Corcoran et al v. CVS Health Corporation

Northern District of California, cand-4:2015-cv-03504

OPPOSITION/RESPONSE (re [433] MOTION in Limine) Plaintiffs' Omnibus Response to CVS's Motions in Limine filed by Debbie Barrett, Tyler Clark, Robert Garber, Robert Jenks, Darlene McAfee, Stephen Sullivan, Carl Washington.

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7 Bonny E. Sweeney (Cal. Bar No. 176174) Robert B. Gilmore (admitted pro hac vice) 1 HAUSFELD LLP Edward H. Meyers (admitted pro hac vice) 2 600 Montgomery St., Suite 3200 STEIN MITCHELL BEATO & MISSNER LLP San Francisco, California 94111 901 15th Street, N.W., Suite 700 3 Tel: 415-633-1908 Washington, D.C. 20005 Fax: 415-358-4980 Tel: 202-737-7777 4 bsweeney@hausfeld.com Fax: 202-296-8312 rgilmore@steinmitchell.com 5 Richard Lewis (admitted pro hac vice) emeyers@steinmitchell.com 6 Sathya S. Gosselin (Cal. Bar No. 269171) HAUSFELD LLP Elizabeth C. Pritzker (Cal. Bar No. 146267) 7 1700 K St. NW, Suite 650 Jonathan K. Levine (Cal. Bar No. 220289) Washington, D.C. 20006 Caroline Corbitt (Cal. Bar No. 305492) 8 Tel: 202-540-7200 PRITZKER LEVINE LLP Fax: 202-540-7201 1900 Powell Street, Suite 450 9 rlewis@hausfeld.com Emeryville, California 94608 10 sgosselin@hausfeld.com Tel. 415-692-0772 Fax. 415-366-6110 11 ecp@pritzkerlevine.com jkl@pritzkerlevine.com 12 ccc@pritzkerlevine.com 13 Class Counsel 14 UNITED STATES DISTRICT COURT 15 NORTHERN DISTRICT OF CALIFORNIA OAKLAND DIVISION 16 Christopher Corcoran, et al., on behalf of Case No. 4:15-cv-03504-YGR-JSC 17 themselves and others similarly situated, 18 CLASS ACTION Plaintiffs, 19 v. PLAINTIFFS' OMNIBUS RESPONSE TO CVS'S MOTIONS IN LIMINE NOS. CVS Pharmacy, Inc., 1-8 20 Defendant. Date: May 13, 2020 21 Time: 9:30 a.m. 22 Courtroom: 1 Judge: Hon. Yvonne Gonzalez Rogers 23 24 25 26 27 28 PLS.' RESP. TO CVS'S MOTIONS IN LIMINE CASE NO. 4:15-CV-03504-YGR 7 1 TABLE OF CONTENTS TABLE OF CONTENTS .................................................................................................................. ii 2 TABLE OF AUTHORITIES ........................................................................................................... iii 3 I. RESPONSE TO CVS'S MOTION IN LIMINE NO. 1: PRECLUDE REFERENCES TO 4 OTHER HSP LEGAL PROCEEDINGS ................................................................................... 1 II. RESPONSE TO CVS'S MOTION IN LIMINE NO. 2: PRECLUDE ARGUMENT THAT 5 U&C CONTRACT DEFINITIONS ARE CLEAR OR UNAMBIGUOUS .............................. 4 6 III. RESPONSE TO CVS'S MOTION IN LIMINE NO. 3: PRECLUDE EVIDENCE OR ARGUMENT THAT CVS AND THE PBMS ALLEGEDLY CONSPIRED .......................... 6 7 IV. RESPONSE TO CVS'S MOTION IN LIMINE NO. 4: EXCLUDE THE JANUARY 2015 8 CVS-OPTUM CONTRACT. ..................................................................................................... 9 V. RESPONSE TO CVS'S MOTION IN LIMINE NO. 5: TO PRECLUDE EVIDENCE AND 9 ARGUMENT ON NON-ACTIONABLE CONDUCT ........................................................... 13 10 VI. RESPONSE TO CVS'S MOTION IN LIMINE NO. 6: TO EXCLUDE DR. JOEL HAY'S MISLEADING CALCULATIONS ......................................................................................... 16 11 VII. RESPONSE TO CVS'S MOTION IN LIMINE NO. 7: EXCLUDE DR. JOEL HAY'S 12 INTERPRETATION OF PBM CONRACTS. ........................................................................ 18 VIII. RESPONSE TO CVS'S MOTION IN LIMINE NO. 8: CONCERNING THE ROLE OF 13 CVS'S CORPORATE REPRESENTATIVE AND IN-HOUSE COUNSEL ......................... 20 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PLS.' RESP. TO CVS'S MOTIONS IN LIMINE CASE NO. 4:15-CV-03504-YGR-JSC ii 7 1 TABLE OF AUTHORITIES 2 3 Page(s) 4 Cases 5 Actuate Corp. v. Aon Corp., No. C 10-05750 WHA, 2012 WL 2285187 (N.D. Cal. June 18, 2012) .................................... 2 6 In re Aircrash in Bali Indonesia, 7 871 F.2d 812 (9th Cir. 1989) ................................................................................................... 11 8 Am. Cas. Co. of Reading, PA v. Continisio, 9 819 F. Supp. 385 (D.N.J. 1993), aff'd, 17 F.3d 62 (3d Cir. 1994) .......................................... 10 10 Apple, Inc. v. Samsung Elecs. Co., No. 11-CV-01846-LHK, 2012 WL 2571332 (N.D. Cal. June 30, 2012) ................................ 17 11 Apple iPod iTunes Antitrust Litigation, 12 No. 05-CV-0037 YGR, 2014 WL 12719192 (N.D. Cal. Nov. 18, 2014) ................................. 2 13 Arizona v. California, 14 460 U.S. 605 (1983) .................................................................................................................. 4 15 Badger v. Wal-Mart Stores, Inc., No. 2:11-CV-1609-KJD-CWH, 2013 WL 3297084 (D. Nev. June 28, 2013).................. 14, 15 16 Brazos River Auth. v. GE Ionics, Inc., 17 469 F.3d 416 (5th Cir. 2006) ................................................................................................... 11 18 In re Cmty. Lending, Inc., No. C 08-00201 JW, 2011 WL 7479165 (N.D. Cal. June 1, 2011) .................................. 20, 21 19 20 Corcoran v. CVS Health Corp., 169 F. Supp. 3d 970 (N.D. Cal. 2016) .................................................................................... 13 21 Corcoran v. CVS Health Corp., 22 779 F. App'x 431 (9th Cir. 2019)..................................................................................... passim 23 Corcoran v. CVS Pharm., Inc., No. 17-16996, 2018 WL 1791735 (9th Cir. April 13, 2018) ................................ 12, 13, 14, 15 24 Daubert v. Merrell Dow Pharms., 25 509 U.S. 579 (1993) ................................................................................................................ 17 26 27 28 PLS.' RESP. TO CVS'S MOTIONS IN LIMINE CASE NO. 4:15-CV-03504-YGR-JSC iii 7 Fahmy v. Jay Z, 1 No. 2:07-cv-05715-CAS, 2015 WL 5680299 (C.D. Cal. Sep. 24, 2015) ................................. 4 2 Fraser v. Goodale, 3 342 F.3d 1032 (9th Cir. 2003) ................................................................................................... 9 4 Gotlin v. Lederman, 616 F. Supp. 2d 376 (E.D.N.Y. 2009) vacated in part on other grounds, 483 F. 5 App'x 583 (2d Cir. 2012) ........................................................................................................ 12 6 Hana Fin., Inc. v. Hana Bank, 735 F.3d 1158 (9th Cir. 2013), aff'd, 574 U.S. 418 (2015) .................................................... 15 7 8 In re Homestore.com, Inc., NO. CV 01-11115, 2011 WL 291176 (C.D. Cal. Jan. 25, 2011) .............................................. 1 9 Ingle v. Circuit City, 10 408 F.3d 592 (9th Cir. 2005) ..................................................................................................... 4 11 Internmatch, Inc. v. Nxtbigthing, LLC, No. 14-CV-05438-JST, 2016 WL 1212626 (N.D. Cal. Mar. 28, 2016) ................................. 17 12 13 Jackson v. Cnty. of San Bernardino, 194 F. Supp. 3d 1004 (C.D. Cal. 2016) ................................................................................... 20 14 Jackson v. Fed. Express, 15 No. CV-1001760-MMMCWX, 2011 WL 13268074 (C.D. Cal. June 13, 2011) ................. 2, 3 16 Kennedy v. Collagen Corp., 161 F.3d 1226 (9th Cir. 1998) ................................................................................................. 17 17 Montoya v. Orange Cty. Sheriff's Dep't, 18 No. SACV111922JGBRNBX, 2013 WL 12348371 (C.D. Cal. Oct. 23, 2013) ....................... 