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Prescott v. CVS Health Corp.

United States District Court, W.D. Washington, Seattle

November 27, 2017

JEANINE PRESCOTT, et al., Plaintiffs,
v.
CVS HEALTH CORPORATION, et al., Defendants.

          ORDER GRANTING PBM 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. # 86. The PBM 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. C17-1823 (D.N.J.). 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 Bewley, et al. v. CVS Health Corp., et al., No. C17-802, were filed here in the Western District of Washington. On September 18, 2017, the Honorable David O. Carter, District Judge, transferred Johnson to the District of New Jersey based on the first-to-file rule. Johnson v. OptumRx Inc., et al., No. C17-900, Dkt. # 56 (C.D. Cal. filed May 23, 2017). On November 7, 2017, this Court similarly transferred Bewley. Bewley, et al. v. CVS Health Corp., et al., No. C17-802, Dkt. # 62 (W.D. Wash. filed May 24, 2017). The Johnson, Bewley, and Boss complaints assert the same types of claims by similar classes of plaintiffs alleging the same unlawful collusion between the PBM defendants and drug manufacturer defendants. These drug manufacturer defendants produce insulin (Boss), Victoza (Johnson), and glucagon (Bewley), medications for people with diabetes.

         In the present case plaintiffs assert similar claims based on the same alleged pricing scheme with respect to glucose test strips, a medical product for people with diabetes to monitor their blood sugar. Here, the PBM defendants are the same, but the manufacturer defendants are different. The manufacturer defendants in this case make glucose test strips, but they do not manufacture the diabetes medications at issue in the other lawsuits. The PBM defendants ask this Court to transfer the case to the District of New Jersey. Plaintiffs and the manufacturer defendants oppose the motion to transfer.

         DISCUSSION

         The PBM defendants ask this Court to transfer the case under the first-to-file rule. Alternatively, the PBM defendants request a transfer under 28 U.S.C. § 1404(a). 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, 974-75 (9th Cir. 2011).

         A. First-to-file

         “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, 1239-40 (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.

         Based on the second factor, the Court finds that transfer is not appropriate pursuant to the first-to-file rule. Unlike in Bewley, where every defendant had also been named in the Boss action, the manufacturer defendants here are not substantially similar to defendants in the New Jersey cases. The defendant manufacturers in this case produce glucose test strips, but they do not also produce diabetes medications, like insulin, which are at issue in the other complaints. Because the parties are not substantially similar to warrant transfer under the first-to-file rule, this Court will instead consider transfer pursuant to 28 U.S.C. § 1404(a).

         B. 28 U.S.C. § 1404(a)

         Section 1404(a) provides that “[f]or the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought or to any district or division to which all parties have consented.” 28 U.S.C. § 1404(a). Considering whether to transfer a case pursuant to § 1404(a) requires an “individualized, case-by-case consideration of convenience and fairness.” Van Dusen v. Barrack, 376 U.S. 612, 622 (1964). Factors that may be considered include: “(1) the location where the relevant agreements were negotiated and executed, (2) the state that is most familiar with the governing law, (3) the plaintiff's choice of forum, (4) the respective parties' contacts with the forum, (5) the contacts relating to the plaintiff's cause of action in the chosen forum, (6) the differences in the costs of litigation in the two forums, (7) the availability of compulsory process to compel attendance of unwilling non-party witnesses, and (8) the ease of access to sources of proof.” Jones v. GNC Franchising, Inc., 211 F.3d 495, 498-99 (9th Cir. 2000). These factors are not exhaustive, ...


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