Corcoran et al v. CVS Health Corporation

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

Proposed Jury Instructions by Parties [Proposed] Joint Jury Instructions Submitted by Plaintiffs and CVS.

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76 Submitting Counsel on Signature Pages 1 2 UNITED STATES DISTRICT COURT 3 NORTHERN DISTRICT OF CALIFORNIA OAKLAND DIVISION 4 5 Christopher Corcoran, et al., on behalf of Case No. 4:15-cv-03504-YGR-JSC themselves and others similarly situated, 6 CLASS ACTION Plaintiffs, 7 [PROPOSED] JOINT JURY v. INSTRUCTIONS 8 CVS Pharmacy, Inc., Judge: Hon. Yvonne Gonzalez Rogers 9 Defendant. 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS CASE NO. 4:15-CV-03504-YGR 76 1 TABLE OF CONTENTS 2 Index of Proposed Jury Instructions .................................................................................................. 1 3 Joint Proposed Jury Instruction No. 1: Civil Cover Sheet ................................................................ 3 4 PART I: INSTRUCTIONS TO BE GIVEN BEFORE TRIAL ........................................................ 4 5 Joint Proposed Jury Instruction No. 2: Duty of Jury ......................................................................... 5 6 Joint Proposed Jury Instruction No. 3: Claims And Defenses .......................................................... 6 7 Plaintiffs' Proposed Jury Instruction No. 4: Introduction To A Class Action .................................. 7 8 Defendant's Proposed Jury Instruction No. 4: Introduction To A Class Action............................... 9 9 Joint Proposed Jury Instruction No. 5: Burden of Proof ................................................................. 13 10 Joint Proposed Jury Instruction No. 6: What is Evidence ............................................................... 14 11 Joint Proposed Jury Instruction No. 7: What is not Evidence ......................................................... 17 12 Joint Proposed Jury Instruction No. 8: Evidence for a Limited Purpose ........................................ 18 13 Joint Proposed Jury Instruction No. 9: Direct and Circumstantial Evidence .................................. 19 14 Joint Proposed Jury Instruction No. 10: Ruling on Objections ....................................................... 20 15 Joint Proposed Jury Instruction No. 11: Credibility of Witnesses .................................................. 21 16 Joint Proposed Jury Instruction No. 12: Conduct of the Jury ......................................................... 23 17 Joint Proposed Jury Instruction No. 13: Publicity During Trial ..................................................... 25 18 Joint Proposed Jury Instruction No. 14: No Transcript Available to Jury ..................................... 26 19 Joint Proposed Jury Instruction No. 15: Taking Notes ................................................................... 27 20 Joint Proposed Jury Instruction No. 16: Questions To Witnesses By Jurors During Trial ............ 28 21 Joint Proposed Jury Instruction No. 17: Bench Conferences and Recesses................................... 29 22 Joint Proposed Jury Instruction No. 18: Outline of Trial ................................................................ 30 23 Joint Proposed Jury Instruction No. 19: Stipulations of Fact .......................................................... 31 24 PART II: INSTRUCTIONS TO BE GIVEN DURING TRIAL ..................................................... 32 25 Joint Proposed Jury Instruction No. 20: Deposition in Lieu of Live Testimony ............................ 33 26 Joint Proposed Jury Instruction No. 21: Use of Expert Opinion ..................................................... 34 27 28 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS CASE NO. 4:15-CV-03504-YGR 76 1 Joint Proposed Jury Instruction No. 22: Charts and Summaries not Received in Evidence ........... 35 2 Joint Proposed Jury Instruction No. 23: Charts and Summaries Received in Evidence ................. 36 3 PART III: INSTRUCTIONS TO BE GIVEN AFTER TRIAL AND 4 BEFORE DELIBERATIONS ....................................................................................................... 37 5 Joint Proposed Jury Instruction No. 24: Court Reads and Provides Written Instructions 6 at End of Case ................................................................................................................................. 38 7 Joint Proposed Jury Instruction No. 25: Duty to Deliberate ........................................................... 39 8 Joint Proposed Jury Instruction No. 26: Conduct of the Jury ......................................................... 40 9 Joint Proposed Jury Instruction No. 27: Communication with Court ............................................. 42 10 Joint Proposed Jury Instruction No. 28: Corporations – 11 Fair Treatment ................................................................................................................................. 43 12 Joint Proposed Jury Instruction No. 29: Liability of Corporations – Scope of Authority not in 13 Issue ................................................................................................................................................. 44 14 Defendant's Proposed Jury Instruction No. 30: Overview of Claims and Defenses Instruction .... 45 15 [Plaintiffs' Proposed Instruction No. 31: Third-Party Beneficiary Status] ..................................... 48 16 Defendant's Proposed Instruction No. 31: Third-Party Beneficiary Status ................................... 52 17 [Plaintiffs' Proposed Jury Instruction No. 32: Breaches Of CVS-PBM Contracts] ....................... 73 18 Defendant's Proposed Jury Instruction No. 32: Breaches Of CVS-PBM Contracts....................... 77 19 Plaintiffs' Proposed Jury Instruction No. 33: Elements Of Plaintiffs' 20 Consumer Protection Claims ......................................................................................................... 86 21 Defendant's Proposed Jury Instruction No. 33: Elements Of Plaintiffs' 22 Consumer Protection Claims ......................................................................................................... 95 23 Plaintiffs' Proposed Jury Instruction No. 34: Statute of Limitations ............................................ 128 24 Defendant's Proposed Jury Instruction No. 34: Statute of Limitations ........................................ 133 25 Plaintiffs' Proposed Jury Instruction No. 35: Damages ................................................................ 142 26 Defendant's Proposed Jury Instruction No. 35: Damages ............................................................ 144 27 Plaintiffs' Proposed Instruction No. 36: Punitive Damages ......................................................... 149 28 3 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 Defendant's Proposed Instruction No. 36: Punitive Damages ...................................................... 152 2 Joint Proposed Jury Instruction No. 37: Return of Verdict ........................................................... 170 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 4 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 INDEX OF PROPOSED JURY INSTRUCTIONS 2 The following chart lists the parties' proposed jury instructions and their status as either 3 (A)greed or (D)isagreed: 4 Instruction Agreed? Competing Instruction Preferred 5 No. 1 A 6 No. 2 A 7 No. 3 A 8 No. 4 D 9 No. 5 D 10 No. 6 A 11 No. 7 A 12 No. 8 A 13 No. 9 A 14 No. 10 A 15 No. 11 A 16 No. 12 A 17 No. 13 A 18 No. 14 A 19 No. 15 A 20 No. 16 A 21 No. 17 A 22 No. 18 A 23 No. 19 A 24 No. 20 A 25 No. 21 A 26 No. 22 A 27 28 1 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 No. 23 A 2 No. 24 A 3 No. 25 A 4 No. 26 A 5 No. 27 A 6 No. 28 A 7 No. 29 A 8 No. 30 D 9 No. 31 D 10 No. 32 D 11 No. 33 D 12 No. 34 D 13 No. 35 D 14 No. 36 D 15 No. 37 A 16 17 18 19 20 21 22 23 24 25 26 27 28 2 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 JOINT PROPOSED JURY INSTRUCTION NO. 1: CIVIL COVER SHEET 2 UNITED STATES DISTRICT COURT 3 NORTHERN DISTRICT OF CALIFORNIA 4 OAKLAND DIVISION 5 Christopher Corcoran, et al., on behalf of Case No. 4:15-cv-03504-YGR-JSC 6 themselves and others similarly situated, Plaintiffs, JURY INSTRUCTIONS 7 v. 8 Date: April 20, 2020 9 CVS Pharmacy, Inc., Time: 1:00 pm Defendant. Courtroom: 1, 4th Floor 10 Judge: Hon. Yvonne Gonzalez Rogers 11 12 13 Dated: ____________ ______________________________ YVONNE GONZALEZ ROGERS 14 UNITED STATES DISTRICT COURT JUDGE 15 16 AUTHORITY 17 Ninth Circuit Model Civil Jury Instruction No. 1.1. 18 19 20 21 22 23 24 25 26 27 Date Submitted: May 5, 2020 28 3 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 PART I: INSTRUCTIONS TO BE GIVEN BEFORE TRIAL 2 The following Proposed Joint Instructions would be given to the jury after it is seated and 3 before the parties present their Opening Statements. 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 4 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 JOINT PROPOSED JURY INSTRUCTION NO. 2: DUTY OF JURY 2 Members of the jury: You are now the jury in this case. It is my duty to instruct you on the 3 law. 4 It is your duty to find the facts from all the evidence in the case. To those facts you will 5 apply the law as I give it to you. You must follow the law as I give it to you whether you agree with 6 it or not. And you must not be influenced by any personal likes or dislikes, opinions, prejudices or 7 sympathy. That means that you must decide the case solely on the evidence before you. You will 8 recall that you took an oath to do so. 9 At the end of the trial I will give you final instructions. It is the final instructions that will 10 govern your duties. 11 Please do not read into these instructions, or anything I may say or do, that I have an opinion 12 regarding the evidence or what your verdict should be. 13 14 15 AUTHORITY 16 Ninth Circuit Model Civil Jury Instruction No. 1.3. 17 18 19 20 21 22 23 24 25 26 27 Date Submitted: May 5, 2020 28 5 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 JOINT PROPOSED JURY INSTRUCTION NO. 3: CLAIMS AND DEFENSES 2 To help you follow the evidence, I will give you a brief agreed statement by the parties: 3 This lawsuit involves the price for generic drugs at CVS pharmacies from November 2008– 4 July 2015. The Plaintiffs and the groups of individuals they represent are insured consumers who 5 shopped at CVS pharmacies in six states (Arizona, California, Florida, Illinois, Massachusetts, and 6 New York) whose prescriptions were processed by certain pharmacy benefit managers or 7 "PBMs." CVS Pharmacy, Inc. is the defendant. Plaintiffs claim that CVS committed unfair and 8 deceptive practices in violation of the consumer protection statutes in the six states in connection 9 with its former Health Savings Pass ("HSP") program. Plaintiffs claim that CVS violated its 10 contracts with PBMs, committed unfair and deceptive acts, and caused Plaintiffs and class 11 members to pay higher copayments when using their insurance by failing to report the HSP program 12 price as the pharmacy's "usual and customary" or "U&C" price. CVS denies that the HSP price was 13 the pharmacy's U&C price; that it was required to report the HSP price under the PBM contracts; 14 or that it engaged in any unfair or deceptive conduct by not reporting the HSP price as the U&C 15 price. CVS also claims Plaintiffs' claims were untimely under the governing statutes of 16 limitations. Plaintiffs dispute this and maintain that their claims were timely filed. 17 18 AUTHORITY 19 Ninth Circuit Model Civil Jury Instruction No. 1.5 [Modified]. 20 21 22 23 24 25 26 Date Submitted: May 5, 2020 27 28 6 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 PLAINTIFFS' PROPOSED JURY INSTRUCTION NO. 4: INTRODUCTION TO A 1 CLASS ACTION 2 A party who brings a lawsuit is called a plaintiff. A party who is sued in a lawsuit is called 3 a defendant. Here, the defendant is CVS Pharmacy, Inc., which I will call "CVS" throughout. In 4 this case, the plaintiffs have brought a class action. A class action is used where it is deemed that 5 one lawsuit is the best device to resolve the same claims of many similarly situated individuals 6 against one or more defendants. 7 Because the class is represented in court and is by definition so numerous that having them 8 all in court would be impracticable, there is no expectation that all the class members would be 9 present during a trial. Because of the number of claims that are at issue in this case, not every 10 member of the classes will testify. You may assume that the evidence presented at this trial applies 11 to all members of the particular class to which the evidence relates, except as I specifically tell you 12 otherwise. 13 When I refer to "Plaintiffs," the court is referring to all class members, including the 14 individual plaintiffs who are named in the lawsuit and are present in the courtroom. Those 15 individuals sometimes may be referred to as the "Named Plaintiffs" or the "Class Representatives." 16 Each class is state-specific, meaning there is one class in each of the following states: 17 Arizona, California, Florida, Illinois, Massachusetts, New York. Each class is represented by at 18 least one Named Plaintiff: 19 Named Plaintiff Darlene McAfee brings this action on behalf of the 20 members of the Arizona Class; 21 Named Plaintiff Tyler Clark brings this action on behalf of the members of the California Class; 22 Named Plaintiffs Debbie Barrett and Robert Jenks bring this action 23 on behalf of the members of the Florida Class; 24 Named Plaintiffs Robert Jenks and Carl Washington bring this 25 action on behalf of the members of the Illinois Class; 26 Named Plaintiff Robert Garber brings this action on behalf of the members of the Massachusetts Class; and 27 28 7 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 Named Plaintiff Stephen Sullivan brings this action on behalf of the 1 members of the New York Class. 2 The class members in this case are individuals in Arizona, California, Florida, Illinois, 3 Massachusetts and New York who: (1) purchased one or more generic prescription drugs from CVS 4 between November 9, 2008 and July 31, 2015 that were offered through CVS's Health Savings Pass 5 program at the time of the purchase; (2) were insured for the purchase(s) through a third-party payor 6 plan administered by one of the following pharmacy benefit managers, also known as "PBMs": 7 Caremark/PCS, Express Scripts, Medco, MedImpact, or Optum/Prescription Solutions (prior to 8 January 29, 2015); and (3) paid CVS an out-of-pocket payment for the purchase that was greater 9 than the Health Savings Pass price for the prescription. 10 The fact that this case is proceeding as a class action does not reflect in any way that a 11 judgment has been made one way or the other about the merits of the Plaintiffs' claims. That this 12 is a class action should not affect your view one way or the other of the evidence that has been 13 presented, and it should not influence your deliberations in any way. You shall not infer anything 14 about the merits of this case based upon the fact that it has proceeded as a class action. 15 16 AUTHORITY 17 Model Instructions No. 1.5; Order Certifying Classes, ECF No. 407, at 16 (Amending class 18 certification to include New York and Arizona). 19 20 21 22 23 24 25 26 Date Submitted: May 5, 2020 27 28 8 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 CVS'S PROPOSED JURY INSTRUCTION NO. 4: INTRODUCTION TO A CLASS 1 ACTION 2 I will now give you specific instructions on the claims to be decided: This case involves a 3 "class action" lawsuit. A class action is a lawsuit that has been brought by one or more plaintiffs, 4 who are generally referred to as "Named Plaintiffs" or "Class Representatives," on behalf of a larger 5 group of people who have similar legal claims and who are generally referred to as a "class." In a 6 class action, common issues presented by the claims of many individuals in the class can be resolved 7 at the same time. 8 In this lawsuit, there are six classes of people who: (1) between November 2008 and July 9 31, 2015, purchased one or more generic prescription drugs that were offered through CVS's Health 10 Savings Pass program, or "HSP" for short, at the time of the purchase; (2) were insured for the 11 purchase(s) through a third-party payor plan administered by one of the following pharmacy benefit 12 managers, also known as "PBMs": Caremark, Express Scripts, Medco, MedImpact, or Optum (prior 13 to January 29, 2015); and (3) paid CVS an out-of-pocket payment for the purchase greater than the 14 HSP price for the prescription. Each class is state-specific, meaning there is one class in each of the 15 following states: Arizona, California, Florida, Illinois, Massachusetts, New York. Each class is 16 represented by at least one Named Plaintiff: 17 Named Plaintiff Darlene McAfee brings this action on behalf of the 18 members of the Arizona Class; 19 Named Plaintiff Tyler Clark brings this action on behalf of the members of the California Class; 20 Named Plaintiffs Debbie Barrett and Robert Jenks bring this action 21 on behalf of the members of the Florida Class; 22 Named Plaintiffs Robert Jenks and Carl Washington bring this 23 action on behalf of the members of the Illinois Class; 24 Named Plaintiff Robert Garber brings this action on behalf of the members of the Massachusetts Class; and 25 Named Plaintiff Stephen Sullivan brings this action on behalf of the 26 members of the New York Class. 27 28 9 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 In these instructions, I will refer to the Named Plaintiffs and the Classes all together as 2 "Plaintiffs" or "members of the Classes," unless it is necessary to identify specific Named Plaintiffs 3 or Classes. Where necessary to distinguish between the Plaintiffs in different states, I will do so by 4 identifying the "Arizona Plaintiffs" or "members of the Arizona Class," for example, which will 5 refer to the Arizona Named Plaintiff and the Arizona Class. I will refer to the five pharmacy benefit 6 managers above all together as the "PBMs" unless it is necessary to distinguish between them for a 7 specific instruction, in which case I will refer to the specific PBM or PBMs by name. 8 Because of the number of claims that are at issue in this case, not every member of the classes 9 will testify. You may assume that the evidence presented at this trial applies to all members of the 10 particular class to which the evidence relates, except as I specifically tell you otherwise. For 11 questions that are common to the class, which I will identify for you, all members of a particular 12 class will be bound by the result of this trial as those issues relate to that particular class. For 13 questions that are specific to a Named Plaintiff, only the Named Plaintiff will be bound by the result 14 of this trial. 15 The fact that this case is proceeding as a class action does not reflect in any way that a 16 judgment has been made one way or the other about the merits of the Plaintiffs' claims. That this 17 is a class action should not affect your view one way or the other of the evidence that has been 18 presented, and it should not influence your deliberations in any way. You shall not infer anything 19 about the merits of this case based upon the fact that it has proceeded as a class action. 20 AUTHORITY: 21 Ninth Circuit Model Civil Jury Instruction No. 1.5 [Modified]; see also Jury Instructions in 22 Perez v. Rash Curtis, 4:16-cv-03396-YGR (N.D. Cal. May 17, 2019) (explaining class action) [Dkt. 23 No. 357 at 22]; Jury Instructions in Farar, et al. v. Bayer, No. 3:14-cv-04601-WHO, at 4 (N.D. Cal. 24 Feb. 21, 2019) [Dkt. No. 313] (no inference from class action). 25 26 Date Submitted: May 5, 2020 27 28 10 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 PARTIES' STATEMENT REGARDING DISPUTED JURY INSTRUCTION NO. 4 2 Plaintiffs: While Plaintiffs' and CVS's instructions are very similar, Plaintiffs object to CVS's 3 version because it asserts that there are individualized, named Plaintiff-specific issues that need to 4 be addressed and resolved separate from the classes as a whole. As explained in Plaintiffs' Response 5 to CVS's Proposal re Adjudication of Individualized Issues, CVS's position is incorrect and contrary 6 to this Court's and the Ninth Circuit's rulings in this case. 7 Regarding terminology, Plaintiffs' instructions refer to the named class representatives and 8 absent class members collectively as "Plaintiffs", which is appropriate given that this is a certified 9 class action. CVS's instructions throughout raise artificial distinctions between the Named 10 Plaintiffs and class members. 11 12 CVS: The parties offer largely identical instructions on class action litigation. But CVS proposes 13 language in the instruction to the effect that some issues must be determined on an individual basis, 14 and not on a class-wide basis: "For questions that are common to the class, which I will identify for 15 you, all members of a particular class will be bound by the result of this trial as those issues relate 16 to that particular class. For questions that are specific to a Named Plaintiff, only the Named Plaintiff 17 will be bound by the result of this trial." Plaintiffs object to that language; they argue that all issues 18 should be decided class-wide, notwithstanding CVS's rights under the Constitution and law for a 19 full and fair determination of all triable issues as to each class member. 20 As CVS explains more fully in its Proposal for Adjudication of Individualized Issues 21 (submitted with these proposed instructions), defendants like CVS have constitutional Due Process 22 and Seventh Amendment rights to fully litigate the elements and the defenses with respect to each 23 class member's claims. See, e.g., In re Asacol Antitrust Litig., 907 F.3d 42, 55 (1st Cir. 2018) 24 (Where "determining whether any given individual was injured (and therefore has a claim) turns on 25 an assessment of the individual facts concerning that person…, the defendant must be offered the 26 opportunity to challenge each class member's proof that the defendant is liable to that class 27 member." (citing Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 366–67 (2011))). The brief lays 28 11 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 out examples of issues relevant to the prima facie elements of Plaintiffs' claims and affirmative 2 defenses that are class member-specific and cannot be adjudicated on a class-wide basis. Examples 3 include (1) whether the class member's awareness of the HSP program and/or how their copayments 4 were calculated negates materiality, reliance, or proximate causation, (2) whether any out-of-pocket 5 maximums, copayments, or reimbursement of copays by the insurance company forecloses the class 6 member's claim of injury; and (3) when the statute of limitations began to run for class members 7 whose limitations period is tethered to when the individual "knew or should have known" of her 8 injury. 9 Further, CVS's proposed instruction uses the same terminology—"Named Plaintiffs" and 10 "Class Representatives" (capitalized)—that is used throughout CVS's proposed instructions on the 11 core issues (e.g., third-party beneficiary, breach of contract, the consumer protection statutes, etc.). 12 Plaintiffs' instructions use different terminology. Thus, if the Court is inclined to accept CVS's 13 instructions on the core issues, it should use the terminology in CVS's Proposed Instruction No. 4. 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 12 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 PLAINTIFFS' PROPOSED JURY INSTRUCTION NO. 5: BURDEN OF PROOF 2 When a party has the burden of proving any claim or affirmative defense by a preponderance 3 of the evidence, it means you must be persuaded by the evidence that the claim or affirmative 4 defense is more probably true than not true. 5 You should base your decision on all of the evidence, regardless of which party presented it. 6 7 AUTHORITY 8 Ninth Circuit Model Civil Jury Instruction No. 1.6. 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 Date Submitted: May 5, 2020 28 13 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 CVS'S PROPOSED JURY INSTRUCTION NO. 5: BURDEN OF PROOF 2 When a party has the burden of proving any claim or affirmative defense by a preponderance 3 of the evidence, it means you must be persuaded by the evidence that the claim or affirmative 4 defense is more probably true than not true. 5 When a party has the burden of proving any claim or defense by clear and convincing 6 evidence, it means that the party must present evidence that leaves you with a firm belief or 7 conviction that is highly probable that the factual contentions of the claim or defense are true. This 8 is a higher standard of proof than proof by a preponderance of the evidence, but it does not require 9 proof beyond a reasonable doubt. 10 You should base your decision on all of the evidence, regardless of which party presented it. 11 12 AUTHORITY 13 Ninth Circuit Model Civil Jury Instruction Nos. 1.6 (Burden of Proof-Preponderance of the 14 Evidence) [Modified] and 1.7 (Burden of Proof-Clear and Convincing Evidence) [Modified]. 