1 19 Orr v. Bank of Am., NT & SA, 20 285 F.3d 764 (9th Cir. 2002) ..................................................................................................... 9 21 Pyramid Techs., Inc. v. Hartford Cas. Ins. Co., 752 F.3d 807 (9th Cir. 2014) ................................................................................................... 16 22 Romero v. Cnty. of Santa Clara, 23 666 F. App'x 609 (9th Cir. 2016).............................................................................................. 7 24 Sara Lee Corp. v. Kraft Foods Inc., 25 276 F.R.D. 500 (N.D. Ill. 2011) .............................................................................................. 21 26 Sheet Metal Workers Local No. 20 Welfare & Benefit Fund v. CVS Pharmacy, Inc., 305 F. Supp. 3d 337 (D.R.I. 2018) ............................................................................................ 7 27 28 PLS.' RESP. TO CVS'S MOTIONS IN LIMINE CASE NO. 4:15-CV-03504-YGR-JSC iv 7 Silver State Intellectual Techs., Inc. v. Garmin Int'l, Inc., 1 No. 2:11-CV-01578-GMN, 2015 WL 2152658 (D. Nev. May 7, 2015) .................................. 1 2 Smith v. Miller Brewing Co. Health Benefits Program, 3 860 F. Supp. 855 (M.D. Ga. 1994) .......................................................................................... 10 4 Smith v. United HealthCare Servs., Inc., No. CIV. 00-1163ADMAJB, 2003 WL 22047861 (D. Minn. Aug. 28, 2003) ....................... 10 5 Thompson v. Whirlpool Corp., 6 No. C06-1804-JCC, 2008 WL 2063549 (W.D. Wash. May 13, 2008) ................................... 17 7 United States v. Hankey, 8 203 F.3d 1160 (9th Cir. 2000) ................................................................................................. 11 9 Univ. Healthsystem Consortium v. UnitedHealth Grp., Inc., 13 CV 6683, 2014 WL 4685753 (N.D. Ill. Sept. 19, 2014) .................................................... 21 10 Wasco Prods., Inc. v. Southwall Techs., Inc., 11 435 F.3d 989 (9th Cir. 2006) ..................................................................................................... 7 12 Rules & Statutes 13 Fed. R. Civ. P. 56(c) ........................................................................................................................ 9 14 Fed. R. P. 30(b)(6) ......................................................................................................................... 21 15 Fed. R. Evid. 403 ....................................................................................................................... 5, 11 16 Fed. R. Evid. 404 ............................................................................................................................. 2 17 Fed. R. Evid. 405 ............................................................................................................................. 2 18 Fed. R. Evid. 407 ..................................................................................................................... 10, 11 19 Other Authorities 20 21 Wright & Miller, 23 Fed. Prac. & Proc. Evid. § 5283 (2d ed.) ..................................................... 10 22 23 24 25 26 27 28 PLS.' RESP. TO CVS'S MOTIONS IN LIMINE CASE NO. 4:15-CV-03504-YGR-JSC v 7 I. RESPONSE TO CVS'S MOTION IN LIMINE NO. 1: PRECLUDE REFERENCES TO 1 OTHER HSP LEGAL PROCEEDINGS 2 For the reasons set forth in Plaintiffs' own Motion in Limine No. 2, Plaintiffs do not oppose 3 parts of CVS's motion to the extent it seeks exclusion of two concluded proceedings involving CVS's 4 U&C reporting and HSP program: United States ex rel. Winkelman (D. Mass.) and State of Texas ex 5 rel. Winkelman (353rd Dist. Ct. Travis Cnty. Tex.). CVS MIL No. 1 at 2. Winkelman was resolved on 6 a motion to dismiss on a False Claims Act ground not relevant to this case. And CVS settled with 7 Texas Medicaid for $22 million concerning the HSP program claims. Regardless, neither party need 8 refer to the fact of these two proceedings involving government actors and regulations.1 To be clear, 9 though, as Plaintiffs noted in their motion, the parties should be permitted to introduce evidence 10 adduced in the two Winkelman cases and any other case involving CVS's U&C pricing and HSP 11 program, such as trial or deposition testimony, produced documents, etc., as long as such evidence is 12 otherwise relevant and admissible. See In re Homestore.com, Inc., NO. CV 01-11115 RSWL, 2011 13 WL 291176, at *13 (C.D. Cal. Jan. 25, 2011) (denying in limine motion to exclude all testimony from 14 prior criminal proceeding). The parties can tailor their presentation of such evidence by not referring 15 to the nature or outcome of the proceedings in which this evidence originally was adduced. 16 With respect to private litigation involving third-party payors, such as the Sheet Metal Workers 17 third-party payor class action pending in the District of Rhode Island (which targets the same CVS- 18 PBM relationships at issue here),2 the evidence of the fact of those proceedings is relevant and 19 admissible, and should be permitted, as claims brought by third-party payors involve the same sort of 20 1 CVS offers no reason why it should be permitted to "referenc[e] the fact that Connecticut, in 2010, 21 amended its Medicaid definition of usual and customary." CVS MIL No. 1 at 1 n.2. As explained in 22 Plaintiffs' Motion in Limine No. 2, the introduction by either party of federal or state Medicaid program definitions, is irrelevant and will confuse and distract the jury. To the extent that otherwise 23 relevant and admissible documents contains references to federal or state Medicaid programs, those references can be redacted, as other courts have ordered in similar circumstances. See, e.g., Silver 24 State Intellectual Techs., Inc. v. Garmin Int'l, Inc., No. 2:11-CV-01578-GMN, 2015 WL 2152658, at *3 (D. Nev. May 7, 2015); Montoya v. Orange Cty. Sheriff's Dep't, No. SACV111922JGBRNBX, 25 2013 WL 12348371, at *7 (C.D. Cal. Oct. 23, 2013). 26 2 See 1st Am. Compl., Sheet Metal Workers Local No. 20 Welfare & Benefit Fund v. CVS Pharmacy, 27 Inc., 16-cv-00046-S (D.R.I. filed May 4, 2018), Dkt. No. 81. 28 PLS.' RESP. TO CVS'S MOTIONS IN LIMINE CASE NO. 4:15-CV-03504-YGR 7 1 insurance-pharmacy-PBM relationships at issue in this case. "Generally speaking, evidence of other 2 lawsuits against a defendant is admissible where relevant and offered for a proper purpose under 3 Rule 404(b)." Jackson v. Fed. Express, No. CV-1001760-MMMCWX, 2011 WL 13268074, at *2 4 (C.D. Cal. June 13, 2011) (emphasis added). While Federal Rule of Evidence 404(b) makes evidence 5 of other wrongs or acts inadmissible to prove "a person's character in order to show that on a particular 6 occasion the person acted in accordance with the character," they may be admissible for other 7 purposes, such as "proving motive, opportunity, intent, preparation, plan, knowledge, identity, absence 8 of mistake, or lack of accident." Fed. R. Evid. 404(b); see also Fed. R. Evid. 405(b) (character evidence 9 may be admissible if it is an essential element of the claim). 