Supreme Court Vacates Federal Circuit Opinion on Declaratory Judgment Jurisdiction

Eisai v. Teva Pharms. USA, No. 10-1070 (U.S. 2011)

In a little-noticed decision two weeks ago, the Supreme Court vacated the Federal Circuit's decision in Teva v. Eisai and remanded the case with instructions to dismiss it as moot. The Court's decision (found on the Order List of June 13) is significant in that it vacates a precedential decision of the Federal Circuit that arguably expanded declaratory judgment jurisdiction for subsequent ANDA filers.

As we explained in a post back in October, when Teva v. Eisai was decided, it appeared that the Federal Circuit found--for the first time--that the possible delay of a first Paragraph IV ANDA filer in launching its product was a sufficient injury to subsequent Paragraph IV ANDA filers so as to create a justiciable case or controversy. The Federal Circuit thus held that Teva (a subsequent filer in this case) had established declaratory judgment jurisdiction.

Following that decision, Eisai timely filed a petition for rehearing or rehearing en banc. While the petition was pending, the first filer (Ranbaxy) launched its ANDA product, thereby triggering its 180-day exclusivity period--which was the sole objective of Teva's declaratory judgment suit in the first place. Accordingly, Teva and Eisai informed the Federal Circuit that the case was moot, and Eisai requested that the Federal Circuit vacate its opinion and judgment in light of mootness. The Federal Circuit, however, refused to vacate its opinion, leading Eisai to appeal to the Supreme Court.

According to Eisai's cert petition,

The Federal Circuit's denial of vacatur is directly contrary to the line of this Court's precedents beginning with United States v. Munsingwear, Inc. that hold that courts should vacate judgments in a case that becomes moot unless the moving party's actions make vacatur inequitable. Eisai is unfairly saddled with a preclusive judgment of suspect merit in an important area of federal jurisprudence even though mootness prevents further review by this Court.

A commentator on SCOTUSblog noted that Teva initially declined to file a response to Eisai's petition (perhaps trying to signal to the Court, "move along, there's nothing to see here"), but the Court asked Teva for a response and twice relisted the case for consideration at its weekly conference, indicating its interest in Eisai's petition. According to the commentator, "the GVR and mootness dismissal in Eisai is somewhat akin to a summary reversal."

Thus, district courts in future cases will need to evaluate whether declaratory judgment jurisdiction exists without reference to Teva v. Eisai.