01/23/2008
Cooley Achieves Dismissal of Antitrust Case Against Covidien
San Francisco, Calif. – January 23, 2008 – Cooley Godward Kronish announced that yesterday, the United States District Court for the Eastern District of Missouri dismissed an antitrust class action complaint against client Covidien (formerly Tyco Healthcare). In the complaint, plaintiff alleged that a putative national class of hospitals and other purchasers paid overcharge prices for urology catheters supplied by Covidien and CR Bard, Inc. Covidien is a leading global provider of healthcare products.
Specifically, the named plaintiff alleged that Covidien and Bard had pursued common contracting practices with group purchasing organizations (GPOs) and with hospitals that had foreclosed competition in the alleged catheter markets and had resulted in artificially inflated prices. Plaintiff alleged claims under Sections 1 and 2 of the Sherman Act, Section 3 of the Clayton Act, Missouri state antitrust laws, and the Missouri Fair Merchandising Practices Act.The Court held that plaintiff had failed to state a claim against Covidien. Citing Bell Atlantic Corp. v. Twombly, 127 S.Ct. 1955 (2007), the Court held that the allegations of common contracting practices for the sale of urology devices were insufficient to support the inference of a conspiracy between Covidien and Bard to restrain trade or exclude competition. The Court also rejected plaintiff's argument that the market shares of Covidien and Bard could be aggregated to impose antitrust liability despite the absence of collusion or conspiracy.
As the Court stated, "Without any specific allegations of an agreement between Bard and Tyco, Plaintiff cannot bootstrap its claims against Tyco by accumulating its market share with that of Bard." (Order at 14.) The Court found that the complaint showed that Covidien, as a separate competitor, lacked sufficient market share or power to support antitrust liability under Sherman Act Sections 1 and 2 and Clayton Act Section 3. The Court also found that the Missouri Fair Merchandising Practices Act applies only to merchandise purchased for personal, family or household use. The Court dismissed all the federal antitrust and state law claims against Covidien, and denied plaintiff's motion to file an amended complaint against Covidien.
Covidien is represented by partner James Donato and associates Craig Huckelbridge and Margaret Branick-Abilla in the San Francisco office of Cooley Godward Kronish LLP, along with Gerry Greiman of Spencer, Fain, Britt & Browne (St. Louis, Mo.).
Plaintiff is represented by Kenneth Walsh of Kirby McInerney LLP (New York), Rusty Hardin (Houston, Texas), David Boies III of Straus & Boies LLP (Fairfax, Va.) and Michael Ponder of Cook, Barkett, Maguire and Ponder LC (Cape Girardeau, Mo.).
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