judge in Philadelphia is criticizing the Federal Trade Commission for threatening “to pick up its marbles and play in venues more to its liking.”

U.S. District Judge Paul Diamond scolded the FTC in its case contending drug makers had entered into agreements to delay producing two generic drugs, (sub. req.) reports. Diamond granted a motion to sever the claims for each drug after Endo Pharmaceuticals and other defendants argued they had nothing to do with one another.

But Diamond said in his Oct. 20 opinion (PDF) that he would refuse the FTC’s “cavalier suggestion” that he transfer the severed cases to other districts where private-party multidistrict litigation is pending. He noted the FTC had not filed a formal transfer motion, but warned that there would have to be a change in circumstances for him to grant it.

Diamond also chastised the FTC for threatening to voluntarily withdraw the claims and file them elsewhere. If the FTC carried through with the threat, Diamond said, he would “entertain defendants’ requests for fees and costs.”

Diamond noted that the defendants have also moved for dismissal of the case, and they contend that the FTC’s threat to dismiss and refile is intended to avoid a negative ruling on the motion. Diamond said the dismissal motions, as well as the defendants’ contentions about the FTC motive, appear to be “anything but frivolous.”

“If the FTC is determined to leave this forum before I rule on defendants’ dismissal motions, it does so at its own peril,” Diamond wrote. “Significantly, even if the FTC voluntarily dismisses and refiles, I could still hear defendants’ motions for costs and counsel fees relating to the original action—including the fees and costs incurred in preparing their weighty dismissal motions.”

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