Pharmacychecker.com, LLC v. Legitscript, LLC

Portland, Oregon civil litigation lawyers represented the parties in an anti-trust violation theory.



Two wrongs don't make a right. Nor do they necessarily

cancel each other out. In this case, PharmacyChecker.com

LLC ("PharmacyChecker”) sued its competitor LegitScript

LLC ("LegitScript”) for engaging in a group boycott in

violation of antitrust laws. LegitScript moved for summary

judgment, contending that PharmacyChecker lacked

antitrust standing because PharmacyChecker's business

facilitated illegal activities and, accordingly, it could not

suffer any legally cognizable injury under Section 4 of the

Clayton Act. The district court denied LegitScript's motion

and certified an interlocutory appeal under 28 U.S.C.

§ 1292(b). We affirm. Following the Supreme Court's

teachings and the precedents in this Circuit, we must hold

that, to further the public policy in favor of vigorous antitrust

enforcement, a plaintiff may have antitrust standing under

Section 4 of the Clayton Act to sue for injuries suffered by

its business or property interest when competing in a

legitimate market, even if such business or property interest

has been attained by unlawful means.

I.

A.1

The Federal Food, Drug, and Cosmetic Act ("FFDCA”)

prohibits the "introduction or delivery for introduction into

PHARMACYCHECKER . COM LLC V. L EGIT SCRIPT LLC 5

interstate commerce” of any drug that is adulterated,

misbranded, or not approved by the Food and Drug

Administration ("FDA”). 21 U.S.C. §§ 331(a), 331(d),

355(a); see also In re Canadian Imp. Antitrust Litig., 470

F.3d 785, 788–89 (8th Cir. 2006) (noting that personal

importation of foreign drugs into the United States can

violate the FFDCA either "because the drugs are not

approved in accordance with 21 U.S.C. § 355, are not

labeled as required by 21 U.S.C. § 352, or are dispensed

without a valid prescription in contravention of 21 U.S.C.

§ 353(b)(1)”).



It is illegal in "most circumstances” "for individuals to

import drugs” into the United States "for personal use

because these products purchased from other countries often

have not been approved by the FDA for use and sale in” the

United States. Personal Importation, U.S. FOOD & DRUG

ADMIN., https://www.fda.gov/industry/import-

basics/personal-importation (last updated Oct. 8, 2024). The

FDA "may consider a more permissive decision” in

"allowing the importation of medications for personal use”

if, for instance, the drug "is not for treatment of a serious

condition and there is no known significant health risk,” or

if the drug "is for a serious condition for which effective

treatment may not be available domestically either through

commercial or clinical means.” Id. And foreign nationals

who vacation, study, or work in the United States may also

ship to themselves as much as a 90-day supply of drugs for

personal use; if they stay in the United States for more than

90 days, they may have additional medications shipped to

them.2 Id.



Against this backdrop, PharmacyChecker operates the

PharmacyChecker.com website. The website is not a

pharmacy; it does not "buy, sell, distribute, dispense, or

process orders for” any drugs. Rather, it accredits online

pharmacies across the globe for their safety standards, and it

compares the prices of the drugs offered by those pharmacies

for its website users from around the world. According to

PharmacyChecker, its "central objective has been to

examine the qualifications (i.e., practice and safety

standards) of online pharmacies wherever they might be to

provide worldwide visitors with information to make good

choices, to be safe, and to get medication most affordably.”

PharmacyChecker's business model depends on

charging online pharmacies verification fees and click-

through fees. 3 From January 2015 through August 2021

("Relevant Period”), approximately 14% of

PharmacyChecker's revenue came from verification fees,

which were charged to online pharmacies for services that

PharmacyChecker provided in accrediting those pharmacies

and listing them on its website. About 84% of the

verification fees that PharmacyChecker collected were paid

by foreign pharmacies.



In the Relevant Period, approximately 85% of

PharmacyChecker's revenue came from click-through fees,

which PharmacyChecker charged its accredited pharmacies

whenever their hyperlinks on the PharmacyChecker.com

website were clicked. About 95% of PharmacyChecker's

click-through revenue in the Relevant Period came from

online pharmacies located outside the United States;

approximately 69% of that revenue resulted from clicks

made by PharmacyChecker.com users located inside the

United States. This means around 56% of

PharmacyChecker's total revenue in the Relevant Period

was generated from clicks made by PharmacyChecker.com

users inside the United States on hyperlinks for online

pharmacies outside the United States.



These click-through fees were charged to the pharmacies

solely based on the clicks made by PharmacyChecker.com

users. PharmacyChecker collected these fees irrespective of

whether its users ended up purchasing any drugs.

Accordingly, PharmacyChecker did not track its website

users' activities after they clicked through to those

pharmacies' websites and did not know how many of its U.S.

users purchased drugs from foreign pharmacies and had

them shipped into the United States. On this point, the

record consists of one online pharmacy's deposition

testimony that only about 3.47% of the clicks from

PharmacyChecker.com resulted in a drug transaction.

Affirmed