Mao-Mso Recovery II, LLC v. Boehringer Ingelheim Pharm., Inc.

• Decision Date: 13 December 2017
• Docket Number: Case No. 1:17–cv–21996–UU
• Citation: 281 F.Supp.3d 1309
• Parties: MAO–MSO RECOVERY II, LLC, et al., Plaintiffs, v. BOEHRINGER INGELHEIM PHARMACEUTICALS, INC., et al., Defendants.
• Court: U.S. District Court — Southern District of Florida

281 F.Supp.3d 1309

MAO–MSO RECOVERY II, LLC, et al., Plaintiffs,

v.BOEHRINGER INGELHEIM PHARMACEUTICALS, INC., et al., Defendants.

Case No. 1:17–cv–21996–UU

United States District Court, S.D. Florida.

Signed December 13, 2017

Order denying reconsideration Jan. 26, 2018

Frank Carlos Quesada, John Hasan Ruiz, MSP Recovery Law Firm, Miami, FL, Andres Rivero, Amanda Marie McGovern, Rivero Mestre LLP, Coral Gables, FL, for Plaintiffs.

Cheryl Zak Lardieri, Goodell De Vries Leech & Dann LLP, Boston, MD, Michael Daniel Begey, Christian Tiblier, Lena Marguerite Mirilovic, Rumberger, Kirk & Caldwell, P.A., Orlando, FL, Robert A. Limbacher, Goodell, DeVries, Leech & Dann, LLP, Philadelphia, PA, Aaron Stenzler Weiss, Carlton Fields Jorden Burt, P.A., Miami, FL, for Defendants.

ORDER ON RECONSIDERATION

Ursula Ungaro, UNITED STATES DISTRICT JUDGETHIS CAUSE comes before the Court upon Defendant Boehringer Ingelheim Pharmaceutical, Inc.'s Motion to Dismiss (D.E. 77) and Providio Defendants' Motion to Dismiss (D.E. 79).

THE COURT has considered the Motions, the pertinent portions of the record and is otherwise fully advised in the premises. For the reasons set forth below, the Court concludes that Plaintiffs lack standing to pursue their claims. Because standing is a jurisdictional issue, the Court does not reach Defendants' other bases for dismissal. See Stalley ex rel. United States v. Orlando Reg'l Healthcare Sys., Inc. , 524 F.3d 1229, 1232 (11th Cir. 2008) ("Because standing is jurisdictional, a dismissal for lack of standing has the same effect as a dismissal for lack of subject matter jurisdiction under Fed. R. Civ. P. 12(b)(1).").

FACTUAL ALLEGATIONS

The following facts are taken from Plaintiffs' Second Amended Class Action Complaint (D.E. 69) (the "Amended Complaint").

I. The Parties

Plaintiffs are four companies that are assignees of various unidentified Medicare Advantage Organizations ("MAOs"). D.E. 69, ¶¶ 3–5. Plaintiffs, MAO–MSO Recovery II, LLC, MSP Recovery, LLC, and MSPA Claims 1, LLC, were named Plaintiffs in the First Amended Class Action Complaint. D.E. 40. Plaintiff, MSP Recovery Claims, Series LLC, was added to this action in the Second Amended Class Action Complaint. D.E. 69. As assignees of these MAOs, Plaintiffs have the right to recover Medicare payments made by the MAOs, and for which the MAOs have a right of recovery against third parties. Id.

Defendant, Boehringer Ingelheim Pharmaceuticals, Inc. ("Boehringer, Inc.") is a pharmaceutical company based in Connecticut. Id. ¶ 8. Defendants, Boehringer Ingelheim Pharma GMBH & Co. KG, Boehringer International GMBH, and Bidachem S.P.A., are pharmaceutical companies based in Germany and Italy. Id. ¶¶ 9–11. Together these four defendants manufactured, distributed, marketed, labeled, or sold a blood-thinning drug called Pradaxa. Id. ¶ 41. Collectively, all four of these defendants are the "Pharmaceutical Defendants." Of the Pharmaceutical Defendants, only Boehringer, Inc. is presently involved in this litigation; Plaintiffs have not served the international defendants.

Defendants, Providio Medisolution, LLC, and Providio Lien Counsel, LLC, (together the "Providio Defendants"), are administrators of a multi-district-litigation settlement fund (the "Settlement Fund"). Id. ¶ 114. The Settlement Fund was created by the Pharmaceutical Defendants to settle claims related to Pradaxa. Id. ¶¶ 113.

II. The Allegations of the Second Amended Complaint

A. An Overview

Plaintiffs allege that Defendants violated the Medicare Secondary Payer Act ("MSPA"), 42 U.S.C. § 1395y(b), which is an amendment to the Medicare Act. Id. ¶¶ 25. They allege that individuals who were injured by Pradaxa incurred medical costs treating those injuries. Id. ¶ 59. A "large volume" of those costs were paid for by MAOs. Id. ¶ 61. Pursuant to the MSPA, Defendants have an obligation to repay the MAOs for those costs. Id. ¶ 72. The MAOs assigned their rights to collect those costs to Plaintiffs. Id. ¶ 38. Accordingly, Plaintiffs allege that Defendants owe Plaintiffs—and a class of similarly situated entities—the medical-service costs incurred by individuals injured by Pradaxa. Id. ¶ 51.

B. The Legal Framework

The Medicare Act is divided into several parts; part C is relevant here. Id. ¶ 19–20. Medicare Part C permits individuals eligible for Medicare to elect to receive their benefits through enrollment in an MAO. Id. ¶ 20. The MAOs contract with the Centers for Medicare and Medicaid Services ("CMS") to administer Medicare benefits to Part–C enrollees. Id. CMS delegates to the MAOs the obligation to administer, pay, and assume all Medicare economic risk for the benefits provided to Part–C enrollees. Id.