10 Here, the evidence of other lawsuits by private payors concerning CVS's U&C pricing and the 11 HSP program is relevant to establish CVS's knowledge that payors—looking at the same sort of U&C 12 definitions and pricing arrangements as in this case—evidently disagree with CVS on whether CVS's 13 HSP pricing qualified as a U&C price. During this litigation, the linchpin of CVS's defense has been 14 its contention that there was a uniform consensus within the industry that CVS's HSP program did not 15 qualify as U&C pricing. It is apparent that CVS will try to elicit testimony from its employees and 16 experts to this effect. However, that some of CVS's counterparts in the industry disagree with CVS's 17 position—and that CVS knows of this disagreement—is evident from lawsuits being filed against CVS 18 alleging claims similar to those here. The jury should be presented with a balanced picture, rather than 19 the one-sided account that CVS intends to present. That approach would be consistent with this Court's 20 ruling in Apple iPod iTunes Antitrust Litigation—a ruling CVS mischaracterizes in its motion—where 21 this Court denied in part Apple's similar motion in limine, holding that "[e]vidence regarding a 22 witness's knowledge of other litigation and the impact, if any, of such litigation during the relevant 23 time period on his or her decision-making, may in fact be relevant." No. 05-CV-0037 YGR, 2014 WL 24 12719192, at *3 (N.D. Cal. Nov. 18, 2014). 25 Furthermore, evidence of other lawsuits may also be relevant to demonstrate inconsistencies 26 in a defendant's assertions. See Actuate Corp. v. Aon Corp., No. C 10-05750 WHA, 2012 WL 27 28 PLS.' RESP. TO CVS'S MOTIONS IN LIMINE CASE NO. 4:15-CV-03504-YGR-JSC 2 7 1 2285187, at *1 (N.D. Cal. June 18, 2012) (denying motion in limine). Here, Plaintiffs should be 2 permitted to rebut any argument or evidence from CVS by pointing to the fact of other lawsuits as 3 inconsistent with the supposed consensus CVS argues exists. In Jackson, for instance, the Court 4 permitted Plaintiffs to make an offer of proof to support the potential use of other similar lawsuits to 5 rebut defense witness statements. 2011 WL 13268074, at *13. 6 For these reasons, the Court should deny CVS's overbroad and unfair attempt to skew the 7 evidence in its favor. The Court should permit evidence and argument concerning other private 8 litigation against CVS concerning its U&C pricing and HSP program for any permitted purpose under 9 the Rules of Evidence. 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PLS.' RESP. TO CVS'S MOTIONS IN LIMINE CASE NO. 4:15-CV-03504-YGR-JSC 3 7 II. RESPONSE TO CVS'S MOTION IN LIMINE NO. 2: PRECLUDE ARGUMENT 1 THAT U&C CONTRACT DEFINITIONS ARE CLEAR OR UNAMBIGUOUS 2 CVS's second motion in limine seeks to preclude Plaintiffs from arguing or eliciting evidence 3 to the effect that the U&C terms in the CVS-PBM contracts are clear and unambiguous. This motion 4 should be denied. The "law of the case" does not prohibit Plaintiffs from arguing to the jury that the 5 evidence shows the U&C terms in the CVS-PBM contracts are written in "plain English", or are "easy 6 to understand", "clear", "comprehensible", "intelligible", or "unambiguous". 7 The relevant issue of law this Court decided in its summary judgment opinion—and which 8 Plaintiffs did not appeal—was that Plaintiffs could not use the parol evidence rule to exclude CVS's 9 evidence purporting to interpret the contracts. Dkt. No. 327 at 19-21. CVS's reliance on the law-of- 10 the-case doctrine is therefore misplaced: Plaintiffs do not intend to challenge CVS's evidence under 11 the parol evidence rule. Rather, Plaintiffs intend to rely on the U&C provisions in the contracts in 12 addition to extrinsic evidence that supports Plaintiffs' interpretation of those contract terms—exactly 13 what the Ninth Circuit ruled Plaintiffs were permitted to present to a jury. Corcoran v. CVS Health 14 Corp., 779 F. App'x 431, 433-34 (9th Cir. 2019). Under the law of the case doctrine, "a court is 15 generally precluded from reconsidering an issue previously decided by the same court, or a higher 16 court in the identical case." Ingle v. Circuit City, 408 F.3d 592, 594 (9th Cir. 2005) (citing United 17 States v. Lummi Indian Tribe, 235 F.3d 443, 452 (9th Cir.2000)). This doctrine has developed to 18 "maintain consistency and avoid reconsideration of matters once decided during the course of a single 19 continuing lawsuit." Id. (citing 18B Wright, Miller & Cooper, Federal Practice and Procedure: 20 Jurisdiction 2d § 4478, at 637-38 (2002)). It does not have nearly the breadth ascribed to it by CVS. 21 Indeed, CVS's own cases make clear that the law of the case doctrine has a narrow scope. Arizona v. 22 California, 460 U.S. 605, 618 (1983) ("Unlike the more precise requirements of res judicata, law of 23 the case is an amorphous concept. . . . Law of the case directs a court's discretion, it does not limit the 24 tribunal's power."); Fahmy v. Jay Z, No. 2:07-cv-05715-CAS, 2015 WL 5680299, at *11 (C.D. Cal. 25 Sep. 24, 2015) (declining to apply doctrine as widely as urged by defendant, and rejecting "wholesale 26 exclusion of evidence regarding these issues"). 27 28 PLS.' RESP. TO CVS'S MOTIONS IN LIMINE CASE NO. 4:15-CV-03504-YGR-JSC 4 7 1 Neither this Court, nor the Ninth Circuit, has either implicitly or explicitly decided the issue of 2 precisely what words Plaintiffs or CVS can use to describe the meaning of the contract provisions. 3 Therefore, the law-of-the-case doctrine does not prohibit Plaintiffs from making rhetorical use of the 4 words "clear", "unambiguous", or other synonyms to describe the U&C provisions to the jury. 5 Finally, use of the words "clear" or "unambiguous" would not unfairly prejudice CVS or 6 confuse the jury. CVS can present its own evidence and argument to the contrary. Indeed, it would be 7 unduly prejudicial to Plaintiffs if they were barred from arguing to the jury that the critical contract 8 terms are clear and unambiguous. CVS will be urging the jury to look anywhere but the contracts, 9 and Plaintiffs should be able to counter that diversion. CVS has not shown and cannot show that the 10 probative value of excluding the rhetorical use of the words "clear", "unambiguous", or other 11 synonyms at trial is substantially outweighed by unfair prejudice or the risk of confusion. Fed. R. Evid. 12 403. 13 For these reasons, the Court should deny CVS's overbroad and unfair attempt to skew evidence 14 it its favor. 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PLS.' RESP. TO CVS'S MOTIONS IN LIMINE CASE NO. 4:15-CV-03504-YGR-JSC 5 7 III. RESPONSE TO CVS'S MOTION IN LIMINE NO. 3: PRECLUDE EVIDENCE OR 1 ARGUMENT THAT CVS AND THE PBMS ALLEGEDLY CONSPIRED 2 In its third motion in limine, CVS asks the Court to preclude Plaintiffs from presenting 3 evidence or argument that the PBMs "conspired" or "schemed" with CVS to inflate its reported U&C 4 prices. It is perhaps the height of irony for CVS to argue that the use of the words "conspire" or 5 "scheme" to describe what CVS has long (and inaccurately) portrayed as "agreements" between CVS 6 and "the PBMs" would unfairly prejudice CVS and mislead jurors. The Court should deny this motion. 7 CVS states "there is no evidence that the Five PBMs' position on generic membership 8 programs was the result of a conspiracy." CVS MIL No. 3 at 2. Plaintiffs concur that CVS has almost 9 no admissible evidence as to what "the PBMs," as corporate actors, agreed or did not agree to.3 10 Nonetheless, CVS has repeatedly argued, both before this Court and the Ninth Circuit, that CVS and 11 the PBMs "agreed" that CVS's HSP price was not a U&C price under the PBM contracts. This, in 12 fact, was one of CVS's core arguments at summary judgment. CVS argued there: "the PBMs—CVS's counterparties and the actual recipients of the U&C price—agreed then, and still agree, that the HSP 13 price does not constitute the U&C price under their contracts…" (Dkt. No. 271 at 1 (emphasis 14 added)).4 CVS makes this argument even though the PBM contracts at issue are fully integrated 15 contracts that do not specifically exclude HSP or membership program pricing from U&C and, instead, 16 provide expansive definitions of U&C that include discount programs offered by a pharmacy to attract 17 or retain cash customers. 