United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued April 26, 1999 Decided July 20, 1999
No. 99-5022
Teva Pharmaceuticals, USA, Inc.,
Appellant
v.
United States Food and Drug Administration, et al.,
Appellees
Consolidated with
No. 99-5027
Appeals from the United States District Court
for the District of Columbia
(No. 99cv00067)
Geoffrey M. Levitt and James N. Czaban argued the cause
for appellant. With them on the briefs was David M. Ma-
lone.
Robert A. Dormer, James R. Phelps and Douglas B. Far-
quhar were on the brief for appellant Purepac Pharmaceuti-
cal Company.
Andrew E. Clark, Attorney, U.S. Department of Justice,
argued the cause for the federal appellees. With him on the
brief were David W. Ogden, Acting Assistant Attorney Gen-
eral, Eugene Thirolf, Jr., Director, Office of Consumer Litiga-
tion, and Drake S. Cutini, Attorney.
James D. Miller argued the cause for intervenors-appellees
TorPharm, a Division of Apotex, Inc., et al. With him on the
brief were Eugene M. Pfeifer, Peter M. Todaro, Donald O.
Beers and David E. Korn.
Before: Edwards, Chief Judge, Rogers, Circuit Judge and
Buckley, Senior Circuit Judge.
Opinion for the Court filed by Circuit Judge Rogers.
Rogers, Circuit Judge: Teva Pharmaceuticals and Purepac
Pharmaceutical Company appeal the denial of injunctive relief
requiring the Food and Drug Administration ("FDA") to
recognize the dismissal of a declaratory judgment complaint
for patent infringement as a "court decision" under the
Abbreviated New Drug Application ("ANDA") statute. See
21 U.S.C. s 355(j)(5)(B)(iv)(II) (Supp. III 1997). Appellants
are "subsequent" ANDA applicants hoping to market ticlopi-
dine tablets, a generic version of the name-brand drug "Ti-
clid," used to treat stroke victims.1 To meet the require-
__________
1 Purepac has joined in the argument presented in the brief
filed by Teva, having been unsuccessful in a previous challenge to
the FDA's interpretation of the ANDA statute in Purepac Pharma-
ceutical Co. v. Friedman, 162 F.3d 1201 (D.C. Cir. 1998). Purepac
now seeks reversal of the district court's denial of injunctive relief
and a remand for entry of an order directing the FDA to make all
approved ANDAs for generic ticlopidine products, including Pure-
pac's, effective as of February 10, 1999. Teva seeks a similar
ments of the ANDA statute, Teva sued the patent holder2 in
the Central District of California in order to obtain a "court
decision" that would start, or trigger, a 180-day period of
market exclusivity for the first ANDA applicant, and thereaf-
ter allow appellants to market their generic drug. The
California court dismissed the complaint for lack of subject-
matter jurisdiction after finding, based on the patent holder's
admission of non-infringement, that Teva lacked a reasonable
apprehension of suit by the patent holder. The FDA never-
theless refused to recognize the dismissal as a triggering
"court decision" under the ANDA statute. Because we con-
clude that the FDA's refusal was arbitrary and capricious
inasmuch as the FDA has taken an inconsistent position in
another case and failed to explain adequately the inconsisten-
cy, we reverse and remand the case to the district court to
determine anew whether injunctive relief is appropriate.
I.
The statutory background is succinctly summarized as fol-
lows. In 1984, Congress amended the Food and Drug Act in
order to expedite the approval of generic versions of name-
brand drugs that already have FDA approval, thus making
available more low-cost generic drugs. See Drug Price Com-
petition & Patent Term Restoration Act of 1984, Pub. L. No.
98-417, tit. I, 98 Stat. 1585 (1984) (codified as amended at 21
U.S.C. s 355 (1994 & Supp. III 1997)); see also H.R. Rep.
No. 98-857, pt. 1, at 14 (1984), reprinted in 1984 U.S.C.C.A.N.
__________
remedy: reversal and remand, with the district court ordering the
FDA to make Teva's ANDA effective as of February 10th.
