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Bewley v. CVS Health Corporation

United States District Court, W.D. Washington

November 7, 2017

MICHAEL BEWLEY, et al., Plaintiffs,
v.
CVS HEALTH CORPORATION, et al., Defendants.

          ORDER GRANTING DEFENDANTS' MOTION TO TRANSFER

          ROBERT S. LASNIK UNITED STATES DISTRICT JUDGE

         This matter comes before the Court on “Defendants' Motion to Transfer This Action to the District of New Jersey.” Dkt. # 44. Defendants assert that this case should be transferred pursuant to the first-to-file rule or 28 U.S.C. § 1404(a) because multiple similar actions have already been filed in that district.

         Having reviewed the memoranda, declarations, and exhibits submitted by the parties, [1] the Court finds as follows:

         BACKGROUND

         On March 17, 2017, a class action lawsuit was filed in the District of New Jersey alleging collusion between pharmacy benefit managers (“PBMs”) and drug manufacturers to unlawfully inflate the price of insulin, a life-saving drug used to treat diabetes. Boss, et al. v. CVS Health Corp., et al., No. 17C-1823 (D.N.J.) (“Boss”). Four other class action lawsuits related to the pricing of insulin were also filed in the District of New Jersey around this same time.[2] While waiting for the court in New Jersey to appoint interim lead counsel, [3] the Boss attorneys filed three separate lawsuits in other districts.

         On May 23, 2017, Johnson v. OptumRx Inc., et al., No. C17-900 was filed in the Central District of California. On May 24, 2017, this case and Prescott, et al. v. CVS Health Corp., et al., No. C17-803, were filed here in the Western District of Washington. These cases allege the same collusion between PBMs and drug manufacturers, but they involve different diabetes medications and supplies besides insulin. In the present case, plaintiffs allege that defendants conspired to unlawfully inflate the price of glucagon, a medicine for the emergency treatment of people with diabetes who experience severe hypoglycemia.[4]

         Defendants ask this Court to transfer the case to the District of New Jersey under the first-to-file rule. Alternatively, defendants request a transfer under 28 U.S.C. § 1404(a).[5]

         DISCUSSION

         Courts “usually avoid duplicative litigation when similar cases are pending in two different federal courts.” R.R. Street & Co. v. Transport Ins. Co., 656 F.3d 966, 974-975 (9th Cir. 2011). “The first-to-file rule is intended to serve the purpose of promoting efficiency well and should not be disregarded lightly. When applying the first-to-file rule, courts should be driven to maximize economy, consistency, and comity.” Kohn Law Group, Inc. v. Auto Parts Mfg. Miss., Inc., 787 F.3d 1237, 1239-1240 (9th Cir. 2015) (internal citations, quotation marks, and alterations omitted). The first-to-file rule “is not a rigid or inflexible rule to be mechanically applied, but rather is to be applied with a view to the dictates of sound judicial administration.” Decker Coal Co. v. Commonwealth Edison Co., 805 F.2d 834, 844 (9th Cir. 1986).

         In deciding whether to transfer under the first-to-file rule, “a court analyzes three factors: chronology of the lawsuits, similarity of the parties, and similarity of the issues.” Kohn, 787 F.3d at 1240. It is undisputed that the Boss complaint was filed more than two months before the instant action.

         The first-to-file also rule requires substantial similarity between parties. Id. In the context of class actions, the district court should compare the putative classes rather than the named plaintiffs to see whether the classes represent at least some of the same individuals. See Pedro v. Millennium Prod., Inc., No. 15C-5253, 2016 WL 3029681, at *3-4 (N.D. Cal. May 27, 2016); see also Adoma v. Univ. of Phoenix, Inc., 711 F.Supp.2d 1142, 1147-1148 (E.D. Cal. 2010). In the present case, there are three named plaintiffs: Michael Bewley, Julia Boss, and Type 1 Diabetes Defense Foundation.[6] These plaintiffs propose to represent the following four classes who purchased glucagon: the Non-ERISA Employee/Exchange Plan Class; the ERISA class; the Medicare Class; and the Uninsured Class. Dkt. # 1 at ⁋ 189. The Boss complaint lists five named plaintiffs, including both Julia Boss and Type 1 Diabetes Defense Foundation. Boss, No. 17C-1823, Dkt. # 1 (D.N.J. filed Mar. 17, 2017). Plaintiffs in Boss propose to represent the same four types of classes, except those classes purchased insulin rather than glucagon. Id. at ⁋ 204. In both cases, the classes consist of persons who purchased medication, insulin and/or glucagon, for diabetes treatment. Further, the fact that two of the three named plaintiffs in the present action are also named plaintiffs in Boss indicates that the glucagon classes and the insulin classes will include at least some of the same individuals. The Court finds that the plaintiffs in both cases are substantially similar to warrant transfer.

         Additionally, all nine defendants in this case are also listed as defendants in the Boss complaint.[7] The Boss complaint includes one additional defendant, Sanofi-Aventis U.S. LLC, a Delaware company headquartered in Bridgewater, New Jersey. Id. at ⁋ 46. The presence of one additional defendant, however, does not change the fact that the parties on the whole are substantially similar. See Kohn, 787 F.3d at 1240 (“We conclude that the omission of [a defendant] from the present action does not defeat application of the first-to-file rule.”). The Court finds that plaintiffs and defendants in this case are substantially similar to the Boss action to warrant transfer.

         Finally, the Court finds that the similarity of the issues also weighs in favor of transfer. The present case alleges an unlawful pricing scheme between PBMs and drug manufacturers with respect to glucagon. The Boss complaint alleges the same unlawful pricing scheme, except Boss concerns insulin. In both cases, plaintiffs assert claims under the Racketeer Influenced and Corrupt Organizations Act (RICO), the Sherman Act, the Employee Retirement Income Security Act (ERISA), various state consumer protection laws, and common law fraud and unjust enrichment. Dkt. # 1; Boss, No. 17C-1823, Dkt. # 1 (D.N.J. filed Mar. 17, 2017). In their complaint, plaintiffs acknowledge that the inflated prices of insulin and glucagon are caused by the same conduct. See Dkt. # 1 at ⁋ 12 (“Like the skyrocketing price of insulin, the list prices of glucagon are artificially inflated as a result of a scheme, enterprise, and price-fixing conspiracy among the [defendants.]”). Plaintiffs' opposition briefing stresses that glucagon and insulin “are different drugs, with different ...


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