Klein et al v. Prime Therapeutics, LLC et al

MEMORANDUM in Support re MOTION for Injunction

D. Minn.September 18, 2017

520525.1 UNITED STATES DISTRICT COURT DISTRICT OF MINNESOTA Elan and Adam Klein, Leah Weaver, and Arissa Paschalidis, and all others similarly situated, Plaintiffs, v. Prime Therapeutics, LLC; Express Scripts Holding Co.; Express Scripts, Inc.; and CVS Health Corp., Defendants. Civil Action No. 17-CV-01884 (PAM/SER) PLAINTIFFS’ MEMORANDUM OF LAW IN SUPPORT OF MOTION FOR INJUNCTION Plaintiffs Elan and Adam Klein, Leah Weaver, and Arissa Paschalidis, on behalf of themselves and those similarly situated (collectively, the “Minnesota Plaintiffs”), seek to enjoin plaintiffs in a later-filed ERISA action from prosecuting their claims, pursuant to the first-to-file rule. Nearly three months after the Minnesota Plaintiffs filed the above-captioned action (the “Minnesota Action”), plaintiffs in the copycat action—Traci Brannon, Lindsey Rizzo, and Jamie Herr (collectively, the “Kansas Plaintiffs”)—filed substantively identical claims against pharmacy benefit manager (“PBM”) defendants in the United States District Court for the District of Kansas. Brannon, et al. v. Express Scripts Holding Company, et al., No. 2:17-cv-02497-DDC-GLR (the “Kansas Action”). As detailed below, the Kansas Action suffers from a litany of serious and likely fatal defects concerning standing and personal jurisdiction and should be enjoined based on CASE 0:17-cv-01884-PAM-SER Document 101 Filed 09/18/17 Page 1 of 18 520525.1 2 the first-to-file rule, as a deficient action seeking to inappropriately leapfrog the Minnesota Action. On June 2, 2017, the Minnesota Plaintiffs filed the Minnesota Action against several large PBMs—Prime Therapeutics, LLC; Express Scripts Holding Co.; Express Scripts, Inc.; and CVS Health Corp. (collectively, “PBM Defendants”)—alleging that the PBM Defendants violated their fiduciary duties under the Employment Retirement Income Security Act of 1974 (“ERISA”). Dkt. No. 1. The Minnesota Plaintiffs allege that the PBM Defendants’ actions caused direct injury and losses to the Minnesota Plaintiffs and the putative class and seek equitable relief, including restitution and/or disgorgement. Almost three months after the Minnesota Plaintiffs filed the Minnesota Action, the Kansas Plaintiffs filed the Kansas Action on August 29, 2017, alleging ERISA violations by PBM defendants based on the same facts concerning EpiPen. The Kansas Action should be enjoined based on the first-to-file rule articulated by the Eighth Circuit and this Court. The need to enjoin is particularly cogent here, given the significant flaws in the Kansas Action.1 Because the Minnesota Plaintiffs properly commenced the Minnesota Action before the Kansas Plaintiffs commenced the Kansas Action, the Minnesota Plaintiffs respectfully request that the Court exercise its broad discretion and enjoin the Kansas Plaintiffs from pursuing the Kansas Action. 1 Similarly, in appointing class counsel, Rule 23(g)(1)(A)(i) of the Federal Rules of Civil Procedure specifically requires a court to consider “the work counsel has done in identifying or investigating potential claims in the action,” which clearly weighs against appointing counsel who merely filed a later copycat action. CASE 0:17-cv-01884-PAM-SER Document 101 Filed 09/18/17 Page 2 of 18 520525.1 3 I. BACKGROUND A. Procedural Background In their first-filed Minnesota Action, the Minnesota Plaintiffs allege that the PBM Defendants violated their fiduciary duties under ERISA by negotiating increasingly large rebates from Mylan, which markets and sells EpiPen, for themselves and their insurer and employer clients, including access rebates, performance rebates, market share rebates, and price protection rebates, among others. The Minnesota Plaintiffs allege that the PBM Defendants negotiated for these rebates, as well as administrative and other fees for themselves, instead of seeking lower or stable EpiPen prices for the health insurance plan members whose prescription drug benefits the PBM Defendants administer. The Minnesota Plaintiffs allege that the Defendants’ actions caused the out-of-pocket costs paid by the Minnesota Plaintiffs and putative class to significantly increase. The Minnesota Plaintiffs further allege that the PBM Defendants are liable (1) as co- fiduciaries under ERISA § 