2 Syntex (U.S.A.), Inc., the holder of Patent No. 4,591,592
(" '592 patent" or "patent") that covers a finished dosage formula-
tion of a ticlopidine tablet, but not the active pharmaceutical ingre-
dient ticlopidine hydrochloride, and Hoffmann-LaRoche Laborato-
ries Inc., which markets ticlopidine tablets under the brand-name
"Ticlid," are two of the intervenors. For ease of reference we refer
to Syntex and Hoffmann-LaRoche collectively as "Syntex." Also
intervening is TorPharm, which has identified itself as the first
applicant to file its ANDA.
2647, 2647. Under the so-called Hatch-Waxman amend-
ments, an abbreviated new drug application process allows
applicants, upon meeting certain requirements, to proceed
more quickly to the marketplace. The ANDA applicant must
show that: (i) the use of the drug has been previously
approved; (ii) the new drug contains the same active ingredi-
ent(s) as the previously approved drug, or document the
differences; (iii) the new drug has the same route of adminis-
tration, dosage form, and strength of the previously approved
drug, or document the differences; (iv) the new drug is the
bioequivalent or has the same therapeutic effect as the previ-
ously approved drug; (v) the new drug has the same labeling
as the previously approved drug, or the differences are
approved; and (vi) it has complied with other statutory
requirements, which include providing a full list of articles
used as components, a full statement of composition, samples
of the drug, labeling specimens, and a description of manufac-
turing, processing, and packaging. See 21 U.S.C. s 355(j)(2).
To avoid the patent infringement problems inherent in such
a statutory scheme, the ANDA applicant must provide the
FDA with a certificate establishing that the marketing of the
generic drug will not infringe the patent for the listed drug.
To this end, the applicant must certify that: (I) the patent
information has not been filed, (II) the patent has expired,
(III) the patent will expire on a specified date, or (IV) the
"patent is invalid or will not be infringed by the manufacture,
use, or sale of the new drug for which the application is
submitted." Id. s 355(j)(2)(A)(vii). As part of a certification
under Paragraph IV, the ANDA applicant must notify the
patent holder and approved applicants of its application and
include a statement of the factual and legal basis for the
applicant's opinion that the patent is not valid or will not be
infringed. See id. s 355(j)(2)(B). Under FDA regulations,
the applicant may also certify that the patent is unenforcea-
ble. See 21 C.F.R. s 314.94(a)(12)(i)(A)(4) (Westlaw 1999).
ANDA applicants who submit Paragraph IV certifications
are subject to a "market-exclusivity provision," see 21 U.S.C.
s 355(j)(5)(B)(iv), under which previous applicants are grant-
ed 180 days during which subsequent applications cannot be
approved.3 This period is started, or triggered, by the earlier
of (1) the date the Secretary of Health and Human Services
receives notification from the previous applicant of the first
commercial marketing of its drug or (2) the date of a "deci-
sion of a court" in a patent or declaratory judgment action
"holding" that the patent is either "invalid or not infringed."
Id.; see also id. s 355(j)(5)(B)(iii) (describing suits for patent
infringement or declaratory judgment).
Heretofore, the court invalidated the FDA's "successful
defense" requirement, whereby the first ANDA applicant
could obtain 180 days of market exclusivity only after success-
fully defending a patent lawsuit. See Mova Pharm. Corp. v.
Shalala, 140 F.3d 1060, 1076 (D.C. Cir. 1998). Accord
Granutec, Inc. v. Shalala, No. 97-1873, 1998 WL 153410, at
*7 (4th Cir. April 3, 1998). In response, the FDA issued a
"Guidance for Industry" announcing its intention to promul-
gate new regulations on market exclusivity and "until such
time as the rulemaking process is complete," to "regulate
directly from the statute, and ... make decisions on 180-day
generic drug exclusivity on a case-by-case basis." See Guid-
ance for Industry: 180-Day Generic Drug Exclusivity Under
the Hatch-Waxman Amendments to the Federal Food, Drug
and Cosmetic Act 4 (June 1998) ("Guidance for Industry").