15 16 17 18 19 20 21 22 23 24 25 Date Submitted: May 5, 2020 26 27 28 14 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 PARTIES' STATEMENT REGARDING DISPUTED JURY INSTRUCTION NO. 5 2 Plaintiffs: Plaintiffs disagree with CVS's inclusion of the "clear and convincing" standard in this 3 Proposed Instruction at the outset as it will confuse the jury. Preponderance of the evidence is the 4 standard that applies to the elements of Plaintiffs' claims and CVS's affirmative statute of 5 limitations defense. The clear and convincing standard only applies to certain states' punitive 6 damages law, and therefore Plaintiffs appropriately include it with their instruction on that topic. 7 8 CVS: Plaintiffs' requested instructions regarding punitive and multiple damages (Plaintiffs' 9 Proposed Instruction No. 36) should not be given because the instructions are not supported by the 10 evidence. But, if those instructions are given at trial, the jury should be instructed on the meaning 11 of "clear and convincing evidence" because some of the states' laws require clear and convincing 12 evidence to justify such damages. CVS's Proposed Instruction No. 5 therefore instructs on "clear 13 and convincing evidence" in addition to "by a preponderance of evidence." Plaintiffs' proposed 14 instruction does not address the former. 15 16 17 18 19 20 21 22 23 24 25 26 27 28 15 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 JOINT PROPOSED JURY INSTRUCTION NO. 6: WHAT IS EVIDENCE 2 The evidence you are to consider in deciding what the facts are consists of: 3 1. the sworn testimony of any witness; 4 2. the exhibits that are admitted into evidence; 5 3. any facts to which the lawyers have agreed; and 6 4. any facts that I may instruct you to accept as proved. 7 8 AUTHORITY 9 Ninth Circuit Model Civil Jury Instruction No. 1.9. 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 Date Submitted: May 5, 2020 28 16 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 JOINT PROPOSED JURY INSTRUCTION NO. 7: WHAT IS NOT EVIDENCE 2 In reaching your verdict, you may consider only the testimony and exhibits received into 3 evidence. Certain things are not evidence, and you may not consider them in deciding what the facts 4 are. I will list them for you: 5 (1) Arguments and statements by lawyers are not evidence. The lawyers are not witnesses. What 6 they may say in their opening statements, closing arguments and at other times is intended 7 to help you interpret the evidence, but it is not evidence. If the facts as you remember them 8 differ from the way the lawyers have stated them, your memory of them controls. 9 (2) Questions and objections by lawyers are not evidence. Attorneys have a duty to their clients 10 to object when they believe a question is improper under the rules of evidence. You should 11 not be influenced by the objection or by the court's ruling on it. 12 (3) Testimony that is excluded or stricken, or that you are instructed to disregard, is not evidence 13 and must not be considered. In addition, some evidence may be received only for a limited 14 purpose; when I instruct you to consider certain evidence only for a limited purpose, you 15 must do so and you may not consider that evidence for any other purpose. 16 (4) Anything you may see or hear when the court was not in session is not evidence. You are to 17 decide the case solely on the evidence received at the trial. 18 19 AUTHORITY 20 Ninth Circuit Model Civil Jury Instruction No. 1.10. 21 22 23 24 25 26 Date Submitted: May 5, 2020 27 28 17 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 JOINT PROPOSED JURY INSTRUCTION NO. 8: EVIDENCE FOR A LIMITED 1 PURPOSE 2 Some evidence may be admitted only for a limited purpose. 3 When I instruct you that an item of evidence has been admitted only for a limited purpose, 4 you must consider it only for that limited purpose and not for any other purpose. 5 6 AUTHORITY 7 Ninth Circuit Model Civil Jury Instruction No. 1.11. 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Date Submitted: May 5, 2020 27 28 18 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 JOINT PROPOSED JURY INSTRUCTION NO. 9: DIRECT AND CIRCUMSTANTIAL 1 EVIDENCE 2 Evidence may be direct or circumstantial. Direct evidence is direct proof of a fact, such as 3 testimony by a witness about what that witness personally saw or heard or did. Circumstantial 4 evidence is proof of one or more facts from which you could find another fact. You should consider 5 both kinds of evidence. The law makes no distinction between the weight to be given to either direct 6 or circumstantial evidence. It is for you to decide how much weight to give to any evidence. 7 By way of example, if you wake up in the morning and see that the sidewalk is wet, you may 8 find from that fact that it rained during the night. However, other evidence, such as a turned on 9 garden hose, may provide a different explanation for the presence of water on the sidewalk. 10 Therefore, before you decide that a fact has been proved by circumstantial evidence, you must 11 consider all the evidence in the light of reason, experience and common sense. 12 13 AUTHORITY 14 Ninth Circuit Model Civil Jury Instruction No. 1.12. 15 16 17 18 19 20 21 22 23 24 25 26 Date Submitted: May 5, 2020 27 28 19 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 JOINT PROPOSED JURY INSTRUCTION NO. 10: RULING ON OBJECTIONS 2 There are rules of evidence that control what can be received into evidence. When a lawyer 3 asks a question or offers an exhibit into evidence and a lawyer on the other side thinks that it is not 4 permitted by the rules of evidence, that lawyer may object. If I overrule the objection, the question 5 may be answered or the exhibit received. If I sustain the objection, the question cannot be answered, 6 and the exhibit cannot be received. Whenever I sustain an objection to a question, you must ignore 7 the question and must not guess what the answer might have been. 8 Sometimes I may order that evidence be stricken from the record and that you disregard or 9 ignore that evidence. That means when you are deciding the case, you must not consider the stricken 10 evidence for any purpose. 11 12 AUTHORITY 13 Ninth Circuit Model Civil Jury Instruction No. 1.13. 14 15 16 17 18 19 20 21 22 23 24 25 26 27 Date Submitted: May 5, 2020 28 20 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 JOINT PROPOSED JURY INSTRUCTION NO. 11: CREDIBILITY OF WITNESSES 2 In deciding the facts in this case, you may have to decide which testimony to believe and 3 which testimony not to believe. You may believe everything a witness says, or part of it, or none of 4 it. 5 In considering the testimony of any witness, you may take into account: 6 (1) the opportunity and ability of the witness to see or hear or know the things testified 7 to; 8 (2) the witness's memory; 9 (3) the witness's manner while testifying; 10 (4) the witness's interest in the outcome of the case, if any; 11 (5) the witness's bias or prejudice, if any; 12 (6) whether other evidence contradicted the witness's testimony; 13 (7) the reasonableness of the witness's testimony in light of all the evidence; and 14 (8) any other factors that bear on believability. 15 Sometimes a witness may say something that is not consistent with something else he or she 16 said. Sometimes different witnesses will give different versions of what happened. People often 17 forget things or make mistakes in what they remember. Also, two people may see the same event 18 but remember it differently. You may consider these differences, but do not decide that testimony 19 is untrue just because it differs from other testimony. 20 However, if you decide that a witness has deliberately testified untruthfully about something 21 important, you may choose not to believe anything that witness said. On the other hand, if you think 22 the witness testified untruthfully about some things but told the truth about others, you may accept 23 the part you think is true and ignore the rest. 24 The weight of the evidence as to a fact does not necessarily depend on the number of 25 witnesses who testify. What is important is how believable the witnesses were, and how much 26 weight you think their testimony deserves. 27 28 21 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 AUTHORITY 2 Ninth Circuit Model Civil Jury Instruction No. 1.14. 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 Date Submitted: May 5, 2020 28 22 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 JOINT PROPOSED JURY INSTRUCTION NO. 12: CONDUCT OF THE JURY 2 I will now say a few words about your conduct as jurors. 3 First, keep an open mind throughout the trial, and do not decide what the verdict should be 4 until you and your fellow jurors have completed your deliberations at the end of the case. 5 Second, because you must decide this case based only on the evidence received in the case 6 and on my instructions as to the law that applies, you must not be exposed to any other information 7 about the case or to the issues it involves during the course of your jury duty. Thus, until the end of 8 the case or unless I tell you otherwise: 9 Do not communicate with anyone in any way and do not let anyone else communicate with 10 you in any way about the merits of the case or anything to do with it. This includes discussing the 11 case in person, in writing, by phone or electronic means, via email, text messaging, or any internet 12 chat room, blog, website or application, including but not limited to Facebook, YouTube, Twitter, 13 Instagram, LinkedIn, Snapchat, or any other forms of social media. This applies to communicating 14 with your fellow jurors until I give you the case for deliberation, and it applies to communicating 15 with everyone else including your family members, your employer, the media or press, and the 16 people involved in the trial, although you may notify your family and your employer that you have 17 been seated as a juror in the case, and how long you expect the trial to last. But, if you are asked or 18 approached in any way about your jury service or anything about this case, you must respond that 19 you have been ordered not to discuss the matter and report the contact to the court. 20 Because you will receive all the evidence and legal instruction you properly may consider 21 to return a verdict: do not read, watch or listen to any news or media accounts or commentary about 22 the case or anything to do with it; do not do any research, such as consulting dictionaries, searching 23 the Internet, or using other reference materials; and do not make any investigation or in any other 24 way try to learn about the case on your own. Do not visit or view any place discussed in this case, 25 and do not use Internet programs or other devices to search for or view any place discussed during 26 the trial. Also, do not do any research about this case, the law, or the people involved—including 27 the parties, the witnesses or the lawyers—until you have been excused as jurors. If you happen to 28 23 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 read or hear anything touching on this case in the media, turn away and report it to me as soon as 2 possible. 3 These rules protect each party's right to have this case decided only on evidence that has 4 been presented here in court. Witnesses here in court take an oath to tell the truth, and the accuracy 5 of their testimony is tested through the trial process. If you do any research or investigation outside 6 the courtroom, or gain any information through improper communications, then your verdict may 7 be influenced by inaccurate, incomplete or misleading information that has not been tested by the 8 trial process. Each of the parties is entitled to a fair trial by an impartial jury, and if you decide the 9 case based on information not presented in court, you will have denied the parties a fair trial. 10 Remember, you have taken an oath to follow the rules, and it is very important that you follow these 11 rules. 12 A juror who violates these restrictions jeopardizes the fairness of these proceedings, and a 13 mistrial could result that would require the entire trial process to start over. If any juror is exposed 14 to any outside information, please notify the court immediately. 15 16 AUTHORITY 17 Ninth Circuit Model Civil Jury Instruction No. 1.15. 18 19 20 21 22 23 24 25 26 27 Date Submitted: May 5, 2020 28 24 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 JOINT PROPOSED JURY INSTRUCTION NO. 13: PUBLICITY DURING TRIAL 2 If there is any news media account or commentary about the case or anything to do with it, 3 you must ignore it. You must not read, watch or listen to any news media account or commentary 4 about the case or anything to do with it. The case must be decided by you solely and exclusively on 5 the evidence that will be received in the case and on my instructions as to the law that applies. If 6 any juror is exposed to any outside information, please notify me immediately. 7 8 AUTHORITY 9 Ninth Circuit Model Civil Jury Instruction No. 1.16. 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 Date Submitted: May 5, 2020 28 25 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 JOINT PROPOSED JURY INSTRUCTION NO. 14: NO TRANSCRIPT AVAILABLE TO 1 JURY 2 I urge you to pay close attention to the trial testimony as it is given. During deliberations 3 you will not have a transcript of the trial testimony. 4 5 AUTHORITY 6 Ninth Circuit Model Civil Jury Instruction No. 1.17. 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Date Submitted: May 5, 2020 27 28 26 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 JOINT PROPOSED JURY INSTRUCTION NO. 15: TAKING NOTES 2 If you wish, you may take notes to help you remember the evidence. If you do take notes, 3 please keep them to yourself until you go to the jury room to decide the case. Do not let notetaking 4 distract you. When you leave, your notes should be left in the jury room. No one will read your 5 notes. 6 Whether or not you take notes, you should rely on your own memory of the evidence. Notes 7 are only to assist your memory. You should not be overly influenced by your notes or those of other 8 jurors. 9 10 AUTHORITY 11 Ninth Circuit Model Civil Jury Instruction No. 1.18. 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 Date Submitted: May 5, 2020 28 27 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 JOINT PROPOSED JURY INSTRUCTION NO. 16: QUESTIONS TO WITNESSES BY 1 JURORS DURING TRIAL 2 When attorneys have finished their examination of a witness, you may ask questions of the 3 witness. In the front pocket of your notebooks, there is a blank form. I allow jurors to propose 4 questions to witnesses after the lawyers have completed their examination. The purpose is to allow 5 you to clarify the testimony. You are not to express any opinion about the testimony. You are not 6 to argue with the witness. If you propose a question, remember that your role is to be the neutral 7 fact finder, not an advocate for one side or the other. Before I excuse a witness, I will offer the 8 opportunity for you to submit your questions (if any). We will collect the questions, and I will 9 review them with the lawyers to ensure the question is appropriate and proper under the rules of 10 evidence. There are some proposed questions that I do not permit. And there are some proposed 11 questions where I may change the wording slightly to make the question appropriate. Do not give 12 undue weight to answers to questions that you or another juror may propose. Evaluate these 13 questions and answers in the same manner as you evaluate all other evidence in this case. By giving 14 you the opportunity to ask questions, I am not requesting or even suggesting that you do so. I am 15 just giving you the opportunity. If the rules of evidence do not permit a particular question, I will 16 advise you. After your questions, if any, the attorneys may ask additional questions. 17 18 AUTHORITY 19 Model Instructions No. 1.19; see also Jury Instructions in Perez v. Rash Curtis, 4:16-cv- 20 03396-YGR (N.D. Cal. May 17, 2019). 21 22 23 24 25 26 Date Submitted: May 5, 2020 27 28 28 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 JOINT PROPOSED JURY INSTRUCTION NO. 17: BENCH CONFERENCES AND 1 RECESSES 2 From time to time during the trial, it may become necessary for me to talk with the attorneys 3 out of the hearing of the jury, either by having a conference at the bench when the jury is present in 4 the courtroom, or by calling a recess. Please understand that while you are waiting, we are working. 5 The purpose of these conferences is not to keep relevant information from you, but to decide how 6 certain evidence is to be treated under the rules of evidence and to avoid confusion and error. 7 Of course, we will do what we can to keep the number and length of these conferences to a 8 minimum. I may not always grant an attorney's request for a conference. Do not consider my 9 granting or denying a request for a conference as any indication of my opinion of the case or of what 10 your verdict should be. 11 12 AUTHORITY 13 Ninth Circuit Model Civil Jury Instruction No. 1.20. 14 15 16 17 18 19 20 21 22 23 24 25 26 Date Submitted: May 5, 2020 27 28 29 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 JOINT PROPOSED JURY INSTRUCTION NO. 18: OUTLINE OF TRIAL 2 Trials proceed in the following way: First, each side may make an opening statement. An 3 opening statement is not evidence. It is simply an outline to help you understand what that party 4 expects the evidence will show. A party is not required to make an opening statement. 5 Plaintiffs will then present evidence, and counsel for the defendant may cross examine. Then 6 the defendant may present evidence, and counsel for the plaintiffs may cross examine. 7 After the evidence has been presented, I will instruct you on the law that applies to the case 8 and the attorneys will make closing arguments. 9 After that, you will go to the jury room to deliberate on your verdict. 10 11 AUTHORITY 12 Ninth Circuit Model Civil Jury Instruction No. 1.21. 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 Date Submitted: May 5, 2020 28 30 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 JOINT PROPOSED JURY INSTRUCTION NO. 19: STIPULATIONS OF FACT 2 The parties have agreed to certain facts to be placed in evidence as Exhibit(s) or that will be 3 read to you. You must therefore treat these facts as having been proved. 4 5 AUTHORITY 6 Ninth Circuit Model Civil Jury Instruction No. 2.2. 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 Date Submitted: May 5, 2020 28 31 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 PART II: INSTRUCTIONS TO BE GIVEN DURING TRIAL 2 The following Proposed Joint Instructions would be given to the jury during the course of 3 the trial as the occasion arises (e.g., the instruction on deposition testimony would be provided when 4 deposition testimony by video first is played for the jury). 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 32 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 JOINT PROPOSED JURY INSTRUCTION NO. 20: DEPOSITION IN LIEU OF LIVE 1 TESTIMONY 2 A deposition is the sworn testimony of a witness taken before trial. The witness is placed 3 under oath to tell the truth and lawyers for each party may ask questions. The questions and answers 4 are recorded. When a person is unavailable to testify at trial, the deposition of that person may be 5 used at the trial. 6 The deposition[s] of [name(s) of witness(es)] were taken on [dates]. Insofar as possible, 7 you should consider deposition testimony, presented to you in court in lieu of live testimony, in the 8 same way as if the witness had been present to testify. 9 10 AUTHORITY 11 Ninth Circuit Model Civil Jury Instruction No. 2.4. 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Date Submitted: May 5, 2020 27 28 33 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 JOINT PROPOSED JURY INSTRUCTION NO. 21: USE OF EXPERT OPINION 2 You have heard testimony from several expert witnesses who testified to their opinions and 3 the reasons for their opinions. This opinion testimony is allowed, because of the education or 4 experience of this witness. 5 Such opinion testimony should be judged like any other testimony. You may accept it or 6 reject it, and give it as much weight as you think it deserves, considering the witness's education 7 and experience, the reasons given for the opinion, and all the other evidence in the case. 8 9 AUTHORITY 10 Ninth Circuit Model Civil Jury Instruction No. 2.13. 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 Date Submitted: May 5, 2020 28 34 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 JOINT PROPOSED JURY INSTRUCTION NO. 22: CHARTS AND SUMMARIES NOT 1 RECEIVED IN EVIDENCE 2 Certain charts and summaries not admitted into evidence have been shown to you in order 3 to help explain the contents of books, records, documents, or other evidence in the case. Charts and 4 summaries are only as good as the underlying evidence that supports them. You should, therefore, 5 give them only such weight as you think the underlying evidence deserves. 6 7 AUTHORITY 8 Ninth Circuit Model Civil Jury Instruction No. 2.14. 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Date Submitted: May 5, 2020 27 28 35 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 JOINT PROPOSED JURY INSTRUCTION NO. 23: CHARTS AND SUMMARIES 1 RECEIVED IN EVIDENCE 2 Certain charts and summaries have been admitted into evidence to illustrate information 3 brought out in the trial. Charts and summaries are only as good as the testimony or other admitted 4 evidence that supports them. You should, therefore, give them only such weight as you think the 5 underlying evidence deserves. 6 7 AUTHORITY 8 Ninth Circuit Model Civil Jury Instruction No. 2.15. 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Date Submitted: May 5, 2020 27 28 36 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 PART III: INSTRUCTIONS TO BE GIVEN AFTER TRIAL AND BEFORE 1 DELIBERATIONS 2 The following Proposed Joint Instructions would be given to the jury after the parties have 3 rested and presented their closing arguments, and before the jury begins its deliberations. 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 37 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 JOINT PROPOSED JURY INSTRUCTION NO. 24: COURT READS AND PROVIDES 1 WRITTEN INSTRUCTIONS AT END OF CASE 2 Members of the Jury: Now that you have heard all of the evidence, it is my duty to instruct 3 you on the law that applies to this case. 4 Each of you has received a copy of these instructions that you may take with you to the jury 5 room to consult during your deliberations. 6 It is your duty to find the facts from all the evidence in the case. To those facts you will 7 apply the law as I give it to you. You must follow the law as I give it to you whether you agree with 8 it or not. And you must not be influenced by any personal likes or dislikes, opinions, prejudices, or 9 sympathy. That means that you must decide the case solely on the evidence before you. You will 10 recall that you took an oath to do so. 11 Please do not read into these instructions or anything that I may say or do or have said or 12 done that I have an opinion regarding the evidence or what your verdict should be. 13 14 AUTHORITY 15 Ninth Circuit Model Civil Jury Instruction No. 1.4. 16 17 18 19 20 21 22 23 24 25 26 Date Submitted: May 5, 2020 27 28 38 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 JOINT PROPOSED JURY INSTRUCTION NO. 25: DUTY TO DELIBERATE 2 Before you begin your deliberations, elect one member of the jury as your presiding juror. 3 The presiding juror will preside over the deliberations and serve as the spokesperson for the jury in 4 court. 5 You shall diligently strive to reach agreement with all of the other jurors if you can do so. 6 Your verdict must be unanimous. 7 Each of you must decide the case for yourself, but you should do so only after you have 8 considered all of the evidence, discussed it fully with the other jurors, and listened to their views. 9 It is important that you attempt to reach a unanimous verdict but, of course, only if each of 10 you can do so after having made your own conscientious decision. Do not be unwilling to change 11 your opinion if the discussion persuades you that you should. But do not come to a decision simply 12 because other jurors think it is right, or change an honest belief about the weight and effect of the 13 evidence simply to reach a verdict. 14 15 AUTHORITY 16 Ninth Circuit Model Civil Jury Instruction No. 3.1. 17 18 19 20 21 22 23 24 25 26 27 Date Submitted: May 5, 2020 28 39 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 JOINT PROPOSED JURY INSTRUCTION NO. 26: CONDUCT OF THE JURY 2 Because you must base your verdict only on the evidence received in the case and on these 3 instructions, I remind you that you must not be exposed to any other information about the case or 4 to the issues it involves. Except for discussing the case with your fellow jurors during your 5 deliberations: 6 Do not communicate with anyone in any way and do not let anyone else communicate with 7 you in any way about the merits of the case or anything to do with it. This includes discussing the 8 case in person, in writing, by phone or electronic means, via email, via text messaging, or any 9 internet chat room, blog, website or application, including but not limited to Facebook, YouTube, 10 Twitter, Instagram, LinkedIn, Snapchat, or any other forms of social media. This applies to 11 communicating with your family members, your employer, the media or press, and the people 12 involved in the trial. If you are asked or approached in any way about your jury service or anything 13 about this case, you must respond that you have been ordered not to discuss the matter and to report 14 the contact to the court. 