18 To the extent CVS has admissible evidence that would permit it at trial to argue that "the 19 PBMs" and CVS "agreed" upon an interpretation of the U&C terms of the PBM contracts, it is not 20 21 3 In their MIL No. 1, Plaintiffs move to exclude or limit CVS's evidence to the extent CVS seeks to 22 use it to say that "the PBMs," as corporate actors, agreed on anything, because the individual employee testimony CVS offers for this proposition is, for the most part, not authorized corporate testimony 23 binding on any PBM. As well, the declarations of the largely former PBM employees that CVS submits to support its third motion in limine (Exs. 1-5) are inadmissible hearsay. 24 4 CVS made similar arguments in its briefing before the Ninth Circuit. See, e.g., Ninth Cir. No. 17- 25 16996, Dkt. No. 20, at 24-35 (The PBMs testified that the U&C prices submitted by CVS during the existence of the HSP program were not misrepresentations, because "CVS and The PBMs attached 26 the same meaning to the contractual definition of 'U&C.' The PBMs therefore did not believe CVS was obligated to submit the HSP price as the U&C price.") (emphasis added)). 27 28 PLS.' RESP. TO CVS'S MOTIONS IN LIMINE CASE NO. 4:15-CV-03504-YGR-JSC 6 7 1 improper or prejudicial to CVS for Plaintiffs to argue that "the PBMs" and CVS by this same 2 agreement "conspired" or "schemed" to harm Plaintiffs and class members, by depriving them of the 3 "lower of U&C" pricing provision of the PBM contracts, and harming Plaintiffs and class members 4 by charging them higher out-of-pocket payments for generic prescription drugs than these PBM 5 contracts specify. A "scheme," as defined by Merriam-Webster, is "a plan or program of action" 6 ("especially: a crafty or secret one"), and in its verb form means "to make plans."5 "Conspire" means 7 "to join in a secret agreement to do an unlawful or wrongful act or an act which becomes unlawful as 8 a result of the secret agreement" or, more simply, "to act in harmony toward a common end."6 Both 9 words suggest or signify agreement—the very assertion that CVS urges here. Indeed, the United States 10 District Court of Rhode Island, after considering the very same arguments and much of the same 11 evidence that CVS hopes to proffer here, held they provided a sufficient factual basis for a RICO conspiracy among CVS and the PBMs. Sheet Metal Workers Local No. 20 Welfare & Benefit Fund v. 12 CVS Pharmacy, Inc., 305 F. Supp. 3d 337, 349–50 (D.R.I. 2018) (upholding RICO claim despite lack 13 of allegation of "an explicit agreement among the PBMs to look the other way as CVS failed to report 14 HSP prices" as its U&C prices.) 15 Where, as here, argument that the PBMs "conspired" or "schemed" with CVS to inflate its 16 reported U&C prices is amply supported by inferences that may logically be drawn from facts or 17 argument in the record, the jury should be allowed to hear and consider all such inferences in rendering 18 its decision. See Romero v. Cnty. of Santa Clara, 666 F. App'x 609, 612 (9th Cir. 2016) (approving 19 trial court's application of FRE 403 to the extent such application is not illogical, implausible, or 20 without support in inferences that may be drawn from facts in the record). 21 CVS's related argument – that Plaintiffs somehow delayed too long to be able to argue that the 22 PBMs "schemed" or "conspired" with CVS to inflate its U&C prices (see CVS MIL No. 3 at 3) – is 23 belied by the record, too. Discovery in this action has revealed virtually no contemporaneous evidence 24 5 See https://www.merriam-webster.com/dictionary/scheme 25 6 See https://www.merriam-webster.com/dictionary/conspire; and see Wasco Prods., Inc. v. Southwall 26 Techs., Inc., 435 F.3d 989, 990–91 (9th Cir. 2006) (basic element of conspiracy is the existence of an agreement). 27 28 PLS.' RESP. TO CVS'S MOTIONS IN LIMINE CASE NO. 4:15-CV-03504-YGR-JSC 7 7 1 to support CVS's assertion that "the PBMs" at the time of contract negotiation or at any time during 2 implementation "agreed then" that "the HSP price does not constitute the U&C price under the 3 contracts." CVS only first introduced this argument in its opposition to Plaintiffs' motion for class 4 certification and at summary judgment, using form declarations from largely former PBM employees 5 that had been carefully crafted by CVS's counsel as part of that briefing. The Ninth Circuit, in 6 reversing this court's summary judgment order, plainly understood this. "Although CVS and the PBMs 7 agreed during this litigation (as opposed to when the agreements were negotiated) that the PBM 8 contracts did not require CVS to submit its HSP prices as the U & C prices," the Ninth Circuit found, 9 "plaintiffs proffered 'some evidentiary support for [their] competing interpretation[ ] of the 10 contract[s'] language.'" Corcoran, 779 F. App'x at 433 (emphasis added) (citing Nat'l Union Fire Ins. 11 Co. of Pittsburgh, Pa. v. Argonaut Ins. Co., 701 F.2d 95, 97 (9th Cir. 1983) (holding that disputes over the record evidence on this issue should go to the jury)). 12 As the Ninth Circuit ruled, Plaintiffs are entitled to present to the jury evidence in support of 13 their reasonable interpretation of the U&C language in the PBM contracts. CVS's MIL No. 3 should 14 be denied. 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PLS.' RESP. TO CVS'S MOTIONS IN LIMINE CASE NO. 4:15-CV-03504-YGR-JSC 8 7 IV. RESPONSE TO CVS'S MOTION IN LIMINE NO. 4: EXCLUDE THE JANUARY 2015 1 CVS-OPTUM CONTRACT. 2 The Court should deny CVS's attempt to exclude the January 2015 Optum Contract ("2015 3 Contract") because the changes in the 2015 Contract already were found to be admissible by the Ninth 4 Circuit, and were not the result of a remedial action taken in response to the Plaintiffs' harm. 5 Therefore, Rule 407 has no application to the 2015 Contract.7 6 First, the Ninth Circuit already found that this evidence was highly probative and (along with 7 Plaintiffs' other evidence) needed to be presented to the jury. The 2015 Contract changed the earlier 8 CVS-Optum contract by removing discounts from the definition of U&C.8 These changes are plainly 9 relevant to whether the version of the CVS-Optum contract operative during the class period included 10 discounts in its U&C definition. Indeed, this is one of the material facts in dispute that the Ninth 11 Circuit held precluded summary judgment in this case: "[T]he district court noted that '[i]n some cases, 12 the PBMs even amended the agreement to exclude explicitly membership programs from their 13 definition of U & C.' But this same evidence could show the opposite, i.e., that the U & C definitions 14 in the PBM contracts encompassed the HSP prices. A jury could reasonably infer that subsequent 15 modifications of the agreements indicate that the prior definitions of U & C included HSP prices." 