The court upheld this approach in Purepac Pharmaceutical
Co. v. Friedman, 162 F.3d 1201, 1204-05 (D.C. Cir. 1998): the
FDA may regulate directly from the statute and is not
required to maintain any litigation requirement in determin-
ing the first applicant's entitlement to 180 days of market
exclusivity.
__________
3 As interpreted by the FDA, the statute does not guarantee
the first ANDA applicant a 180-day period of exclusivity. The
court-decision trigger can be activated by any subsequent ANDA
applicant's litigation whether or not the first applicant has enjoyed
a period of exclusivity. See Guidance for Industry: 180-Day Ge-
neric Drug Exclusivity Under the Hatch-Waxman Amendments to
the Federal Food, Drug and Cosmetic Act 5 (June 1998).
II.
Teva challenges the denial of injunctive relief on the princi-
pal ground that the FDA's refusal to treat the dismissal of
Teva's declaratory judgment action as a triggering "court
decision" is inconsistent with the ANDA statute and hence,
the district court erred in ruling that Teva had failed to
demonstrate a likelihood of success on the merits. Basically,
Teva contends that the California dismissal is functionally
equivalent to a final decision of noninfringement and unen-
forceability on the merits because it was based on the patent
holder's express representation to Teva and the California
court that Teva's formulation did not infringe the patent and
that the patent holder would not sue Teva for infringement.
Indeed, Teva goes so far as to maintain that its interpretation
of the statute is the only possible alternative to the FDA's
impermissible construction under the circumstances of this
case; otherwise, subsequent ANDA applicants' efforts to use
the Hatch-Waxman procedure could be thwarted anytime a
patent holder stated that it did not intend to enforce its
patent, thus preventing the courts from exercising subject
matter jurisdiction to issue the holding of noninfringement
that the FDA's position requires.
According to Teva's complaint, on June 20, 1997, Teva filed
its ANDA to market ticlopidine, a generic version of the drug
"Ticlid." While it awaited tentative approval of its applica-
tion, Teva sued Syntex, seeking a declaratory judgment of
noninfringement of Syntex's patent for a finished dosage
formulation of ticlopidine tablets.4 On the same day, Syntex
sent Teva a letter expressing the opinion that Teva would not
infringe Syntex's patent, declaring: "We will make no claim
of patent infringement based on the sale of ticlopidine hydro-
chloride tablets having the formulation you have disclosed to
us." Thereafter, Teva prepared a joint motion for entry of
__________
4 Syntex had previously sued Teva and others for possible
infringement of its process patent for ticlopidine, but voluntarily
dismissed its complaint against Teva without prejudice once Teva
revealed its process. That litigation was unrelated to the formula-
tion patent at issue in the declaratory judgment action.
consent judgment that would hold Syntex's patent not infring-
ed; but Syntex instead moved to dismiss the complaint for
lack of subject-matter jurisdiction, explaining:
Given Syntex's express assurance that it would not bring
suit against Teva on the '592 patent, Teva can have no
reasonable apprehension that it will face a lawsuit for
infringement of the '592 patent. Without such reason-
able apprehension, no actual case or controversy exists of
sufficient immediacy or reality to base jurisdiction over
Teva's declaratory judgment claim.
Accompanying the motion was a declaration by John Parise,
counsel for Syntex, referring to the June 8, 1998, letter that
Syntex sent Teva stating that Syntex would make no claim of
patent infringement against Teva. Noting that under Feder-
al Rule Civil Procedure 12(b)(1) the district court could
consider materials outside of the pleadings, see Dreier v.
United States, 106 F.3d 844, 847 (9th Cir. 1997), Syntex
attached a proposed order with three findings, including that
Teva "lacked and lacks a reasonable apprehension of suit by
Syntex for infringement of [the] ... [p]atent." The district
court granted Syntex's motion, adopting its findings, specifi-
cally that Teva "lacks a reasonable apprehension of suit by
Syntex for infringement of [the patent];" hence there was "no
justiciable case or controversy between the parties concerning
any infringement by Teva of the '592 [p]atent," and conse-
quently the court lacked subject matter jurisdiction over the
action.
