Source: cases/15usc1/f-supp-3d-360-730-city-of-rockford-v-mallinckrodt.case
Case source: https://www.neochart.com/catalog/cases/f-supp-3d/volume_360/0730_01/index.html
A plaintiff alleging conspiracy to fix prices in violation of the Sherman Act must allege "enough factual matter (taken as true) to suggest that an agreement was made"-that is, "enough fact[s] to raise a reasonable expectation that discovery will reveal evidence of illegal agreement."
But at this stage of litigation, the court draws all reasonable inferences from the complaint in favor of plaintiffs and taking the SAC as a whole finds that plaintiffs have sufficiently alleged a conspiracy.
One such exception is the "co-conspirator" exception, which allows indirect purchasers to sue middlemen-conspirators if the plaintiffs can establish a conspiracy and overcharges:
But at the Rule 12 stage, the court draws all reasonable inferences in favor of plaintiffs, and finds that Illinois Brick is not a bar to plaintiffs' claims.
First, in Illinois Brick Co. v. Illinois, 431 U.S. 720, 97 S.Ct. 2061, 52 L.Ed.2d 707 (1977), the Supreme Court held that only direct purchasers from alleged antitrust violators may bring federal antitrust actions.
As currently formulated, plaintiffs do not plausibly allege that Acument was a direct purchaser from a member of the alleged conspiracy, nor does Acument plausibly allege any other theory which would furnish antitrust standing to it.
The third prong requires that an antitrust plaintiff must allege that the "claimed injuries are of the type the antitrust laws were intended to prevent and reflect the anticompetitive effect of either the violation of or anticompetitive acts made possible by the violation."
Thus, Rockford has satisfied the "antitrust injury" prong and, accordingly, the court finds that Rockford has stated a § 1 claim.
At this stage, it is sufficient for plaintiffs to plausibly allege that defendants engaged in conduct that resulted in an unreasonable restraint of trade.
Consequently, the court finds that Rockford's assertions of anticompetitive conduct are sufficient to adequately plead the "unreasonable restraint of trade" prong of Rockford's § 1 claim.
casedsl 1.2
# author: Flash1 (gemini-3.8-flash-high)
# triaged-by: Fable (2026-11-10)
case /f-supp-3d/360/0730-01
name City of Rockford v. Mallinckrodt ARD, Inc.
cite 360 F. Supp. 3d 730 (2019)
# IR court field says: United States District Court for the Eastern District of Illinois
court United States District Court for the Northern District of Illinois
date 2019-01-25
url catalog/cases/f-supp-3d/volume_360/0730_01/index.html
source ir/caselaw/f_supp_3d_360.jsonl sha1=45d92834e726a6541c05a35492f3f228f59b27d9 chars=60000
opinion op : order by Kapala @0..60000 controlling
? opinion: the IR text is capped at 60000 chars; the cut falls in the state-law part (Count VIII). The federal antitrust analysis (Counts VI-VII, @13455..47848) is complete. No appended footnotes inside the cap.
party rockford : City of Rockford, Illinois (self-insured health-plan payor that paid ESI for Acthar; plaintiff)
party acument : Acument Global Technologies Inc. (self-insured payor that paid CVS Caremark for Acthar; plaintiff)
party mallinckrodt : Mallinckrodt plc and Mallinckrodt ARD, Inc., formerly Questcor (manufacturer of Acthar; defendants)
party express-scripts : Express Scripts Holding Co. and subsidiaries ESI, CuraScript, Accredo, UBC (exclusive distributor of Acthar; defendants)
theory excl : manufacturer and its exclusive distributor conspired to fix and inflate Acthar's price (exclusive dealing arrangement "ASAP") and to keep the only rival drug, Synacthen, off the market
law 15usc1
role applied
posture civil putative class action by two self-insured payors against a drug manufacturer and its exclusive distributor under §§ 1 and 2 (Counts VII, VI) plus state-law and RICO claims; Rule 12(b)(6) motions; denied as to Rockford's federal antitrust claims, granted without prejudice (leave to replead) as to Acument's for want of antitrust standing
result mixed
element agreement : satisfied [pleaded]
party rockford mallinckrodt express-scripts
theory excl
route vertical-agreement
pattern manufacturer and its sole distributor: exclusive-distribution program followed by an unresisted 1,310% price increase
rule @18054..18339 | A plaintiff alleging conspiracy to fix prices in violation of the Sherman Act must allege "enough factual matter (taken as true) to suggest that an agreement was made"-that is, "enough fact[s] to raise a reasonable expectation that discovery will reveal evidence of illegal agreement."
fact @2029..2210 [supports] | On August 27, 2007, Mallinckrodt embarked on a "new strategy" that sought to limit Acthar's distribution by designating Express Scripts as Mallinckrodt's sole distributor of Acthar.
fact @20903..21152 [supports] | Specifically, Express Scripts agreed not to push back on Mallinckrodt's decisions to inflate Acthar's price beyond the competitive level, in contrast to when Express Scripts took the opposite approach in 2015 with respect to Turing's drug, Daraprim.
fact @9570..9668 [cuts-against] | Mallinckrodt set the average wholesale prices of Acthar used by Express Scripts for reimbursement.
held @21553..21761 | But at this stage of litigation, the court draws all reasonable inferences from the complaint in favor of plaintiffs and taking the SAC as a whole finds that plaintiffs have sufficiently alleged a conspiracy.
gloss The agreement is decided inside the Illinois Brick co-conspirator discussion and then adopted for the § 1 "first prong" (@32973). Defendants argued the pleaded facts showed Mallinckrodt set the price unilaterally; the court held that did not negate the inference of agreement.