405(a) for knowingly participating in and enabling other fiduciaries’ breaches of their duty to act solely in the interests of the Minnesota Plaintiffs and the putative class and (2) to the extent not deemed fiduciaries, as non-fiduciaries under ERISA § 502(a)(3) because the PBM Defendants had actual or constructive knowledge of and participated in other fiduciaries’ violations of ERISA. In addition, the Minnesota Plaintiffs allege that the PBM Defendants engaged in prohibited transactions as fiduciaries, violating ERISA § 406(b)(2). The Minnesota Plaintiffs allege that the PBM Defendants’ actions caused direct injury and losses to them and the putative class and seek equitable relief, including restitution and/or disgorgement. CASE 0:17-cv-01884-PAM-SER Document 101 Filed 09/18/17 Page 3 of 18 520525.1 4 On August 29, 2017, nearly three months after the Minnesota Action was filed, the Kansas Plaintiffs filed their action in the District of Kansas, which was later assigned to the Honorable Daniel D. Crabtree.2 As with the first-filed Minnesota Action, the Kansas Action similarly alleges that defendant PBMs violated their fiduciary duties under ERISA through the same course of conduct related to EpiPen. See id. The next day, on August 30, 2017, plaintiffs’ counsel in the Kansas Action filed a Notice of Related Action seeking to consolidate the Kansas Action with the pending multidistrict litigation, In re: EpiPen Marketing, Sales Practices and Antitrust Litigation (the “MDL Action”), which had been assigned to Judge Crabtree by the Judicial Panel on Multidistrict Litigation (“JPML”) on August 4, 2017.3 The same group of attorneys represents plaintiffs in the Kansas Action and the MDL Action.4 All of the cases in the MDL Action bring antitrust, RICO, and/or consumer protection claims against Mylan.5 2 See Brannon, et al., No. 2:17-cv-02497-DDC-GLR, Complaint (Dkt. No. 1) (D. Kan. Aug. 29, 2017), Ex. A to the Declaration of Kathleen M. Donovan-Maher (“Donovan-Maher Decl.”), submitted herewith. 3 See Brannon, et al., No. 2:17-cv-02497-DDC-GLR, Notice of Related Action (Dkt. No. 4) (D. Kan. Aug. 30, 2017), Donovan-Maher Decl. Ex. B; In re: EpiPen (Epinephrine Injection, USP) Marketing, Sales Practices and Antitrust Litigation,, MDL No. 2785, No. 17-md-2785-DDC-TJJ, Transfer Order (Dkt. No. 1) (D. Kan. Aug. 4, 2017), Donovan-Maher Decl. Ex. C. 4 See Brannon, et al., No. 2:17-cv-02497-DDC-GLR, Complaint (Dkt. No. 1) (D. Kan. Aug. 29, 2017), Donovan-Maher Decl. Ex. A; In re: EpiPen Marketing, Sales Practices and Antitrust Litigation, MDL No. 2785, No. 17-md-2785-DDC-TJJ, Order Appointing Counsel (Dkt. No. 40) (D. Kan. Sept. 12, 2017), Donovan-Maher Decl. Ex. D. 5 See In re: EpiPen Marketing, Sales Practices and Antitrust Litigation, MDL No. 2785, No. 17-md-2785-DDC-TJJ, Transfer Order (Dkt. No. 1) (D. Kan. Aug. 4, 2017), Donovan-Maher Decl. Ex. C. CASE 0:17-cv-01884-PAM-SER Document 101 Filed 09/18/17 Page 4 of 18 520525.1 5 None of the cases in the MDL Action bring ERISA claims or name PBMs as defendants.6 Defendants Express Scripts, OptumRx, and UnitedHealth have all objected to consolidation of the Kansas Action with the MDL Action, as did Mylan and the Minnesota Plaintiffs.7 Also on August 30, 2017, plaintiffs’ counsel in the Kansas Action filed a Notice of Potential Tag-Along Action with the JPML, identifying this Minnesota Action as a potential tag-along action, with the simultaneous relation, by counsel for the Kansas Plaintiffs, of the Kansas Action to the MDL Action.8 The actions of counsel in the 6 See In re: EpiPen Marketing, Sales Practices and Antitrust Litigation, MDL No. 2785, No. 17-md-2785-DDC-TJJ, Transfer Order (Dkt. No. 1) (D. Kan. Aug. 4, 2017), Donovan-Maher Decl. Ex. C. 7 See In re: EpiPen Marketing, Sales Practices and Antitrust Litigation, MDL No. 2785, No. 17-md-2785-DDC-TJJ, Opposition to Consolidation as a Related Action (Minnesota Plaintiffs) (Dkt. No. 17) (D. Kan. Sept. 6, 2017), Donovan-Maher Decl. Ex. E; In re: EpiPen Marketing, Sales Practices and Antitrust Litigation, MDL No. 2785, No. 17-md-2785-DDC-TJJ, Response of Express Scripts to Notice of Related Action (Dkt. No. 31) (D. Kan. Sept. 7, 2017), Donovan-Maher Decl. Ex. F; In re: EpiPen Marketing, Sales Practices and Antitrust Litigation, MDL No. 2785, No. 17-md-2785- DDC-TJJ, Defendant Prime Therapeutics LLC’s Response in