On October 29, 1998, the FDA tentatively approved Teva's
ANDA to market ticlopidine. However, the FDA informed
Teva that because there was a previous ANDA applicant and
neither commercial marketing nor a court decision had oc-
curred, its application was ineligible for final approval. Teva
attempted to persuade the FDA that the California dismissal
satisfied the "court decision" requirement, but the FDA did
not respond to Teva's request for an effective approval date
and on December 2, 1998, notified Teva that it refused to
meet to discuss the issue. Teva then filed the instant lawsuit
in district court for a declaratory judgment that Teva is
entitled to have its ANDA become effective on February 10,
1999 (180 days after the California dismissal), an injunction
making Teva's ANDA effective on that date, and a temporary
restraining order to forestall the FDA from approving the
first ANDA application if such approval would give the first
applicant any exclusive marketing beyond February 10, 1999.
The district court declined to award injunctive relief. It
concluded for three reasons that Teva could not demonstrate
a likelihood of success on the merits. First, the district court
ruled that the California dismissal did not fall within the plain
language of s 355(j)(5)(B)(iv)(II), and, second, that even if
Teva could show that the statute was ambiguous, it was
unlikely to succeed in showing that the FDA's interpretation
was impermissible, or that Teva's interpretation was the only
permissible alternative. The district court concluded, third,
that Teva's reliance on patent law decisions of the Federal
Circuit was misplaced because they had no direct bearing on
the "court decision" provision in ANDA. Consequently, the
district court reasoned, in view of language in decisions of this
court,5 that the triggering "court decision" provision required
nothing less than a decision on the merits. The district court
was also unpersuaded by Teva's arguments concerning irrep-
arable harm, injury to the other parties, and the public
interest.6
III.
On appeal, Teva contends that the district court erred in
denying injunctive relief because the California dismissal
qualified as a "court decision" under s 355(j)(5)(B)(iv)(II) and
the FDA's refusal to recognize the dismissal as such was
arbitrary and capricious, an abuse of discretion, and based on
an unreasonable and impermissible interpretation of the stat-
ute. Our review of the denial of injunctive relief is for abuse
of discretion, but we review de novo the district court's
__________
5 See Purepac, 162 F.3d at 1205 n.6; Mova, 140 F.3d at 1073 &
n.18.
6 See Mova, 140 F.3d at 1066 (outlining standard for prelimi-
nary injunctions).
conclusion of law, namely that Teva was unlikely to prevail in
its challenge to the FDA's refusal to treat the California
dismissal as a triggering "court decision." See Mova, 140
F.3d at 1066 (citing CityFed Financial Corp. v. Office of
Thrift Supervision, 58 F.3d 738, 746 (D.C. Cir. 1995)).
The FDA maintains that its interpretation of the "court
decision" provision is entitled to deference under Chevron
U.S.A., Inc. v. Natural Resources Defense Counsel, Inc., 467
U.S. 837, 842-44 (1984). In fact, however, the FDA has
offered no particular interpretation of that provision, relying
instead on its authority to interpret the provision narrowly
until it promulgates a new rule. Without regard to how the
FDA should address the issue in its next rulemaking, it is
clear that the FDA, consistent with its statement that it
would "regulate directly from the statute" on a "case-by-case
basis," see Guidance for Industry at 4; see also Purepac, 162
F.3d at 1205, cannot avoid the merits of Teva's contention
that the California dismissal satisfies the "court decision"
requirement under s 355(j)(5)(B)(iv)(II). We review the
FDA's response to Teva's claim guided by settled principles
of administrative law. See 5 U.S.C. s 706 (1994); Southwest-
ern Bell Tel. Co. v. FCC, 168 F.3d 1344, 1352 (D.C. Cir. 1999).
Upon a review of the record, we conclude that the FDA's
response was arbitrary and capricious.