16 Corcoran, 779 F. App'x. at 433(emphasis added). CVS's assertion that the Ninth Circuit was not 17 passing on the admissibility of this evidence ignores the basic fact that only admissible evidence is 18 sufficient to create a material issue of fact precluding summary judgment. See Fed. R. Civ. P. 56(c)(2) 19 ("A party may object that the material cited to support or dispute a fact cannot be presented in a form 20 that would be admissible in evidence."); Fraser v. Goodale, 342 F.3d 1032, 1036-37 (9th Cir. 2003) 21 (recognizing that the court may only consider admissible evidence at summary judgment); Orr v. Bank 22 of Am., NT & SA, 285 F.3d 764, 773 (9th Cir. 2002) ("A trial court can only consider admissible 23 evidence in ruling on a motion for summary judgment."). The Ninth Circuit's ruling makes clear that 24 7 Contrary to CVS's assertions, even if Rule 407 did apply to the 2015 Contract, which it does not, it 25 would be premature to rule on whether the evidence would be admissible for other purposes, including impeachment, until the evidence is offered during trial. 26 8 See CVS MIL No. 4 at 1-2. 27 28 PLS.' RESP. TO CVS'S MOTIONS IN LIMINE CASE NO. 4:15-CV-03504-YGR-JSC 9 7 1 evidence of CVS and its counterparts' amending certain U&C definitions to expressly exclude 2 discount programs is admissible and not subject to FRE 407. 3 Second, the modification of these contract language is not a remedial measure because it in no 4 way reduces Plaintiffs' harm—CVS's overcharging Plaintiffs and class members as a result of the 5 pharmacy's failure to report its HSP prices as U&C prices. CVS's effort to exclude discounts from 6 U&C was intended to maximize its own profits and shield CVS from liability for its culpable conduct, 7 not to prevent harm to consumers who purchased generic drugs from CVS. It is black letter law that 8 "Rule 407 does not apply where the response to an injury or harm is aimed at mitigating its effect on 9 the perpetrator of the harm, but not making the harm less likely to occur." Wright & Miller, 23 Fed. 10 Prac. & Proc. Evid. § 5283 (2d ed.). As the Advisory Committee Notes make clear, Rule 407 promotes 11 the "social policy of encouraging people to take, or at least not discouraging them from taking, steps 12 in furtherance of added safety." See Fed. R. Evid. 407 Adv. Comm. Notes (1972). CVS's contract 13 modification conduct, designed to limit its exposure, not reduce the harm to class members, simply 14 does not qualify for protection under FRE 407. 15 Third, numerous courts have admitted later modifications to contract language to ascertain the 16 meaning of the disputed terminology—precisely the reason for which the Ninth Circuit found this 17 evidence to be relevant. See, e.g., Smith v. United HealthCare Servs., Inc., No. CIV. 00- 18 1163ADMAJB, 2003 WL 22047861, at *11 (D. Minn. Aug. 28, 2003) ("The use of the evidence is 19 not for proving 'culpable conduct,' but rather to ascertain the proper meaning of disputed, purportedly 20 ambiguous contract terminology."); Smith v. Miller Brewing Co. Health Benefits Program, 860 F. 21 Supp. 855, 857 n. 1 (M.D. Ga. 1994) (stating that the court may consider subsequent measures in 22 evaluating meaning of disputed ERISA plan language); Am. Cas. Co. of Reading, PA v. Continisio, 23 819 F. Supp. 385, 398 & n.8 (D.N.J. 1993) (subsequent revisions of policy language were not 24 excludable under Rule 407 where subsequent revisions were offered for purpose of showing ambiguity 25 of earlier contract language), aff'd, 17 F.3d 62 (3d Cir. 1994). 26 27 28 PLS.' RESP. TO CVS'S MOTIONS IN LIMINE CASE NO. 4:15-CV-03504-YGR-JSC 10 7 1 Fourth, CVS's attempt to exclude the 2015 Contract under FRE 407 fails because the changes 2 to the 2015 Contract—though patently an effort to exclude the HSP prices from the existing U&C 3 definition by excluding "discount cards"—was consistent with CVS's pre-existing policy to exclude 4 all discounts from U&C definitions. From November 2000, CVS maintained a formal, written policy 5 under which CVS directed its negotiators to attempt to exclude all discounts from every contract's 6 U&C definition: "Contract Administration [Redacted] will attempt to include the following in all third 7 party contracts subject to this policy: … 1.19 U & C with no discount language."9 This policy applied 8 to all new contracts, contract amendments, and contract renewals.10 Numerous courts have held that 9 changes that were initiated before a harm occurred are not subject to FRE 407. See Brazos River Auth. 10 v. GE Ionics, Inc., 469 F.3d 416, 428 (5th Cir. 2006) ("[b]y definition, rule 407 would not apply" to 11 cases where "the measures were initiated before the problems occurred.") (emphasis added); see also 12 In re Aircrash in Bali Indonesia, 871 F.2d 812, 816 (9th Cir. 1989) (analysis that began before 13 plaintiffs' harm was not excludable under Rule 407). 14 Fifth, CVS asserts in a single sentence that the 2015 Contract may need to be excluded under 15 Rule 403 because its probative value may be substantially outweighed "by the unfair prejudice that 16 Rule 407 is meant to prevent."11 But CVS misapprehends Rule 403's purpose. The Rule does not 17 exclude all prejudicial evidence; after all, "[r]elevant evidence is inherently prejudicial; but it is only 18 unfair prejudice, substantially outweighing probative value, which permits exclusion of relevant 19 matter under Rule 403." United States v. Hankey, 203 F.3d 1160, 1172 (9th Cir. 2000) (affirming 20 district court's admitting evidence). In fact, it is rather disingenuous for CVS now to claim that it is so 21 unfairly prejudiced by this evidence that it should not be admitted. At summary judgment, CVS 22 affirmatively embraced this evidence as supposedly supportive of its position. CVS relied on (and 23 caused this Court to rely on) Mr. Reichardt's assertion that the 2015 Contract simply memorialized 24 9 See Supplemental Declaration of Jonathan K. Levine, Ex. A at CVSC-0355496-97. 25 10 Id. at CVSC-0355495-96. The record indicates that there were multiple amendments to the CVS- Optum contract during the class period adding various networks etc. 26 11 CVS MIL No. 4 at 4. 27 28 PLS.' RESP. TO CVS'S MOTIONS IN LIMINE CASE NO. 4:15-CV-03504-YGR-JSC 11 7 1 both parties' prior understanding12 that CVS was not required to Submit its Health Savings Pass price 2 as its usual and customary ('U&C') price on claims submitted to Optum under the Predecessor 3 Agreement. See Dkt. No. 271 at 8 (citing PX-691, Reichardt Decl. ¶ 10) & 12-13 (quoting Reichardt 4 Dep.); see also Def.'s Separate Statement of Facts at 11-12 (asserting as purportedly undisputed facts 5 Optum's interpretation of both contracts); Appellee's Br. of CVS Pharm., Inc., Corcoran v. CVS 6 Pharm., Inc., No. 17-16996, 2018 WL 1791735, at *6 (9th Cir. April 13, 2018) (relying on both Optum 7 contracts for the meaning of U&C). It was not until the Ninth Circuit pointed out the obvious—i.e. 8 that this evidence could show that the prior contract included discounts like HSP in its definition of 9 U&C—that CVS changed its position on the 2015 Contract. Having put the 2015 Contract at issue, 10 CVS cannot now challenge its admission. Cf. Gotlin v. Lederman, 616 F. Supp. 2d 376, 390 (E.D.N.Y. 11 2009) vacated in part on other grounds, 483 F. App'x 583 (2d Cir. 2012) (holding that an evidentiary 12 "objection had been effectively waived" by a party moving for summary judgment that introduced and 13 relied upon the evidence in its own motion and supporting memorandum). 