Some readers may remember the False Claims Act lawsuit filed by Amphastar Pharmaceuticals Inc. (Amphastar) against Sanofi-Aventis, S.A. (Sanofi), alleging that Lovenox – a blood thinner – was improperly patented and that Sanofi “obtained an illegal monopoly over a drug and then knowingly overcharged the United States.” In July 2015, California Central District Court dismissed the suit as “clearly frivolous” because Amphaster knew or should have known that it was not an original source of information as the allegations were based on publicly disclosed information, and as a result, the court lacked jurisdiction over its claims. The Ninth Circuit affirmed the dismissal in May 2017.
As outlined in greater detail below, Sanofi filed for attorney fees and expenses that it laid out to defend the frivolous suit. Those court filings seemed to take on a life of their own and recently, on May 3, 2021, Magistrate Judge Shashi H. Kewalramani issued an Order requiring Amphastar to pay $17,203,703 to Sanofi for attorney fees and costs, and interest, for the defense of the frivolous suit.
Background
On July 14, 2017, Sanofi-Aventis S.A. (Sanofi) filed for attorney fees and expenses to defend the frivolous suit. On November 20, 2017, Magistrate Judge Shashi H. Kewalramani granted the attorney fees, ordering Amphastar to pay Sanofi “their reasonable attorneys’ fees and expenses from the date the Complaint was unsealed to the final disposition of this case,” and issuing a separate Order to refer the case to a magistrate judge (if necessary) to determine the amount of the award to be made.
On August 7, 2018, Sanofi filed their Application for Fees and Expenses and on May 21, 2019, the parties filed a Joint Stipulation and Application for Order Re Non-Fee Expenses, which was approved the same day by the Court. The joint stipulation stated that $672,086.85 “is a reasonable amount of Aventis’s non-fee expenses from the unsealing of the complaint through April 30, 2018, in addition to the taxable costs previously paid by Amphastar and that this amount is adequately supported by documentation provided during discovery.”
Then, on November 13, 2020, Magistrate Judge Shashi H. Kewalramani issued the Fee Order, awarding Sanofi the aforementioned $672,086.85 for non-fee expenses as agreed to in the stipulation and $12,132,526.34 in attorneys’ fees and “interest at the prime rate on Aventis’s claimed fee expenses,” ordering Sanofi to “provide fresh calculations” demonstrating the amount of interest due. Magistrate Judge Kewalramani also noted that it would award Sanofi “a delay-in-payment-adjustment” under separate Order after the interest calculations were submitted.
The parties then went back and forth issuing several declarations surrounding the interest and delay-in-payment-adjustment. In total, Sanofi sought $17,335,811 for work performed from the unsealing of the Complaint through April 30, 2018, as well as work completed from May 1, 2018 through November 13, 2020. For the first period, Sanofi sought $12,212,822 in fees, $672,102 in expenses, and $3,346,131 for interest, totaling $16,231,056. For the second time period, from May 1, 2018 through November 13, 2020, Sanofi sought an additional $1,104,755 ($936,384 in fees, $101,258 in expenses, and $67,149 in interest).
May 2021 Memorandum and Opinion
In the May 3, 2021, decision upholding the fees payable from Amphastar to Sanofi, Magistrate Kewalramani awarded the entire amount sought for fees and expenses in the first time period ($12,212,822 in fees and $672,102 in expenses) plus the full amount of interest ($3,346,131), resulting in an award of $16,231,055 for work performed from October 28, 2011 (when the complaint was unsealed) through April 30, 2018.
With respect to the second time period, covering May 1, 2018 through November 13, 2020, Magistrate Kewalramani awarded Sanofi the entire fees and expenses requested but only $60,333 of the interest requested, resulting in an award of $972,648 for the second time period.
Therefore, the total award payable to Sanofi is $17,203,703.
This case should serve as a reminder to all that the filing of frivolous suits will not be tolerated in the courts and can result in a huge cost to the company.