First, the FDA concedes that its refusal to recognize the
California dismissal as a triggering "court decision" is not
compelled by the statutory language. The statute requires a
"decision of a court holding the patent ... invalid or not
infringed." See 21 U.S.C. s 355(j)(5)(B)(iv)(II). A "decision"
can take several forms, including final judgment after a full
trial, summary judgment or partial summary judgment, or
even a dismissal for failure to state a cause of action. The
term "holding," most often contrasted with the term "dicta,"
is also susceptible to interpretation. See, e.g., Seminole Tribe
of Fla. v. Florida, 517 U.S. 44, 66-67 (1996); Wilder v. Apfel,
153 F.3d 799, 803-04 (7th Cir. 1998); Gersman v. Group
Health Ass'n, 975 F.2d 886, 897 (D.C. Cir. 1992). Further-
more, the significance of a court's "decision" or "holding"
often lies in its preclusive effect. Of course, as intervenors
maintain, not every court action can be construed as a
"decision" with a "holding"; for example, a dismissal for lack
of personal jurisdiction is not a decision on the merits and has
no preclusive effect.
But the California dismissal cannot be classified as a typical
dismissal for lack of subject matter jurisdiction. Although, as
a general rule, such a dismissal has no preclusive effect
because the court lacked authority or competence to hear and
decide the case, see Prakash v. American Univ., 727 F.2d
1174, 1182 (D.C. Cir. 1984) (citing 5 C. Wright & A. Miller,
Federal Practice s 1350, at 554 (1969)),7 here the dismissal
was based exclusively and necessarily on Syntex's declaration
that Teva's product would not infringe its patent and its
express disavowal of an intent to sue. Syntex expressly
sought to have the California court consider more than the
pleadings, notwithstanding its request for dismissal for lack of
subject matter jurisdiction, noting in its motion papers that
the court could grant a motion to dismiss under Federal Rule
of Civil Procedure 12(b)(1) based on materials in addition to
the pleadings themselves. Before the California court was
Syntex's June 8th letter stating that Teva's "formulation ...
does not infringe" the patent, and the declaration of Syntex's
counsel that Teva's "formulation did not warrant bringing a
patent infringement action." It also had express findings of
fact proposed by Syntex, including the one necessary for a
finding of no case or controversy, namely that Teva lacked a
reasonable apprehension of suit by Syntex for infringement.
Syntex not only remained silent after receiving Teva's notice
of its ANDA filing and failed to file an infringement suit
within 45 days after receiving Teva's Paragraph IV notifica-
tion, but it also sought to have Teva's complaint dismissed for
lack of subject matter jurisdiction. It was able to file such a
motion, however, only because of its own statements and
actions eliminating any case or controversy about the enforce-
ability of the patent against Teva. Its motion was granted on
the basis of an express finding of fact by the California court
__________
7 See also 5A Charles Alan Wright & Arthur R. Miller,
Federal Practice and Procedure s 1350, at 225 (2d ed. 1990).
regarding Teva's reasonable nonapprehension of suit, as Syn-
tex itself had proposed as part of its motion to dismiss.
From the perspective of the California court, then, Syntex's
declaration and conduct eliminated the need for a declaratory
judgment because Syntex would be estopped from challeng-
ing Teva's marketing of its generic drug on the ground of
patent infringement.
The FDA and intervenor TorPharm (the first ANDA filer)
conceded at oral argument that the California dismissal pre-
vents Syntex from suing Teva for infringement. The conclu-
sion that the California dismissal has estoppel effect is sup-
ported by the decisions of the United States Court of Appeals
for the Federal Circuit. That court has recognized that a
dismissal of a declaratory judgment action for lack of a case
or controversy due to the patent holder's disavowal of any
intent to sue for infringement has preclusive effect. See
Super Sack Mfg. Corp. v. Chase Packaging Corp., 57 F.3d
1054, 1059 (Fed. Cir. 1995); Spectronics Corp. v. H.B. Fuller
Co., 940 F.2d 631, 636-38 (Fed. Cir. 1991); see also Fina
Research, S.A. v. Baroid Ltd., 141 F.3d 1479, 1483-84 (Fed.
Cir. 1998) (discussing Super Sack and Spectronics). Al-
though the district court here correctly noted that the Feder-
al Circuit was confronted only with cases in which the plain-
tiff sought a declaratory judgment in order to avoid litigation
and liability for infringement, and did not consider whether
such a decision would have any collateral effect or additional
significance under the ANDA statute, the relevant consider-
ation is the estoppel of the patent holder from later claiming
that the ANDA applicant is liable for patent infringement.
