Staley v. Gilead Scis., Inc.
| Docket Number | Case No. 19-cv-02573-EMC |
| Decision Date | 08 March 2022 |
| Citation | 589 F.Supp.3d 1132 |
| Parties | STALEY, et al., Plaintiffs, v. GILEAD SCIENCES, INC., et al., Defendants. |
| Court | U.S. District Court — Northern District of California |
ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS’ MOTIONS TO DISMISS
Currently pending before the Court are two motions to dismiss – one filed by Teva and the other by Gilead. Both Teva and Gilead challenge the complaint filed by United HealthCare Services, Inc. ("UHS") in Case No. C-21-9202 EMC. The motions overlap in content. Having considered the parties’ briefs as well as the oral argument of counsel, the Court hereby GRANTS in part and DENIES in part each motion to dismiss.
UHS is a Minnesota corporation with its principal place of business in Minnesota. See Compl. ¶ 20. As alleged in the operative complaint, UHS "engages in servicing prescription drug managed care programs provided to members and beneficiaries under insurance plans offered by UHS's subsidiaries and affiliates, which, together, constitute the largest single health insurance carrier and services provider in the United States, and serve some 70 million individual insureds." Compl. ¶ 21. Essentially, it pays for pharmaceutical drugs used by its insureds.
UHS brings suit on its own behalf as an end-payor plaintiff ("EPP"). See Compl. ¶ 21 ().
In addition, UHS brings suit as a direct purchaser plaintiff ("DPP") because it has been assigned rights by a third party. See Compl. ¶¶ 23-24 ().
Like the other EPPs and DPPs, UHS brings federal antitrust claims as well as claims based on state antitrust law and state consumer protection law.
Federal Rule of Civil Procedure 8(a)(2) requires a complaint to include "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). A complaint that fails to meet this standard may be dismissed pursuant to Federal Rule of Civil Procedure 12(b)(6). See Fed. R. Civ. P. 12(b)(6). To overcome a Rule 12(b)(6) motion to dismiss after the Supreme Court's decisions in Ashcroft v. Iqbal , 556 U.S. 662, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009), and Bell Atlantic Corp. v. Twombly , 550 U.S. 544, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007), a plaintiff's "factual allegations [in the complaint] ‘must ... suggest that the claim has at least a plausible chance of success.’ " Levitt v. Yelp! Inc. , 765 F.3d 1123, 1135 (9th Cir. 2014). The court "accept[s] factual allegations in the complaint as true and construe[s] the pleadings in the light most favorable to the nonmoving party." Manzarek v. St. Paul Fire & Marine Ins. Co. , 519 F.3d 1025, 1031 (9th Cir. 2008). But "allegations in a complaint ... may not simply recite the elements of a cause of action [and] must contain sufficient allegations of underlying facts to give fair notice and to enable the opposing party to defend itself effectively." Levitt , 765 F.3d at 1135 (internal quotation marks omitted). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal , 556 U.S. at 678, 129 S.Ct. 1937. "The plausibility standard is not akin to a probability requirement, but it asks for more than a sheer possibility that a defendant has acted unlawfully." Id. (internal quotation marks omitted).
Teva has moved to dismiss part of the federal antitrust claims – specifically those based on injuries that occurred outside the four-year limitations period. Teva notes that, UHS, like the Walgreen and CVS Plaintiffs, sought to include injuries outside the period on the basis of American Pipe tolling, even though Teva was not named as a defendant in the earlier-filed KPH/FWK suits.
In response, UHS essentially states that it accepts the Court's ruling in the Walgreen and CVS cases will apply here (though it is preserving its position for appeal). See 2022 WL 126116 (). Accordingly, the Court grants Teva's motion to dismiss with respect to the statute of limitations. Specifically, claims based on purchases made prior to October 19, 2017 are barred.1
Both Teva and Gilead have moved to dismiss certain EPP claims based on state antitrust law and/or state consumer protection law. Specifically, they move to dismiss parts of Count 11.
Count 11 is an alternative claim to Count 10.
Teva and Gilead have moved to dismiss Count 11 to the extent it is based on the following state laws:
For many of these state laws, Teva and Gilead make the same basic argument – i.e. , that the statutes are intended to protect consumers or consumer transactions and, here, UHS did not purchase the drugs at issue for consumer purposes, but rather for commercial purposes, because UHS did not purchase the drugs for its own use but rather for the use of someone else (its insureds).
The Court addresses each specific statute below. However, as a general observation, it notes that Defendants’ position is problematic in that Defendants ignore the remedial purpose behind the statutes which, as a general matter, supports a liberal construction and/or application of the laws. For example:
It is important that the Court bear in mind this liberal approach because Defendants’ construction of these statutes is at odds with their broad remedial purpose. Defendants elevate form over substance. Under Defendants’ position, the ultimate end user of the drug, the insured, cannot bring suit for any alleged misconduct because she did not pay for the drug herself but neither could the insurer, who pays for that drug on behalf of the insured. Under Defendants’ position, neither end payor can enforce the consumer protection law, a result hardly consistent with the remedial purpose of the act which specially enables suits by end payors.
Under Indiana law (the Indiana Deceptive Consumer Sales Act ("ICDSA")), "[a] supplier may not commit an unfair, abuse, or deceptive act, omission, or practice in connection with a consumer transaction." Ind. Code § 24-5-0.5-3(a).
"Consumer transaction" means a sale, lease, assignment, award by chance, or other disposition of an item of personal property, real property, a service, or an intangible ... to a person for purposes that are primarily personal, familial, charitable, agricultural, or household, or a solicitation to supply any of these things.
Id. § 24-5-0.5-2(a)(1). " ‘Person’ means an individual, corporation, the state of Indiana or its subdivisions or agencies, business trust, estate, trust, partnership, association, nonprofit corporation or organization, or cooperative or any other legal entity." Id. § 24-5-0.5-2(a)(2). "A person relying upon an uncured or incurable deceptive act may bring an action for the damages actually suffered as a consumer as a result of the deceptive act or five hundred dollars ($500), whichever is greater." Id. § 24-5-0.5-4(a).
As noted above, Defendants argue that the Indiana claim should be dismissed because UHS made purchases of the drugs for someone else (its insureds) and not for itself; in other words, UHS made the purchases for commercial purposes, and not consumer purposes.
The Court does not agree. Case law weighs against Defendants’ argument....
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