Pursuant to the MSPA, any payment made by an MAO is "conditional" or "secondary" whenever there is a "primary plan." Id. ¶ 26. A primary plan must either pay for the enrollee's medical services or later reimburse the MAO for their secondary payments. Id. ¶ 26. A primary plan's obligation to reimburse the MAO is demonstrated by, among other things, a waiver and release of liability whether or not there is a determination or admission of liability. Id. ¶ 27. Thus, a tort settlement in favor of a Medicare enrollee triggers the tortfeasor's reimbursement obligation. Id.

MAOs have the right to charge primary plans, such as tortfeasors, to recover secondary payments. Id. ¶ 30–32. The MSPA provides a private right of action by which a secondary payer, like an MAO, can recover from a primary plan that fails to fulfill its reimbursement obligation. Id. ¶ 33. The private right of action is codified at 42 U.S.C. § 1395y(b)(3)(A) and allows a secondary payer to collect double damages. Id. A primary plan's liability under this statute can be established by a settlement agreement. Id. ¶ 34.

C. The Conduct at Issue

1) The Pharmaceutical Defendants' Conduct

The Pharmaceutical Defendants manufactured a blood-thinning drug called Pradaxa. Id. ¶ 41. Defendants introduced the drug to North American markets in 2010. Id. ¶ 42. Patients who used Pradaxa experienced an increased risk of developing life-threatening internal bleeding. Id. ¶ 46. As a result, numerous lawsuits were brought against the Pharmaceutical Defendants, and the cases were consolidated into multi-district-litigation ("MDL") proceedings in the Southern District of Illinois. Id. ¶ 52.

Plaintiffs identify one Part–C individual, by initials only, who suffered injuries from Pradaxa. Id. ¶ 50. This individual's MAO, Summacare, paid the medical bills incurred to treat the individuals' Pradaxa-related injuries.¹ Id. Summacare assigned its reimbursement rights to Plaintiff, MSP Recovery, LLC, on May 12, 2017. Id. , Ex. A. MSP Recovery, LLC, then assigned its recovery rights to the newly added Plaintiff, MSP Recovery Claims, Series LLC, on June 12, 2017. Id. , Ex. B.

In May, 2014, the Pharmaceutical Defendants settled the MDL proceedings. Id. ¶ 53. By virtue of the settlement, the Pharmaceutical Defendants became primary plans under the MSPA. Id. ¶ 55. Accordingly, they are obligated to reimburse MAOs for secondary payments paid on behalf of individuals to cover the costs of their Pradaxa-related injuries. Id. ¶ 56. Because Plaintiffs are the assignees of MAOs, Plaintiffs are entitled to collect the reimbursements. Id. ¶ 62.

At the time of the settlement, the Pharmaceutical Defendants were aware, or should have been aware, that they were obligated to reimburse the medical costs incurred by Medicare enrollees to treat the injuries they sustained from Pradaxa. Id. ¶ 54. Additionally, on or about June 1, 2016, Plaintiffs notified the Pharmaceutical Defendants of their reimbursement rights. Id. ¶ 58, Ex. D. Despite receiving Plaintiffs' notice, the Pharmaceutical Defendants failed to reimburse Plaintiffs. Id. ¶ 59. Accordingly, Plaintiffs allege that they are entitled to recover double damages from the Pharmaceutical Defendants under the MSPA. Id. ¶ 62.

2) The Providio Defendants' Conduct

After the Pharmaceutical Defendants settled the MDL proceedings, the MDL Court appointed the Providio Defendants to administer the Settlement Fund. Id. ¶ 57. Plaintiffs notified the Providio Defendants of their reimbursement rights and demanded that the secondary payments to which they are entitled be repaid from the Settlement Fund. Id. ¶ 58, Ex. D. Despite receiving Plaintiffs' notice, the Providio Defendants failed to reimburse Plaintiffs, claiming that the settlement proceeds had been distributed. Id. ¶ 59. Accordingly, Plaintiffs allege that they are entitled to recover double damages from the Providio Defendants under the MSPA. Id. ¶ 80. Plaintiffs also claim that, by virtue of their position as administrators of the Settlement Fund, the Providio Defendants had a fiduciary duty to pay Plaintiffs the reimbursements required by the MSPA. Id. ¶ 123. Because the Providio Defendants did not do so, Plaintiffs allege that they breached their fiduciary duty. Id.

PROCEDURAL HISTORY

Plaintiffs filed their first complaint on May 27, 2017. D.E. 1. On July 14, Boehringer, Inc. filed a motion to dismiss for lack of standing and failure to state a claim. D.E. 27. On August 3, Plaintiffs filed their Amended Complaint. D.E. 40. On August 18, Boehringer, Inc. and the Providio Defendants filed motions to dismiss the Amended Complaint for lack of standing and failure to state a claim. D.E. 46, 47. Additionally, the Providio Defendants argue that they are not subject to personal jurisdiction in Florida.

On October 10, 2017, the Court dismissed the first Amended Class Action Complaint for lack of standing. D.E. 65. As with the present motions to dismiss, Defendants made a facial challenge to standing. The Court ruled that, to establish standing, Plaintiffs had to show: "(1) that the MAOs [from whom Plaintiff's received their assignments] suffered an injury (i.e., were not reimbursed when they were entitled to be), and (2) that the MAOs assigned their reimbursement rights to Plaintiffs." Id. , p. 8. The first Amended...