Bona Law Defends Summary Judgment Win at Ninth Circuit in Antitrust Case About Internet Censorship by Pharmacy Groups
September 25, 2024
SAN DIEGO, Sept. 25—In a brief submitted to the Ninth Circuit on Monday, September 16, 2024, Bona Law argued that a federal district court was correct to deny summary judgment in a long-running antitrust case that alleges a conspiracy among internet gatekeepers to keep information about drug pricing and alternative online pharmacies from reaching consumers.
In a January 2024 decision, District Judge Michael Simon at the Portland, Oregon federal court determined that defendant LegitScript’s argument that plaintiff PharmacyChecker lacked antitrust standing was faulty.
PharmacyChecker provides free information services to website visitors about prescription drug costs and safe online pharmacy websites, including online pharmacies located abroad.
LegitScript, a private for-profit pharmacy verification company, had argued that PharmacyChecker, a competitor, lacked standing because its business was either illegal or engaged in facilitating illegal conduct of third parties because it allowed non-U.S. pharmacy websites to participate in its programs.
LegitScript relied on another decision in a different court against PharmacyChecker. In March 2023, District Judge Kenneth Karas in New York agreed with a similar argument made by different defendants in a related case. Judge Karas held that PharmacyChecker’s business was “almost completely geared toward facilitating” illegal imports because a “majority” of its click-based revenue came from foreign pharmacies.
Judge Simon in Oregon, however, did not find that reasoning persuasive. He said that “[i]t would contravene Supreme Court and Ninth Circuit precedent for this Court to fashion a new rule that deprives a plaintiff of an antitrust cause of action and immunize an antitrust defendant when the plaintiff’s business is entirely legal. That is so even if the plaintiff’s website is used for purposes of facilitating unlawful activity by others and the plaintiff indirectly derives revenue (even a large portion of its revenue) from that activity.”
Judge Simon also found that even if LegitScript were correct about drug importation law, the evidence—correctly viewed at summary judgment—showed at best only a “miniscule” amount of the alleged activity involving facilitation.
PharmacyChecker filed its antitrust case in August 2019 in the Southern District of New York alleging a conspiracy among two of its competitors, LegitScript and the National Association of Boards of Pharmacy, and several pharmacy groups, to use shadow regulation imposed through deals with key internet gatekeepers such as Google and Microsoft to censor information about lower-cost, safe prescription medicine on the Internet. PharmacyChecker alleged that it was effectively excluded from the prescription drug information market through this scheme.
The New York court granted LegitScript’s motion to dismiss on jurisdictional grounds, but then severed and transferred the claim against LegitScript to its home in the District of Oregon while the case against the other defendants proceeded in New York.
The Ninth Circuit case is PharmacyChecker.com LLC v. LegitScript LLC, No. 24-2697 (Ninth Cir.). PharmacyChecker is represented by Bona Law lawyer Aaron Gott in the Ninth Circuit.