Opposition to Plaintiffs’ Notice of Related Action (Dkt. No. 34) (D. Kan. Sept. 7, 2017), Donovan-Maher Decl. Ex. G; In re: EpiPen Marketing, Sales Practices and Antitrust Litigation, MDL No. 2785, No. 17-md-2785-DDC-TJJ, Mylan Defendants’ Objection to Inclusion of Brannon in In re EpiPen Marketing and Sales Practices Litigation, MDL No. 2785 (Dkt. No. 35) (D. Kan. Sept. 7, 2017), Donovan-Maher Decl. Ex. H; In re: EpiPen Marketing, Sales Practices and Antitrust Litigation, MDL No. 2785, No. 17-md-2785-DDC-TJJ, OptumRX, Inc. and UnitedHealth Groups, Inc.’s Response to Plaintiffs’ Notice of Related Action (Dkt. No. 36) (D. Kan. Sept. 7, 2017), Donovan-Maher Decl. Ex. I. 8 See In re: EpiPen Marketing, Sales Practices and Antitrust Litigation, MDL No. 2785, No. 17-md-2785-DDC-TJJ, Notice of Potential Tag-Along Action (Dkt. No. 71) (J.P.M.L. Aug. 30, 2017), Donovan-Maher Decl. Ex. J. By filing the Notice of Potential Tag-Along Action in the JPML, the Kansas Plaintiffs sought to coordinate and consolidate pretrial proceedings pursuant to 28 U.S.C. § 1407. See In re: Bear Creek Technologies, Inc., (‘722) Patent Litig., 858 F. Supp. 2d 1375, 1377 (J.P.M.L. 2012) CASE 0:17-cv-01884-PAM-SER Document 101 Filed 09/18/17 Page 5 of 18 520525.1 6 Kansas Action essentially amount to an end-run around the JPML by filing a new action in the District of Kansas, where both standing and personal jurisdiction over the defendants appears to be lacking, for the apparent sole purpose of asserting new and unrelated ERISA claims against new and unrelated defendants to allow counsel in the Kansas Action to take control of the first-filed Minnesota Action and bring it into the MDL Action.9 B. The Kansas Action Overlaps Substantially with the First-Filed Minnesota Action There are vast differences between the antitrust, consumer, and RICO actions against Mylan consolidated in the MDL Action on the one hand, and the Kansas and Minnesota ERISA actions against PBM defendants on the other hand. However, the similarities between the ERISA actions—the Minnesota Action and the Kansas Action— are substantial. Both the Minnesota Action and the Kansas Action include similar parties, similar class definitions, similar issues of law and fact, and similar allegations against similar PBM defendants. In fact, the parties to the Minnesota Action and the Kansas Action are nearly identical, both in terms of defendants and in terms of the putative classes of plaintiffs. In both the Minnesota Action and the Kansas Action, plaintiffs name Express Scripts Holding Co.; Express Scripts, Inc.; and Prime (noting that under § 1407 the JPML transfers the cases to a district court, typically the MDL transferee court, for consolidation of the pretrial proceedings). 9 Pursuant to JPML Rule 7.2(a), by filing the Kansas Action in Kansas (despite the apparent lack of personal jurisdiction over the PBM defendants there), where the JPML has already consolidated the MDL Action, no JPML action is required to consolidate the Kansas Action into the MDL action. CASE 0:17-cv-01884-PAM-SER Document 101 Filed 09/18/17 Page 6 of 18 520525.1 7 Therapeutics, LLC as defendants.10 Thus, all of the plaintiffs’ ERISA claims can and should be disposed of in one action. In addition, all issues involved in both actions are nearly identical and arise from the same set of operative facts. Both actions seek to determine whether the PBM defendants breached their fiduciary obligations under ERISA by negotiating increasingly higher rebates and other monies from Mylan, driving up the list price of EpiPen to their benefit and to the detriment of plaintiffs and the putative class. Both plaintiff groups also seek to obtain equitable relief for these ERISA violations. Under these circumstances, proceeding simultaneously in Minnesota and Kansas multiplies the work of both the courts and the parties, wastes judicial resources, and may result in conflicting orders—further reasons for this Court to enjoin the Kansas Plaintiffs. II. ARGUMENT A. This Court Should Apply the First-to-File Rule and Enjoin the Kansas Plaintiffs from Pursuing the Kansas Action Courts in the District of Minnesota and the Eighth Circuit, where the Minnesota Action is pending, as well as courts in the District of Kansas and the Tenth Circuit, where the Kansas Action is pending, routinely apply the first-to-file rule to stay later-filed actions asserting similar claims against similar defendants.11 Courts have routinely 10 The Kansas Plaintiffs also name United Health Group, Inc. and OptumRx, Inc. as defendants and the Minnesota Plaintiffs name CVS Health Corp. as a defendant. See Wallace B. Roderick Revocable Living Trust v. XTO Energy, Inc., 679 F. Supp. 2d 1287, 1296 (D. Kan. 2010) (applying first-to-file rule where parties “substantially similar” but not identical); Wright v. Walden Univ., LLC, No. 16-4402, 2017 WL 1435717, at *3 (D. Minn. Apr. 21, 2017) (same). 