Bona Law Client PharmacyChecker.com Defeats Summary Judgment Motion by LegitScript in Antitrust Lawsuit
January 8, 2024
A federal court has rejected an attempt to toss Bona Law client PharmacyChecker’s antitrust lawsuit about competition and transparency in prescription drug pricing. Judge Michael Simon of the U.S. District Court for the District of Oregon issued an order January 3, 2024 denying summary judgment to defendant LegitScript, LLC, a private for-profit pharmacy verification company and competitor of PharmacyChecker.
The decision comes after a different federal court reached the opposite conclusion in Spring 2023.
PharmacyChecker provides free information services to its website visitors about public policy issues relating to U.S. prescription drug costs and provides comparative price information for online pharmacies, including online pharmacies located abroad. Its complaint alleges a conspiracy among several entities, including alleged non-profit fronts for large pharmacy and pharmaceutical interests, to persuade key internet gatekeepers such as Google, and payment processors to censor the internet by blacklisting websites that provide information about saving money on prescription drugs.
LegitScript moved for summary judgment, arguing that PharmacyChecker’s services are illegal because they allow website users to find foreign online pharmacies to purchase and import drugs into the United States. According to LegitScript, that claimed potential illegal conduct by third parties should preclude PharmacyChecker from prosecuting its claim that LegitScript joined an illegal group boycott to eliminate PharmacyChecker.com from the markets in which it competes.
The court completely rejected LegitScript’s arguments, finding first that “PharmacyChecker’s business is legal. LegitScript has identified no federal or state law that PharmacyChecker has violated. Nor has LegitScript pointed to any instance of a federal or state law enforcement agency prosecuting or even threatening to prosecute PharmacyChecker, or any instance of a federal or state regulatory body taking or even threatening to take any action against PharmacyChecker (e.g., by issuing a cease-and-desist order). Nor, for that matter, has LegitScript shown that visitors to PharmacyChecker’s website—including those visitors who click on links to non-U.S. pharmacies—engage in illegal activity simply by using PharmacyChecker’s website.”
Next, the court held that a firm like PharmacyChecker that “does not itself engage in illegal activity” but that may facilitate illegal activity by others (personal importation of prescription drugs) does have antitrust standing. In reaching this conclusion, the court analyzed relevant Supreme Court and Ninth Circuit authorities, which confirm that defenses based on the purportedly illegal or wrongful conduct by an antitrust plaintiff do not excuse or immunize the defendants who violated the antitrust laws. The court said that even a plaintiff who has directly engaged in illegal activity—which is not the case for PharmacyChecker—has standing to pursue its antitrust rights.
Judge Simon was not persuaded by the fact that another district judge in a different court, Judge Kenneth M. Karas of the Southern District of New York, granted summary judgment in a related case, holding that a plaintiff whose business is “completely or almost completely geared toward facilitating illegality” lacks antitrust standing. Judge Simon noted that Judge Karas “derived this legal standard from his analysis of various cases,” for which Judge Simon did not find support in binding precedent from the Ninth Circuit and the U.S. Supreme Court.
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Bona Law’s team for PharmacyChecker.com is led by Aaron Gott, Molly Donovan and Jim Lerner.