Put otherwise, the California dismissal appears to meet the
requirements of a triggering "court decision" because that
court had to make a predicate finding with respect to whether
Syntex would ever sue Teva for infringement in order to
conclude that there was no case or controversy between the
parties. In dismissing Teva's complaint for lack of subject
matter jurisdiction, the California court expressly found that
Teva "lacks a reasonable apprehension of suit by Syntex for
infringement of [its patent]." According to Syntex's motion
to dismiss Teva's complaint, that finding could only have been
based on the patent holder's declaration of counsel and its
June 8th letter to Teva. Although the dismissal was not a
judgment on the merits after consideration of evidence pre-
sented by the parties, there was no need for such a procedure
here because the dismissal sufficed to estop Syntex from
suing Teva for patent infringement. See Super Sack, 57 F.3d
at 1059; Spectronics Corp., 940 F.2d at 638. This is the
result that appears to be the purpose of the triggering "court
decision" provision. A contrary view, as Teva contends,
means that the patent holder could manipulate the system in
order to block or delay generic competition by stating that
the patent holder will not enforce its patent against the
Paragraph IV challenger. See Mova, 140 F.3d at 1073 &
n.18. For these reasons, the California dismissal would ap-
pear to meet the requirements of a "court decision" under
s 355(j)(5)(B)(iv)(II). On remand, of course, the FDA will
have the opportunity to explain why it fails to meet them.
Second, it is unclear that a triggering "court decision" need
explicitly hold the patent at issue is "invalid" or is "not
infringed" in order to trigger the 180-day period of market
exclusivity. Both the FDA and the Federal Circuit recognize
that a certification that a patent is "unenforceable" suffices
for purposes of the Paragraph IV certification, see 21 C.F.R.
s 314.94(a)(12)(i)(A)(4); Merck & Co. v. Danbury Pharmacal,
Inc., 694 F. Supp. 1, 2-3 (D. Del. 1988), aff'd, 873 F.2d 1418
(Fed. Cir. 1989), even though the statute provides that such
certification must state that the patent is "invalid" or "will not
be infringed," see 21 U.S.C. s 355(j)(2)(A)(vii)(IV). When it
promulgated the final regulations on ANDA applications, the
FDA explained that it included "unenforceability" because
"[t]he alternative interpretation, precluding applicants chal-
lenging patents as unenforceable from filing certifications
under paragraph IV, would be contrary to Congress' obvious
intent in allowing patent challenges under [ANDA] and would
lead to absurd results." 59 Fed. Reg. 50,338, 50,339 (1994).
Likewise reflecting the same concerns, see id. at 50,353, the
FDA regulations provide that a "court decision" need not hold
the patent is "invalid" or "not infringed" but alternatively
may hold the patent unenforceable, see 21 C.F.R.
s 314.107(c)(1)(ii) (Westlaw 1999).
Intervenors' attempt to assert that unenforceability, which
is included in the regulation, and estoppel, which is presented
here, should be treated differently under s 355(j)(5)(B)(iv)(II)
is unpersuasive. Although it is true that a determination of
unenforceability, such as for inequitable conduct, applies gen-
erally, preventing the patent holder from enforcing the patent
against any entity, see Elk Corp. of Dallas v. GAF Bldg.
Materials Corp., 168 F.3d 28, 30, 32 (Fed. Cir. 1999), and the
estoppel arising from the California dismissal operates only
against Syntex as to Teva, see generally 18 Charles Alan
Wright et al., Federal Practice and Procedure s 4443, at
381-91 (1981); see also Cotton v. Heyman, 63 F.3d 1115, 1119
(D.C. Cir. 1995), this appears to be a distinction without
difference for purposes of the "court-decision" requirement.
To start, or trigger, the period of market exclusivity by a
"court decision," an ANDA applicant need only obtain a
judgment that has the effect of rendering the patent invalid
or not infringed with respect to itself; the statute does not
require, nor does any party contend that it requires, the
patent to be invalidated as to any and all ANDA applicants.