11 The District of Kansas and the Tenth Circuit have applied the first-to-file CASE 0:17-cv-01884-PAM-SER Document 101 Filed 09/18/17 Page 7 of 18 520525.1 8 determined that “the first court in which jurisdiction attaches has priority to consider the case.” See Nw. Airlines, Inc. v. Am. Airlines, Inc., 989 F.2d 1002, 1004-05 (8th Cir. 1993) (citation omitted); Marietta Campbell Ins. Grp., LLC v. Jefferson-Pilot Life Ins. Co., No. 2:07-cv-32, 2007 WL 3197311, at *2 (D.N.D. Oct. 26, 2007) (declaring that under Eighth Circuit precedent, jurisdiction attaches at the time the complaint is filed). In the Eighth Circuit, injunctions that seek to enjoin a party from proceeding with a duplicative, second-filed lawsuit in another forum are governed by the standards set forth in United States Fire Insurance Co. v. Goodyear Tire & Rubber Co. See 920 F.2d 487, 488-89 (8th Cir. 1990); see also Nw. Airlines, Inc., 989 F.2d at 1004-05 (declaring that injunctions enjoining second-filed lawsuits do not require a discussion of the merits of the underlying controversy as a traditional injunctive relief analysis would require). In Northwest Airlines, the Eighth Circuit affirmed an order from the District of Minnesota enjoining a later-filed parallel proceeding in Texas based on the first-to-file rule. See Nw. Airlines, 989 F.2d at 1003; see also Scarlett v. White, No. 16-cv-2925, 2017 WL 1011450, at *5-9 (D. Minn. Feb. 22, 2017) (granting transfer to the Northern District of California under the first-to-file rule because a similar action was ongoing in the doctrine in a similar manner as courts in the Eighth Circuit. In Wallace B. Roderick Revocable Living Trust v. XTO Energy, Inc., the District of Kansas determined that the first-to-file rule mandated the case either be transferred to the Western District of Oklahoma or be dismissed because a similar case was proceeding in the Western District of Oklahoma and it was filed earlier than the case in the District of Kansas. See 679 F. Supp. 2d at 1299; see also Cessna Aircraft Co. v. Brown, 348 F.2d 689, 692 (10th Cir. 1965) (applying first-to-file rule in Tenth Circuit); Ed Tobergte Assocs., Inc. v. Zide Sport Shop of Ohio, Inc., 83 F. Supp. 2d 1197, 1199-1200 (D. Kan. 1999) (granting plaintiffs’ motion to stay proceedings pursuant to first-to-file rule). In fact, counsel in the Kansas Action should be well aware of the first-to-file doctrine, having represented the plaintiff in Roderick. 679 F. Supp. 2d 1287. CASE 0:17-cv-01884-PAM-SER Document 101 Filed 09/18/17 Page 8 of 18 520525.1 9 Northern District of California and had been filed before the case in the District of Minnesota); Riedell Shoes, Inc. v. Adidas AG, No. 11-251 (MJD/AJB), 2011 WL 1868180, at *5-6 (D. Minn. May 16, 2011) (enjoining later-filed parallel action in Oregon under first-to-file rule). In applying the United States Fire Insurance standard, the Northwest Airlines court stated that the first court in which jurisdiction attaches has priority to consider the case and that the first-to-file rule should apply in the absence of compelling circumstances. See Nw. Airlines, Inc., 989 F.2d at 1004-05. The list of compelling circumstances, which include “[w]ise judicial administration, giving regard to conservation of judicial resources and comprehensive disposition of litigation,” supports application of the first-to-file rule here. See Selph v. Nelson, Reabe and Snyder, Inc., 966 F.2d 411, 413-14 (8th Cir. 1992) (internal citations and quotation marks omitted). Here, it is clear that the Minnesota Action—filed on June 2, 2017—was filed well before the Kansas Action—filed on August 29, 2017. See Marietta Campbell Ins. Grp., LLC, 2007 WL 3197311, at *2 (basing first-filed determination on complaint filing date).12 Finally, no compelling circumstances exist to deviate from