15 Do not read, watch, or listen to any news or media accounts or commentary about the case 16 or anything to do with it; do not do any research, such as consulting dictionaries, searching the 17 Internet, or using other reference materials; and do not make any investigation or in any other way 18 try to learn about the case on your own. Do not visit or view any place discussed in this case, and 19 do not use Internet programs or other devices to search for or view any place discussed during the 20 trial. Also, do not do any research about this case, the law, or the people involved—including the 21 parties, the witnesses or the lawyers—until you have been excused as jurors. If you happen to read 22 or hear anything touching on this case in the media, turn away and report it to me as soon as possible. 23 These rules protect each party's right to have this case decided only on evidence 24 that has been presented here in court. Witnesses here in court take an oath to tell the truth, and the 25 accuracy of their testimony is tested through the trial process. If you do any research or investigation 26 outside the courtroom, or gain any information through improper communications, then your verdict 27 may be influenced by inaccurate, incomplete or misleading information that has not been tested by 28 40 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 the trial process. Each of the parties is entitled to a fair trial by an impartial jury, and if you decide 2 the case based on information not presented in court, you will have denied the parties a fair trial. 3 Remember, you have taken an oath to follow the rules, and it is very 4 important that you follow these rules. 5 A juror who violates these restrictions jeopardizes the fairness of these proceedings, and a 6 mistrial could result that would require the entire trial process to start over. If any juror is exposed 7 to any outside information, please notify the court immediately. 8 9 AUTHORITY 10 Ninth Circuit Model Civil Jury Instruction No. 3.2. 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 Date Submitted: May 5, 2020 28 41 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 JOINT PROPOSED JURY INSTRUCTION NO. 27: COMMUNICATION WITH COURT 2 If it becomes necessary during your deliberations to communicate with me, you may send a 3 note through the clerk, signed by any one or more of you. No member of the jury should ever 4 attempt to communicate with me except by a signed writing. I will not communicate with any 5 member of the jury on anything concerning the case except in writing or here in open court. If you 6 send out a question, I will consult with the lawyers before answering it, which may take some time. 7 You may continue your deliberations while waiting for the answer to any question. Remember that 8 you are not to tell anyone—including the court—how the jury stands, whether in terms of vote count 9 or otherwise, until after you have reached a unanimous verdict or have been discharged. 10 11 AUTHORITY 12 Ninth Circuit Model Civil Jury Instruction No. 3.3. 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 Date Submitted: May 5, 2020 28 42 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 JOINT PROPOSED JURY INSTRUCTION NO. 28: CORPORATIONS – FAIR 1 TREATMENT 2 All parties are equal before the law and a corporation, like CVS Pharmacy, Inc., is entitled 3 to the same fair and conscientious consideration by you as any other party would be. 4 5 AUTHORITY 6 Ninth Circuit Model Instructions No. 4.1 [Modified]; see also Jury Instructions in Farar, et 7 al. v. Bayer, No. 3:14-cv-04601-WHO (N.D. Cal. Feb. 21, 2019) [Dkt. No. 313] (case instructing 8 jury on consumer protection laws in CA, FL, and NY). 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Date Submitted: May 5, 2020 27 28 43 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 JOINT PROPOSED JURY INSTRUCTION NO. 29: LIABILITY OF CORPORATIONS – 1 SCOPE OF AUTHORITY NOT IN ISSUE 2 Under the law, a corporation is considered to be a person. It can only act through its 3 employees, agents, directors, or officers. Therefore, a corporation is responsible for the acts of its 4 employees, agents, directors, and officers performed within the scope of authority. 5 6 AUTHORITY 7 Ninth Circuit Model Civil Jury Instruction No. 4.2. 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Date Submitted: May 5, 2020 27 28 44 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 CVS'S PROPOSED JURY INSTRUCTION NO. 30: OVERVIEW OF CLAIMS AND 1 DEFENSES INSTRUCTION 2 In order for Plaintiffs and class members to prove their claims that CVS violated the 3 consumer protection statutes of Arizona, California, Florida, Illinois, Massachusetts, and New York, 4 Plaintiffs must prove by a preponderance of the evidence each of the following propositions: 5 First, Plaintiffs must prove that they and class members are third-party beneficiaries of the 6 CVS-PBM contracts that apply to their claims; 7 Second, Plaintiffs must prove that CVS breached the CVS-PBM contracts by not submitting 8 the HSP program prices as U&C prices; and 9 Third, Plaintiffs must prove each of the elements of the state consumer protection statutes 10 that apply to their claims. 11 I will instruct you on the requirements of each of the above propositions. You must consider 12 independently whether Plaintiffs have proved by a preponderance of the evidence the requirements 13 of each of these propositions. 14 I will instruct you separately with respect to the five PBM contracts that are at issue in this 15 case, because those are separate contracts which are governed by the laws of different states. For 16 that reason, your answers to the questions on the Verdict Form may be different with respect to the 17 different PBM contracts. 18 I will also instruct you separately with respect to the six state consumer protection statutes 19 because each of them is a separate law. For that reason, your answers to the questions on the verdict 20 form may be different with respect to the different Classes. 21 AUTHORITY: 22 A similar instruction was used in Farar, et al. v. Bayer, No. 3:14-cv-04601-WHO (N.D. Cal. 23 Feb. 21, 2019) to explain the trial plan, which bifurcated considerations of liability and damages. 24 25 26 Date Submitted: May 5, 2020 27 28 45 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 PARTIES' STATEMENT REGARDING DISPUTED JURY INSTRUCTION NO. 30 1 Plaintiffs: Plaintiffs submit that CVS's proposed instruction does not accurately explain the 2 requirements for Plaintiffs' claims, for the reasons explained in Plaintiffs' position statements 3 regarding the instructions that follow below; namely, Plaintiffs dispute that the law or the rulings of 4 this Court or the Ninth Circuit in this case requires them to establish (i) that Plaintiffs are third-party 5 beneficiaries of the CVS-PBM contracts, or (ii) a separate breach of contract claim against CVS. 6 Nor do Plaintiffs believe that the Court's or the jury's time is well-served by reading yet 7 another instruction, particularly one that does not provide them with substantive guidance as to the 8 parties' claims and defenses. The Court will provide the sort of overview that CVS's proposal offers 9 when the Court instructs the jury on the verdict form; thus, this proposed instruction is superfluous. 10 11 CVS: CVS's Proposed Instruction No. 30 provides a succinct "roadmap" to the lengthy instructions 12 that follow. CVS's proposal allows the jury easily to understand the sequence and structure of the 13 instructions that follow, which are organized around the three primary questions that the jury will 14 be called upon to answer: Were Plaintiffs third-party beneficiaries of the five CVS-PBM contracts? 15 Did CVS breach those CVS-PBM contracts? Did CVS violate the six consumer protection statutes? 16 Providing the jury with this "roadmap" instruction will help the jury comprehend the series of 17 instructions as they hear them, deliberate each issue, and ultimately answer each corresponding 18 question that follows in the same order on the verdict form. Federal Judicial Center, Civil Litigation 19 Management Manual, App'x A – Form 47 ("Guidelines for Preparation of Jury Instructions") (2d 20 ed. 2010) ("The instructions as a whole should be organized into a logical sequence conforming to 21 the analytical approach the jury should take to the case. It is well to explain this organization to the 22 jury in the instructions and to provide transitional statements."); see also, e.g., Employers Ins. of 23 Wausau v. St. Clair Contractors, Inc., 223 F. App'x 644, 646 (9th Cir. 2007) (approving jury 24 instructions that "provide[d] sufficient guidance" to jury to decide issues consistent with the law). 25 Plaintiffs oppose CVS's Proposed Jury Instruction No. 30 because it informs the jury that 26 they will receive separate instructions for each CVS-PBM contract. Plaintiffs do not—and cannot— 27 28 46 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 explain why this aspect of the roadmap is objectionable. In order to state a claim, Plaintiffs have 2 conceded they must be third-party beneficiaries under the relevant CVS-PBM contract, see, e.g., 3 Transcript of Ninth Circuit Oral Argument (Dec. 17, 2018) (Plaintiffs' counsel: "We think 4 [Plaintiffs and class members] do need to be and are third-party beneficiaries."), and that the law of 5 the state identified in the contract sets the standard for who is a third-party beneficiary, Plfs. Am. 6 Mot. for Class Cert. at 14 (June 6, 2017) (ECF No. 274) ("[T]he CVS-Class PBM contracts' choice- 7 of-law provisions control for purposes of determining whether Plaintiffs are third-party 8 beneficiaries."). The five CVS-PBM contracts all contain different choice-of-law provisions 9 concerning their interpretation, and the requirements for a third-party beneficiary varies 10 significantly under those states' laws. See CVS's Proposed Instruction No. 31 ("Third-Party 11 Beneficiary Status"). Therefore, the jury should be told that they will be instructed as to different 12 state laws that apply to the different contracts. 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 47 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 [PLAINTIFFS' PROPOSED JURY INSTRUCTION NO. 31: THIRD-PARTY 1 BENEFICIARY STATUS] 2 [DISCLAIMER: As explained in Plaintiffs' position statement below, Plaintiffs submit that 3 an instruction on third-party beneficiary status is not necessary. In the event the Court 4 concludes otherwise, Plaintiffs submit this proposed instruction] 5 [Plaintiffs claim that they were injured by CVS's breaches of the CVS-PBM contracts. 6 Plaintiffs and class members are not parties to those contracts but assert that they have rights to sue 7 as third-party beneficiaries of those contracts. A third-party beneficiary is a person who is entitled 8 to certain benefits from a contract even though that person did not sign the contract. 9 You must determine whether Plaintiffs are entitled to pursue their claims against CVS as 10 third-party beneficiaries of the CVS-PBM contracts. 11 If you find that the contracts were intended to benefit Plaintiffs, and that this intent to benefit 12 Plaintiffs is shown expressly in the contracts, then you can find that Plaintiffs were third-party 13 beneficiaries of these contracts. 14 You are permitted to make this finding despite four of the CVS-PBM contracts 15 (Caremark/Advance PCS, Medco, MedImpact, and Optum/Prescription Solutions) containing 16 language asserting that persons who are not signatories to those contracts cannot claim benefits 17 under those contracts (what is known as a "third-party disclaimer"), although you can consider the 18 presence of such third-party disclaimers in those contracts in making that finding. 19 These contract provisions are known as third-party beneficiary disclaimers.] 20 21 AUTHORITY: 22 23 Arizona: "[I]n order for a person to recover as a third-party beneficiary of a contract, an 24 intention to benefit that person must be indicated in the contract itself." Norton v. First Fed. Sav., 25 624 P.2d 854, 856 (Ariz. 1981) (en banc) (internal citation omitted), Faulkner, USA, Inc. v. Durrant 26 Grp., Inc., No. CV-11-08086, 2013 WL 11834262, at *5 (D. Ariz. May 30, 2013) (a disclaimer of 27 28 48 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 third-party beneficiaries can "be modified or overcome by. . . other terms" that express clear intent 2 to benefit third parties). 3 California: A "third party qualifies as a beneficiary under a contract if the parties intended 4 to benefit the third party and the terms of the contract make that intent evident." Balsam v. Tucows 5 Inc., 627 F.3d 1158, 1161 (9th Cir. 2010) (internal quotation marks omitted), Jajco, Inc. v. Leader 6 Drug Stores, Inc., No. C 12-05703 PJH, 2013 WL 2403593, at *4-8 (N.D. Cal. May 31, 2013) 7 ("Under Ninth Circuit authority [and California law], a third party may enforce a contract as a third 8 party beneficiary despite a general contractual disclaimer where there is evidence that the parties to 9 the contract intended to benefit third parties."). 10 Delaware1: Delaware Superior Court Civil Pattern Jury Instructions, 19.21 (Third Party 11 Beneficiaries), "[T]he contracting parties must have intended that the third party beneficiary benefit 12 from the contract" and "the intent to benefit the third party must be a material part of the parties' 13 purpose in entering into the contract." Saudi Am. Bank v. Shaw Grp., Inc. (In re Stone & Webster, 14 Inc.), 558 F.3d 234, 241 (3d. Cir. 2009) (internal quotation marks omitted), Arkansas Teacher 15 Retirement System v. Alon USA Energy, Inc., No. 2017-0453-KSJM, 2019 WL 2714331 (Del. Ch. 16 June 28, 2019) (Delaware courts have recognized the rights of third-party beneficiaries despite 17 express contractual disclaimer of third-party beneficiaries); see also Amirsaleh v. Bd. of Trade of 18 City of New York, Inc., No. CIV.A. 2822-CC, 2008 WL 4182998, at *5 (Del. Ch. Sept. 11, 2008) 19 (rejecting the argument that a disclaimer of third-party beneficiaries precluded plaintiff's claims as 20 a third-party beneficiary). 21 Illinois: "A third party is a direct beneficiary when the contracting parties have manifested 22 an intent to confer a benefit upon the third party…. Courts require an express provision." F.H. 23 Paschen/S.N. Nielsen, Inc. v. Burnham Station, L.L.C., 865 N.E.2d 228, 235 (Ill. App. Ct. 2007) 24 (internal citations and quotation marks omitted); Am. United Logistics, Inc. v. Catellus Dev. Corp., 25 319 F.3d 921, 930 (7th Cir. 2003) (under Illinois law, a third-party beneficiary may sue for breach 26 1 27 The Express Scripts Contract contains a choice of law provision identifying Delaware law as controlling. 28 49 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 of contract despite an express disclaimer when a separate contractual provision expressly confers an 2 intended benefit and the circumstances surrounding the contract's execution support the intention); 3 Turner v. Orthopedic & Shoulder Ctr., S.C., 82 N.E.3d 801, 813 (Ill. App. 2017) ("If covered 4 persons are intended direct third-party beneficiaries of the agreement between the health-care 5 provider and the health insurer, and if the agreement states that a certain rate, to be paid by the 6 insurer, shall be full payment for the covered services, with no right of recourse against the covered 7 person, no reasonable mind would regard a higher rate to be a reasonable charge. Charging a higher 8 rate and recouping the difference from the covered person (we do not refer to copayments and 9 deductibles) would violate the contractual rights of both the insurer and the covered person. If, 10 despite the disclaimer of third-party beneficiaries in Barry, pursuing a lien for medical bills that had 11 been paid at the contractually agreed-upon discounted rate would be unreasonable … it would be 12 even more unreasonable to do so if the covered persons were intended third-party beneficiaries of 13 the discounted rate.") (internal citations omitted). 14 New York: A third party must establish "that the contract was intended for his benefit" and 15 an "assumption by the contracting parties of a duty to compensate him if the benefit is lost." Moman 16 v. Sony BMG Music Entm't., 880 N.Y.S.2d 874 (Sup. Ct. 2009) (unpublished table decision), 2009 17 WL 224685, at *4 (N.Y. Sup. Jan. 20, 2009); Diamond Castle Partners IV PRC, L.P. v. 18 IAC/InterActiveCorp, 82 A.D.3d 421, 422 (N.Y. App. Div. 2011) (holding that "plaintiffs 19 enforceable rights [] were not extinguished by the 'boilerplate "no third-party beneficiaries" 20 language' . . . . To construe the purchase agreement in the manner suggested by defendant would be 21 to ignore the clear, specific provisions of the purchase agreement recognizing plaintiffs' rights under 22 the agreement, which we decline to do."). 23 24 25 26 27 28 50 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 Date Submitted: May 5, 2020 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 51 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 CVS'S PROPOSED JURY INSTRUCTION NO. 31: THIRD-PARTY BENEFICIARY 1 STATUS 2 Plaintiffs claim that they were injured by CVS's breaches of the CVS-PBM contracts. 3 Plaintiffs are not parties to those contracts but assert that they have rights to sue as third-party 4 beneficiaries of those contracts. A third-party beneficiary is a person who is entitled to certain 5 benefits from a contract even though that person did not sign the contract. 6 You must determine whether Plaintiffs are entitled to pursue their claims against CVS as 7 third-party beneficiaries of the CVS-PBM contracts. This determination must be made contract-by- 8 contract, according to the instructions that I give you for each CVS-PBM contract. 9 If you find that Plaintiffs have not proved that the members of the Classes are third-party 10 beneficiaries of a given CVS-PBM contract, then you must find for CVS on all claims associated 11 with that CVS-PBM contract. 12 I will now instruct you on the third-party beneficiary issue with respect to each of the five 13 CVS-PBM contracts. 14 15 AUTHORITY 16 Corcoran v. CVS Health Corp., 779 F. App'x 431, 433 n.2 (9th Cir. June 12, 2019); 17 Transcript of Ninth Circuit Oral Argument (Dec. 17, 2018) (Plaintiffs' counsel: "We think 18 [Plaintiffs and class members] do need to be and are third-party beneficiaries."); Lamps Plus, Inc. 19 v. Varela, 587 U.S. ___ (No. 17-988), 139 S. Ct. 1407, 1414–15 (2019) (deferring to Ninth Circuit's 20 "interpretation and application of state law" in contract-interpretation context); see id. at 1430–31 21 (Kagan, J., dissenting) ("But the construction of those contractual terms (save for in limited 22 circumstances, addressed below) is 'a question of state law, which this Court does not sit to review.' 23 (quoting Volt Info. Scis., Inc., v. Bd. of Tr. of Leland Stanford Jr. Univ., 489 U.S. 468, 474 (1989)). 24 25 26 27 28 52 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 1. The CVS-Caremark Contract 2 Arizona law applies to the CVS-Caremark contract. Under Arizona law, to establish that 3 they are third-party beneficiaries of the CVS-Caremark contract, Plaintiffs must prove: 4 First, that CVS and Caremark intended that the members of the Classes directly benefit from the contract; 5 Second, that CVS and Caremark intended to recognize the members 6 of the Classes as the primary parties in interest under the contract; and 7 Third, that the contract itself indicated an intent to benefit the 8 members of the Classes. 9 CVS's and Caremark's mere knowledge that members of the Classes would be impacted by 10 how the parties performed under the contract is not sufficient to establish that Plaintiffs and members 11 of the Classes are third-party beneficiaries. Rather, Plaintiffs must demonstrate that they and 12 members of the Classes were directly and intentionally benefited such that they should be considered 13 the real promisees of performance under the contract between CVS and Caremark. 14 If you find that the CVS-Caremark contract contains a provision expressly stating there are 15 no third-party beneficiaries under the contract, you may conclude that CVS and Caremark did not 16 intend to benefit members of the Classes. 17 AUTHORITY 18 Two Bros. Distrib., Inc. v. Valero Mktg. & Supply Co., No. 15-cv-01509-PHX-DGC, 2015 19 WL 7567487 (Nov. 25, 2015) (citing Basurto v. Utah Constr. & Min. Co., 485 P.2d 859, 863 (Ariz. 20 Ct. App. 1971) (mere knowledge insufficient)); Adapted from Revised Arizona Jury Instructions 21 (Civil), Contract 15, Third Party Beneficiary (December 2015); see also Faulkner, USA, Inc. v. 22 Durrant Grp., Inc., No. CV-11-08086-PHX-NVW, 2013 WL 11834262, at *4–5 (D. Ariz. May 30, 23 2013) ("Because an express provision of the Consultant Agreement disavows, without reservation 24 or condition, the creation of contract rights in favor of any third party, Plaintiffs may not pursue 25 contract-based claims against the Subconsultants."). 26 27 28 53 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 2. The CVS-Express Scripts Contract 2 Delaware law applies to the CVS-Express Scripts contract. Under Delaware law, a third- 3 party beneficiary is a person who is entitled to certain benefits from a contract even though that 4 person did not sign that contract. The rights of a third party claiming beneficiary status must be 5 measured by the terms of the agreement between the contracting parties. Generally the rights of a 6 third-party beneficiary are spelled out in the contract and can be asserted only against the party that 7 has obligated itself. To establish that they are third-party beneficiaries of the CVS-Express Scripts 8 contract, Plaintiffs must prove: 9 First, that CVS and Express Scripts intended that the members of the Classes benefit from the contract; 10 Second, that the benefit to the members of the Classes was (a) 11 intended as a gift by CVS and Express Scripts, or (b) intended to 12 satisfy a pre-existing obligation owed by CVS and Express Scripts to the members of the Classes; and 13 Third, that the intent to benefit the members of the Classes was a 14 material part of CVS's and Express Scripts's purpose in entering into the contract. 15 16 A purpose is "material" if there is a substantial likelihood that CVS and Express Scripts 17 considered it important in deciding whether to enter into the CVS-Express Scripts contract. 18 19 AUTHORITY 20 DE Model Instruction 19.21 (Third Party Beneficiaries) (citing cases); NAMA Hldgs., LLC 21 v. Related World Mkt. Ctr., LLC, 922 A.2d 417, 434 (Del. Ch. 2007); see also Comrie v. Enterasys 22 Networks, Inc., 2004 WL 293337, at *3 (Del. Ch. Feb. 17, 2004) (quoting Insituform of N. Am., Inc. 23 v. Chandler, 534 A.2d 257, 270 (Del. Ch. 1987) ("the conferring of a beneficial effect on such third 24 party-whether it be a creditor of the promisee or an object of his or her generosity-should be a 25 material part of the contract's purpose" (second emphasis added)); cf. Eagle Force Holdings, LLC 26 v. Campbell, 187 A.3d 1209, 1230 (Del. 2018) (defining how courts identify "material" terms in a 27 contract); Rosenblatt v. Getty Oil Co., 493 A.2d 929, 944 (Del. 1985) (adopting materiality 28 54 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 definition from TSC Indus., Inc. v. Northway, Inc., 426 U.S. 438, 449 (1976) of "An omitted fact is 2 material if there is a substantial likelihood that a reasonable shareholder would consider it important 3 in deciding how to vote."). 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 55 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 3. The CVS-Medco Contract 2 New York law applies to the CVS-Medco contract. Under New York law, Plaintiffs may 3 sue as third-party beneficiaries of the CVS-Medco contract only if you find that the CVS-Medco 4 contract was made for the benefit of the members of the Classes. 5 To demonstrate that CVS and Medco intended to benefit the members of the Classes, 6 Plaintiffs must prove that the members of the Classes are the only persons who could recover for 7 the breach of the CVS-Medco contract, or that it is otherwise clear from the language of the CVS- 8 Medco contract that CVS and Medco intended to permit enforcement of the CVS-Medco contract 9 by the members of the Classes To make either showing, Plaintiffs must establish that there is express 10 language in the CVS-Medco contracts naming the members of the Classes as third-party 11 beneficiaries of the CVS-Medco contract. 12 If you find that the CVS-Medco contract contains a provision expressly stating there are no 13 third-party beneficiaries under the contract, you may conclude that CVS and Medco did not intend 14 to benefit the members of the Classes. 