See 21 U.S.C. s 355(j)(5)(B)(iv)(II). As the FDA and Tor-
Pharm concede, Syntex cannot sue Teva for patent infringe-
ment as a result of the California dismissal. In its regula-
tions, the FDA added "unenforceability" to the list of what
qualifies as a "court decision" because it concluded that
implementing the statute in any other way would be contrary
to Congress' intent and produce absurd results. See 59 Fed.
Reg. at 50,353 (referring to 59 Fed. Reg. at 50, 339). Howev-
er, the situation presented here appears no less absurd
because Teva can never be sued by Syntex for patent in-
fringement, but the FDA has nevertheless concluded that the
California dismissal cannot satisfy the "court decision" re-
quirement of the statute. Thus, the FDA's application of the
statute to this case runs counter to its explanation for permit-
ting unenforceability to qualify as a "court decision."
Third, the FDA's treatment of the California dismissal
appears contrary to the FDA's "Guidance for Industry" in
two respects. Cf. Cherokee Nation of Okla. v. Babbitt, 117
F.3d 1489, 1499 (D.C. Cir. 1997) ("An agency is required to
follow its own regulations.") First, the FDA has effectively
declined to proceed on a "case-by-case basis," proposing
instead to consider Teva's interpretation as part of the rule-
making process. Although the FDA generally has discretion
to determine whether to proceed by adjudication or rulemak-
ing, see Mobil Oil Exploration & Producing Southeast Inc. v.
United Distribution Cos., 498 U.S. 211, 230 (1991); SEC v.
Chenery Corp., 332 U.S. 194, 203 (1947); Arkansas Power &
Light Co. v ICC, 725 F.2d 716, 723 (D.C. Cir. 1984), litigants
also have a right to adjudication of their claims, see AT&T v.
FCC, 978 F.2d 727, 731-33 (D.C. Cir. 1992). The FDA has
been mute in response to Teva's request for a complete
explanation of the rejection of its interpretation. Noting the
language of the statute, its purposes, and ambiguities, the
FDA has recognized in its brief to this court, as the court in
Mova did, see 140 F.3d at 1073 n.18, that a dismissal could be
sufficient to satisfy the "court decision" requirement. See
Federal Appellee's Br. at 20-21. Yet, the FDA says in its
brief that it is "not at this time prepared to conclude that
dismissal of Teva's declaratory judgment action for lack of
subject matter jurisdiction is a 'decision of a court' under
section 355(j)(5)(B)(iv)(II)." Id. at 20. Contrary to the
FDA's view, nothing in our decision in Purepac, 162 F.3d
1201, relieved the FDA of its obligation to abide by the
commitments it made in the "Guidance for Industry" as to
how it would proceed until a new rulemaking was completed.
How the FDA can justify this approach to Teva's interpre-
tation of the California dismissal in light of its treatment of
other cases remains a mystery; presumably in a "case-by-
case" analysis the FDA is obligated to explain such differ-
ences. See ANR Pipeline Co. v. FERC, 71 F.3d 897, 901
(D.C. Cir. 1995); Pontchartrain Broad. Co. v. FCC, 15 F.3d
183, 185 (D.C. Cir. 1994). Specifically, the FDA has not
explained why it would recognize a grant of partial summary
judgment, based on the patent holder's admission of non-
infringement, as a "court decision" in Granutec, 1998 WL
153410, at *5, but decline to give similar effect to a dismissal
based on a finding of no reasonable apprehension of suit
arising from the patent holder's admission of non-
infringement. In Granutec, the FDA argued that the partial
grant of summary judgment in a prior case satisfied the
"court decision" requirement. See id.; see also Glaxo, Inc. v.
Boehringer Ingelheim Corp., 954 F.Supp. 469 (D. Conn.1996),
final judgment entered, 962 F. Supp. 295 (D. Conn.1997),
aff'd, 119 F.3d 14 (Fed. Cir. 1997) (unpublished opinion).
That Boehringer involved a judgment on the merits, while
Teva's complaint was dismissed for lack of subject-matter
jurisdiction, does not detract from the fact that both proceed-
ings prevent the patent holder from suing the ANDA appli-
cant for patent infringement. Given that the California dis-
missal supports estoppel to the same extent as the grant of
partial summary judgment at issue in Granutec, it is unclear
why the California dismissal would not satisfy the "court
decision" requirement of s 355(j)(5)(B)(iv)(II). At least the
FDA has not provided an explanation wherein there is a
material difference for purposes of triggering the "court
decision" provision.
