Picone v. Shire U.S. Inc. (Indirect Purchaser Antitrust Class Action)

UNITED STATES DISTRICT COURT

DISTRICT OF MASSACHUSETTS

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In re INTUNIV ANTITRUST LITIGATION * Civil Action No. 1:16-cv-12396-ADB

(Indirect Purchasers) *

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MEMORANDUM AND ORDER ON PLAINTIFFS’ MOTION FOR RECONSIDERATION

BURROUGHS, D.J.

Indirect Purchaser Plaintiffs (“IPPs”) seek reconsideration of the Court’s August 21,

2019, Order [ECF No. 230] that denied their motion for class certification. [ECF No. 235]. The

IPPs now request that the Court certify a class of persons who bought brand Intuniv or generic

Guanfacine ER with cash or co-insurance. For the reasons discussed herein, the motion for

reconsideration [ECF No. 235] is DENIED.

I. BACKGROUND

A more complete version of the facts is provided in the Court’s August 21, 2019, Order.

See In re Intuniv Antitrust Litig., No. 16-cv-12396, 2019 WL 3947262, at *1–2 (D. Mass. Aug.

21 2019); [ECF No. 230]. The IPPs moved for certification of two classes of consumers who

they claim were overcharged for Intuniv because of an allegedly anticompetitive settlement

agreement between Shire and Actavis (“Defendants”). [ECF No. 146]. Those proposed classes

included:

The Nationwide Consumer Class: For the period beginning November 15, 2012,

to the present: (A) all persons who purchased brand or generic Intuniv in the United

States for personal or household use, and who paid the purchase price themselves;

and (B) all persons covered by commercial health insurance who purchased brand

Intuniv in the United States for personal or household use, and who paid some of

the purchase price pursuant to a co-payment or co-insurance provision.

Illinois Brick Repealer Class: For the period beginning November 15, 2012, to

the present, all persons in Arizona, California, Florida, Iowa, Maine,

Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska,

Nevada, New Hampshire, New Mexico, New York, North Carolina, North Dakota,

Oregon, Rhode Island, South Dakota, Tennessee, Vermont, West Virginia,

Wisconsin, and the District of Columbia: (A) who paid the purchase price

themselves for brand or generic Intuniv in the United States for personal or

household use; and (B) all persons covered by commercial health insurance who

purchased brand Intuniv in the United States for personal or household use, and

who paid some of the purchase price pursuant to a co-payment or co-insurance

provision.

[Id. at 1–2]. The Court determined that the IPPs had not provided a workable plan to exclude a

large number of uninjured class members, including roughly 25,000 brand loyalists, several

thousand coupon-using class members, and a de minimis number of potential class members who

purchased Intuniv only after reaching their out-of-pocket maximums. [ECF No. 230 at 16–17].

The Court therefore refused to certify either of the two proposed classes. [Id. at 18].

The IPPs moved for reconsideration on September 4, 2019, arguing that the Court should

have certified one subclass of potential plaintiffs consisting of consumers “who bought brand

Intuniv or generic Guanfacine ER with cash or co-insurance.” [ECF No. 235 at 2]. Defendants

responded on September 18, 2019. [ECF Nos. 241, 242]. On September 26, 2019, the IPPs

requested leave to file a reply brief, [ECF No. 260], which Defendants opposed, [ECF No. 266].

The Court granted the motion, [ECF No. 267], and the IPPs filed their reply on October 21,

2019, [ECF No. 268].

On September 6, 2019, the IPPs filed a petition for an interlocutory appeal with the First

Circuit. Picone, et al. v. Shire U.S. Inc., et al., No. 19-8023, 2019 WL 3947262 (1st Cir. 2019).

Defendants responded on September 16, 2019, and the IPPs replied on September 24, 2019. Id.

II. DISCUSSION

A. Jurisdiction

Under the Federal Rules of Civil Procedure, “the proper method for challenging an

adverse class certification decision prior to judgment is to seek interlocutory review . . . .”