the first-to-file rule. 12 In the Kansas Plaintiffs’ Statement in Support of Consolidation of the Kansas Action into the MDL Action, the Kansas Plaintiffs attempt to argue that the Minnesota Action was not the first-filed action because their counsel filed a separate EpiPen-related marketing, sales practices, and antitrust action against Mylan in October 2016. See In re: EpiPen Marketing, Sales Practices and Antitrust Litigation, MDL No. 2785, No. 17-md- 2785-DDC-TJJ, Plaintiffs’ Statement in Support of Consolidation (Dkt. No. 18) (D. Kan. Sept. 7, 2017), Donovan-Maher Decl. Ex. K, at 5 & n.6 (citing Serrano, et al. v. Mylan N.V., et al., No. 2:16-cv-02711-DDC-TJJ (D. Kan. filed Oct. 26, 2016)). The Kansas Plaintiffs equate this Mylan lawsuit, which names no PBMs as defendants and relies on wholly different legal theories, with the case currently before this Court, which alleges a breach of fiduciary duty under ERISA by the PBM Defendants. But these two cases— the earlier Mylan lawsuit and the Minnesota Action—are entirely dissimilar, and the first- CASE 0:17-cv-01884-PAM-SER Document 101 Filed 09/18/17 Page 9 of 18 520525.1 10 See Nw. Airlines, 989 F.2d at 1006-07 (compelling circumstances are generally those that tend to show that the first-filing party either acted in bad faith or raced to the courthouse to preempt a suit by the other party). In fact, to the extent such compelling circumstances exist, they clearly militate in favor of enjoining the Kansas Action in favor of the Minnesota Action. B. The Kansas Action Appears to Lack Personal Jurisdiction over the PBM Defendants Plaintiffs in the Kansas action seem to attempt to assert personal jurisdiction on a theory of general jurisdiction, but have not sufficiently alleged general jurisdiction under the controlling United States Supreme Court precedent of Daimler AG v. Bauman because no plaintiff and no defendant is “at home” in Kansas. See 134 S. Ct. 746, 754 (2014). None of the plaintiffs in the Kansas Action are residents of Kansas. None of the defendant PBMs are residents of Kansas, as they are neither headquartered nor incorporated in Kansas. Plaintiffs in the Kansas Action are Oklahoma, Connecticut, and New Jersey residents.13 The defendants in the Kansas Action are incorporated in Delaware and California with principal places of business in Missouri, California, and Minnesota.14 Thus, the Kansas District Court lacks general jurisdiction. See, e.g., filed case alleging ERISA violations by the PBMs was the Minnesota Action. 13 See Brannon, et al., No. 2:17-cv-02497-DDC-GLR, Complaint (Dkt. No. 1) (D. Kan. Aug. 29, 2017), Donovan-Maher Decl. Ex. A, at ¶¶ 1-6. 14 See id., Ex. A, at ¶¶ 7-15. According to the Kansas Action, Express Scripts Holding Co. is a Delaware corporation with its principal place of business in St. Louis, Missouri; Express Scripts, Inc. is a Delaware corporation with its principal place of business in St. Louis, Missouri; UnitedHealth Group, Inc. is a Delaware corporation with its principal place of business in Minnetonka, Minnesota; OptumRx, Inc. is a California CASE 0:17-cv-01884-PAM-SER Document 101 Filed 09/18/17 Page 10 of 18 520525.1 11 Bristol-Myers Squibb Co. v. Super. Ct. of Cal., San Francisco Cty., 137 S. Ct. 1773, 1779-80 (2017); Viasystems, Inc. v. EBM-Papst St. Georgen GmbH & Co., 646 F.3d 589, 596-98 (8th Cir. 2011) (dismissing plaintiffs’ claims due to lack of general jurisdiction over non-resident defendants); Shrader v. Biddinger, 633 F.3d 1235, 1243, 1247 (10th Cir. 2011) (same); In re Syngenta AG MIR 162 Corn Litig., No. 14-md-2591, 2016 WL 2866166, at *7-8 (D. Kan. May 17, 2016) (determining that plaintiffs could not establish specific personal jurisdiction over Syngenta and dismissing plaintiffs’ claims). In addition, the PBM defendants’ breaches of fiduciary duty alleged in the complaint in the Kansas Action do not appear to “arise out of or relate to the defendant[s’] forum conduct.” See Bristol-Myers Squibb Co., 137 S. Ct. at 1786 (internal quotations omitted). There must be an “affiliation between the forum and the underlying controversy, principally, [an] activity or an occurrence that takes place in the forum State.” See id. at 1781 (citations omitted). Thus, the court in the Kansas Action also appears to lack specific jurisdiction over the defendants. See id.; see also Berry v. Ulrich Hereford