Second, the FDA's response to Teva's interpretation of the
"court decision" requirement is not easily viewed as "regu-
lat[ing] directly from the statute," as the FDA committed to
do in its "Guidance for Industry." The FDA "acknowledges
that its current interpretation of the court decision trigger is
narrower than the statute may be able to support.... [and]
that Teva's interpretation of the court decision trigger may be
permissible." Yet if the FDA's interpretation of section
355(j)(5)(B)(iv)(II) is "narrower than the statute [is] able to
support," then its interpretation cannot stand without justifi-
cation because the FDA must interpret the statute to avoid
absurd results and further congressional intent. See Robin-
son v. Shell Oil Co., 519 U.S. 337, 346 (1997); R.G. Johnson
Co. v. Apfel, 172 F.3d 890, 895 (D.C. Cir. 1999). A narrow
interpretation cannot be reasonable simply because it is nar-
rower than it could be; to the contrary that interpretation
may in fact be narrower than it should be given the purposes
of the statutory scheme and congressional intent. See Pro-
cess Gas Consumers Group v. United States Dep't of Agricul-
ture, 694 F.2d 778, 792 (D.C. Cir. 1982) (in banc); see
generally Oil, Chemical & Atomic Workers Int'l Union v.
NLRB, 46 F.3d 82, 90 (D.C. Cir. 1995); Association of
Civilian Technicians v. FLRA, 22 F.3d 1150, 1153 (D.C. Cir.
1994). It is the narrowness of the interpretation that must be
justified, and the court can only review that choice of narrow-
ness based on the reasons provided by the FDA, see Chenery,
332 U.S. at 196; here, it has provided none.
As a result of the FDA's current construction of the "court
decision" requirement and its treatment of Teva's application,
generic ticlopidine tablets were not available in the market-
place for a number of months despite the fact that appellants
both stood ready to market them. Syntex remained the
exclusive manufacturer of "Ticlid," and the first ANDA appli-
cant's market exclusivity period had not begun because the
FDA had yet to approve that applicant's filing. On July 1,
1999, the FDA finally approved TorPharm's ANDA, and
TorPharm commenced marketing on July 6, so now at least
one generic version of ticlopidine tablets is available.8 Yet,
this series of events may well not have been what Congress
contemplated in enacting the Hatch-Waxman amendents to
expedite generic drug approvals. See H.R. Rep. No. 98-857,
pt. 1, at 14-15, reprinted in 1984 U.S.C.C.A.N. 2647, 2647-48;
cf. Mova, 140 F.3d at 1073. Be that as it may, our decision to
reverse the denial of injunctive relief rests on the FDA's
failure to explain adequately its refusal to treat the California
dismissal as a triggering "court decision" under
s 355(j)(5)(B)(iv)(II), particularly in view of its announcement
in its "Guidance for Industry" of how it would proceed
pending a new rulemaking. Although the FDA is likely
__________
8 The FDA's approval of TorPharm's ANDA does not moot this
appeal because Teva sought a preliminary injunction against the
FDA compelling it to deem Teva's application effective as of Febru-
ary 10, 1999. Though Teva will be able to market its ticlopidine
tablet 180 days after July 6 without fail, in the interim Teva and
Purepac face continued harm because of their denied access to the
market, see Byrd v. EPA, 174 F.3d 239, 244 (D.C. Cir. 1999), harm
potentially heightened because of TorPharm's period of market
exclusivity.
correct that Teva's interpretation is not the only permissible
construction of the "court decision" requirement, Teva has
demonstrated that the FDA's refusal to treat the California
dismissal as a trigger was arbitrary and capricious in light of
the FDA's response in another case.
Accordingly, we reverse, and because our conclusion could
well affect the district court's evaluation of appellants' other
arguments concerning harm, injury, and the public interest,
we remand the case to the district court to consider anew the
request for injunctive relief.