Donovan v. Phillip Morris USA, Inc., No. 06-cv-12234, 2012 WL 957633, at *5 (D. Mass. Mar.

21, 2012). Under Rule 23, “[a] court of appeals may permit an appeal from an order granting or

denying class-action certification . . . [if a] party . . . file[s] a petition for permission to appeal

with the circuit clerk within 14 days after the order is entered . . . .” Fed. R. Civ. P. 23(f). While

seeking reconsideration from this Court, the IPPs filed a petition seeking interlocutory review

with the First Circuit on September 6, 2019, which this Court has now reviewed. See Petition for

Permission to Appeal, Picone, No. 19-8023 (1st Cir. Sept. 6, 2019).

“An interlocutory appeal ordinarily suspends the power of the district court to modify the

order subject to appeal, but does not oust district-court jurisdiction to continue with proceedings

that do not threaten either the appeal’s orderly disposition or its raison d’etre.” 16A Charles

Alan Wright & Arthur R. Miller, Federal Practice and Procedure, § 3949.1 (5th ed. 2019). “[A]n

appeal from either a final order or an interlocutory order made immediately appealable by statute

divests a district court of authority to proceed with respect to any matter touching upon, or

involved in, the appeal . . . .” United States v. Mala, 7 F.3d 1058, 1060–61 (1st Cir. 1993).

The IPPs’ petition for interlocutory appeal asks, in part, that the First Circuit remand to

this Court to consider whether the class definition should be narrowed to exclude consumers with

co-pays. See Petition for Permission to Appeal at 17–21, Picone, No. 19-8023 (1st Cir. Sept. 6,

2019). In other words, the petition requests the exact same relief sought in the IPPs’ motion for

reconsideration. See [ECF No. 235 at 3, 5–7]. In order to avoid the “danger [that] a district

court and a court of appeals w[ill] be simultaneously analyzing the same judgment,” Griggs v.

Provident Consumers Disc. Co., 459 U.S. 56, 59 (1982), the Court is left with two options. The

Court may either stay the proceeding pending the interlocutory appeal or deny the motion for

reconsideration, so that the First Circuit and this Court are not considering the issue

simultaneously. Because the Court finds that the motion for reconsideration lacks merit, it elects

to deny the motion and provide a clean jurisdictional record to the court of appeals.

B. Legal Standard

A district court has “inherent power” to reconsider an interlocutory order, such as a

denial of class certification. ACC Bldg. 1, LLC v. Tex. Instruments, Inc., No. 16-40011, 2019

WL 3891029, at *3 (D Mass. Aug. 19, 2019). Because a denial of class certification is an “order

from which an appeal lies” under Rule 23(f), motions for reconsideration of class certification

orders are considered under Rule 59(e) of the Federal Rules of Civil Procedure. Marie v. Allied

Home Mortg. Corp., 402 F.3d 1, 7 (1st Cir. 2005) (quoting Fed. R. Civ. P. 54(a)); see, e.g.,

O’Donnell v. Robert Half Int’l, Inc., 534 F. Supp. 2d 173, 178 (D. Mass. 2008) (applying Rule

59(e) when evaluating a motion to reconsider a denial conditional certification of a class).

Granting a motion for reconsideration is “an extraordinary remedy which should only be used

sparingly.” Palmer v. Champion Mortg., 465 F.3d 24, 30 (1st Cir. 2006) (quoting 11 Charles

Alan Wright et al., Federal Practice and Procedure § 2810.1 (2d ed. 1995)). “A motion for

reconsideration should be granted only if the court has patently misunderstood a party or there is

a significant change in the law or facts since the submission of the issues to the court by the

parties.” O’Donnell, 534 F. Supp. 2d at 178.

