Class Action Defense Cases-In re Pharmacy Benefit Managers: Judicial Panel On Multidistrict Litigation (MDL) Grants Plaintiff’s Motion To Centralize Antitrust Class Action Litigation In The Eastern District of Pennsylvania

Feb 9, 2007 | By: Michael J. Hassen

Judicial Panel Holds Pretrial Coordination of Class Action Lawsuits Pursuant to 28 U.S.C. § 1407 Warranted and Concurs with View of Some Plaintiff and Defense Attorneys that Eastern District of Pennsylvania is Appropriate Transferee Court

Six federal antitrust securities class action lawsuits were filed in Alabama, California, Illinois and Pennsylvania against several defendants “aris[ing] out of allegations that certain conduct by the pharmacy benefit manager (PBM) defendants-including the negotiation of rates for the sale of prescription drugs by retail pharmacies-violated the federal antitrust laws.” In re Pharmacy Benefit Managers Antitrust Litig., 452 F.Supp.2d 1352, 1352-53 (Jud.Pan.Mult.Lit. 2006). Plaintiffs in one of the Pennsylvania actions filed a motion with the Judicial Panel for Multidistrict Litigation (MDL) requesting centralization of the class actions pursuant to 28 U.S.C. § 1407 in the Eastern District of Pennsylvania. Id., at 1353. Defense attorneys for parties named in three of the class actions, as well as the California plaintiffs, supported the motion, id. Other plaintiffs supported centralization but argued in favor of the Northern District of Alabama as the appropriate forum, while other defendants opposed centralization and argued in the alternative for transfer to the Northern District of Illinois. Id.

The Judicial Panel acknowledged that “unique questions of fact relating to each PBM” may “spawn some unique discovery” based on the specific contracts between each plan sponsor/PBM, but found centralization warranted because “all plaintiffs allege that these contracts create a price-fixing conspiracy” and “all actions can be expected to focus on similar PBM practices and procedures.” Id. As the Judicial Panel explained at pages 1353 and 1354,

Transfer to a single district under Section 1407 has the salutary effect of placing all actions before one court which can formulate a pretrial program that: 1) allows pretrial proceedings with respect to any non-common issues to proceed concurrently with pretrial proceedings on common issues …; and 2) ensures that pretrial proceedings will be conducted in a manner leading to the just and expeditious resolution of all actions to the overall benefit of the parties. The MDL-1782 transferee court can employ any number of pretrial techniques-such as establishing separate discovery and/or motion tracks-to efficiently manage this litigation. In any event, we leave the extent and manner of coordination or consolidation of these actions to the discretion of the transferee court… .

With respect to the appropriate transferee court, the Judicial Panel found that, “Given the geographic dispersal of constituent actions, any of the suggested transferee districts would be an appropriate transferee forum.” Id., at 1354. The Judicial Panel selected the Eastern District of Pennsylvania because two class actions already were pending in that court and the district court has the experience necessary to properly oversee the litigation. Id.

Download PDF file of In re Pharmacy Benefit Managers Antitrust Litigation Transfer Order

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