Ranch, Inc., No. 17-2109-JTM, 2017 WL 3130589, at *10 (D. Kan. July 24, 2017) (determining that the District of Kansas did not have jurisdiction because the plaintiff did not prove that the defendant purposefully directed activity in Kansas). C. The Kansas Plaintiffs Appear to Lack Standing to Bring Their Lawsuit The Kansas Action fails to affirmatively plead sufficient facts to establish that (1) any of the named plaintiffs has standing to assert the alleged ERISA violations; or (2) any corporation headquartered in Irvine, California; Prime Therapeutics, LLC is a Delaware corporation with its principal place of business in Eagan, Minnesota. See id., Ex. A, at ¶¶ 7-15. CASE 0:17-cv-01884-PAM-SER Document 101 Filed 09/18/17 Page 11 of 18 520525.1 12 of the named plaintiffs is a member of the defined class. Standing to assert the ERISA violations alleged in the Kansas Action requires a plaintiff to have paid a portion of the EpiPen purchase price, and that purchase price must have been based on an inflated list price.15 As with standing, class membership in the Kansas Action is defined in part as those who “were required to pay all or a portion of the purchase price based on an inflated list price.”16 For example, a plaintiff might have a deductible requiring a certain amount of out-of-pocket spending prior to the commencement of plan benefits, such as prescription drug coverage. Such a plaintiff would pay the list price for any EpiPen purchases made before fulfilling the plan’s deductible amount. As another example, a plaintiff might have co-insurance and pay a certain percentage of all prescription drug purchases out-of-pocket. On the other hand, someone who merely paid a flat $20 co-pay for EpiPen throughout the class period would not have standing or be a member of the defined class, as the co-pay amount they paid for EpiPen is not based on an inflated list price. Kansas Action plaintiff Brannon, whose PBM is Prime Therapeutics, is alleged to have paid a flat $30 co-pay for EpiPen.17 This allegation fails to demonstrate that plaintiff Brannon paid any portion of the purchase price based on an inflated list price. See id. Consequently, plaintiff Brannon has failed to establish standing or that she is a member of the defined class in the Kansas Action. The other two named plaintiffs in the 15 See Brannon, et al., No. 2:17-cv-02497-DDC-GLR, Complaint (Dkt. No. 1) (D. Kan. Aug. 29, 2017), Donovan-Maher Decl. Ex. A, at ¶ 138. 16 See id., Ex. A, at ¶ 138 17 See id., Ex. A, at ¶ 1. CASE 0:17-cv-01884-PAM-SER Document 101 Filed 09/18/17 Page 12 of 18 520525.1 13 Kansas Action similarly fail to establish standing or class membership. Plaintiff Lindsey Rizzo, whose PBM is Express Scripts, simply asserts numerous EpiPen purchases in which she paid a co-pay.18 Such an assertion provides no indication whatsoever that any portion of the EpiPen purchase price that she paid was based on an inflated list price. Likewise, plaintiff Jamie Herr, whose PBM is OptumRx, alleges that she “used United Healthcare’s prescription drug benefit administered by OptumRx to make at least some” EpiPen purchases.19 This allegation completely lacks any information showing plaintiff Herr’s payment of any portion of the EpiPen purchase price based on an inflated list price. D. The Kansas Action Presents Several Other Procedural Issues 1. The Kansas Plaintiffs Improperly Filed a Notice of Related Action with the Judicial Panel for Multidistrict Litigation On August 30, 2017, counsel in the Kansas Action filed a Notice of Related Action seeking to consolidate the Kansas Action with the pending MDL Action, which likewise had been assigned to the Honorable Daniel D. Crabtree by the JPML on August 3, 2017.20 At the same time, counsel in the Kansas Action filed a Notice of Potential Tag-Along Action with the JPML, identifying the Minnesota Action as a potential tag- along action solely based on Kansas counsel’s own relation of the Kansas Action to the 18 See id., Ex. A, at ¶¶ 3-4. 19 See id., Ex. A, at ¶¶ 5-6. 