15 16 AUTHORITY 17 Dormitory Auth. v. Samson Constr. Co., 94 N.E.3d 456, 459–60 (N.Y. 2018) ("We have 18 previously sanctioned a third party's right to enforce a contract in two situations: when the third 19 party is the only one who could recover for the breach of contract or when it is otherwise clear from 20 the language of the contract that there was 'an intent to permit enforcement by the third party.'"); 21 see also id. ("[For] construction contracts, we have generally required express contractual language 22 stating that the contracting parties intended to benefit a third party," which "reflects the particular 23 nature of construction contracts and the fact that…there are often several contracts between various 24 entities, with performance ultimately benefitting all of the entities involved."); Milliken & Co. v. 25 Consol. Edison Co. of New York, 644 N.E.2d 268, 271 (1994) ("[P]laintiffs-respondents cannot seek 26 recovery as third-party beneficiaries of the contract between their landlords and the defendant 27 utility." (citations omitted)); see also, e.g., Banco Espirito Santo, S.A. v. Concessionaria Do 28 56 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 Rodoanel Oeste S.A., 951 N.Y.S.2d 19, 26–27 (App. Div. 2012) ("Plaintiffs argument that they were 2 intended third-party beneficiaries of the Senior Lender CTA is refuted by the documentary evidence. 3 For instance, Section 8.14 of the CTA agreement states, in a paragraph entitled 'No Third Party 4 Beneficiaries,' that such agreement "'is solely for the benefit of the Borrower and no other Person 5 ... shall have any rights hereunder against any Senior Lender with respect to the senior loans, the 6 proceeds thereof or otherwise.'"); Buckhorn Inc. v. Orbis Corp., 618 F. App'x 1000, 1005 (Fed. Cir. 7 2015) (applying New York law) ("Orbis does not argue it was the intended beneficiary of the PLA. 8 Nor could it have made such an argument" due to the express provision disclaiming third-party 9 beneficiaries). 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 57 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 4. The CVS-MedImpact Contract 2 Illinois law applies to the CVS-MedImpact contract. Under Illinois law, there is a strong 3 presumption that CVS and MedImpact intended that the provisions in the contract apply only to 4 them, and not to third parties, such as the members of the Classes. That CVS and MedImpact knew, 5 expected, or even intended that the members of the Classes would benefit from their contract is not 6 enough to overcome the presumption that the contracts were intended for the direct benefit only of 7 CVS and MedImpact. 8 Whether the members of the Classes are third-party beneficiaries of the CVS-MedImpact 9 contract depends on the intent of CVS and MedImpact, as evidenced by the language in the contract. 10 It must appear from the language of the contracts that the contracts were made for the direct, not 11 merely incidental, benefit of the members of the Classes. The Plaintiffs bear the burden of showing 12 that CVS and MedImpact intended to confer a direct benefit on the members of the Classes. 13 Such an intention must be shown by an express provision in the CVS-MedImpact contract 14 identifying the members of the Classes by name or by a description of a class of people to which 15 they belong. If a contract makes no mention of the members of the Classes or does not describe a 16 group of people to which they belong, then the members of the Classes are not third-party 17 beneficiaries of the contract. 18 If you find that the CVS-MedImpact contract contains a provision expressly stating there are 19 no third-party beneficiaries under the contract, you may conclude that CVS and MedImpact did not 20 intend to benefit the members of the Classes. 21 22 AUTHORITY 23 1 LexisNexis Practice Guide: Illinois Contract Litigation § 1.05 (Third Party Beneficiaries); 24 Martis v. Grinnell Mut. Reins. Co., 905 N.E.2d 920, 924 (Ill. App. 2009) (explaining Illinois third- 25 party beneficiary jurisprudence) (collecting cases); see also Barry v. St. Mary's Hosp. Decatur, 68 26 N.E.3d 964, 976 (Ill. App. Ct. 2016) (describing no third-party beneficiary clause as "clear and 27 unequivocal" proof that the plaintiff "was not a third-party beneficiary of the contract"). 28 58 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 5. The CVS-Optum Contract 2 California law applies to the CVS-Optum contract. Under California law, to establish that 3 they are third-party beneficiaries of the CVS-Optum contract, Plaintiffs must prove that CVS and 4 Optum (f/k/a Prescription Solutions) intended for members of the Classes to benefit from the CVS- 5 Optum contract. It is not necessary for Plaintiffs to prove that they and members of the Classes 6 have been named in the contract. In deciding what CVS and Optum intended, you should consider 7 the entire contract and the circumstances under which it was made. 8 If you find that the CVS-Optum contract contains a provision expressly stating there are no 9 third-party beneficiaries under the contract, you may conclude that CVS and Optum did not intend 10 to benefit members of the Classes. 11 12 AUTHORITY 13 Adapted from California Civil Jury Instructions (CACI) No. 301 ("Third-Party 14 Beneficiary"); see also Balsam v. Tucows Inc., 627 F.3d 1158, 1162–63 (9th Cir. 2010) (applying 15 California law) ("Given the absence of any evidence to the contrary, we conclude that the 'No Third 16 Party Beneficiaries' clause unambiguously manifests an intent not to create any obligations to third 17 parties through the RAA. See Cal. Civ.Code § 1638 ("If contractual language is clear and explicit 18 and does not involve an absurdity, the plain meaning governs." (emphasis added)). 19 20 21 22 23 24 25 26 Date Submitted: May 5, 2020 27 28 59 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 PARTIES' STATEMENT REGARDING DISPUTED JURY INSTRUCTION NO. 31 2 Plaintiffs: Plaintiffs submit that an instruction about their third-party beneficiary status is 3 unnecessary and contrary to law. To prevail on their claims, Plaintiffs must prove that CVS's 4 reporting of U&C prices was false, misleading, deceptive or unfair. See authority cited in support 5 of Plaintiffs' Proposed Instruction No. 33; Corcoran v. CVS Health Corp., 779 F. App'x 431, 433 6 (9th Cir. 2019) ("A jury weighs the evidence and determines whether CVS engaged in wrongful 7 conduct in its reporting of U & C prices, which resulted in the PBMs calculating higher 8 copayments."). And while it is true that Plaintiffs look to the PBM contracts to determine what CVS 9 was required to submit as its U&C prices, it is enough for Plaintiffs to show that CVS acted contrary 10 to the terms of those contract to establish false, misleading, deceptive or unfair conduct. Id. ("It is 11 enough for plaintiffs to show that CVS failed to report the HSP prices as U & C prices contrary to 12 the PBM contracts, and that, as a result, plaintiffs were charged higher copayments."). The Ninth 13 Circuit's decision does not require Plaintiffs to prove that they are third-party beneficiaries. Id. 14 This Court too recognized that "plaintiffs need not be third-party beneficiaries to the 15 agreements to raise the UDAP. . . claims brought here," in a portion of its summary judgment 16 opinion not reversed by the Ninth Circuit. Corcoran v. CVS Health Corp., 2017 WL 3873709, at 17 *10 n.19 (N.D. Cal. Sept. 5, 2017). Other courts are in accord. See, e.g., In re Anthem, Inc. Data 18 Breach Litig., No. 15-MD-02617-LHK, 2016 WL 3029783, at *31-32 (N.D. Cal. May 27, 2016) 19 (holding that insureds who indirectly paid premiums, which in turn were used to pay defendants for 20 insurance, could assert UCL claim against defendants without being third party beneficiaries: "a 21 plaintiff need not be an intended third party beneficiary to bring a UCL [Unfair Competition Law] 22 claim, and that UCL liability is often broader than contract liability"); see also id. at *32 (describing 23 Ehret v. Uber Techs., Inc., 68 F. Supp. 3d 1121 (N.D. Cal. 2014), in which court dismissed plaintiff's 24 breach of contract claim for failure to alleged facts demonstrated required beneficiary status but 25 allowed CLRA and UCL claims to proceed: a "UCL claim. . . is [thus] not limited to the structures 26 of the alleged contractual terms" (quoting Ehret, at 1141); rather "[t]he UCL's 'prescriptions are 27 aimed at unlawful or unfair [or fraudulent] business practices (wherein a violation may be found 28 60 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 even if conduct violates no specific law [or contract]).'" (quoting Ehret, at 1141) (brackets in 2 original Anthem decision)). Plaintiffs thus intend to prove that CVS's failure to report its HSP prices 3 as U&C prices were contrary to its contracts with the PBMs, and they do not need to prove that they 4 were third party beneficiaries to those contracts to do so.2 5 CVS itself fails to cite a single case that requires Plaintiffs to be third-party beneficiaries in 6 order to pursue the UDAP claims at issue here. Each case cited by CVS in support of its third-party 7 beneficiary instruction alleges breach of contract claims, not violations of UDAP statutes. For 8 example, CVS cites to In re Stone & Webster, Inc., 558 F.3d 234, 241 (3d. Cir. 2009) for the 9 proposition that "the intent to benefit the third party must be a material part of the parties' purpose 10 in entering into the contract" under Delaware law. However, In re Stone & Webster, Inc., concerns 11 only a transaction arising out of an asset purchase agreement, and thus arising out of contract law, 12 not a consumer protection statute such as the UDAP statutes at issue here. See id. at 238-39. CVS 13 ultimately provides no support for its contention that third-party beneficiary status must be proven.3 14 2 The Ninth Circuit addressed the third-party beneficiary issue only once, in a footnote. After first 15 acknowledging that the "key disputed factual questions relat[e] to the interpretation of the 16 agreements and whether CVS was obligated to report its HSP prices as the U & C prices. . ." Corcoran, 779 F. App'x at 433 n.2 (emphasis added) the court went on to state that "the evidence 17 raise[d] other related genuine issues of material fact" as well, listing off a series of potential issues "such as. . . whether Plaintiffs are third-party beneficiaries." Id. The Ninth Circuit did not state, 18 however, that proof of third-party beneficiary status was an element of Plaintiffs' UDAP claims, or suggest any other reason why it might be necessary for Plaintiffs to prove that they were third-party 19 beneficiaries. Nor did the Ninth Circuit comment on or challenge this Court's determination that 20 it was not necessary for Plaintiffs to prove that fact. 21 3 CVS argues that Plaintiffs must prove that they are third-party beneficiaries because of Plaintiffs' counsel's response to a question by the appellate panel at oral argument. However, that statement 22 does not reflect accurately the UDAP law of the six states, and the Ninth Circuit did not rely on that statement for its decision. Judicial estoppel requires that a party's later inconsistent position was 23 successful in "persuading a court to accept that party's earlier position." New Hampshire v. Maine, 24 532 U.S. 742, 750-51 (2001) ("Absent success in a prior proceeding, a party's later inconsistent position introduces no 'risk of inconsistent court determinations.'") (quotation omitted); see also E- 25 Pass Techs. v. Moses & Singer, LLP, No. C-09-5967 EMC, 2011 WL 5357912, at *6 (N.D. Cal. Nov. 4, 2011). Because the Ninth Circuit did not rely on Plaintiffs' counsel's statement for its 26 decision, there is no risk of inconsistent decisions, and therefore no legal basis for prohibiting Plaintiffs from aligning their position with the law. See Reed Elsevier, Inc. v. Muchnick, 559 U.S. 27 154, 170 (2010) (declining to apply judicial estoppel where parties' submissions with the lower 28 61 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 The fact that Plaintiffs have previously argued—and indeed still believe—that they are 2 third-party beneficiaries to the contracts does not require them to prove that formal legal status to 3 prevail on their UDAP claims. As part of the process of preparing jury instructions, investigating 4 the relevant authorities—including this Court's own finding on this point—and meeting and 5 conferring with CVS, Plaintiffs have concluded that a jury instruction and verdict interrogatory on 6 third-party beneficiary status is both unnecessary and confusing. Nothing in the Ninth Circuit's 7 opinion, any of this Court's decisions, or any of CVS's legal authorities is to the contrary. 8 If, however, the Court finds that Plaintiffs must prove their third-party beneficiary status 9 (which they can), Plaintiffs respectfully submit their alternative instruction is more straightforward 10 than the one proposed by CVS and based on the relevant state authorities and this Court's rulings. 11 In contrast, CVS's proposed instruction ignores this Court's Standing Civil Pretrial Order, which 12 states that "Instructions shall be brief, clear, written in plain English, and free of argument." Civil 13 Pretrial Order, at (f)(iv). CVS's third-party beneficiary status instruction consumes six pages, is rife 14 with legal jargon, and is blatantly argumentative. 15 Moreover, CVS's proposal is also erroneous because CVS insists on a siloed, seriatim 16 treatment of each of the CVS-PBM contracts. CVS's approach disregards the Ninth Circuit's ruling 17 that each state consumer protection class should include all five CVS-PBM contracts at issue, 18 because (i) there were no "meaningful differences in the PBM agreements"; (ii) "[t]he named 19 plaintiffs and the absent class members" were all positioned the same, as they were all "insured 20 customers who were charged copayments higher than the HSP prices, which plaintiffs maintain 21 should have been CVS's actual U & C prices"; and thus (iii) "[a]s a result, the named plaintiffs were 22 injured in the same manner as the absent class members and they suffered the same type of 23 damages, i.e., the delta between the actual copayment and the HSP price." Corcoran v. CVS Health 24 Corp., 779 F. App'x 431, 434 (9th Cir. 2019). For this reason, the Ninth Circuit concluded that "the 25 courts were in tension with their arguments to the Supreme Court because there were no 26 "inconsistent court determinations" in their favor). 27 28 62 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 class representatives' claims are 'reasonably coextensive,' if not 'substantially identical' to the 2 claims of the absent class members." Id. CVS acts as if this ruling, and the class certification in this 3 case, does not exist, but it is the law of the case that there is no meaningful difference between either 4 the contract terms, or the law, concerning these contracts.4 Thus, CVS's proposal to include five 5 separate CVS-PBM third party beneficiary contract instructions is contrary to the law of the case, 6 unnecessary, redundant, and will likely confuse the jury. A single common instruction on third-party 7 beneficiary status, as Plaintiffs propose (if the Court requires it), is more appropriate. 8 Finally, CVS's instruction omits the crucial point that, under the applicable law for each 9 contract, a boilerplate disclaimer can be overridden by more specific terms that evidence an intent 10 to benefit the third-parties in question. Without this critical point, the jury will be misled by CVS 11 into thinking that the presence of such boilerplate disclaimers resolves the question. 12 13 CVS: Plaintiffs have long agreed that they must show they were third-party beneficiaries of the 14 CVS-PBM contracts to prevail on their claims. For example, in the parties' August 12, 2020 status 15 report, Plaintiffs stated that it has been their "longstanding argument" that "they are in fact third- 16 party beneficiaries" of the CVS-PBM contracts. See Updated Joint Case Mgmt. Statement (Aug. 17 12, 2019) (Dkt. No. 365) at 7. As recently as Plaintiffs' initial proposed instructions and verdict 18 form, sent to CVS less than two weeks ago (Apr. 24, 2020), Plaintiffs indicated the Court should 19 instruct the jury on third-party beneficiary law and the jury should answer ("Yes" or "No") whether 20 CVS and the PBMs intended Plaintiffs to be third-party beneficiaries as the second question in their 21 deliberations. The excerpt of Plaintiffs' draft verdict form is below: 22 23 24 25 26 4 Under the law of the case doctrine, a district court "cannot vary or examine [an appellate court's mandate] for any purpose other than executing it." Hall v. City of Los Angeles, 697 F.3d 1059, 1067 27 (9th Cir. 2012). 28 63 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 2 3 4 5 6 7 8 9 10 11 12 13 14 See R. Gilmore Email to G. Geyerman re: CVS – Combined Jury Instructions and Plaintiffs' 15 Proposed Verdict Form (Apr. 24, 2020), attaching proposed instructions and verdict form, at 16 Instruction #32 and Verdict Form Question I.2. A "revised" version of Plaintiffs' verdict form sent 17 to CVS on April 28, 2020 repeated this same question verbatim. See J. Levine Email G. Geyerman 18 (Apr. 28, 2020), attaching revised verdict form. Only in the final stages of the meet-and-confer 19 process—two business days before these proposed instructions were due to be filed on May 5, 20 2020—did Plaintiffs change their minds and, for the first time, claim that the jury need not be 21 instructed on the standards for finding a third-party beneficiary. 22 Contrary to Plaintiffs' last-minute switch in position, it is absolutely appropriate for the 23 Court to instruct the jury about third-party beneficiary law, and indeed, Plaintiffs are estopped from 24 arguing otherwise. Plaintiffs' argument before the Ninth Circuit was that Plaintiffs had to prove 25 they were third-party beneficiaries in order to state a claim. Transcript of Ninth Circuit Oral 26 Argument (Dec. 17, 2018) ("Appeal Transcript") at 8:23–9:3 (The Court: "Let me ask a question. 27 28 64 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 Do the plaintiffs need to be third party beneficiaries to bring any [of their5] claims?" Plaintiffs' 2 counsel: "We think [Plaintiffs and class members] do need to be and are third-party beneficiaries."); 3 see also, e.g., Plfs. Opp. to Mot. for Summ. J. at 2 (June 6, 2017) (ECF No. 304) ("Plaintiffs are 4 intended beneficiaries of the CVS-PBM contracts, and CVS's deceptive conduct denied them the 5 benefits of those contracts' U&C pricing terms. CVS and the PBMs' supposed (and belated) 6 extracontractual 'understandings' cannot alter the plain and unambiguous terms of their fully 7 integrated contracts, and thereby disregard intended benefits for third parties."): see also id. at 21 8 ("[P]laintiffs are third-party beneficiaries with a right to enforce the plain language of the 9 contracts."). Plaintiffs did so in an effort to explain how they could have a right to pay a copayment 10 no higher than CVS's U&C price. (The CVS-PBM contracts' reimbursement formula capped 11 CVS's payment (from the PBM) at the U&C price.) Plaintiff expressly argued the issue "involves 12 a question of fact" that could not be decided as a matter of law at the summary judgment stage. 13 Appeal Transcript at 8:23–9:9. The Ninth Circuit accepted that argument, holding whether Plaintiffs 14 are third-party beneficiaries is a "material" disputed issue of fact the jury must decide at trial. 15 Corcoran v. CVS Health Corp., 779 F. App'x 431, 433 n.2 (9th Cir. June 12, 2019).6 16 Judicial estoppel bars Plaintiffs from now arguing that they need not prove they are third- 17 party beneficiaries to prove their claims. "'[Judicial estoppel's] purpose is to protect the integrity 18 of the judicial process by prohibiting parties from deliberately changing positions according to the 19 5 The transcript contains a typographical error ("any other"). The audio of this colloquy is available 20 at https://www.youtube.com/watch?v=X5-NFlydNXg (time stamp 6:24–6:45). 21 6 In their argument above, Plaintiffs act like the Ninth Circuit's holding on third-party beneficiary comports with this Court's comment at summary judgment that "Plaintiffs need not be third-party 22 beneficiaries to raise the UDAP and common law claims brought here." Corcoran, 2017 WL 3873709, at *20 n.19. But that's the opposite conclusion Plaintiffs drew from the Ninth Circuit's 23 opinion just a few months ago, when resisting CVS's request for more briefing on third-party 24 beneficiary status. See Updated Joint Case Mgmt. Statement (Aug. 12, 2019) (Dkt. No. 365) at 7 (Plaintiffs: "This Court concluded [at summary judgment] that '[P]laintiffs need not be third-party 25 beneficiaries to the agreements to raise the UDAP and common law claims brought here.' Dkt. 327 at 30 n.19. The Ninth Circuit differed on this point but determined, explicitly, that there exists a 26 genuine issue of material fact as to whether Plaintiffs are third-party beneficiaries.") (emphasis added). To say the Ninth Circuit "differed" is to say that it concluded Plaintiffs do, in fact, have to 27 be third-party beneficiaries to press their cause of action. 28 65 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 exigencies of the moment,'" which is exactly what Plaintiffs have done. Ah Quin v. Cnty of Kauai 2 Dept. of Transp., 733 F.3d 267, 270 (9th Cir. 2013) (quoting New Hampshire v. Maine, 532 U.S. 3 742, 750 (2001)). Several factors that courts have found justify judicial estoppel apply here: (1) 4 Plaintiffs' current position is "clearly inconsistent" with their position in the Ninth Circuit; (2) 5 Plaintiffs persuaded the Ninth Circuit to not only reverse the entry of summary judgment but to 6 reject CVS's argument that whether Plaintiffs were third-party beneficiaries could be decided in 7 CVS's favor as a matter of law given the presence of no-third-party-beneficiary provisions in the 8 contracts; and (3) having used that doctrine on appeal, Plaintiffs would have an "unfair advantage" 9 were they to now avoid having to prove that element of their claims. Id. at 270. 10 Judicial estoppel or not, Plaintiffs' legal theory in this case could make sense only if 11 Plaintiffs are third-party beneficiaries of the CVS-PBM contracts. If they are not, then nothing 12 "unfair" or "deceptive" can possibly have been done to them, in violation of the consumer protection 13 statutes, by virtue of CVS allegedly breaching a contract it had with a third party, the PBM. Since 14 Plaintiffs' theory depends on (among other things) a showing that they are third-party beneficiaries 15 of the contracts, the Court should so instruct the jury. The cases Plaintiffs cite for the proposition 16 that consumer protection laws do not require a breach of contract or third-party beneficiary status 17 are inapt; unlike here, the plaintiffs' sole theory of "deception" or "unfairness" in those cases was 18 not a breach of contract to which they were not parties. 19 What is more, in arguing against instructing the jury on third-party beneficiary status (and 20 breach of contract, see infra Plaintiffs' Proposed Instruction No. 32), Plaintiffs reveal a major 21 inconsistency in their trial strategy. Such instructions are unnecessary, Plaintiffs say, because 22 Plaintiffs are not asserting a cause of action for breach of contract, but causes of action under six 23 consumer protection statutes. At the same time, in Plaintiffs' Proposed Instruction No. 33 24 identifying the elements of those six statutes, Plaintiffs would instruct the jury that CVS's 25 "Wrongful Conduct"—the deception or unfairness element—is proven simply if CVS breached its 26 contracts with the PBMs. In other words, Plaintiffs on the one hand want proof of CVS's breach of 27 contract to satisfy their burden of proving actionable conduct under the consumer protection statutes, 28 66 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 yet at the same time they do not want the Court to instruct the jury on the legal standards for finding 2 a breach of contract. That is absurd. It is also contrary to state law: As explained further in CVS's 3 position statement on Proposed Instruction No. 33, as a matter of law, a defendant's mere breach of 4 contract does not give rise to a consumer protection violation. In short, a breach of contract (and 5 third-party beneficiary status) is necessary, but not sufficient, for Plaintiffs to show a violation of 6 the consumer protection laws under Plaintiffs' theory of wrongdoing. 7 As to the substance of the instructions, CVS's proposed instruction is superior to Plaintiffs' 8 proposed instruction. CVS's instruction instructs the jury separately on the law on third-party 9 beneficiary status in each of the five states. Whether a party qualifies as a third-party beneficiary 10 of a contract is a question of state law. Arthur Andersen LLP v. Carlisle, 556 U.S. 624, 631 (2009) 11 ("'[T]raditional principles' of state law allow a contract to be enforced by or against nonparties to 12 the contract through '…third-party beneficiary theories….'" (quoting 21 Williston on Contracts § 13 57:19 (4th ed. 2001))). Each CVS-PBM contract at issue in this litigation is governed by a different 14 state's law. See supra. The laws in those states vary significantly in what they require a potential 15 plaintiff to show in order to establish third-party beneficiary status. For example, Arizona 16 (Caremark) requires evidence that the proposed third-party beneficiary was actually the "primary" 17 party in interest under the contract. On the other hand, Delaware (Express Scripts) expressly 18 requires that the potential third-party beneficiary be either a creditor-beneficiary or a donee- 19 beneficiary of the promisee. Similarly, Illinois (MedImpact) applies a "strong presumption" that 20 third-party beneficiaries do not exist and that a contract's terms apply only to the contracting parties. 