14 Given the clear relevance recognized by the Ninth Circuit, the 2015 Contract is admissible, 15 and the Court should deny CVS's fourth motion in limine in its entirety. 16 17 18 19 20 21 22 23 24 12 According to CVS, Optum came to its understanding that programs like HSP were not included 25 in U&C "well before November 2008, when CVS launched HSP." Dkt. No. 271 at 13. If the 2015 Optum agreement simply memorialized this understanding that Optum shared with CVS since 26 before the beginning of the Class Period (i.e. Nov. 2008), it is per se not a remedial measure because the understanding was reached before any of the Plaintiffs' harm in this case. 27 28 PLS.' RESP. TO CVS'S MOTIONS IN LIMINE CASE NO. 4:15-CV-03504-YGR-JSC 12 7 V. RESPONSE TO CVS'S MOTION IN LIMINE NO. 5: TO PRECLUDE EVIDENCE 1 AND ARGUMENT ON NON-ACTIONABLE CONDUCT 2 CVS's fifth motion in limine asks the Court to "bar Plaintiffs from arguing or implying that 3 CVS's liability may arise from (1) a failure to disclose information to Class Members or (2) any 4 affirmative representation to Class Members concerning the accuracy of their copayments." CVS MIL 5 No. 5 at 4. CVS argues that these two categories involve "acts or omissions that are not actionable as 6 a matter of law[.]" Id. at 1 (emphasis added). For the reasons set forth below, the Court should deny 7 this motion. 8 A. Plaintiffs Should Be Allowed to Argue that CVS Deceived Them and Concealed Key 9 Information As to CVS's first request, CVS argues that "[e]xcluding category (1) is warranted because, [] 10 the Court already has decided [that] CVS had no affirmative duty to disclose information to Class 11 Members concerning the Health Savings Pass ('HSP') program or usual and customary pricing." CVS 12 MIL No. 5 at 1. CVS, however, distorts the Court's ruling. In the section of the Court's opinion on 13 which CVS relies, the Court dismissed Plaintiffs' constructive fraud claims, "declin[ing] Plaintiffs' 14 invitation to impose a duty on pharmacists as a matter of law which encompasses matters of drug 15 pricing." Corcoran v. CVS Health Corp., 169 F. Supp. 3d 970, 989 (N.D. Cal. 2016). As the Court 16 expressly noted in its Order, "[i]n contrast to a claim for actual fraud, a claim for constructive fraud 17 exists where persons in a fiduciary, special, or confidential relationship violate their duty to disclose, 18 even in the absence of intent to deceive." Id. at 988 (emphasis added; citations omitted). The Court 19 thus declined to find a fiduciary, special, or confidential relationship between class members and CVS 20 and its pharmacists, and Plaintiffs have no intention of arguing otherwise at trial. 21 But the fact that CVS pharmacists have no formal legal "duty" to inform customers about lower 22 prices does not mean that Plaintiffs should be barred from presenting evidence that CVS did not 23 "disclose to Class Members information about HSP or U&C pricing, and how such pricing might 24 affect copayments." CVS MIL No. 5 at 3 (emphasis added). Plaintiffs should not be prohibited from 25 arguing that CVS deceived Plaintiffs and class members at the point of sale by charging inflated 26 27 28 PLS.' RESP. TO CVS'S MOTIONS IN LIMINE CASE NO. 4:15-CV-03504-YGR-JSC 13 7 1 copayments. This is the core of Plaintiffs' case. Indeed, the same Order CVS relies on expressly 2 acknowledges "[t]he gravamen of the [Plaintiffs' complaint] . . . . that CVS deceived Plaintiffs by 3 reporting U&C prices significantly above the prices available to members of the HSP program, and 4 then charged Plaintiffs inflated copays of a result of their deceitful practice." Corcoran, 169 F. Supp. 5 at 987. Moreover, Plaintiffs must present evidence of materiality and reliance on CVS's 6 representations for their claims under some of the states' consumer protection statutes. To do so, 7 Plaintiffs must be permitted to discuss how CVS's failure to tell them about its calculation of U&C 8 and the HSP program and the corresponding impacts on their copayments impacted their behavior 9 (i.e., whether CVS's deception and omissions were material to them and whether they relied on CVS's 10 representations and omissions to their detriment). Plaintiffs also must present evidence about CVS's 11 fraudulent concealment to rebut CVS's statute of limitations arguments, which will involve evidence 12 and arguments about CVS's failure to disclose. It would be far more prejudicial to Plaintiffs to exclude 13 this evidence than it would be to CVS to include it.13 14 Thus, while Plaintiffs have no intention of reprising their constructive fraud claim, the Court 15 should not prevent Plaintiffs from presenting evidence about CVS's failure to disclose information 16 that is highly relevant to their claims. Nothing in the "law of the case" suggests otherwise. 17 B. CVS's Request to Preclude Plaintiffs from Introducing Evidence or Arguing that 18 CVS Misrepresented the Accuracy of the Copayment Has No Basis CVS also asks the Court to prohibit Plaintiffs from introducing evidence or arguing that CVS 19 explicitly or implicitly represented to Plaintiffs and class members that the copayments collected by 20 CVS were "accurate," "correct," or "the like." CVS MIL No. 5 at 4. Although CVS's fifth motion in 21 limine is purportedly about barring discussion of acts or omissions that are supposedly "not actionable 22 as a matter of law" (id. at 1), CVS fails to identify any legal basis for prohibiting Plaintiffs from 23 24 13 Moreover, CVS has previously argued that Plaintiffs and class members could and should have 25 effectively mitigated their damages by using the HSP program rather than their insurance. If CVS is going to make such arguments at trial, Plaintiffs should be able to put on evidence about CVS's failure 26 to disclose the HSP program. See Badger v. Wal-Mart Stores, Inc., No. 2:11-CV-1609-KJD-CWH, 2013 WL 3297084, at *5 (D. Nev. June 28, 2013). 27 28 PLS.' RESP. TO CVS'S MOTIONS IN LIMINE CASE NO. 4:15-CV-03504-YGR-JSC 14 7 1 presenting such evidence. Instead, CVS contends that, as a factual matter, it "could not possibly have 2 'represented' to Plaintiffs and class members that their copayments were 'accurate' or 'correct'" 3 because "whatever the 'right' amount is under the individual's plan is not something [CVS] knows or 4 can determine." Id. at 4. CVS thus asks the Court to "preclude Plaintiffs from arguing or suggesting 5 to the jury that CVS made representations to Class Members to the effect that their copayments were 6 'accurate,' 'correct,' or the like, or that the customers 'receive[d] the benefit of their insurance.'" Id. 7 (citing Pls. Opp'n to CVS's Mot. for Summ. J. at 1, 10–11, 17, Dkt. No. 304). 8 But CVS's contention that it cannot be held accountable for the accuracy or inaccuracy of any 9 copayment it collects because it not privy to the "details of a given payor's reimbursement 10 methodology" is a non sequitur. The only "inaccuracy" at issue in this case is the one CVS—and CVS 11 alone—controls: the U&C price that CVS reported to the PBM. 12 As this Court recognized in the decision on which CVS relies, Plaintiffs' claims are based on 13 the false representation CVS made "every time it charged Plaintiffs for copays that were calculated 14 based on inflated U&C prices." Corcoran, 169 F. Supp. at 988. See also id. at 994 (Plaintiffs 15 sufficiently alleged deceptive acts under state statutes for the same reasons). To preclude Plaintiffs 16 from presenting evidence on this critical issue would thus be tantamount to granting summary 17 judgment for CVS.14 Accordingly, the Court should deny CVS's fifth motion in limine in its entirety. 