20 See Brannon et al., No. 17-cv-02497, Notice of Related Action (Dkt. No. 4) (D. Kan. Aug. 30, 2017), Donovan-Maher Decl. Ex. B; In re: EpiPen Marketing, Sales Practices and Antitrust Litigation, MDL No. 2785, No. 17-md-2785-DDC-TJJ, Transfer Order (Dkt. No. 1) (D. Kan. Aug. 4, 2017), Donovan-Maher Decl. Ex. C. CASE 0:17-cv-01884-PAM-SER Document 101 Filed 09/18/17 Page 13 of 18 520525.1 14 MDL Action.21 JPML Rule 7.1(a) only provides for a Notice of Potential Tag-along Action by “[a]ny party or counsel in actions previously transferred under Section 1407 . . . in which that party is also named or in which that counsel appears.” JPML Rule 7.1(a) (emphasis added). The Kansas Action is not an action that has been previously transferred, as transfer is still pending before Judge Crabtree pursuant to JPML Rule 7.2(a) and District of Kansas Rule 23-A. See D. Kan. Local Rule 23-A(a). Similarly, District of Kansas Rule 23-A(a) only provides for a Notice of Related Case by “any party to a Multi-District Litigation …named in a civil action pending in this District . . . .” See id. (emphasis added). In the Kansas Action, the Notice of Related Case was filed by the Kansas Plaintiffs, none of whom is a party to the MDL Action. 2. The Repeated Use of Brannon as Named Plaintiff Raises Rule 23 Concerns The repeated filings of complaints with named plaintiff Brannon by the same set of counsel also raise concerns related to class certification under Rule 23 of the Federal Rules of Civil Procedure. First, plaintiff Brannon was named in the Amended Complaint in the consumer-protection action filed in the District of Kansas on October 26, 2016.22 Plaintiff Brannon was thereafter omitted from the Second Amended Complaint filed in the District of Kansas on February 3, 2017.23 Plaintiff Brannon next shows up as a 21 See In re: EpiPen Marketing, Sales Practices and Antitrust Litigation, MDL No. 2785, No. 17-md-2785-DDC-TJJ, Notice of Potential Tag-Along Action (Dkt. No. 71) (J.P.M.L. Aug. 30, 2017), Donovan-Maher Decl. Ex. J. 22 See In re: EpiPen Auto-Injector Litig., No. 16-cv-02711, Amended Complaint (Dkt. No. 4) (D. Kan. Oct. 26, 2016), Donovan-Maher Decl. Ex. L. 23 See In re: EpiPen Auto-Injector Litig., No. 16-cv-02711, Second Amended Class Action Complaint (Dkt. No. 40) (D. Kan. Feb. 3, 2017), Donovan-Maher Decl. Ex. CASE 0:17-cv-01884-PAM-SER Document 101 Filed 09/18/17 Page 14 of 18 520525.1 15 named plaintiff in an August 11, 2017 action naming the PBMs as RICO defendants and Prime Therapeutics as an ERISA defendant.24 That action was voluntarily dismissed on August 28, 2017, and on August 29, 2017, plaintiff Brannon was named in the present Kansas Action alleging ERISA violations by PBM defendants.25 3. The Kansas Plaintiffs Inappropriately Seek to Consolidate the Minnesota Action into the MDL Action under 28 U.S.C. § 1407 Under 28 U.S.C. § 1407, cases may be consolidated by the JPML where: (1) the actions “involv[e] one or more common questions of facts”; (2) transfer “will be for the convenience of parties and witnesses”; and (3) transfer “will promote the just and efficient conduct of such actions.” See 28 U.S.C. § 1407; see also In re Skinnygirl Margarita Beverage Marketing & Sales Practices Litig., 829 F. Supp. 2d 1380, 1381 (J.P.M.L. 2011) (refusing to consolidate under § 1407 because the cases shared some factual questions but “the common material disputed facts may be limited in number.”). Here, the Minnesota Action is substantially different than the MDL Action and should not be consolidated into the MDL Action. The Minnesota Plaintiffs, Mylan, and the PBMs have already notified the JPML of their opposition to consolidation, with briefs due September 21 and 22. In addition, on September 15, 2017, PBM defendants Express Scripts and Prime Therapeutics filed a motion to transfer venue from the District of M. 24 See Brannon v. CVS Health Corp. et al., No. 17-cv-02464, Complaint (Dkt. No. 1) (D. Kan. Aug. 11, 2017), Donovan-Maher Decl. Ex. N. 25 See Brannon v. CVS Health Corp. et al., No. 17-cv-02464, Notice of Voluntary Dismissal (Dkt. No. 4) (D. Kan. Aug. 28, 2017), Donovan-Maher Decl. Ex. O; Brannon, et al., No. 2:17-cv-02497-DDC-GLR, Complaint (Dkt. No. 1) (D. Kan. Aug. 29, 2017), Donovan-Maher Decl. Ex. A. CASE 0:17-cv-01884-PAM-SER Document 101 Filed 09/18/17 Page 15 of 18 520525.1 16 Kansas to the District of Minnesota, seeking to transfer the Kansas Action on the basis of the first-to-file rule and 28 U.S.C. § 1404(a).26 The motion notes that transfer is appropriate despite the maneuvering by Plaintiffs’ counsel in the MDL Action to “leapfrog” the Minnesota Action. Given the clear impropriety of consolidation and objection to consolidation by