21 CVS's proposed instruction adheres to the fundamental purpose of jury instructions (i.e., accurately 22 instructing the jury on the law) because each CVS-PBM contract is governed by a different state's 23 laws, and the difference between those laws could be meaningful to the outcome of the jury's 24 deliberations. Mazza v. Am. Honda Motor Co., 666 F.3d 581, 594 (9th Cir. 2012) (reversing class 25 certification where "each class member's consumer protection claim" was governed by different 26 laws and noting the need for "different jury instruction[s] for materially different bodies of state 27 law"). Notably, Plaintiffs are not arguing that CVS's instruction misstates the various states' laws. 28 67 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 In contrast, Plaintiffs' proposed instruction would reduce each of the five states' laws to a 2 single question—whether it is "shown expressly" that "the contracts were intended to benefit 3 Plaintiffs." That does not accurately recite the law, much less for all five states. Furthermore, 4 although all five states have jurisprudence illuminating what it means to "intend to benefit" a non- 5 signatory to the contract, and what it means to show that intent "expressly," Plaintiffs do not propose 6 to instruct the jury with any of that guidance. By using the states' pattern instructions and governing 7 case law, CVS's instruction ensures that the jury receives a fair and complete instruction on the 8 governing law. 9 Plaintiffs' proposed instruction and their proffered "authorities" elide the significant 10 differences between the states' third-party beneficiary jurisprudence. The following non-exhaustive 11 examples help to highlight this point: 12 13 State Plaintiffs' Proffered Authority The Law AZ "[I]n order for a person to recover as a third- "The Arizona rule is that in order for a 14 party beneficiary of a contract, an intention person to recover as a third-party 15 to benefit that person must be manifested in beneficiary of a contract, an intention to the contract itself." Norton v. First Fed. benefit that person must be indicated in the 16 Sav., 624 P.2d 854, 856 (Ariz. 1981) (en contract itself. The contemplated benefit banc) (internal citation omitted) must be both intentional and direct, and 'it 17 must definitely appear that the parties intend to recognize the third party as the 18 primary party in interest.' Norton v. First 19 Fed. Sav., 624 P.2d 854, 856 (Ariz. 1981) (emphasis added) (citations omitted). 20 DE "[T]he contracting parties must have "According to Delaware law, which 21 intended that the third party beneficiary governs the Purchase Agreement, 'to 22 benefit from the contract" and "the intent to qualify as a third party beneficiary of a benefit the third party must be a material contract, (a) the contracting parties must 23 part of the parties' purpose in entering into have intended that the third party the contract." Saudi Am. Bank v. Shaw beneficiary benefit from the contract, (b) 24 Grp., Inc. (In re Stone & Webster, Inc.), 558 the benefit must have been intended as a F.3d 234, 241 (3d. Cir. 2009) (internal gift or in satisfaction of a pre-existing 25 quotation marks omitted). obligation to that person, and (c) the intent 26 to benefit the third party must be a material part of the parties' purpose in entering into 27 the contract.'" In re Stone & Webster, Inc., 28 68 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 558 F.3d 234, 241 (3d Cir. 2009) (emphasis 1 added) (applying Delaware law) (citations 2 omitted). 3 IL "A third party is a direct beneficiary when "A third party is a direct beneficiary when the contracting parties have manifested an the contracting parties have manifested an 4 intent to confer a benefit upon the third intent to confer a benefit upon the third party…. Courts require an express party. Whether a party is a third-party 5 provision." F.H. Paschen/S.N. Nielsen, Inc. beneficiary is determined on a case-by-case 6 v. Burnham Station, L.L.C., 865 N.E.2d basis. Courts require an express provision 228, 235 (Ill. App. Ct. 2007) (internal because the contract's provisions apply to 7 citations and quotation marks omitted). only them and not to third parties. "'In order to overcome that presumption, the 8 implication that the contract applies to third parties must be so strong as to be 9 practically an express declaration.'" F.H. 10 Paschen/S.N. Nielsen, Inc. v. Burnham Station, L.L.C., 865 N.E.2d 228, 235 (Ill. 11 App. Ct. 2007) (emphasis added) (citations omitted). 12 13 NY A third party must establish "that the "One who seeks to maintain an action for contract was intended for his benefit" and breach of contract as a third party 14 an "assumption by the contracting parties of beneficiary must establish that 1) there is an a duty to compensate him if the benefit is existing valid and binding contract between 15 lost." Moman v. Sony BMG Music Entm't., the signatories, 2) the contract was intended 880 N.Y.S.2d 874 (Sup. Ct. 2009) for the third party's benefit, and 3) the 16 (unpublished table decision), 2009 WL benefit to the third party is sufficiently 17 224685, at *3 immediate, rather than incidental, to indicate the assumption by the contracting 18 parties of a duty to compensate that party if the benefit is lost. Additionally, it must be 19 established that no one other than the third party can recover if the promisor breaches 20 the contract or that the language of the 21 contract otherwise clearly evidences an intent to permit enforcement by the third 22 party. Courts are generally reluctant to construe an intent to benefit a third party in 23 the absence of clear contractual language evincing such an intent." N.Y. Pattern Jury 24 Instr.--Civil 4:1 (emphasis added) (citations 25 omitted). 26 Plaintiffs criticize CVS's proposed instruction for proceeding contract-by-contract on third- 27 28 69 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 party beneficiary status. Proceeding in that fashion is unnecessary, Plaintiffs say, because the Ninth 2 Circuit (supposedly) found no "meaningful differences in the PBM agreements." But the Ninth 3 Circuit did not find that, and certainly not with respect to third-party beneficiary status. The Ninth 4 Circuit's comment concerned class certification, not the merits; it found that a class representative 5 is typical of the class as a whole because the Court's order on class certification identified no 6 "meaningful differences" in the PBM contracts that would make it impossible for a class 7 representative whose prescriptions were adjudicated by one PBM to represent class members whose 8 purchases were adjudicated by a different PBM. The Ninth Circuit did not hold that the PBM 9 contracts are identical for purposes of the third-party-beneficiary issue, and they clearly are not 10 identical. Four of the five contracts have language to the effect that there are no third-party 11 beneficiaries, but one does not have such a provision. For the four that do, the language across the 12 contracts is not uniform. Although Plaintiffs have argued the U&C definitions in the PBM contracts 13 are not materially different, they have never argued the language of the third-party beneficiary 14 provisions is not materially different. 15 Even if the contracts somehow were identical on this issue (they are not), CVS's state by 16 state instruction still would be appropriate because each state's law on third-party beneficiaries is 17 different, as shown above. The Ninth Circuit's decision on class certification does not speak to that 18 point: There is a separate class and class representative for each state, so the Ninth Circuit had no 19 occasion to consider whether differences in state law make a class representative from one state 20 typical of class members in another state. Because the state law and contract language on third- 21 party beneficiaries varies by contract, CVS's contract-by-contract instruction is appropriate. 22 Finally, CVS proposes language to the effect that the jury may use the express "no-third- 23 party beneficiary" provisions in four of the five CVS-PBM contracts (all except Express Scripts) to 24 find there is no intended beneficiary. That is based on cases in each relevant jurisdiction holding as 25 a matter of law there was no intent to benefit a non-signatory to the contract where the contract 26 contained a no-third-party-beneficiary clause. Faulkner, USA, Inc. v. Durrant Grp., Inc., 2013 WL 27 11834262, at *5 (D. Ariz. May 30, 2013) (granting summary judgment); Balsam v. Tucows Inc., 28 70 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 627 F.3d 1158, 1163 (9th Cir. 2010) (affirming dismissal under California law); Barry v. St. Mary's 2 Hosp. Decatur, 68 N.E.3d 964, 976 (Ill. App. Ct. 2016) (affirming dismissal); Banco Espirito Santo, 3 S.A. v. Concessionaria Do Rodoanel Oeste S.A., 951 N.Y.S.2d 19, 26–27 (App. Div. 2012) 4 (reversing denial of summary judgment, remanding with order to enter judgment for defendant). By 5 contrast, Plaintiffs have no credible authority to support the competing language they propose 6 concerning these types of clauses ("[y]ou are permitted to. . . find[] despite. . ."). In the first 7 category of cases cited by Plaintiffs, the non-signatories to the contract were found not to be third- 8 party beneficiaries.7 In the second category of cases, the non-signatory was found to be a third- 9 party beneficiary, but only after a separate provision in the contract specifically identified the non- 10 signatory as expressly authorized to enforce the contract.8 The CVS-PBM contracts do not contain 11 any provision stating that an individual customer has a right to enforce the contract that the PBM 12 negotiated with CVS. And this makes sense: The contracts are complicated, high-value confidential 13 7 See, e.g., Faulkner, USA, Inc. v. Durrant Grp., Inc., No. CV-11-08086-PHX-NVW, 2013 WL 14 11834262, at *5 (D. Ariz. May 30, 2013) ("Because an express provision of the Consultant Agreement disavows, without reservation or condition, the creation of contract rights in favor of 15 any third party, Plaintiffs may not pursue contract-based claims against the Subconsultants."); 16 Balsam v. Tucows Inc., 627 F.3d 1158, 1162–63 (9th Cir. 2010) (applying California law) ("Given the absence of any evidence to the contrary, we conclude that the 'No Third Party Beneficiaries' 17 clause unambiguously manifests an intent not to create any obligations to third parties through the RAA. See Cal. Civ.Code § 1638 ("If contractual language is clear and explicit and does not involve 18 an absurdity, the plain meaning governs." (emphasis added)). 19 8 Arkansas Teacher Ret. Sys. v. Alon USA Energy, Inc., No. CV 2017-0453-KSJM, 2019 WL 20 2714331, at *11 (Del. Ch. June 28, 2019) (reasoning that the merger contracts at-issue "granted merger consideration directly to the members" of the merged corporation and allowed those 21 members to "elect" the form of their consideration at the time of the merger, and so the members were third-party beneficiaries of the contracts between the merged corporations (quoting Amirsaleh 22 v. Bd. of Trade of City of N.Y., Inc., 2008 WL 4182998, at *5 (Del. Ch. Sept. 11, 2008)); Am. United Logistics, Inc. v. Catellus Dev. Corp., 319 F.3d 921, 930 (7th Cir. 2003) ("[Third party's] name 23 remained in the contract as the operator of the warehouse space [leased by third party's affiliate]," 24 which amounted to "an intended benefit. The acknowledgment of [third party] in the contract and the alleged discussions during contract negotiations [that the third party would operate the 25 warehouse] are enough to show that [the contract parties] intended [the third party] to receive a benefit from the contract."); Diamond Castle Partners IV PRC, L.P. v. IAC/InterActivecorp, 918 26 N.Y.S.2d 73, 74–75 (2011) (finding third party was an intended beneficiary where the third party was included in the contract's use of "parties," and the disclaimer only "limited enforcement of the 27 agreement to 'parties.'"). 28 71 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 contracts negotiated between sophisticated businesses, which had no incentive to confer 2 enforcement rights on individual consumers. 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 72 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 [PLAINTIFFS' PROPOSED JURY INSTRUCTION NO. 32: BREACHES OF CVS-PBM 1 CONTRACTS] 2 [DISCLAIMER: As explained in Plaintiffs' position statement, Plaintiffs submit that an 3 instruction on breach of contract is not necessary. In the event the Court concludes otherwise, 4 Plaintiffs submit this proposed instruction] 5 [A breach of contract occurs when a party to a contract fails to perform an obligation 6 contained in the contract. Here, Plaintiffs and CVS dispute the scope of the obligation contained in 7 the CVS-PBM contracts. Specifically, Plaintiffs and CVS dispute whether the definition of Usual 8 & Customary price in each CVS-PBM contract obligated CVS to submit its HSP prices as Usual & 9 Customary prices. 10 If you determine that CVS's contracts with the Plaintiffs' PBMs required CVS to submit its 11 HSP prices as its Usual and Customary Prices, you may find that CVS's practice of not doing so, 12 and of collecting from Plaintiffs and class members out of pocket payments (such as copayments) 13 higher than CVS's HSP prices, constitutes a false, misleading, deceptive or unfair act or practice. 14 In deciding what the words of a contract mean, you must decide what the parties intended at 15 the time the contract was created. You may consider the usual and ordinary meaning of the language 16 used in the contract as well as the circumstances surrounding the making of the contract. 17 The following instructions may also help you interpret the words of the contract: 18 You should assume that the parties intended the words in their contract to have their usual 19 and ordinary meaning unless you decide that the parties intended the words to have a special 20 meaning. 21 In deciding what the words in a contract meant to the parties, you may consider how the 22 parties acted after the contract was created but before any disagreement about its interpretation 23 arose. 24 In determining the meaning of the words of the contract, you must first consider all of the 25 other instructions that I have given you. If, after considering these instructions, you still cannot agree 26 on the meaning of the words, then you should interpret the contract against the party that drafted the 27 disputed words or caused the uncertainty.] 28 73 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 2 AUTHORITY 3 "Contrary to CVS's assertion, plaintiffs need not produce evidence that the PBMs believed 4 that CVS misrepresented the U&C price. It is enough for plaintiffs to show that CVS failed to report 5 the HSP prices as U&C prices contrary to the PBM contracts, and that, as a result, plaintiffs were 6 charged higher copayments." Corcoran v. CVS Health Corp., 779 F. App'x 431, 433 (9th Cir. 2019). 7 "Although CVS and the PBMs agreed during this litigation (as opposed to when the agreements 8 were negotiated) that the PBM contracts did not require CVS to submit its HSP prices as the U&C 9 prices, plaintiffs proffered 'some evidentiary support for [their] competing interpretation[] of the 10 contract[s'] language.'" Id. (quoting Nat'l Union Fire Ins. Co. of Pittsburgh, Pa. v. Argonaut Ins. 11 Co., 701 F.2d 95, 97 (9th Cir. 1983)). Further, "[a] jury could reasonably infer that subsequent 12 modifications of the agreements indicate that the prior definitions of U&C included HSP prices." 13 Id. The Ninth Circuit also stated that: "In addition to key disputed factual questions relating to the 14 interpretation of the agreements and whether CVS was obligated to report its HSP prices as the U&C 15 prices, the evidence raises other related genuine issues of material fact such as: (1) whether the HSP 16 program constitutes a 'cash discount' program…." Id. at 433 n.2. 17 Arizona: Arizona Model Jury Instruction, Contract 26 (Determining Intent of the Parties). 18 "The court will adopt a construction given to a contract by the parties themselves unless such 19 construction does violence to the express terms of the writing …. The acts of parties under a contract, 20 before disputes arise, are the best evidence of the meaning of doubtful contractual terms." 21 Associated Students of Univ. of Ariz. v. Ariz. Bd. of Regents, 120 Ariz. 100, 104–05, 584 P.2d 564, 22 568–69 (Ct. App. 1978) (citations omitted). 23 California: Judicial Council of California Civil Jury Instructions Nos. 314 (Interpretation- 24 Disputed Words), 315 (Interpretation-Meaning of Ordinary Words), 318 (Interpretation- 25 Construction by Conduct), & 320 (Interpretation-Construction Against Drafter); 26 Delaware: Delaware Pattern Jury Instruction Civil § 19.15 (Construction of Ambiguous 27 Terms). "To aid in the interpretation of the text's meaning, 'Delaware adheres to the "objective" 28 74 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 theory of contracts, i.e. a contract's construction should be that which would be understood by an 2 objective, reasonable third party.'" Sunline Commercial Carriers, Inc. v. CITGO Petroleum Corp., 3 206 A.3d 836, 846 (Del. 2019) (citations omitted). 4 Florida: Florida Contract & Business Jury Instructions 416.14 (Interpretation-Disputed 5 Term(s)), 416.15 (Interpretation-Meaning of Ordinary Words), 416.18 (Interpretation-Construction 6 by Conduct), & 416.20 (Interpretation-Construction Against Drafter). Under the Florida pattern 7 instruction, "In order to determine what the parties agreed to, you should consider the plain and 8 ordinary meaning of the language used in the contract as well as the circumstances surrounding the 9 making of the contract. The agreement of the parties is determined only by what the parties said, 10 wrote, or did. You may not consider the parties' thoughts or unspoken intentions." In Florida, an 11 objective test is used to determine the agreement of the parties. Fivecoat v. Publix Super Markets, 12 Inc., 928 So.2d 402, 403 (Fla. 1st DCA 2006). The agreement of the parties "is ascertained from the 13 language used in the instrument and the objects to be accomplished …." Rylander v. Sears Roebuck 14 & Co., 302 So.2d 478, 479 (Fla. 3d DCA 1974); Jones v. Treasure, 984 So.2d 634, 638 (Fla. 4th 15 DCA 2008). When determining the agreement of the parties, a court need not consider whether or 16 not the parties reached a subjective meeting of the minds as to the terms of a contract. Robbie v. 17 City of Miami, 469 So.2d 1384, 1385 (Fla. 1985). 18 Illinois: Illinois Pattern Jury Instructions 700.00 (Contracts): "If there is a dispute as to the 19 language used or the facts essential to a purported contract, the issues of whether a contract exists, 20 the terms of the contract, and the intent of the parties concerning the contract formation are questions 21 of fact for the jury. In re Estate of Kern, 491 N.E.2d 1275, 1280 (Ill. App. Ct. 1986); Emmenegger 22 Construction Co., Inc. v. King, 431 N.E.2d 738, 742 (Ill. App. Ct. 1982); Mulliken v. Lewis, 615 23 N.E.2d 25, 28 (Ill App. Ct. 1993). 24 Massachusetts: Massachusetts Sup. Ct. Civil Practice Jury Instructions § 14.3.3(b); 25 New York: New York Pattern Jury Instr.--Civil 4:1 ("In cases of doubt or ambiguity, a 26 contract must be construed most strongly against the party who prepared it and favorably to a party 27 who had no voice in the selection of its language, 67 Wall St. Co. v Franklin Nat. Bank, 37 NY2d 28 75 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 245, 371 NYS2d 915, 333 NE2d 184 (1975); see Lai Ling Cheng v Modansky Leasing Co., Inc., 73 2 NY2d 454, 541 NYS2d 742, 539 NE2d 570 (1989); Pedersen v Royce, 38 AD3d 1090, 831 NYS2d 3 607 (3d Dept 2007); Coliseum Towers Associates v Nassau, 2 AD3d 562, 769 NYS2d 293 (2d Dept 4 2003); Croman v Wacholder, 2 AD3d 140, 769 NYS2d 219 (1st Dept 2003)."). 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Date Submitted: May 5, 2020 26 27 28 76 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 CVS'S PROPOSED JURY INSTRUCTION NO. 32: BREACHES OF CVS-PBM 1 CONTRACTS 2 If you determine that Plaintiffs have proved that the members of the Classes are third-party 3 beneficiaries of a given CVS-PBM contract, then you must determine whether Plaintiffs have 4 proved by a preponderance of the evidence that CVS breached that CVS-PBM contract according 5 to the instructions that I am about to give you. 6 A contract is a mutual agreement between the contracting parties to do or not to do specified 7 things. A breach of contract occurs when a party to a contract fails to perform an obligation 8 contained in the contract. Here, Plaintiffs and CVS dispute the scope of the obligation contained in 9 the CVS-PBM contracts. Specifically, Plaintiffs and CVS dispute whether the U&C definition in 10 each CVS-PBM contract obligated CVS to submit HSP prices as U&C prices. 11 The meaning of any contract provision depends upon what the parties to the contract agreed 12 the provision meant, or, put another way, what the parties intended the contract provision to mean. 13 So, the meaning of the U&C definitions in each particular CVS-PBM contract depends upon what 14 CVS and each PBM intended the U&C definition in their respective contract to mean. Where the 15 meaning of a contract provision is disputed, it is the duty of the jury to determine what the parties 16 intended the contract provision to mean. So, it is for you as the jury to decide whether or not CVS 17 and each respective PBM intended the U&C definition in their respective CVS-PBM contract to 18 obligate CVS to submit HSP prices as U&C prices. 19 In determining what CVS and each PBM intended: 20  You may consider the usual and ordinary meaning of the 21 language used in the contract as well as the circumstances surrounding the contract. 22  You should assume that CVS and each PBM intended 23 technical words used in their respective CVS-PBM contract to have the meaning that is usually given to them by people who 24 work in that technical field, unless you decide that the parties 25 clearly used the words in a different sense. 26  You should consider the whole CVS-PBM contract, not just isolated parts. You should use each part to help you interpret 27 28 77 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 the others, so that all the parts make sense when taken 1 together. 2  You may consider how CVS and each PBM acted after their 3 contract was created and before any disagreement as to the contract's meaning arose. 4 5 Plaintiffs, as the party asserting a breach of contract, bear the ultimate burden to prove by a 6 preponderance of the evidence that Plaintiffs' interpretation of the U&C definition in each CVS- 7 PBM contract is a correct reflection of what CVS and the PBM intended. If you determine Plaintiffs 8 have not made that showing as to a given CVS-PBM contract, then you must find for CVS on all 9 claims associated with that CVS-PBM contract. 10 11 AUTHORITY 12 10 Corbin on Contracts § 53.1 ("Breach of Contract – When Nonperformance Constitutes a Breach") 13 ("A breach of contract is always a non-performance of duty when that performance is due."); see id. 14 n.1 (citing Restatement (Second) of Contracts § 236(2) ("When performance of a duty under a 15 contract is due any non-performance is a breach.")); see also Lamps Plus, Inc. v. Varela, 587 U.S. 16 ___ (No. 17-988), 139 S. Ct. 1407, 1414–15, 1430–31 (2019) (noting contract interpretation and 17 construction is controlled by state law); Revised Arizona Jury Instructions (Civil), Contract 9, 18 Failure of Consideration (Material Breach) ("A breach of contract occurs when a party fails to 19 perform an obligation under the contract.") (collecting cases); RAJI (Civil), Contract 1, Burden of 20 Proof (More Probably True) and RAJI (Civil), Contract 2, Claims and Elements ("On this claim, 21 [name of plaintiff] must prove. . . ."); RAJI (Civil), Contract 26, Determining Intent of the Parties 22 (December 2015) (citing case law) ("To determine what the parties intended the terms of a contract 23 to mean, you may consider the language of the written agreement; the acts and statements of the 24 parties themselves before any dispute arose; the parties' negotiations; any prior dealings between 25 the parties; any reasonable expectations the parties may have had as the result of the promises or 26 conduct of the other party; and any other evidence that sheds light on the parties' intent."); 27 Traumann v. Soutland Corp., 858 F. Supp. 979, 982 (N.D. Cal. 1994) (applying California law) ("A 28 78 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 claim for breach of contract, however, must be based on the non-performance of express promises 2 or legal duties contained in a contract."); Cal. Civ. Code § 1636 ("A contract must be so interpreted 3 as to give effect to the mutual intention of the parties as it existed at the time of contracting, so far 4 as the same is ascertainable and lawful."); Cal. Civ. Jury Instructions 314 ("Interpretation – Disputed 5 Words"), 316 ("Interpretation – Meaning of Technical Words"), 317 ("Interpretation – Construction 6 of Contract as a Whole"), & 318 ("Interpretation – Construction by Conduct"); Delaware Pattern 7 Civil Jury Instructions 19.21 ("Breach of Contract Defined") (requiring proof that "one or more 8 terms of [the] contract. . . have not been performed"); Delaware Pattern Civil Jury Instructions 9 19.15 ("Construction of Ambiguous Terms – Breach of Contract") (noting goal is to "determine the 10 parties' intent" and allowing jury to consider multiple factors, including the parties' conduct and 11 any other "explanatory circumstances existing when the contract was allegedly made") (collecting 12 cases); Ill. Pattern Jury Instr. 