C. Analysis

The IPPs allege that the Court misunderstood their proposed class. They claim that they

previously proposed three groups of consumers for class certification: (1) consumers who

purchased brand Intuniv with a co-pay; (2) consumers who purchased brand Intuniv with co-

insurance; and (3) consumers who purchased brand or generic Intuniv with cash. [ECF No. 235

at 3]. They argue that if the Court was concerned about including unharmed plaintiffs, it should

only have refused to certify the first group and narrowed the class, instead of denying class

certification. [Id.].

The Court declines to modify its denial of class certification. First, the Court did not

misunderstand the parties, as the IPPs have not previously proposed a class of consumers who

purchased brand Intuniv with co-insurance or cash. Second, the IPPs have failed to demonstrate

that the named plaintiffs would be adequate representatives of the newly proposed class. Finally,

the narrower class would still include the uninjured class members that concerned the Court

when it denied the motion for class certification.

1. Plaintiffs Have Not Previously Proposed This Class

The IPPs had not previously proposed this class for the Court’s consideration. Motions

for reconsideration “may not be used to argue a new legal theory.” Fed. Deposit Ins. Corp. v.

World Univ. Inc., 978 F.2d 10, 16 (1st Cir. 1992). They provide a rare avenue for a party to

request that a court reconsider an argument, not an opportunity to “raise arguments which could,

and should, have been made” before the decision at issue. Harley-Davidson Motor Co., Inc. v.

Bank of New England-Old Colony, N.A., 897 F.2d 611, 616 (1st Cir. 1990) (quoting FDIC v.

Meyer, 781 F.2d 1260, 1268 (7th Cir. 1986)); see AFG Surety Grp., Inc. v. St. Paul Travelers

Cos., Inc., No. 06-cv-1622, 2009 WL 10719988, at * 2 (D.P.R. Feb. 17, 2009) (quoting Pacific

Ins. Co. v. Am. Nat’l Fire Ins. Co., 148 F.3d 396, 403 (4th Cir. 1998) (“[P]arties should not use

[motions for reconsideration] to ‘raise arguments which could, and should, have been made

before judgment issued.’”).

The IPPs cite a number of instances in which they claim that they proposed three distinct

classes in their earlier briefing. [Id. at 4 nn.1–3]. In their memorandum in support of class

certification, however, the IPPs only referenced class members with co-insurance and co-pays,

making no distinction between potential classes. See, e.g., [ECF No. 148 at 7, 19, 24]. In their

reply in support of class certification, the IPPs noted that cash-payers would recover more for

their alleged damages because they could recover for both brand and generic Intuniv payments,

but did not propose this as a separate class. [ECF No. 178 at 12 n.5].

The IPPs therefore never proposed the potential class before the Court and have provided

no caselaw to support the notion that district courts must sua sponte create a workable class after

plaintiffs have failed to carry their burden. The IPPs have therefore failed to demonstrate that

the Court made an error that would warrant reconsideration.

2. Plaintiffs Have Not Demonstrated That They Would Be Adequate

Representatives

Even if the IPPs had clearly raised this new class of cash and co-insurance consumers in

their class certification motion, the Court would have declined to certify the class because the

IPPs failed to demonstrate that the named plaintiffs would be among the members of the class

now proposed.

Rule 23’s four requirements “effectively limit the class claims to those fairly

encompassed by the named plaintiff’s claims.” Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338,

348–49 (2011) (quoting Gen. Tel. Co. of Sw. v. Falcon, 457 U.S. 147, 156 (1982)). “Rule 23

does not set forth a mere pleading standard. A party seeking class certification must

affirmatively demonstrate his compliance with the Rule—that is, he must be prepared to prove

that there are in fact sufficiently numerous parties, common questions of law or fact, etc.” Wal-

Mart Stores, Inc., 564 U.S. at 350.

“[A] class representative must be part of the class and possess the same interest and

suffer the same injury as the class members.” Id. at 348–49 (citations and internal quotation

marks omitted). Therefore, the named plaintiffs’ claims must be “typical of the class,” Lazo v.