the PBM defendants, Mylan, and the Minnesota Plaintiffs, the Kansas Plaintiffs’ motion seeking to consolidate the Minnesota Action into the MDL Action is simply an attempt to take control of the Minnesota Action. The Minnesota Action and the MDL Action involve different parties. The defendants in the MDL Action include Mylan, Pfizer, King Pharmaceuticals, and Meridian Medical Technologies, whereas the Minnesota Action involves PBM defendants. There is no overlap of defendants between the MDL Action and the Minnesota Action. See In re: Mortg. Indus. Foreclosure Litig., 996 F. Supp. 2d 1379, 1379-80 (J.P.M.L. 2014) (refusing to consolidate the actions because the cases involved different defendants and plaintiffs). Second, the transfer would not be convenient for any parties or witnesses. None of the defendants in the Minnesota Action are domiciled in Kansas, and none of the plaintiffs reside in Kansas. Minnesota is more convenient for parties and witnesses, as one PBM defendant is domiciled in Minnesota and one plaintiff resides in Minnesota. Further, transfer of the Minnesota Action to Kansas would not promote just or 26 See Brannon et al., 17-cv-02497, Defendants Prime Therapeutics LLC, Express Scripts Holding Company, and Express Scripts, Inc.’s Memorandum in Support of Motion to Transfer Venue (Dkt. No. 39) (D. Kan. Sept. 15, 2017), Donovan-Maher Decl. Ex. P. CASE 0:17-cv-01884-PAM-SER Document 101 Filed 09/18/17 Page 16 of 18 520525.1 17 efficient conduct of such actions because the Minnesota Action and the MDL Action involve completely different legal theories and facts. The Minnesota Action involves breaches of fiduciary duties under ERISA, whereas the MDL Action does not involve any ERISA claims—the defendants in the MDL action are Mylan, Pfizer, King Pharmaceuticals, and Meridian Medical Technologies, not fiduciaries under ERISA.27 See In re: Sigg Switzerland (USA), Inc., Aluminum Bottles Mktg. & Sales Practices Litig., 682 F. Supp. 2d 1347, 1348 (J.P.M.L. 2010) (declining to consolidate certain actions into an existing MDL because the actions involved different parties, facts, and theories from those in the MDL). Here, the court would not conserve any resources by consolidating the Minnesota Action with the MDL Action because there would be little overlapping discovery or motion practice. See In re: Kohl’s Telephone Consumer Protection Act (TCPA) Litig., 220 F. Supp. 3d 1363, 1364-65 (J.P.M.L. 2016) (rejecting centralization because it would not produce “significant efficiencies”). If this Court centralized the Minnesota Action with the MDL Action, the scope of the MDL Action would drastically increase, including the addition of new parties and claims. If anything, consolidation would likely result in a significant delay to both the ERISA actions and the MDL Action. // // // 27 See In re: EpiPen Marketing, Sales Practices and Antitrust Litigation, MDL No. 2785, No. 17-md-2785-DDC-TJJ, Motion to Transfer (Dkt. No. 1-1) (J.P.M.L. Apr. 24, 2017), Donovan-Maher Decl. Ex. Q. CASE 0:17-cv-01884-PAM-SER Document 101 Filed 09/18/17 Page 17 of 18 520525.1 18 III. CONCLUSION For the foregoing reasons, the Minnesota Plaintiffs respectfully request that the Court enjoin and restrain the Kansas Plaintiffs from pursuing the Kansas Action. Dated: September 18, 2017 LOCKRIDGE GRINDAL NAUEN P.L.L.P. By: /s/Kristen G. Marttila Karen Hanson Riebel, #219770 David W. Asp, #344850 Kristen G. Marttila, #346007 100 Washington Avenue South Minneapolis, MN 55401 Telephone: (612) 339-6900 Facsimile: (612) 339-0981 khriebel@locklaw.com dwasp@locklaw.com kgmarttila@locklaw.com BERMAN TABACCO Mark J. Greenspon (pro hac vice) 3507 Kyoto Gardens Drive, Suite 200 Palm Beach Gardens, FL 33410 Telephone: (561) 835-9400 Facsimile: (561) 835-0322 mgreenspon@bermantabacco.com BERMAN TABACCO Kathleen M. Donovan-Maher (pro hac vice) Patrick T. Egan (pro hac vice) Justin N. Saif (pro hac vice) Steven L. Groopman (pro hac vice) One Liberty Square, 8th Floor Boston, MA 02109 Telephone: (617) 542-8300 Facsimile: (617) 542-1194 kdonovanmaher@bermantabacco.com pegan@bermantabacco.com jsaif@bermantabacco.com sgroopman@bermantabacco.com THE MAUL FIRM, P.C. Anthony F. Maul (pro hac vice) 68 Jay Street, Suite 201 Brooklyn, NY 11201 Telephone: (718) 395-4918 afmaul@maulfirm.com CASE 0:17-cv-01884-PAM-SER Document 101 Filed 09/18/17 Page 18 of 18