700.01 & 700.01V (Breach of Contract – Terms of Contract Not in 13 Dispute) (instruction and verdict form framing the question of breach as whether the defendant 14 "perform[ed] under the contract"); Id. (Contracts Introduction) § II.A. (Offer and Acceptance) ("If 15 there is a dispute as to the language used" then "the intent of the parties concerning the contract 16 formation are questions of fact for the jury." (citing A.W. Wendell & Sons, Inc. v. Qazi, 626 N.E.2d 17 280, 287 (Ill. App. Ct. 1993)); see also A.W. Wendell, 626 N.E.2d at 292 ("If the terms of a contract 18 are ambiguous, or capable of more than one interpretation, its construction is a question of fact and 19 parol evidence is admissible to ascertain the parties' intent."); Anest v. Bailey, 556 N.E.2d 280, 283 20 (Ill. App. Ct. 1990) (noting parties' intention must be "determined both by the language used in the 21 agreement and the circumstances surrounding the agreement"); Robert E. Kehoe, Jr., Jury 22 Instructions for Contract Cases Ch. 5, p.370 (noting where meaning of terms are disputed, the jury 23 should consider "whatever parol evidence has been presented" (collecting cases)); New York 24 Pattern Jury Instruction 4:1 (describing breach as failure to perform "obligations under the contract 25 or agreement"); see also Jay Martin Sys., Inc. v. Ogilvy Grp., Inc., 741 N.Y.S.2d 215, 216 (App. 26 Div. 2002) (describing breach as having "defaulted in fulfilling [an] obligation," and stating the 27 "[c]ontract was breached when [defendant] evaded performance"); see also Glen Banks, New York 28 79 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 Contract Law § 9:21 ("Consideration of Extrinsic Evidence to Determine the Meaning of 2 Ambiguous Language") (providing for consideration of "dealings of the parties" in negotiations and 3 under the contract, the parties' "course of performance," "custom and usage in the trade," and "parol 4 evidence"). 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 Date Submitted: May 5, 2020 28 80 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 PARTIES' STATEMENT REGARDING DISPUTED JURY INSTRUCTION NO. 32 2 Plaintiffs: Plaintiffs respectfully submit that an instruction on breach of contract is unnecessary 3 and contrary to law. As noted in the prior position statement, this case concerns six state unfair and 4 deceptive practice act claims, not a breach of contract claim. Plaintiffs are required to prove that 5 CVS engaged in a false, misleading, deceptive, or unfair act or practice with resulting harm.9 The 6 claims Plaintiffs assert are based in tort, not contract, and thus proving the elements of breach of 7 contract is not relevant for trial.10 8 The PBM contracts and the meaning of the terms in those contracts are undoubtedly 9 necessary to resolution of Plaintiffs' claims, as both this Court and the Ninth Circuit have 10 recognized. Corcoran, 779 F. App'x at 433 ("It is enough for plaintiffs to show that CVS failed to 11 report the HSP prices as U & C prices contrary to the PBM contracts, and that, as a result, plaintiffs 12 were charged higher copayments.") (emphasis added). But again, while CVS's conduct may 13 constitute a breach of contract (just as Plaintiffs may be third-party beneficiaries), it is not necessary 14 that Plaintiffs prove the elements of a breach of contract claim to succeed on their UDAP claims. 15 The Court of Appeals implicitly recognized that a technical breach of contract was not necessary, 16 using the term "contrary" to the contracts, rather than the more technical term of "breach."11 This 17 18 9 See Plaintiffs' Proposed Jury Instruction No. 33. As noted in Proposed Jury Instruction No. 33, there are minor variations among the six states' laws, such as New York requiring the additional 19 element of consumer-oriented practice. 20 10 It is axiomatic that a party can seek damages under more than one legal theory, but can only 21 recover once. See, e.g., Judicial Council of California Civil Jury Instructions (CACI), No. 3934 (2016 edition); see also Foley v. Interactive Data Corp., 47 Cal. 3d 654, 683 (Cal. 1988) ("The 22 distinction between tort and contract is well grounded in common law, and divergent objectives underlie the remedies created in the two areas. Whereas contract actions are created to enforce the 23 intentions of the parties to the agreement, tort law is primarily designed to vindicate 'social 24 policy.'") 25 11 Merriam-Webster defines "contrary" as (i) a fact or condition incompatible with another; (ii) one of a pair of opposites; (iii)(a) a proposition so related to another that though both may be false they 26 cannot both be true; or (iii)(b) either of two terms (such as good and evil) that cannot both be affirmed by the same subject. (emphasis in original). Contrary, Merriam-Webster (online) 27 (https://www.merriam-webster.com/dictionary/contrary) (last accessed May 1, 2020). 28 81 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 makes sense because Plaintiffs are not asserting a breach of contract cause of action, but rather 2 violations of state UDAP statutes. 3 Plaintiffs recognize that both they and CVS, as well as this Court, have used expressions 4 such as "breach of contract" and "breach" of the terms of the contract to describe Plaintiffs' 5 contention that CVS acted contrary to those contracts and their terms. However, use of this 6 shorthand expression does not reflect a legal requirement that Plaintiffs need to prove a breach of 7 contract and all its attendant requirements—from consideration to formation to performance, etc.— 8 in order to succeed on their claims. Moreover, Plaintiffs do not seek contractual remedies, damages, 9 or penalties. Thus, while a technical breach of contract could be found based on the facts of this 10 case, it is not necessary for Plaintiffs to prove this to satisfy the elements of the UDAP statutes at 11 issue. CVS cites no case law to the contrary. 12 If, however, the Court finds that a breach of contract instruction is necessary, Plaintiffs 13 provide their own proposed instruction, which they respectfully submit is consistent with the 14 applicable law, the relevant facts, and the rulings of the Courts in this case. 15 CVS's proposed instruction, on the other hand, is clearly objectionable, and should be 16 rejected. For instance, CVS's instruction repeatedly misstates of the law in this case, claiming that 17 "the meaning of the U&C definitions in each particular CVS-PBM contract depends upon what CVS 18 and each PBM intended the U&C definition in their respective contract to mean." But CVS's 19 position is squarely at odds with the Ninth Circuit's ruling on this precise issue: the Court of Appeals 20 rejected the notion that CVS's and the PBMs' supposed understanding as to the meaning of their 21 contracts was dispositive and foreclosed Plaintiffs offering a competing interpretation: 22 CVS also argues that summary judgment was properly granted, because the 23 testimony of the PBM witnesses established that the parties to the contracts agreed on the meaning of the U & C provisions. … Although CVS and the PBMs agreed 24 during this litigation (as opposed to when the agreements were negotiated) that the PBM contracts did not require CVS to submit its HSP prices as the U & C prices, 25 plaintiffs proffered "some evidentiary support for [their] competing interpretation[ ] of the contract[s'] language." … Given the extrinsic evidence proffered by 26 plaintiffs to support their reasonable interpretation of the U & C language in the 27 PBM contracts, the district court erred in granting summary judgment. 28 82 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 Corcoran v. CVS Health Corp., 779 F. App'x 431, 433 (9th Cir. 2019). Accordingly, if the Court is 2 inclined to issue an instruction on breach of contract, it should reject CVS's proposed instruction 3 and adopt the version submitted by Plaintiffs, which is supported by the Ninth Circuit's ruling in 4 the case and consistent other relevant law. 5 CVS: CVS's Proposed Jury Instruction No. 32 accurately and succinctly states the principles in 6 Arizona, California, Delaware, Illinois, and New York regarding (a) breach of contract, and (b) 7 interpretation of disputed contract terms. 8 Plaintiffs agree that they must prove CVS breached the CVS-PBM contracts as a predicate 9 to proving their consumer protection claims. (Plaintiffs prefer saying they must prove CVS acted 10 "contrary to the PBM contracts," not that it "breached" the contracts, but those are interchangeable 11 terms with no meaningful difference in this context.) For this simple reason, Plaintiffs' position that 12 no breach-of-contract instruction to the jury is necessary is illogical. 13 CVS's Proposed Jury Instruction No. 32 is the superior instruction. Plaintiffs' Proposed 14 Jury Instruction No. 32 improperly conflates the breach-of-contract question with the question 15 whether CVS's conduct was actionable (i.e., "deceptive or unfair") under the applicable consumer 16 protection statutes. The law in the states whose consumer protection statutes are at issue here clearly 17 holds that a breach of contract alone is not sufficient to state a claim under the statute. See infra 18 CVS's Proposed Instruction No. 33.B.1; see also Zenaty-Paulson v. McLane/Sunwest, Inc., No. 19 CIV-99-472-PHX-RCB, 2000 WL 33300666, at *16 (D. Ariz. 2000) (citing Rawlings v. Apodaca, 20 726 P.2d 565, 574 (Ariz. 1986)); Freeman & Mills, Inc. v. Belcher Oil Co., 900 P.2d 669, 679–80 21 (Cal. 1995); Bankers Tr. Co. v. Basciano, 960 So. 2d 773, 778 (Fla. 5th DCA 2007); Rebman v. 22 Follett Higher Edu. Grp., Inc., 575 F. Supp. 2d 1272, 1278–79 (M.D. Fla. 2008); Anderson Elec. v. 23 Ledbetter Erection Corp., 503 N.E.2d 246, 249 (Ill. 1986); Cook v. AAA Life Ins. Co., 13 N.E.3d 24 20, 32 (Ill. App. Ct. 2014); Madan v. Royal Indem. Co., 532 N.E.2d 1214, 1217 (Mass. App. Ct. 25 1989); Tucker v. AM Sutton Assocs., 792 N.Y.S.2d 539, 541 (N.Y. App. Div. 2005); Lee v. 26 Matarrese, 793 N.Y.S.2d 457, 457–58 (N.Y. App. Div. 2005). 27 Apart from that conflation—which is highly significant and is discussed in detail below— 28 83 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 Plaintiffs' instruction largely mirrors CVS's proposed instruction, except that Plaintiffs add an 2 irrelevant instruction on the "Last Resort" rule of contract interpretation (contra proferentem) that 3 ambiguous terms are construed against the party who drafted the terms, or inserted the ambiguity. 4 The rule does not apply here for at least two reasons. First, Plaintiffs have no evidence to support 5 the instruction. Plaintiffs played no role in the drafting or negotiation of the contracts and they have 6 offered no evidence regarding who, as between CVS and each respective PBM, drafted the U&C 7 definitions. Suppose the PBMs rather than CVS drafted the specific language in the U&C definition; 8 do Plaintiffs expect the jury to construe the language against CVS even though CVS did not select 9 the language? 10 Second, even assuming Plaintiffs could show that CVS (not the PBM) drafted the language, 11 Plaintiffs should not be permitted to invoke the doctrine because they are strangers to the contract. 12 See, e.g., Gold v. Rowland, 156 A.3d 477, 505 (Conn. 2017) (applying Indiana law) ("It would be a 13 perverse rule indeed, however, if any person claiming to be the intended beneficiary of an 14 ambiguous contract to which he was not a party were automatically entitled to have the contract 15 construed in his favor precisely because he had played no part in its drafting." (citing St. Paul Fire 16 & Marine Ins. Co. v. Schilli Transportation Services, Inc., 672 F.3d 451, 456 (7th Cir. 2012))). 17 Third, the doctrine aims to deter a party from unilaterally inserting needlessly complex and 18 ambiguous language, and thus does not apply when, as here, a contract term is negotiated. Coliseum 19 Towers Assocs. v. Cty. of Nassau, 769 N.Y.S.2d 293, 296–97 (App. Div. 2003) ("The contra 20 proferentem doctrine was inapplicable to the subject lease since the record demonstrates that CTA 21 participated in negotiating its terms."); see also, e.g., Canam Steel Corp. v. Bowdoin Const. Corp., 22 613 N.E.2d 121, 123 (Mass. App. Ct. 1993) (applying the doctrine to a party's unilaterally drafted 23 letter to the opposing party).12 It is well-recognized that the doctrine should not be used where two 24 parties negotiate and agree to the disputed terms. See, e.g., Universal Cable Prods., LLC v. Atl. 25 12 It is worth noting that Plaintiffs offer no support under Illinois law for giving the instruction, 26 which is not mentioned in the Illinois Pattern Instruction commentary cited by Plaintiffs. Plaintiffs' reference to Florida's contract law is irrelevant because Florida law does not govern any of the five 27 CVS-PBM contracts. 28 84 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 Specialty Ins. Co., 929 F.3d 1143, 1151 (9th Cir. 2019) ("[W]hen two sophisticated parties negotiate 2 the terms of the policy, the insured generally cannot invoke the doctrine of contra proferentem."); 3 Dunne & Gaston v. Keltner, 50 Cal. App. 3d 560, 563 (Cal. Ct. App. 1975) ("The record does not 4 resolve the question of who should be deemed to be the 'preparer,' but it plainly discloses that the 5 terms of the instrument were evolved through negotiations; and it has been held that when an 6 agreement is arrived at by negotiating, the 'preparer' principle should not be applied against either 7 party."); see also Lamps Plus, Inc. v. Varela, 139 S. Ct. 1407, 1433–34 (2019) (Kagan, J., dissenting) 8 ("From an ex ante perspective, [contra proferentem] encourages the drafter to set out its intent in 9 clear contractual language, for the other party then to see and agree to. See Ayres & Gertner, 99 10 Yale L. J., at 91, 105, n. 80 (stating the modern view); 2 W. Blackstone, Commentaries on the Laws 11 of England 380 (1766) (anticipating that view by 200-plus years)."). 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 85 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 PLAINTIFFS' PROPOSED JURY INSTRUCTION NO. 33: ELEMENTS OF 1 PLAINTIFFS' CONSUMER PROTECTION CLAIMS 2 Plaintiffs claim that CVS's conduct violated the consumer protection statutes of Arizona, 3 California, Florida, Illinois, Massachusetts, and New York. These six statutes have very similar and 4 sometimes identical requirements, which are also called elements. The next several instructions will 5 explain those requirements. Plaintiffs must prove the elements of their claims by a preponderance 6 of the evidence. 7 FALSE, MISLEADING, DECEPTIVE, OR UNFAIR ACT OR PRACTICE (ALL STATES) 8 9 The consumer protection statutes of all six states require that Plaintiffs prove that the 10 defendant engaged in a false, misleading, deceptive, or unfair act or practice. For the New York 11 statute, plaintiffs must prove that CVS's conduct was false, misleading or deceptive. For the other 12 states, Plaintiffs must prove that CVS's conduct was false, misleading, or deceptive, or that it was 13 unfair. 14 If you find that the CVS-PBM contracts required CVS to report the HSP price as the usual 15 and customary price, then this element is satisfied for all states. 16 CONSUMER-ORIENTED PRACTICE 17 (NY ONLY – NOT REQUIRED FOR OTHER STATES) 18 The New York statute requires plaintiffs to prove, in addition to proving that CVS's conduct 19 was false, misleading or deceptive, that plaintiffs' claims against CVS concern a consumer oriented 20 practice. A practice is consumer oriented if it has a broad impact on consumers as opposed to a 21 dispute that is unique to specific parties. 22 If you find that CVS's conduct had a broad impact on consumers in general, then this element 23 is satisfied. 24 SALE OR ADVERTISEMENT OF MERCHANDISE 25 (AZ AND MA ONLY – NOT REQUIRED FOR OTHER STATES) 26 The Arizona and Massachusetts statutes require plaintiffs to prove, in addition to proving 27 that CVS's conduct was false, misleading, deceptive or unfair, that plaintiffs' claims against CVS 28 86 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 arose out of the sale or advertisement of merchandise. Relevant to this case, merchandise includes 2 medicines. 3 If you find that CVS's conduct involved the sale of merchandise, then this element is 4 satisfied. 5 TRADE OR COMMERCE (FL AND IL ONLY – NOT REQUIRED FOR OTHER STATES) 6 7 The Florida and Illinois statutes require plaintiffs to prove, in addition to proving that CVS's 8 conduct was false, misleading, deceptive or unfair, that the claims against CVS arose out of a course 9 of conduct involving trade or commerce. Relevant to this case, the sale and purchase of prescription 10 drugs is a form of trade or commerce. 11 If you find that the claims against CVS arose out of a course of conduct that involved trade 12 or commerce, then this element is satisfied. 13 PERSONAL, FAMILY, OR HOUSEHOLD PURPOSES 14 (CA ONLY – NOT REQUIRED FOR OTHER STATES) 15 The California statute requires Plaintiffs to prove that they purchased the prescription drugs 16 at issue in this case for personal, family, or household purposes. 17 If you find that Plaintiffs purchased the prescription drugs at issue in this case for personal, 18 family, or household purposes, then this element is satisfied. 19 20 RELIANCE (AZ ONLY – NOT REQUIRED FOR OTHER STATES) 21 Under the Arizona statute, plaintiffs must also prove that Plaintiffs made the out-of-pocket 22 payments that are challenged in this lawsuit in reliance on CVS's false, misleading, deceptive, or 23 unfair act or practice. Reliance is proven if you find that CVS's false, misleading, deceptive or unfair 24 conduct was a substantial factor in influencing Plaintiffs' decision to pay the challenged payments. 25 You may consider payment of an improperly inflated charge as evidence of reliance. 26 27 28 87 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 If you find that CVS's conduct was a substantial factor in Plaintiffs' decision to make the 2 challenged payments for their prescription medicines at issue in this case, then this element is 3 satisfied. 4 INTENT TO INDUCE RELIANCE (AZ AND IL ONLY – NOT REQUIRED FOR OTHER STATES) 5 6 In Arizona and Illinois, plaintiffs must also prove that CVS intended for Plaintiffs to rely on 7 its false, misleading, deceptive, or unfair act or practice. Charging an inflated price can be evidence 8 of an intention to induce reliance. 9 If you find that CVS intended for Plaintiffs to rely on CVS's conduct in making the 10 purchases of prescription medicines at issue in this case, then this element is satisfied. 11 MATERIALITY 12 (CA AND NY ONLY – NOT REQUIRED FOR OTHER STATES) 13 Under the California and New York statutes, plaintiffs must also prove that CVS's false, 14 misleading, deceptive, or unfair act or practice was material. A fact is material if a reasonable 15 consumer would deem it important in determining how to act in the transaction at issue. You may 16 consider evidence of the prices of goods to be material to any transaction. 17 If you find that it would have been important for Plaintiffs to know that CVS's contracts 18 with PBMs required it to submit HSP prices as U&C prices (if that is what you find; see Instruction 19 No. __ above), and that CVS's failure to do so increased Plaintiffs' out-of-pocket payments, then 20 this element is satisfied. 21 RESULTING HARM 22 (ALL STATES) 23 For all states, plaintiffs must also prove that they were harmed as a result of CVS's false, 24 misleading, deceptive, or unfair conduct. You may consider payment of an inflated price as evidence 25 of harm. 26 If you find that, as a result of CVS's conduct, Plaintiffs were overcharged for their purchases 27 of prescription medicines at issue in this case, then this element is satisfied. 28 88 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 2 AUTHORITY: 3 "Contrary to CVS's assertion, plaintiffs need not produce evidence that the PBMs believed 4 that CVS misrepresented the U&C price. It is enough for plaintiffs to show that CVS failed to report 5 the HSP prices as U&C prices contrary to the PBM contracts, and that, as a result, plaintiffs were 6 charged higher copayments." Corcoran v. CVS Health Corp., 779 F. App'x 431, 433 (9th Cir. 2019). 7 "[P]ayment, as we have said, 'may constitute circumstantial proof of reliance upon a 8 financial representation.' … As in Klay, the defendant here is alleged to have sent the plaintiffs false 9 billing information (albeit in this case misrepresenting the amount of money due rather than, as in 10 Klay, that the proper amount had been paid)…. In cases involving fraudulent overbilling, payment 11 may constitute circumstantial proof of reliance based on the reasonable inference that customers 12 who pay the amount specified in an inflated invoice would not have done so absent reliance upon 13 the invoice's implicit representation that the invoiced amount was honestly owed." In re U.S. 14 Foodservice Inc. Pricing Litig., 729 F.3d 108, 119–20 (2d Cir. 2013). See also Gutierrez v. Wells 15 Fargo Bank, NA, 704 F.3d 712, 729 (9th Cir. 2012) (rejecting arguments that reliance not met 16 because "we are hard pressed to agree that any class member would prefer to incur multiple overdraft 17 fees."); Bias v. Wells Fargo & Co., 312 F.R.D. 528, 541-42 (N.D. Cal. 2015) (citations omitted). 18 Arizona: Revised Arizona Jury Instruction (Civil) 5th, Commercial Torts 21, Commercial 19 Fraud; Arizona Consumer Fraud Act (ACFA), Ariz. Revised Statutes § 44-1521, et seq. See also 20 Castle v. Barrett-Jackson Auction Co., 276 P.3d 540, 542 (Ariz. App. 2012) ("[1] a false promise 21 or misrepresentation [2] made in connection with the sale or advertisement of merchandise and [3] 22 the hearer's consequent and proximate injury" (internal quotation omitted)). 23 "Consumer fraud is a cause of action which is separate and distinct from common law fraud. 24 The mere fact that the word 'fraud' appears in the title of our consumer protection statute does not 25 give rise to an inference that the legislature intended to require a higher degree of proof than that 26 ordinarily required in civil cases…. A 'preponderance of the evidence' instruction effectuates the 27 legislative intent by affording maximum protection to injured consumers; it is consistent with the 28 89 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 general rule that civil cases must be proved by a preponderance of the evidence; and [the defendant] 2 has cited no authority in support of its contention that a higher degree of proof is required." Dunlap 3 v. Jimmy GMC of Tucson, Inc., 666 P.2d 83, 88–89 (Ct. App. 1983) (internal citations omitted). 4 California: CACI No. 4700; Consumer Legal Remedies Act (CLRA), Cal. Civil Code §§ 5 1750, et seq. See Cal. Civ. Code § 1770 ("(a) The following unfair methods of competition and 6 unfair or deceptive acts or practices undertaken by any person in a transaction intended to result or 7 that results in the sale or lease of goods or services to any consumer are unlawful: (13) Making false 8 or misleading statements of fact concerning reasons for, existence of, or amounts of, price 9 reductions. . . . (16) Representing that the subject of a transaction has been supplied in accordance 10 with a previous representation when it has not."); Corcoran v. CVS Health Corp., 169 F. Supp. 3d 11 970, 991-92 (N.D. Cal. 2016) (explaining that the CLRA "is to be 'liberally construed and applied 12 to promote its underlying purposes, which are to protect consumers against unfair and deceptive 13 business practices and to provide efficient and economical procedures to secure such protection.' 14 Id. § 1760," and finding Plaintiffs' "allegations sufficiently detailed to render their claim plausible 15 under CLRA §§ 1770(a)(13) and (a)(16)."); Stafford v. Rite Aid Corp., No. 3:17-CV-1340-AJB- 16 JLB, 2018 WL 4680043 (S.D. Cal. Sept. 28, 2018) (allegations that pharmacy reported inflated 17 U&C prices and thereby overcharged insured customers, were sufficient to plead a deceptive 18 practice under California CLRA); People v. Dollar Rent-A-Car Sys., Inc., 211 Cal. App. 3d 119, 19 125–26, 259 Cal. Rptr. 191, 194–95 (Ct. App. 1989) (finding an unfair act or practice where "[t]he 20 body shops charged defendants a discounted 'wholesale' price for repairs to the cars due to the high 21 volume. Additionally, defendants supplied their own parts which they purchased at more than a 30 22 percent discount. Defendants prepared new repair invoices to reflect a higher 'retail cost' rather than 23 these actual costs for repair. They never informed the customers of this practice, nor did defendants 24 supply customers with an itemized list of the inflated charges. This practice left customers with the 25 erroneous impression that defendants are passing on only the actual repair charges."). 