18 19 20 21 22 23 24 14 If CVS thought there was a basis for the Court to reach such a conclusion as a matter of law, it should have raised that issue earlier. Where "the motion in limine is no more than a rephrased 25 summary-judgment motion, the motion should not be considered." Badger, 2013 WL 3297084, at *4 (citation omitted); Hana Fin., Inc. v. Hana Bank, 735 F.3d 1158, 1162 n.4 (9th Cir. 2013), aff'd, 574 26 U.S. 418 (2015) ("A motion in limine is not the proper vehicle for seeking a dispositive ruling on a claim, particularly after the deadline for filing such motions has passed."). 27 28 PLS.' RESP. TO CVS'S MOTIONS IN LIMINE CASE NO. 4:15-CV-03504-YGR-JSC 15 7 VI. RESPONSE TO CVS'S MOTION IN LIMINE NO. 6: TO EXCLUDE DR. JOEL HAY'S 1 MISLEADING CALCULATIONS 2 CVS is apparently undeterred by the Ninth Circuit's clear pronouncement that the expert 3 testimony provided by Plaintiffs' expert, Dr. Joel Hay, rests on a sound foundation and is the result of 4 reliable methodology and rigorous analyses of the transactional data that was produced by CVS in this 5 case see Corcoran, 779 F. App'x at 434–35, CVS's sixth motion in limine asks that this Court do 6 precisely what the Ninth Circuit has instructed it not do – preclude Dr. Hay's expert testimony as 7 irrelevant or misleading pursuant to FRE 204, 403 and 702. The Court should deny this motion. 8 Dr. Hay is an eminently qualified and experienced expert in pharmaceutical economics. 9 (CVS's Ex. 24 at ¶ 21). As part of his expert retention in this matter, he analyzed the class transactional 10 data produced by CVS to understand whether and to what extent CVS transacted at the HSP price in 11 its cash business – in other words, whether the HSP price was the cash "price for which a drug is sold" 12 and therefore the U&C price. (See id. ¶ 40). That analysis showed, among other things, that CVS not 13 only offered the HSP prices, but in fact did frequently transact at the HSP prices, both within and 14 outside the HSP program itself. (See id. ¶¶40-41; see also CVS's Ex. 25 at ¶¶ 19-21). Dr. Hay did 15 not opine, as CVS here asserts (and similarly argued at the time of summary judgment), that U&C is 16 defined as "the most common price" charged. However, Dr. Hay's analyses of the class transactional 17 data offers evidentiary support for Plaintiffs' argument that discount or membership pricing available 18 to the general public falls within the U&C definitions of the PBM contracts at issue. What is more, 19 Dr. Hay's analyses show the HSP program was far from an exclusive membership program – to the 20 extent such criteria are relevant to whether the HSP prices constitute U&C prices under the PBM 21 contracts (as CVS contends here). 22 While CVS may disagree with Dr. Hay's analyses, that is not a sufficient basis to preclude his 23 expert opinion here. "[T]he district court is not tasked with deciding whether the expert is right or 24 wrong, just whether his testimony has substance such that it would be helpful to a jury." Pyramid 25 Techs., Inc. v. Hartford Cas. Ins. Co., 752 F.3d 807, 813 (9th Cir. 2014) (citation omitted). The Ninth 26 Circuit has already determined that Dr. Hay's expert opinions in this regard are relevant to matters in 27 28 PLS.' RESP. TO CVS'S MOTIONS IN LIMINE CASE NO. 4:15-CV-03504-YGR-JSC 16 7 1 dispute and qualify as admissible, reliable expert testimony under FRE 702. Corcoran, 779 Fed. 2 Appx. at 434–35. There is no reason for the Court to revisit that issue for trial. See Thompson v. 3 Whirlpool Corp., No. C06-1804-JCC, 2008 WL 2063549, at *3 (W.D. Wash. May 13, 2008) (citing 4 Daubert v. Merrell Dow Pharms., 509 U.S. 579, 589-90 (1993) (holding that an expert should be 5 permitted to testify if the proponent demonstrates that: (1) the expert is qualified; (2) the evidence is 6 relevant to the suit; and (3) the evidence is reliable.) 7 CVS also challenges the data choices Dr. Hay made in rendering his opinions, which CVS 8 criticizes as "not measur[ing] anything meaningful," see CVS MIL No. 6 at 3, or interprets the 9 transactional data differently than CVS's experts do. See id. (comparing Dr. Hay's analyses and data 10 choices with that of CVS's expert, Brett Barlag). 11 But a party's disagreement with an opposing party's expert's conclusions is "not a basis for 12 exclusion under Daubert." Internmatch, Inc. v. Nxtbigthing, LLC, No. 14-CV-05438-JST, 2016 WL 13 1212626, at *4 (N.D. Cal. Mar. 28, 2016). See also Apple, Inc. v. Samsung Elecs. Co., No. 11-CV- 14 01846-LHK, 2012 WL 2571332, at *8 (N.D. Cal. June 30, 2012) (one party's disagreement with 15 opposing party's expert's conclusions not a basis for exclusion under Daubert). "Judges in jury trials 16 should not exclude expert testimony simply because they disagree with the conclusions of the expert." 17 Kennedy v. Collagen Corp., 161 F.3d 1226, 1230 (9th Cir. 1998). "Resolving the conflict between 18 these experts", as the Ninth Circuit previously held, "is a matter for the jury, not a basis to exclude 19 one of them under Rule 702. Corcoran, 779 F. App'x at 435 (citing Pyramid Tech., Inc., 752 F.3d at 20 813) (emphasis added)). 21 Dr. Hay's opinions have been held by the Ninth Circuit to be both sound and reliable. As such, 22 they should go to the jury. CVS's sixth motion in limine should be denied. 23 24 25 26 27 28 PLS.' RESP. TO CVS'S MOTIONS IN LIMINE CASE NO. 4:15-CV-03504-YGR-JSC 17 7 VII. RESPONSE TO CVS'S MOTION IN LIMINE NO. 7: EXCLUDE DR. JOEL HAY'S 1 INTERPRETATION OF PBM CONRACTS. 2 CVS seeks to exclude Plaintiffs' expert Dr. Joel Hay from testifying before the jury about (i) 3 the U&C definition in the five PBM agreements at issue, and (ii) what CVS and the PBMs intended 4 when they included the U&C term in those agreements. According to CVS, "[a]n expert who tells a 5 jury what a contract means exceeds the boundaries of appropriate expert testimony as a matter of long- 6 settled law," and "[w]hile an expert's testimony about industry custom or understanding may be 7 admissible, the expert may not testify to the proper, true, or correct interpretation of the contract, or 8 what the parties intended." CVS MIL No. 7 at 1. 9 Plaintiffs agree with CVS on this point, and do not intend for Dr. Hay to give legal opinions 10 about the meaning of a contract, but rather merely to opine on his understanding of the U&C price 11 term based on his experience as a pharmaceutical economist and his knowledge of the pharmacy 12 industry. During the meet and confer process, Plaintiffs asked CVS to agree that this limitation would 13 apply equally to all eight of CVS's testifying experts, particularly John Jones, Edward McGinley and 14 Pamela Wyett—all three of whom submitted substantially overlapping expert reports discussing issues 15 pertaining to the U&C term and contracting practices in the industry. CVS has, as of the date of this 16 response, refused to agree that the limitation it seeks on Plaintiffs' expert should apply equally to 17 CVS's experts. Consistent with the "long-settled law" CVS cites in its motion, the Court should apply 18 the limitation CVS seeks to all experts testifying at trial, whether for Plaintiffs or CVS. 19 CVS's refusal to agree that this limitation would apply equally to its experts is of particular 20 concern with respect to John Jones, who was an executive at Optum during the class period. Mr. Jones, 21 in his expert report and rebuttal expert report, talks specifically about Optum's practices, contracting 22 intent and views with respect to the U&C term, acting more like a fact witness or corporate 23 representative for Optum, and less like the industry expert CVS represents him to be. See Jones Expert 24 Report at pp. 19-2115; Jones Rebuttal Expert Report at pp. 4-716. Mr. Jones is neither a percipient 25 witness nor a designated corporate representative of Optum. Rather, he is an expert, retained by CVS's 26 15 Ex. N to Levine Decl. in support of Plaintiffs' Motions in Limine. 