Sodexo, No. 15-cv-13366, 2017 WL 5147098, at *3 (D. Mass. Nov. 6, 2017) (quoting Fed. R.

Civ. P. 23(a)(3)), and the plaintiffs must have “suffered the same injury” as the purported class,

Wal-Mart Stores, Inc., 564 U.S. at 349–50.

The IPPs failed to demonstrate that the named plaintiffs were actually cash-payers or co-

insurance users who purchased Intuniv. Defendants argue that none of the named plaintiffs

would be members of the newly proposed class, as each named plaintiff had previously testified

that he or she purchased brand or generic Intuniv by paying a co-pay while insured. [ECF No.

241 at 10–11]. The IPPs respond with a list of previous purchases of Intuniv that suggest that

one named plaintiff purchased Intuniv with co-insurance in a few instances. [ECF Nos. 268 at

6–8; 268-3; 268-4]. They also attach a benefits booklet for that same named plaintiff, which

indicates that she may have had to pay thirty-percent co-insurance at participating pharmacies,

rather than the co-pay she testified to paying. [ECF No. 268-5].

A motion for reconsideration “does not provide a vehicle for a party to undo its own

procedural failures, and it certainly does not allow a party to introduce new evidence or advance

arguments that could and should have been presented to the district court prior to the judgment.”

Aybar v. Crispin-Reyes, 118 F.3d 10, 16 (1st Cir. 1997). If the IPPs anticipated arguing that the

named plaintiffs were a part of this newly proposed class, they should have presented this

evidence to the Court before the Court’s decision denying class certification. See In re Mut. Life

Ins. Co. of N. Y. Premium Litig., 299 F. Supp. 2d 4, 7 (D. Mass. 2004). Without a

demonstration that the named plaintiffs actually belong to the IPPs’ newly proposed class, the

Court is unable to “ensure[] that the named plaintiffs are appropriate representatives of the class

whose claims they wish to litigate.” Wal-Mart Stores, Inc., 564 U.S. at 349.

3. The Narrower Class Would Still Potentially Include Uninjured Members

Finally, the IPPs’ newly proposed class would not address the Court’s concerns with the

number of uninjured plaintiffs that would be potentially included. The IPPs describe the Court’s

August 21, 2019, Order as “only . . . declin[ing] to certify the proposed class . . . because it was

troubled with the potential number of uninjured brand loyalists.” [ECF No. 235 at 7]. This

misrepresents the Order.

Though the Court found that the class as originally proposed would include uninjured

“brand loyal” plaintiffs who paid with a co-pay, it also estimated the total number of class

members who were uninjured “due to reasons other than brand loyalty . . . [to] number in the

thousands.” [ECF No. 230 at 8 n.5]. This would include, but not be limited to, coupon users and

those consumers who reached their out-of-pocket maximums. [Id. at 16–17].

The Court previously determined that “[i]dentifying uninjured consumers with any

degree of confidence would require an assessment of individual-specific facts such as the

consumer’s insurance plan, any peculiar views about the equivalence of brand and generic

Intuniv, their consumption habits when faced with similar choices between brand and generic

drugs, their use of coupons, the timing of their purchases of Intuniv, and potentially other

factors.” [ECF No. 230 at 17]. The IPPs’ briefing only argues that those consumers who paid

out-of-pocket or with co-insurance would have been injured regardless of brand loyalty. This

does not go far enough. They still fail to provide a means by which these uninjured class

members could be weeded out.

III. CONCLUSION

The IPPs previously failed to request that the Court consider a class of consumers who

purchased Intuniv out-of-pocket or with co-insurance. On reconsideration, the IPPs have failed

to demonstrate that named plaintiffs would be included in this potential class and that the class

would not include a large number of uninjured consumers. Accordingly, the IPPs’ motion for

reconsideration [ECF No. 235] is DENIED.

SO ORDERED.

November 6, 2019 /s/ Allison D. Burroughs

ALLISON D. BURROUGHS

U.S. DISTRICT JUDGE