26 A fact is material if a reasonable consumer would deem it important in determining how to 27 act in the transaction at issue. Gutierrez v. Carmax Auto Superstores Cal., 19 Cal. App. 5th 1234, 28 90 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 1258, 248 Cal. Rptr. 3d 61, 84 (Ct. App. 2018), as modified on denial of reh'g (Feb. 22, 2018); 2 Massachusetts Mut. Life Ins. Co. v. Superior Court, 97 Cal. App. 4th 1282, 1292-93, 119 Cal. Rptr. 3 2d 190, 197 (2002), as modified on denial of reh'g (May 29, 2002) ("if. . . material 4 misrepresentations were made to the class members, . . . an inference of reliance would arise as to 5 the entire class.") (quotation omitted) 6 "And 'the usual summary judgment rules' apply to '. . . CLRA claims.' A party 'need only 7 produce evidence of a genuine dispute of material fact that could satisfy the preponderance of the 8 evidence burden at trial.'" Miller v. Peter Thomas Roth, LLC, No. C 19-00698 WHA, 2020 WL 9 1433184, at *3 (N.D. Cal. Mar. 24, 2020) (quoting Sonner v. Schwabe N. Am., Inc., 911 F.3d 989, 10 992–93 (9th Cir. 2018; see also Paduano v. Am. Honda Motor Co., 169 Cal. App. 4th 1453, 1463, 11 88 Cal. Rptr. 3d 90, 99 (2009) (recognizing that the preponderance of the evidence standard applies 12 to the CLRA). 13 Florida: Florida Standard Jury Instructions: Contract & Business Jury Instruction 14 § 416.50(a) Florida Deceptive And Unfair Trade Practices Act ("FDUTPA"), 15 https://jury.flcourts.org/wp-content/uploads/Contract-Business/EntireDocument/Entire- 16 Document.pdf; Florida Deceptive and Unfair Trade Practices Act (FDUPTA), Fla. Stat. §§ 501.201- 17 501.213. See also Rollins, Inc. v. Butland, 951 So. 2d 860, 869 (Fla. App. 2006) ("(1) a deceptive 18 act or unfair practice; (2) causation; and (3) actual damages."); Jury Instruction, Vivid 19 Entertainment, LLC v. Jose Baserva, et al., No. 13-cv-00524-JES-DNF, 2015 WL 468644 (M.D. 20 Fla. Jan. 15, 2015); Latman v. Costa Cruise Lines, N.V., 758 So.2d 699, 703 (Fl. App. 2000) 21 ("Suppose that a company systematically overcharges its customers on sales tax. The hypothetical 22 company pays the state the sales tax that it owes, and then keeps the overcharge for itself. We would 23 not hesitate to say that an intentional overcharge of sales tax, which is kept by the company itself, 24 is an unfair and deceptive trade practice and that the consumer must be repaid. That is so even 25 though the consumers clearly were willing to pay the price charged—in the hypothetical example, 26 they actually paid the sales tax overcharges—nor would it make a difference that the consumers 27 paid no attention to the sales tax amount. We think such a claim would be actionable under 28 91 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 FDUTPA."). 2 Even if Florida's deceptive practices act required proving fraud, that would still only require 3 proof by a preponderance of the evidence. See, e.g., JDI Holdings, LLC v. Jet Mgmt., Inc., 732 F. 4 Supp. 2d 1205, 1233 (N.D. Fla. 2010) ("Fraud is to be proven by a preponderance of the evidence 5 in a civil action.") (citing Beal Bank, SSB v. Almand & Assoc., 780 So. 2d 45, 58 n.19 (Fla. 2001)). 6 Illinois: Illinois Consumer Fraud & Deceptive Practices Act (ICFA), 815 Ill. Comp. Stat. 7 Ann. § 505/2. See also Rikos v. Procter & Gamble Co., 799 F.3d 497, 514 (6th Cir. 2015) ("(1) a 8 deceptive act or practice by the defendant, (2) the defendant's intent that the plaintiff rely on the 9 deception, (3) the occurrence of the deception in a course of conduct involving trade or commerce, 10 and (4) actual damage to the plaintiff that is (5) a result of the deception." (internal quotation 11 omitted)); Plaintiffs' Proposed Jury Instructions and General Verdict Form, TVN S.A. and Telewizja 12 Polsat, S.A., v. Telewizja Plus, Ltd., et al., Nos. 1:06CV02773, 07-2774, 2008 WL 685304 (N.D. 13 Ill. Jan. 25, 2008); Forth v. Walgreen Co., No. 17-CV-2246, 2018 WL 1235015, at *9 (N.D. Ill. 14 Mar. 9, 2018) ("And, under Illinois law, a business entity can sue for violations under the [Illinois 15 Consumer Fraud and Deceptive Practices Act] if it can show a personal injury caused by the 16 allegedly fraudulent or deceptive acts… or if it is able to allege that the challenged conduct involves 17 trade practices addressed to the market generally or otherwise implicates consumer protection 18 concerns.") (internal citations and quotation marks omitted) (emphasis added). In Forth, the 19 plaintiffs alleged Walgreen committed a deceptive practice by failing to report its savings club prices 20 as its usual and customary prices. 21 "As a final point, we observe that the trial court decided the common law fraud and consumer 22 fraud claims in tandem and applied the clear and convincing standard of proof for both. Yet, the 23 appropriate standard of proof for a claim brought under the Consumer Fraud Act is the 24 preponderance of the evidence." Fox v. Heimann, 872 N.E.2d 126, 139 (Ill. App. 2007). 25 Massachusetts: MA Superior Court Civil Jury, Instructions § 16 et seq., Ch 93A Consumer 26 Protection Act. See also Saia v. Bay State Gas Co., No. 11-P-978, 2012 WL 1145913, at *3 (Mass. 27 App. Apr. 6, 2012) ("provides a right of action to a consumer [1] who has been injured [2] by another 28 92 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 person's use or employment of any method, act, or practice declared to be unlawful by section two 2 [of chapter 93A] or any rule or regulation issued thereunder." (internal quotation omitted)). In 3 Federal Court, the Seventh Amendment allows Ch.93A claims like Plaintiffs' to go to the jury 4 despite the statutory provision that all claims are to be tried by the court. See Full Spectrum Software, 5 Inc. v. Forte Automation Systems, Inc., 858 F.3d 666, 675-78 (1st Cir. 2017) (holding that the 6 Seventh Amendment may allow jury trials in Ch. 93A cases alleging deception and seeking actual 7 and punitive damages despite the contrary statutory language). As the First Circuit explained, the 8 Seventh Amendment applies when a Ch. 93A claim "necessarily encompasse[s] a claim for 9 'deception,' which does appear to be a claim that is analogous to 18th–century actions at law, such 10 as fraud, deceit, or misrepresentation." Id. at 676 (citations omitted). Finally, a Ch. 93A claim may 11 go to a jury where the plaintiff, like Plaintiffs here, seek damages traditionally awarded in courts of 12 law. Id. ("'[T]he relief sought here—actual and punitive damages—is the traditional form of relief 13 offered in the courts of law.'") (quoting Curtis v. Loether, 415 U.S. 189, 196 (1974)). The 14 preponderance of the evidence standard applies to a Chapter 93A claim. See Butler v. Sigma-Aldrich, 15 Inc., No. CV 02-40238-TSH, 2006 WL 8458677, at *8 (D. Mass. Aug. 31, 2006). 16 New York: N.Y. Pattern Jury Instructions 3:20, Intentional Torts – Fraud and Deceit, XIV. 17 Statutory Remedies; N.Y. Gen. Business Law §§ 349(a), 350. See also Stutman v. Chem. Bank, 731 18 N.E.2d 608, 611 (N.Y. 2000) ("[F]irst, that the challenged act or practice was consumer-oriented; 19 second, that it was misleading in a material way; and third, that the plaintiff suffered injury as a 20 result of the deceptive act."); Proposed Jury Instructions, Jermyn v. Best Buy Stores, L.P., No. 08 21 CV 00214, 2011 WL 5883093 (S.D.N.Y. Nov. 15, 2011). 22 "Plaintiff, thus, need not show that the defendant committed the complained-of acts 23 repeatedly—either to the same plaintiff or to other consumers—but instead must demonstrate that 24 the acts or practices have a broader impact on consumers at large. Private contract disputes, unique 25 to the parties, for example, would not fall within the ambit of the statute." Oswego Laborers' Local 26 214 Pension Fund v. Marine Midland Bank, N.A., 85 N.Y.2d 20, 25, 647 N.E.2d 741, 744 (1995). 27 "A successful GBL § 349 claim requires that a plaintiff prove, by a preponderance of the 28 93 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 evidence, that (1) 'the defendant has engaged in an act or practice that is deceptive or misleading in 2 a material way'; (2) the 'plaintiff has been injured by reason thereof'; and (3) the deceptive act or 3 practice is 'consumer oriented.'" Koch v. Greenberg, 14 F. Supp. 3d 247, 261 (S.D.N.Y. 2014), 4 aff'd, 626 F. App'x 335 (2d Cir. 2015) (quoting Gaidon v. Guardian Life Ins. Co. of Am., 94 N.Y.2d 5 330, 343–44, 704 N.Y.S.2d 177, 725 N.E.2d 598 (Ct. App.1999)). 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 Date Submitted: May 5, 2020 28 94 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 CVS'S PROPOSED JURY INSTRUCTION NO. 33: ELEMENTS OF PLAINTIFFS' 1 CONSUMER PROTECTION CLAIMS 2 A. Elements of the State Consumer Protection Statutes 3 Plaintiffs claim that CVS's breach of the CVS-PBM contracts injured the members of the 4 Classes, whose purchases were associated with that CVS-PBM contract, by causing them to overpay 5 for HSP-eligible drugs that they purchased using their prescription insurance. If you determine that 6 Plaintiffs have proved both that the members of the Classes are third-party beneficiaries of a given 7 CVS-PBM contract and that CVS breached that CVS-PBM contract, then you must make certain 8 determinations relating to whether CVS violated the following statutes with respect to that contract: 9 The Arizona Consumer Fraud Act; 10 The California Consumer Legal Remedies Act; 11 The Florida Deceptive and Unfair Trade Practices Act; 12 The Illinois Consumer Fraud and Deceptive Business Practices Act; 13 The Massachusetts Consumer Protection Act; and 14 The New York Consumer Protection from Deceptive Acts and 15 Practices Statute. 16 Plaintiffs bear the burden of proving each element of each statute. Certain elements of each 17 statute will apply to the claims of all members of that particular class. Other elements will apply 18 only to the claims of the Named Plaintiff representing that particular class. I will instruct you on 19 which elements you are to consider as to all members of the particular class, and which elements 20 you are to consider only to the Named Plaintiff's claim. 21 22 23 24 25 26 27 28 95 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 1. The Arizona Consumer Fraud Act 2 Plaintiffs claim that CVS violated the Arizona Consumer Fraud Act. On this claim, the 3 Plaintiffs must prove each of the following elements by a preponderance of the evidence: 4 First, that CVS engaged in a deceptive or unfair act or practice; 5 Second, that the deceptive or unfair act or practice was in connection with the sale of merchandise; and 6 7 Third, that CVS intended that the members of the Arizona Class rely on the deceptive or unfair act. 8 9 If you find that Plaintiffs have proved the above elements that are common to the members 10 of the Arizona Class, then you must determine whether Plaintiffs have proved the following 11 additional elements as to Arizona Named Plaintiff Darlene McAfee's claim in particular: 12 First, Ms. McAfee suffered damages as a result of reliance on CVS's deceptive or unfair act or practice; and 13 Second, the damages to Ms. McAfee. 14 15 16 AUTHORITY 17 RAJI, Commercial Torts 21, Consumer Fraud (Elements of Claim); Kamal v. Eden 18 Creamery, LLC, No. 2019 WL 2617041, at *15 (S.D. Cal. June 26, 2019) ("To state an ACFA claim, 19 a plaintiff must: (1) the defendant made a false promise or misrepresentation (2) in connection with 20 the sale or advertisement of a product, (3) that plaintiff relied on the representation, and (4) that 21 plaintiff was harmed as a result. Lorona v. Arizona Summit Law Sch., LLC, 188 F. Supp. 3d 927, 22 933 (D. Ariz. 2016)."); Ariz. Rev. Stat. §§ 44-1521(7) (defining "sale"), 44-1521(5) (defining 23 "merchandise"). 24 25 26 27 28 96 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 1. The California Consumer Legal Remedies Act 2 Plaintiffs claim that CVS violated the California Consumer Legal Remedies Act. On this 3 claim, Plaintiffs must prove each of the following elements by a preponderance of the evidence: 4 First, that the members of the California Class purchased HSP- eligible generic prescription drugs for personal, family, or household 5 purposes; and 6 Second, that the members of the California Class were exposed to 7 either false or misleading statements of fact made by CVS concerning the reasons for, existence of, or amounts of, price reductions; or 8 misrepresentations by CVS that the subject of a transaction had been supplied in accordance with a previous representation when it had not. 9 10 If you find that Plaintiffs have proved the above elements that are common to the members 11 of the California Class, then you must determine whether Plaintiffs have proved the following 12 additional elements as to California Named Plaintiff Tyler Clark's claim in particular: 13 First, that Mr. Clark was harmed; and 14 Second, that the harm to Mr. Clark resulted from CVS's conduct. 15 16 17 AUTHORITY 18 CACI § 4700. Consumers Legal Remedies Act—Essential Factual Elements (Civ. Code, § 19 1770) and Directions for Use; Cal Civ Code §§ 1770(a)(13), (16); Moran v. Prime Healthcare 20 Mgmt., Inc., 3 Cal. App. 5th 1131, 1152, 208 Cal. Rptr. 3d 303, 319 (Ct. App. 2016); Nelson v. 21 Person Ford Co., 186 Cal. App. 4th 983, 1022, 112 Cal. Rptr. 3d 607, 638 (2010), disapproved of 22 on other grounds by Raceway Ford Cases, 2 Cal. 5th 161, 385 P.3d 397 (2016). 23 24 25 26 27 28 97 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 2. The Florida Deceptive and Unfair Trade Practices Act 2 Plaintiffs claim CVS violated the Florida Deceptive and Unfair Trade Practices Act. The 3 Florida statute applies to acts that are either deceptive or unfair. Plaintiffs may prove certain 4 elements of this claim for all members of the Florida Class for acts that are allegedly deceptive. For 5 acts that are allegedly unfair, the Plaintiffs must prove the elements for each individual class 6 member. 7 Claims Relating to Allegedly Deceptive Acts: To recover damages from CVS for deceptive trade 8 practices, Plaintiffs must prove the following element by a preponderance of evidence: 9 That CVS engaged in a deceptive act or practice in the conduct of its trade or commerce. 10 11 An act or practice is "deceptive" if it is likely to mislead a person, acting reasonably in the 12 circumstances, to the person's detriment. 13 If you find that Plaintiffs have proved the above element that is common to the members of 14 the Florida Class, then you must determine with respect to the individual claims brought by Florida 15 Named Plaintiffs Debbie Barrett and Robert Jenks whether: 16 CVS's actions were the legal cause of actual damage sustained by Ms. 17 Barrett or Mr. Jenks. 18 Claims Relating to Allegedly Unfair Acts: Concerning allegedly unfair acts or practices, any such 19 claim could apply only to Florida Named Plaintiffs Debbie Barrett or Robert Jenks individually. To 20 recover damages from CVS for unfair acts or practices, Ms. Barrett and Mr. Jenks must prove all of 21 the following elements: 22 First, that CVS engaged in an unfair act or practice in the conduct of 23 its trade or commerce; and 24 Second, that CVS's actions were the legal cause of actual damage sustained by Ms. Barrett or Mr. Jenks. 25 26 An act or practice is "unfair" if it offends established public policy and is immoral, unethical, 27 oppressive, unscrupulous, or substantially injurious to consumers. An "unfair" practice or act must 28 98 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 satisfy three conditions: 2 First, it must produce substantial injury to the particular Named Plaintiff; 3 4 Second, the injury must not be outweighed by a benefit to consumers and/or competition that the practice produces; and 5 Third, it must be an injury that the particular Named Plaintiff could 6 not have reasonably avoided. 7 8 AUTHORITY 9 Beale v. Biomet, Inc., 492 F. Supp. 2d 1360, 1371–72 (S.D. Fla. 2007) (defining "deceptive" 10 and "unfair practice" (quoting Samuels v. King Motor Co. of Fort Lauderdale, 782 So.2d 489, 499 11 (Fla. 4th DCA 2001))); Five for Entm't S.A. v. Rodriguez, 877 F. Supp. 2d 1321, 1330 (S.D. Fla. 12 2012); Porsche Cars N. Am., Inc. v. Diamond, 140 So. 3d 1090, 1097–98 (Fla. 3rd DCA 2014); 13 Dorestin v. Hollywood Imports, Inc., 45 So. 3d 819, 825 (Fla. 4th DCA 2010) ("A FDUTPA claim 14 cannot be stated based upon oral representations which are in contradiction of written terms of a 15 contract, because reliance on such representations is unreasonable as a matter of law."); Fla Stat. § 16 501.203(8) (defining trade or commerce); see also Fla. Supreme Ct. Cmte. On Standard Jury 17 Instructions, Contract and Business Cases 2019 Amendments, at 4 (proposing new instructions 18 416.50 for FDUTPA actions), https://www-media.floridabar.org/uploads/2019/10/Final- 19 Instructions-Verdict-Forms-SJI-CB-2019.pdf. 20 21 22 23 24 25 26 27 28 99 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 3. The Illinois Consumer Fraud and Deceptive Business Practices Act 2 Plaintiffs claim CVS violated the Illinois Consumer Fraud and Deceptive Business Practices 3 Act. On such a claim, Plaintiffs must prove each of the following elements by a preponderance of 4 the evidence: 5 First, that CVS committed a deceptive or unfair act; 6 Second, that the deception or unfairness occurred in the course of conducting trade or commerce; and 7 8 Third, that CVS intended to induce the members of the Illinois Class to rely on the deception or unfairness. 9 10 The factors to be considered in determining unfairness are: (1) whether the practice offends 11 public policy; (2) whether it is immoral, unethical, oppressive, or unscrupulous; and (3) whether it 12 causes substantial injury to consumers. You are instructed to consider whether any such injury to 13 consumers is outweighed by any countervailing benefits to consumers or competition, and whether 14 any such injury could not reasonably have been avoided by the consumer. 15 If you find that Plaintiffs have proved the above elements that are common to the members 16 of the Illinois Class, then you must determine with respect to the individual claims brought by 17 Illinois Named Plaintiffs Robert Jenks and Carl Washington whether: 18 19 First, the particular Named Plaintiff was actually deceived by the deception or unfairness; and 20 Second, the particular Named Plaintiff suffered damages which were 21 proximately caused by CVS's deception or unfairness. 22 23 AUTHORITY 24 Instructions in Baron v. Trask, No. 05-3240 (C.D. Ill. Sept. 9, 2008) [Dkt. No. 201] (given 25 without objection); Pappas v. Pella Corp., 844 N.E.2d 995, 1002–03 (Ill. App. Ct. 2006) (laying 26 out unfairness factors); Kalpake v. Regas, 2018 Il App (1st) 17-1282-U, 2018 WL 1631359, at *9 27 28 100 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 (Ill. App. Ct. Mar. 30, 2018) (identifying elements of ICFA claim); Parrott v. Family Dollar, Inc., 2 2019 WL 4573222, at *4 (N.D. Ill. Sept. 20, 2019) (reciting same elements); Patel v. Zillow, Inc., 3 No. 17 C 4008, 2018 WL 2096453, at *9 (N.D. Ill. May 7, 2018); see also Miner v. Gov't Payment 4 Serv., Inc., No. 1:14-cv-07474, 2015 WL 3528243, at *5–7 (N.D. Ill. June 4, 2015); (explaining 5 connection between Illinois definition of "unfair" and FTC Policy Statement on Unfairness (1980)). 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 101 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 4. The Massachusetts Consumer Protection Act 2 Plaintiffs claim CVS violated the Massachusetts Consumer Protection Act. The 3 Massachusetts statute applies to acts that are either deceptive or unfair. Plaintiffs may prove certain 4 elements of this claim for all members of the Massachusetts Class for acts that are allegedly 5 deceptive. For acts that are allegedly unfair, the Plaintiffs must prove the elements for each 6 individual class member. 7 Claims Relating to Allegedly Deceptive Acts: On such a claim, Massachusetts Plaintiffs 8 must prove each of the following elements by a preponderance of the evidence: 9 First, that CVS was engaged in trade or commerce in its dealings with the members of the Massachusetts Class; and 10 Second, that CVS engaged in a deceptive act or practice. 11 12 Whether CVS was engaged in trade or commerce depends upon your examination of the 13 following factors: The nature of the transaction, the character of the parties, the activities engaged 14 in by the parties, whether there were past similar transactions, whether CVS's motivation was 15 personal or business-related, and whether CVS actively participated in the transaction. 16 A deceptive act or practice is one that has the capacity to deceive. An act or practice is 17 deceptive if it could reasonably cause a person to act differently from the way he or she would have 18 acted if he or she knew the truth about the matter. 19 20 If you find that Plaintiffs have proved the above elements that are common to the members 21 of the Massachusetts Class, then you must determine, with respect to the individual claims brought 22 by Massachusetts Named Plaintiff Robert Garber, whether: 23 24 CVS's deceptive act or practice caused Mr. Garber to suffer an injury. 25 Claims Relating to Allegedly Unfair Acts: Concerning allegedly unfair acts or practices, any 26 such claim could apply only to Massachusetts Named Plaintiff Mr. Garber individually. To recover 27 28 102 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 damages from CVS for unfair acts or practices, Mr. Garber must prove each of the following 2 elements: 3 First, that CVS was engaged in trade or commerce in its dealings with Mr. Garber; 4 5 Second, that CVS engaged in an unfair act or practice; and 6 Third, that CVS's unfair act or practice caused him to suffer an injury. 7 Whether CVS was engaged in trade or commerce depends upon your examination of the 8 following factors: The nature of the transaction, the character of the parties, the activities engaged 9 in by the parties, whether there were past similar transactions, whether CVS's motivation was 10 personal or business-related, and whether CVS actively participated in the transaction. 11 Whether an act or practice is unfair must be decided case-by-case and is a fact-specific 12 inquiry, and to make that determination you must consider whether the conduct lies within some 13 established concept of unfairness; whether it is immoral, unethical, oppressive, unscrupulous, or 14 otherwise unconscionable; or whether it would cause substantial injury to the public or to consumers 15 in general. In deciding whether CVS's conduct was unfair, you must consider the equities between 16 the parties. By that I mean you must consider CVS's and Mr. Garber's conduct, knowledge, and 17 what each should have reasonably known. 18 19 AUTHORITY 20 Instructions in Full Spectrum Software, Inc. v. Forte Auto. Sys., Inc., No. 4:12-cv-40098- 21 TSH (D. Mass. July 7, 2015) [Dkt. No. 182 at 21–25]; Mass. Sup. Ct. Civ. Practice Jury Instructions 22 (MCLE, Inc. 3d ed. 2014 & Supp. 2016) §§ 16.3 (trade or commerce), 16.4.2 (deceptive act), 16.4.3 23 (unfair act); MIT Fin. Grp., Inc. v. Palmer, No. 10-10463-PBS, 2012 WL 1077446, at *14–15 (D. 24 Mass. Mar. 6, 2012) (trade or commerce factors); Hanrahan v. Specialized Loan Serv., LLC, 54 F. 25 Supp. 3d 149, 153–55 (D. Mass. 2014) (defining deceptive act; conduct, knowledge, reasonably 26 should have known for unfairness); Tomasella v. Nestle USA, Inc., 364 F. Supp. 3d 26, 32 (D. Mass. 27 28 103 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 2019) (fact-specific, case-by-case; PMP Assocs., Inc. v. Globe Newspaper Co., 321 N.E.2d 915, 2 917–18 (Mass. 1975) (unfairness factors). 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 104 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 5. The New York Consumer Protection from Deceptive Acts and Practices 1 Statute 2 Plaintiffs claim CVS violated the New York Consumer Protection from Deceptive Acts and 3 Practices Statute. On such a claim, Plaintiffs must prove each of the following elements by a 4 preponderance of the evidence: 5 First, CVS's conduct was consumer-oriented; and 6 Second, CVS's conduct was materially deceptive or misleading. 7 In order to find that CVS's conduct was consumer-oriented, you must determine that CVS's 8 conduct had a broad impact on consumers at large. In other words, it must be proved that there was 9 injury to the public, not just a specific consumer. If the dispute relates to a private contract that is 10 unique to the parties, you should find that the conduct is not consumer-oriented. 11 In order to find that CVS's conduct was materially misleading, you must determine that 12 CVS's conduct was likely to mislead a reasonable consumer acting reasonably under the 13 circumstances. 14 If you find that Plaintiffs have proved the above elements that are common to the members 15 of the New York Class, then you must determine with respect to the individual claims brought by 16 New York Named Plaintiff Stephen Sullivan whether: 17 Mr. Sullivan suffered injury as a result of CVS's materially deceptive 18 or misleading conduct. 19 In order to find that Mr. Sullivan suffered injury, you must determine whether he suffered 20 either pecuniary harm or actual harm as a result of CVS's conduct. 21 22 23 AUTHORITY 24 Stutman v. Chem. Bank, 731 N.E.2d 608, 611 (N.Y. 2000) (elements); Small v. Lorillard 25 Tobacco Co., 720 N.E.2d 892, 897–98 (N.Y. 1999) (pecuniary or actual harm); Oswego Laborers' 26 Local 214 Pension Fund v. Marine Midland Bank, 647 N.E.2d 741, 744–45 (N.Y. 1995); N.Y. Univ. 27 28 105 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 v. Continental Ins. Co., 662 N.E.2d 763, 770 (N.Y. 1995); see generally N.Y. Pattern Jury Instr.— 2 Civil 3:20, Section XIV.A. ("Statutory Remedies"; "General Business Law § 349(a)"). 