16 Ex. Q to Levine Decl. in support of Plaintiffs' Motions in Limine. 27 28 PLS.' RESP. TO CVS'S MOTIONS IN LIMINE CASE NO. 4:15-CV-03504-YGR-JSC 18 7 1 lawyers to opine on industry custom and practices. To the extent CVS intends to use Mr. Jones to 2 testify about the CVS-Optum agreement or the intent of the parties to that agreement, under the guise 3 of expert testimony, this would be improper for the very reasons stated in CVS's motion. For these 4 reasons, the Court should specifically instruct CVS that Mr. Jones in particular may not testify before 5 the jury about (i) the definition of U&C in the CVS-Optum agreement, and (ii) what CVS and Optum 6 intended when they included the U&C term in that agreement. 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PLS.' RESP. TO CVS'S MOTIONS IN LIMINE CASE NO. 4:15-CV-03504-YGR-JSC 19 7 VIII. RESPONSE TO CVS'S MOTION IN LIMINE NO. 8: CONCERNING THE ROLE OF 1 CVS'S CORPORATE REPRESENTATIVE AND IN-HOUSE COUNSEL 2 In its eighth motion in limine, CVS asks the Court (1) for "clarification" as to the scope of 3 permissible examination of its corporate representative at trial, even though CVS has not identified 4 the witness or even the witness's position within the corporation; and (2) to preclude Plaintiffs from 5 calling CVS's principal 30(b)(6) witness to testify at trial. The Court should deny both parts of CVS's 6 motion as premature, overbroad, and unnecessary. 7 In the first part of its motion, CVS asks the Court preemptively to limit Plaintiffs' examination 8 of an unknown witness, with an unknown position at CVS, relying solely on FRE 602. Without 9 knowing who the witness is, or what subjects will be impacted, wholesale exclusion of testimony 10 based on a motion in limine is improper. Instead, CVS should make its objections during trial. In re 11 Cmty. Lending, Inc., No. C 08-00201 JW, 2011 WL 7479165, at *1 (N.D. Cal. June 1, 2011) (holding 12 that a motion to exclude testimony based on lack of personal knowledge is premature, noting that 13 "[s]hould Defendant attempt to introduce witness testimony on these matters, Plaintiffs may raise 14 specific objections to the personal knowledge of that witness during trial"); Jackson v. Cnty. of San 15 Bernardino, 194 F. Supp. 3d 1004, 1008 (C.D. Cal. 2016) (it is a "'better practice [] to deal with 16 questions of admissibility of evidence as they arise [in actual trial]' as opposed to tackling the matter 17 in a vacuum on a motion in limine") (quoting Sperberg v. Goodyear Tire & Rubber Co., 519 F. 2d 18 708, 712 (6th Cir. 1975)).17 19 CVS also seeks to preclude Plaintiffs from calling CVS's principal 30(b)(6) witness18—Hilary 20 Dudley—as a witness at trial, even though CVS has indicated that she will be present in the courtroom. 21 CVS asserts that Ms. Dudley has "no personal knowledge of the conduct at issue in this trial," and that 22 17 In contrast, the PBM witnesses, who already have been deposed, testified during their depositions 23 as to their lack of, or limited, personal knowledge; thus, Plaintiffs' Motion in Limine No. 1 is readily distinguishable from CVS's motion. 24 18 In response to Plaintiffs' notice of 30(b)(6) deposition, CVS designated Hilary Dudley as its 25 corporate representative. After Ms. Dudley's deposition, during which she disclaimed having been prepared to testify as to which CVS-PBM contracts applied to Plaintiffs' claims, Plaintiffs filed a 26 motion to compel. As part of the resolution of that motion, CVS designated Thomas Gibbons to address that topic. 27 28 PLS.' RESP. TO CVS'S MOTIONS IN LIMINE CASE NO. 4:15-CV-03504-YGR-JSC 20 7 1 examination of Ms. Dudley will "unnecessarily prolong the trial" because of her position as an in- 2 house attorney. CVS MIL No. 8. at 2-3. First, CVS overstates the "clear majority rule". While it is 3 true that some courts have not permitted a witness designated as a 30(b)(6) corporate representative 4 during discovery to testify at trial about corporate knowledge but outside his or her personal 5 knowledge, many other courts have reached a different conclusion. In addition to the cases cited by 6 CVS (see id. at 2), see, e.g., Univ. Healthsystem Consortium v. UnitedHealth Grp., Inc., 13 CV 6683, 7 2014 WL 4685753 (N.D. Ill. Sept. 19, 2014) (noting that there is "little principled distinction" between 8 allowing a Rule 30(b)(6) witness to testify at trial without personal knowledge and allowing him to 9 testify at deposition or via affidavit without personal knowledge.). See also Sara Lee Corp. v. Kraft 10 Foods Inc., 276 F.R.D. 500, 503 (N.D. Ill. 2011) (declining to limit 30(b)(6) testimony strictly to 11 matters within the witness' personal knowledge because "[w]hen it comes to using Rule 30(b)(6) 12 depositions at trial, strictly imposing the personal knowledge requirement would only recreate the 13 problems that Rule 30(b)(6) was created to solve."). 14 Second, CVS has not supported its assertion that Ms. Dudley has no personal knowledge of 15 the conduct at issue in this litigation. As just one example, Ms. Dudley undoubtedly has personal, non- 16 privileged knowledge of private litigation by third-party payors against CVS—information which is 17 highly probative as to CVS's main defense in this case, that there was unanimity within the industry 18 that CVS was not required to submit its HSP prices as its U&C prices. See supra at 1-2. 19 Moreover, any conflict between Ms. Dudley's status as a testifying witness and her role as in- 20 house attorney is a problem of CVS's own making, as CVS chose to designate its own lawyer as its 21 principal 30(b)(6) witness. Nor has CVS presented any explanation why the distinction between 22 "company" versus "individual" testimony (see CVS Mot. at 3) for this particular witness would be 23 unusually confusing, given that 30(b)(6) witnesses testify all the time in cases involving corporations. 24 The Court should deny CVS's Motion in Limine No. 8 in its entirety as premature, overbroad 25 and unnecessary. 26 27 28 PLS.' RESP. TO CVS'S MOTIONS IN LIMINE CASE NO. 4:15-CV-03504-YGR-JSC 21 7 1 Dated: May 5, 2020 Respectfully submitted, 2 3 By: /s/ Elizabeth C. Pritzker By: /s/ Robert Gilmore Elizabeth C. Pritzker (Cal. Bar No. 146267) Robert B. Gilmore (admitted pro hac vice) 4 Jonathan K. Levine (Cal. Bar No. 220289) Edward H. Meyers (admitted pro hac vice) Caroline C. Corbitt (Cal. Bar No. 305492) STEIN MITCHELL BEATO & MISSNER LLP 5 PRITZKER LEVINE LLP 6 By: /s/ Bonny Sweeney 7 Bonny E. Sweeney (Cal. Bar No. 176174) Richard Lewis (admitted pro hac vice) 8 Sathya S. Gosselin (Cal. Bar No. 269171) HAUSFELD LLP 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PLS.' RESP. TO CVS'S MOTIONS IN LIMINE CASE NO. 4:15-CV-03504-YGR-JSC 22