? route: the court calls the scheme a "vertical price-fixing" conspiracy between manufacturer and exclusive distributor, so vertical-agreement; UBC is called the "hub" of the distribution chain but no rim of competitors is alleged, so not hub-and-spoke.
element standing : satisfied [pleaded]
party rockford mallinckrodt express-scripts
theory excl
route indirect-purchaser-rule
pattern payor that paid the conspiring exclusive distributor sues distributor and manufacturer: co-conspirator exception to Illinois Brick
rule @16816..16994 | One such exception is the "co-conspirator" exception, which allows indirect purchasers to sue middlemen-conspirators if the plaintiffs can establish a conspiracy and overcharges:
fact @9784..9899 [supports] | ESI then charged Rockford $ 100,457.64 for the 30-day supply of Acthar, pursuant to the terms of the PBM Agreement.
fact @27003..27102 [supports absent] | But here, plaintiffs do not allege that defendants' agreement in fact included a "pass-on" payment.
fact @9669..9783 [cuts-against] | Accordingly, on April 1, 2015, Mallinckrodt had Acthar shipped directly to the children of two Rockford employees.
held @28349..28506 | But at the Rule 12 stage, the court draws all reasonable inferences in favor of plaintiffs, and finds that Illinois Brick is not a bar to plaintiffs' claims.
gloss Added in triage: the Illinois Brick question for Rockford is the most heavily contested federal antitrust issue in the opinion and had no block. The court also found the AGC "proper party" factors met for Rockford (@29127..30482), not recorded separately.
? polarity: the direct-shipment fact is the reason Rockford is an indirect purchaser as against Mallinckrodt; the court treats that as overcome by the co-conspirator exception.
element standing : not-satisfied [pleaded]
party acument mallinckrodt express-scripts
theory excl
route indirect-purchaser-rule
pattern payor that paid a non-conspirator PBM (CVS Caremark), not the alleged co-conspirator distributor
rule @15462..15676 | First, in Illinois Brick Co. v. Illinois, 431 U.S. 720, 97 S.Ct. 2061, 52 L.Ed.2d 707 (1977), the Supreme Court held that only direct purchasers from alleged antitrust violators may bring federal antitrust actions.
fact @10241..10380 [cuts-against] | CVS charged Acument $ 894,617.75 for thirteen administrations of Acthar in a thirteen-month period between December 2015 and December 2016.
fact @10116..10240 [supports] | Plaintiffs allege that CVS stepped into the place of ESI in the Acthar distribution chain, but was still coordinated by UBC.
fact @31830..31974 [cuts-against absent] | Otherwise, the SAC contains scant mentions of CVS and its role as part of the dealing arrangement alleged in all other respects to be exclusive.
held @31975..32208 | As currently formulated, plaintiffs do not plausibly allege that Acument was a direct purchaser from a member of the alleged conspiracy, nor does Acument plausibly allege any other theory which would furnish antitrust standing to it.
gloss Dismissed without prejudice with leave to replead; the court could not complete the AGC analysis for Acument either (@32295).
element injury : satisfied [pleaded]
party rockford mallinckrodt express-scripts
theory excl
route antitrust-injury
pattern payor paying supracompetitive drug prices attributed to restricted distribution and a shelved rival product
rule @39655..39929 | The third prong requires that an antitrust plaintiff must allege that the "claimed injuries are of the type the antitrust laws were intended to prevent and reflect the anticompetitive effect of either the violation of or anticompetitive acts made possible by the violation."
fact @40430..40563 [supports] | Rockford alleges that defendants were able to charge higher prices for Acthar by restricting distribution of Acthar through the ASAP.
fact @40954..41145 [supports] | Had Novartis sold the rights to Synacthen to one of the other bidders that planned to bring Acthar to market, Rockford alleges that purchasers would have had a low-cost alternative to Acthar.
held @41704..41833 | Thus, Rockford has satisfied the "antitrust injury" prong and, accordingly, the court finds that Rockford has stated a § 1 claim.
element restraint : satisfied [pleaded]
party rockford mallinckrodt express-scripts
theory excl
route _whole
pattern exclusive distribution plus acquisition and shelving of the only rival product; mode of analysis expressly deferred to after discovery
rule @37935..38089 | At this stage, it is sufficient for plaintiffs to plausibly allege that defendants engaged in conduct that resulted in an unreasonable restraint of trade.
fact @38221..38445 [supports] | The "new strategy" reduced the number of wholesale distributors of Acthar from three to one, thereby restricting patient's access to Acthar, and employed Express Scripts' market power not to push for lower-cost alternatives.
fact @7619..7705 [supports] | Upon purchasing the rights to Synacthen, Mallinckrodt chose not to bring it to market.
fact @4062..4266 [supports] | As soon as defendants implemented the ASAP, Mallinckrodt increased the price of Acthar from approximately $ 1,980 to $ 27,922.80-a 1,310% increase in the span of a month, and a 69,707% increase from 2001.
held @39447..39634 | Consequently, the court finds that Rockford's assertions of anticompetitive conduct are sufficient to adequately plead the "unreasonable restraint of trade" prong of Rockford's § 1 claim.
gloss The court declined to choose between per se and rule of reason at the pleading stage ("the court need not make this determination at this time", @35681); recorded on the parent element, no mode decided.