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 106 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 B. General Principles Regarding the State Consumer Protection Statutes 1 I have instructed you regarding the elements of the Arizona, California, Florida, Illinois, 2 Massachusetts, and New York consumer protection statutes. I will now instruct you regarding 3 general principles that apply to each of the consumer protection statutes and which you must 4 consider in deciding whether Plaintiffs have proved the elements of each statute. 5 1. Mere Breach of Contract 6 In determining whether CVS engaged in any deceptive or unfair act or practice, you are 7 instructed that a breach of contract is not, by itself, deceptive or unfair. Therefore, if you find that 8 any of Plaintiffs' claims are based exclusively on an alleged breach of contract, then you must find 9 for CVS on any such claim. 10 11 AUTHORITY 12 Zenaty-Paulson v. McLane/Sunwest, Inc., No. CIV-99-472-PHX-RCB, 2000 WL 33300666, 13 at *16 (D. Ariz. 2000) (citing Rawlings v. Apodaca, 726 P.2d 565, 574 (Ariz. 1986)); Freeman & 14 Mills, Inc. v. Belcher Oil Co., 900 P.2d 669, 679–80 (Cal. 1995); Bankers Tr. Co. v. Basciano, 960 15 So. 2d 773, 778 (Fla. 5th DCA 2007); Rebman v. Follett Higher Edu. Grp., Inc., 575 F. Supp. 2d 16 1272, 1278–79 (M.D. Fla. 2008); Anderson Elec. v. Ledbetter Erection Corp., 503 N.E.2d 246, 249 17 (Ill. 1986); Cook v. AAA Life Ins. Co., 13 N.E.3d 20, 32 (Ill. App. Ct. 2014); Madan v. Royal Indem. 18 Co., 532 N.E.2d 1214, 1217 (Mass. App. Ct. 1989); Tucker v. AM Sutton Assocs., 792 N.Y.S.2d 19 539, 541 (N.Y. App. Div. 2005); Lee v. Matarrese, 793 N.Y.S.2d 457, 457–58 (N.Y. App. Div. 20 2005). 21 22 23 24 25 26 27 28 107 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 2. Misrepresentation 1 In determining whether CVS engaged in any deceptive or unfair act or practice, you are 2 instructed that Plaintiffs must prove that CVS made a misrepresentation to the members of the 3 Classes. 4 In deciding whether CVS made a misrepresentation, you are instructed that CVS did not 5 have any duty to disclose to the members of the Classes information about the HSP program, usual 6 and customary pricing, or any potential relationship between those subjects and their copayments. 7 Any failure by CVS to disclose such information is not a misrepresentation. 8 If you find that Plaintiffs have not proved that CVS made a misrepresentation to the members 9 of the Classes, then you must find for CVS on each of Plaintiffs' claims. 10 11 AUTHORITY 12 Corcoran v. CVS Health Corp., No. 4:15-cv-03504, 2017 WL 3873709, at *16 (N.D. Cal. 13 Sept. 5, 2017); see also id. at *20 ("Plaintiffs' claims of misrepresentation rely on defendants 14 breaching their contract with the PBMs and TPPs by submitting false U&C prices."); Corcoran v. 15 CVS Health Corp., 169 F. Supp. 3d 970, 989 (N.D. Cal. 2016) ("[T]he Court declines Plaintiffs' 16 invitation to impose a duty on pharmacists as a matter of law which encompasses matters of drug 17 pricing" and their "invitation to impose a special, confidential, or fiduciary duty on institutions in 18 all commercial transactions, where they will necessarily be in a position of greater knowledge 19 regarding pricing."). 20 21 22 23 24 25 26 27 28 108 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 3. Causation 1 I will now instruct you about two principles of causation—proximate causation and 2 superseding cause. 3 a) Proximate Causation 4 Each of the consumer protection statutes described above includes an element that requires 5 proof that CVS's conduct was the "proximate cause" of the injury or harm. Those elements are as 6 follows: 7 For the Arizona statute, that a plaintiff suffer damage "as a result of" 8 the defendant's conduct; 9 For the California statute, that a plaintiff's harm "resulted from" the 10 defendant's conduct; 11 For the Florida statute, that the defendant's conduct was "the legal cause of" actual damage sustained by the plaintiff; 12 For the Illinois statute, that the plaintiff "suffered damages which 13 were proximately caused by" the defendant's conduct; 14 For the Massachusetts statute, that the defendant's conduct "caused" 15 the plaintiff to suffer an injury; and 16 For the New York statute, that the plaintiff suffered injury "as a result of" the defendant's conduct. 17 18 On the Verdict Form, you will be asked whether CVS's conduct is capable of proximately 19 causing the alleged injury or harm to at least one member of each Class, but you are not being asked 20 to determine whether CVS's conduct proximately caused the alleged injury or harm to all members 21 of the Class. You are, however, being asked to determine whether CVS's conduct proximately 22 caused injury or harm to the Named Plaintiffs. 23 In determining whether CVS's conduct was capable of proximately causing injury or harm 24 to at least one member of a Class, or whether CVS's conduct proximately caused injury or harm to 25 each of the Named Plaintiffs, you are instructed as follows: 26 In order for conduct to be a proximate cause of injury or harm, the conduct must be a substantial factor in bringing about the injury or 27 harm. 28 109 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 Whether conduct is a substantial factor in bringing about injury or 1 harm depends upon the number of other factors which contribute in 2 producing the injury or harm and the extent of effect which those other factors have in producing it; whether the conduct created a force 3 or series of forces which are in continuous and active operation up to the time of the injury or harm; and the lapse of time. 4 Conduct is not a substantial factor in bringing about injury or harm if 5 the injury or harm would have been sustained even if the conduct had not occurred. 6 7 b) Superseding Cause 8 You are also instructed CVS's conduct is not a proximate cause of injury or 9 harm where an intervening force operates as a superseding cause of the injury or 10 harm. A superseding cause is: 11 an act of a third person or other force which by its intervention 12 prevents the actor from being liable for harm to another which his antecedent negligence is a substantial factor in bringing about. 13 14 AUTHORITY 15 Restatement (Second) of Torts §§ 431–33 (substantial factor provisions), 440 (definition of 16 superseding cause), 441 (intervening force as superseding cause) (1965); Schellenbach v. 17 GoDaddy.com, LLC, 321 F.R.D. 613, 619 (D. Ariz. 2017); McDowell v. Davis, 448 P.2d 869, 871– 18 72 (Ariz. 1968) (adopting Restatement); Moore v. USC Univ. Hosp., Inc., No. CV-07-7850 PA (EX), 19 2009 WL 10675631, at *3 (C.D. Cal. Sept. 8, 2009); Behrmann v. Baker, 2d Civil No. B241830, 20 2013 WL 3367301, at *2 (Cal. Ct. App. July 3, 2013) (unpublished); S. Coast Framing, Inc. v. 21 W.C.A.B., 349 P.3d 141, 145–46 (Cal. 2015) (acknowledging California's adoption of Restatement); 22 Stewart Agency, Inc. v. Arrigo Enters., Inc., 266 So. 3d 207, 213 (Fla. 4th DCA 2019); cf. Tenn. 23 Corp. v. Lamb Bros. Constr. Co., 265 So. 2d 533, 536 (Fla. 2nd DCA 1972) (analogizing Florida's 24 legal causation and Restatement sections 431–33 and 435); Spector v. Mondelez Int'l, Inc., 178 F. 25 Supp. 3d 657, 666 (N.D. Ill. 2016); Knauerhaze v. Nelson, 836 N.E.2d 640, 651 (Ill. App. Ct. 2005) 26 (citing Restatement section 431 in laying out proximate cause requirements); Ferreira v. Sterling 27 Jewlers, Inc., 130 F. Supp. 3d 471, 484–85 (D. Mass. 2015); see also Zotbelle, Inc. v. Kryolan Corp., 28 110 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 --- F. Supp. 3d ----, 2019 WL 4602854, at *13 (D. Mass. Sept. 23, 2019); Johnson v. Summers, 577 2 N.E.2d 301, 306 (1991) (citing Restatement and stating conduct must be "a 'substantial factor' in 3 bringing about harm to the plaintiff"); King v. N.Y.C. Emp'ees Ret. Sys., 212 F. Supp. 3d 371, 407 4 (E.D.N.Y. 2016); Murray-Davis v. Rapid Armored Corp., 752 N.Y.S.2d 37, 37–38 (App. Div. 2002) 5 (citing Restatement for proposition that conduct may have been "a substantial proximate cause of 6 the event which produced the injury" (quoting Ferrer v. Harris, 434 N.E.2d 231 (N.Y. 1982))). 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Date Submitted: May 5, 2020 27 28 111 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 PARTIES' STATEMENT REGARDING DISPUTED JURY INSTRUCTION NO. 33 2 Plaintiffs: Plaintiffs submit that their proposed instructions are straightforward, use plain language 3 rather than legal jargon, are not argumentative, and are consistent with this Court's and the Ninth 4 Circuit's rulings and applicable law. Plaintiffs set forth the elements of the six states' statutory 5 causes of action, informed by the nature of this proceeding. They set forth the elements of Plaintiffs' 6 claims that are common across the classes, while including separate instructions for those few 7 elements that differ among the states' laws. In this regard, they are substantially similar in form and 8 content to the preliminary jury instructions Plaintiffs submitted with their class certification papers, 9 which the Court found were appropriate. Corcoran v. CVS Health, No. 15-CV-03504-YGR, 2019 10 WL 6250972, at *9 (N.D. Cal. Nov. 22, 2019). Notably, at last November's hearing on Plaintiffs' 11 amended motion to certify the New York and Arizona classes (with which Plaintiffs again had 12 submitted jury instructions for all six of the classes), the Court pressed CVS to substantiate its 13 argument that those "proposed jury instructions do not properly or precisely match the appropriate 14 state law." Id. CVS's counsel was unable to do so, as the Court concluded: CVS "could not 15 substantively identify any differences so significant that could not otherwise be managed." Id. 16 Despite being unable to identify meaningful problems with Plaintiffs' preliminary proposed 17 jury instructions, CVS now submits a long, convoluted, and jargon-laden set of instructions on the 18 claims and defenses. CVS's instructions and supposed supporting authorities are 17 pages long. 19 They are replete with opaque legal terms, such as "proximate causation," "provision," "superseding 20 cause," "affirmative defense" and on and on. CVS's approach is at odds with this Court's Standing 21 Civil Pretrial Order. 22 CVS's proposed instructions also mischaracterize, ignore, or defy the rulings in this case in 23 multiple respects. First, CVS seeks to interject additional elements for Plaintiffs' UDAP claims that 24 are inconsistent with the Ninth Circuit's holding that "[i]t is enough for plaintiffs to show that CVS 25 failed to report the HSP prices as U&C prices contrary to the PBM contracts, and that, as a result, 26 plaintiffs were charged higher copayments." Corcoran, 779 F. App'x at 433. 27 Second, CVS unduly narrows the potential deceptive conduct at issue, by including the 28 112 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 proposed instruction that "[i]n deciding whether CVS made a misrepresentation, you are instructed 2 that CVS did not have any duty to disclose to the members of the Classes information about the 3 HSP program, usual and customary pricing, or any potential relationship between those subjects and 4 their copayments. Any failure by CVS to disclose such information is not a misrepresentation." As 5 its purported authority for this proposed instruction, CVS cites to this Court's motion to dismiss 6 ruling: "[T]he Court declines Plaintiffs' invitation to impose a duty on pharmacists as a matter of 7 law which encompasses matters of drug pricing" and their "invitation to impose a special, 8 confidential, or fiduciary duty on institutions in all commercial transactions, where they will 9 necessarily be in a position of greater knowledge regarding pricing." Corcoran v. CVS Health Corp., 10 169 F. Supp. 3d 970, 989 (N.D. Cal. 2016). But CVS mischaracterizes this ruling, which dealt 11 specifically with Plaintiffs' previous common law constructive fraud claim, as the initial sentence 12 of the Court's opinion in the section CVS cites makes clear: "In contrast to a claim for actual fraud, 13 a claim for constructive fraud exists where persons in a fiduciary, special, or confidential 14 relationship violate their duty to disclose, even in the absence of intent to deceive." Id. at 988 15 (emphasis added). That holding is not relevant to Plaintiffs' consumer protection claims, which 16 broadly prohibit deceptive acts or practices. CVS's false and deceptive acts here necessarily involve 17 simultaneous false statements: (1) presentation to Plaintiffs and class members by CVS of a false 18 and inflated out-of-pocket copay as the accurate amount for them to pay under their insurance, and 19 (2) and omissions—CVS's failure to inform Plaintiffs that it was not reporting its HSP prices as its 20 U&C prices, and thus was denying Plaintiffs the benefit of their prescription insurance. CVS's 21 incomplete and misleading instruction would give the jury the incorrect impression and take from 22 the jury the opportunity to judge the full range of CVS's deceptive conduct. See also Plaintiffs' 23 Opposition to CVS Motion in Limine No. 5. 24 Third, CVS's instruction treats the case as if it were not a certified class action. CVS 25 proposes that the Court "instruct [the jury] on which elements you are to consider as to all members 26 of the particular class, and which elements you are to consider only to the Named Plaintiff's claim." 27 But there is no basis for such an instruction, and it would be contrary to the Rule 23 rulings made 28 113 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 in this case. The Court did not limit certification only to certain liability issues; the Ninth Circuit 2 expanded this Court's certification further still; and there is no justification for the supposed 3 individualized approach that CVS's instructions suggest. See Pls.' Resp. to CVS's Proposal re 4 Adjudication of Individualized Issues. For this reason, CVS's restriction of its prolix and jargon- 5 filled causation element to the Named Plaintiffs only, is wholly unwarranted and contrary to the 6 operative Court rulings in this case. 7 Fourth, CVS proposes a superseding cause instruction without explaining why it would be 8 warranted. Plaintiffs anticipate that CVS will attempt to argue that the PBMs' knowledge and 9 participation in the conduct acts as a superseding cause. But as Plaintiffs explained in their briefing 10 before this Court and the Ninth Circuit, the PBMs' role cannot be used by CVS as a defense to shield 11 it from liability to Plaintiffs. And the Ninth Circuit agreed, rejecting CVS's arguments that the 12 PBMs' knowledge of CVS's conduct, or purported agreement, presented CVS with a defense to 13 Plaintiffs' claims. Corcoran, 779 F. App'x at 433. What is more, "'[a] superseding cause must be 14 something more than a subsequent act in a chain of causation; it must be an act that was not 15 reasonably foreseeable[.]'" Colgate v. JUUL Labs, Inc., 402 F. Supp. 3d 728, 761 (N.D. Cal. 2019) 16 (quoting USAir Inc. v. U.S. Dep't of Navy, 14 F.3d 1410, 1413 (9th Cir. 1994) (rejecting superseding 17 cause argument as a matter of law). Given the integral nature of the PBMs' role in the pharmacy 18 claim adjudication process, and CVS's knowledge that not reporting the lower HSP prices as its 19 U&C prices would lead to higher payments by Plaintiffs, the PBMs' role was "reasonably 20 foreseeable" and thus CVS cannot establish that the PBMs' participation could constitute a 21 superseding cause. "The courts are quite generally agreed that [foreseeable intervening forces] will 22 not supersede the defendant's responsibility." Prosser and Keeton on Torts § 44, at 303-04 (5th ed. 23 1984); see also Restatement (Second) of Torts § 443 (1965) ("The intervention of a force which is 24 a normal consequence of a situation created by the actor's ... conduct is not a superseding cause of 25 harm which such conduct has been a substantial factor in bringing about."); United States v. Mackby, 26 261 F.3d 821, 824-26, 828 (9th Cir. 2001) (affirming liability under False Claims Act, where clinic 27 instructed its billing company to use an improper code on Medicare reimbursement form, thereby 28 114 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 obtaining fraudulent reimbursements from the government.). 2 In sum, Plaintiffs' straightforward approach—one to which CVS could raise no real 3 objection during the certification hearing last year—should be adopted over CVS's confused and 4 confusing proposal that is contrary this Court and Ninth Circuit rulings made in this case. 5 6 CVS: CVS's Proposed Instruction No. 33 accurately states the elements of each of the six consumer 7 protection statutory claims the jury will decide, and does so as efficiently as practicable in a case 8 where six separate statutes are at issue.13 9 CVS's Proposed Instruction No. 33 concerning all six statutes are sourced from the pattern 10 instructions for consumer protection claims in the applicable states, where such pattern instructions 11 are available, and from caselaw interpreting the particular state laws at issue. By contrast, Plaintiffs' 12 proposed instruction does not follow the states' pattern instructions at all. This in itself is an 13 important reason to prefer CVS's proposed instruction. Plaintiffs' failure to follow state laws and 14 pattern instructions also leads to at least three other big-picture differences between CVS's and 15 Plaintiffs' proposed instructions. 16 1. Breach of Contract Is Not Automatically Deceptive or Unfair Conduct. In fact, a mere 17 breach of contract is never deceptive or unfair conduct. Unlike Plaintiffs' proposal, CVS's 18 instruction correctly informs the jury that it must separately decide whether CVS breached the PBM 19 contracts and whether CVS's conduct violated the "deceptive or unfair" requirements of the state 20 consumer protection statutes. CVS proposes instructions on both topics, and clearly instructs the 21 jury that more than a "mere breach of contract" is required to establish the "deceptive or unfair" 22 conduct element under the various statutes. That is the law in each of the class states. See supra 23 CVS's Proposed Instruction 33.B.1 (explaining "mere breach of contract" is not a deceptive or 24 25 13 Plaintiffs' proposed jury instructions and verdict form indicate they intend for the jury to decide claims under a seventh statute—California's Unfair Competition Law. Private plaintiffs' claims 26 under the UCL are decided by the Court, not the jury. Nationwide Biweekly Admin., Inc. v. Superior Ct., No. S250047, Slip. Op. at 61 (Cal. Apr. 30, 2020) ("In sum, we conclude that there is no right 27 to a jury trial under the California Constitution in a cause of action under the UCL or FAL."). 28 115 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 unfair act); see also, e.g., 2 Business Torts, Ch. 19, State Consumer Protection Laws, § 19.04[4] 2 (Matthew Bender, Revised Edition 2020) ("[A] mere breach of contract, even if intentional, will not 3 sustain an action under an unfair or deceptive trade practices act. Substantial aggravating 4 circumstances attendant to the breach must be shown before the breach will rise to the level of being 5 an unfair or deceptive trade practice."); Zankle v. Queen Anne Landscaping, 724 N.E.2d 988, 992– 6 93 (Ill. 2000) ("[I]t is settled that the Consumer Fraud Act was not intended to apply to every 7 contract dispute or to supplement every breach of contract claim with a redundant remedy."); Brooks 8 v. AIG SunAmerica Life Assurance Co., 480 F.3d 579, 590 (1st Cir. 2007) (applying Massachusetts 9 law) ("A mere breach of contract does not constitute an unfair or deceptive trade practice under 10 93A, unless it rises to the level of 'commercial extortion' or a similar degree of culpable conduct." 11 (citation omitted)).14 In short, proving a breach of contract is necessary, but not sufficient, for 12 Plaintiffs to prove deceptive or unfair conduct for purposes of the consumer protection statutes. 13 Plaintiffs would have the Court instruct the jury: "[i]f you find that the CVS-PBM contracts 14 required CVS to report the HSP price as the usual and customary price, then this [deceptive and 15 unfair conduct] element is satisfied for all states." Such an instruction would be clear error under 16 the law of each of the six class states. 17 Plaintiffs are attempting to collapse into one inquiry the questions of breach of contract, and 18 of deception or unfair conduct, because they have no evidence of (purportedly) deceptive or unfair 19 conduct; they have evidence (purportedly) only that CVS breached of its contracts with the PBMs 20 by not submitting the HSP price as the U&C price. Yet this is a case alleging consumer fraud. See, 21 e.g., Third Am. Compl. ¶ 2, (Apr. 4, 2016) (ECF No. 101) ("This action alleges a common fraudulent 22 14 See also Zenaty-Paulson v. McLane/Sunwest, Inc., No. CIV-99-472-PHX-RCB, 2000 WL 23 33300666, at *16 (D. Ariz. 2000) (citing Rawlings v. Apodaca, 726 P.2d 565, 574 (Ariz. 1986)); 24 Freeman & Mills, Inc. v. Belcher Oil Co., 900 P.2d 669, 679–80 (Cal. 1995); Bankers Tr. Co. v. Basciano, 960 So. 2d 773, 778 (Fla. 5th DCA 2007); Rebman v. Follett Higher Edu. Grp., Inc., 575 25 F. Supp. 2d 1272, 1278–79 (M.D. Fla. 2008); Anderson Elec. v. Ledbetter Erection Corp., 503 N.E.2d 246, 249 (Ill. 1986); Cook v. AAA Life Ins. Co., 13 N.E.3d 20, 32 (Ill. App. Ct. 2014); Madan 26 v. Royal Indem. Co., 532 N.E.2d 1214, 1217 (Mass. App. Ct. 1989); Tucker v. AM Sutton Assocs., 792 N.Y.S.2d 539, 541 (N.Y. App. Div. 2005); Lee v. Matarrese, 793 N.Y.S.2d 457, 457–58 (N.Y. 27 App. Div. 2005). 28 116 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 and deceptive pricing scheme by CVS…."); id. ¶ 11 ("Beginning in 2008, CVS orchestrated and 2 carried out a massive fraud…."); Plfs. Opp. to CVS Mot. for Summ. J. at 23 (June 20, 2017) (ECF 3 No. 304) (comparing Plaintiffs' claims to other "cases of unfair dealing or fraud" and accusing CVS 4 of "fraudulent misrepresentation[s]"); see also Corcoran v. CVS Health Corp., 169 F. Supp. 3d 970, 5 988 (N.D. Cal. 2016) ("The gravamen of Plaintiffs' allegations is that CVS created the HSP program 6 to report misleading U & C prices…."). Plaintiffs must show a misrepresentation to establish 7 deception or unfairness, and yet they have no evidence whatsoever that CVS made any 8 misrepresentations to the PBMs or anyone concerning U&C prices, the HSP program, or insurance 9 copayments, and they are trying to compensate through equating a breach of contract with proof of 10 the actionable conduct under the consumer protection statutes. See, e.g., Corcoran v. CVS Health 11 Corp., No. 4:15-cv-03504, 2017 WL 3873709, at *20 (N.D. Cal. Sept. 5, 2017) (on summary 12 judgment: "Plaintiffs' claims of misrepresentation rely on defendants breaching their contract with 13 the PBMs and TPPs by submitting false U&C prices."); Corcoran, 169 F. Supp. 3d at 988 n.14 (on 14 motion to dismiss: "The Court rejects Defendants' argument that the terms or substance of the 15 fraudulent misrepresentations were not conveyed to Plaintiffs.") (emphases added).15 16 Plaintiffs cite no authority for the proposition that an alleged breach of contract, standing 17 alone, satisfies the deceptive or unfair conduct elements of the statutes. Instead, they rely entirely 18 on a misreading of the Ninth Circuit's opinion. The Ninth Circuit reversed this Court's grant of 19 summary judgment against Plaintiffs, finding that there was a triable issue of whether CVS violated 20 the consumer protection statutes even though the PBMs agreed that CVS's HSP prices were not 21 U&C prices. In that context, the Ninth Circuit stated as follows: 22 Plaintiffs argue that certain emails and presentations (that CVS produced) 23 24 25 15 This is Plaintiffs' description of the "materiality" element of their claims, tethering that element to CVS's compliance with the contracts: "If you find that it would have been important for Plaintiffs 26 to know that CVS's contracts with PBMs required it to submit HSP prices as U&C prices (if that is what you find; see Instruction No. __ above), and that CVS's failure to do so increased Plaintiffs' 27 out-of-pocket payments, then this element is satisfied." 28 117 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 show that CVS employees had expressed concerns about whether CVS 1 needed to report its HSP price as usual and customary, but the district court 2 found that those materials failed to create a triable issue, because CVS did not misrepresent, based on the PBMs' testimony, the U&C price. We 3 disagree. A jury weighs the evidence and determines whether CVS engaged in wrongful conduct in its reporting of U&C prices, which resulted in the 4 PBMs calculating higher copayments. Contrary to CVS's assertion, plaintiffs need not produce evidence that the PBMs believed that CVS 5 misrepresented the U&C price. It is enough for plaintiffs to show that CVS 6 failed to report the HSP prices as U&C prices contrary to the PBM contracts, and that, as a result, plaintiffs were charged higher copayments. 7 Corcoran v. CVS Health Corp., 779 F. App'x 431, 433 (9th Cir. 2019). This passage does not stand 8 for the proposition that Plaintiffs need not prove the elements of the state consumer protection 9 statutes under which they are suing—that issue was not before the Court, and if the Ninth Circuit 10 had intended to interpret the consumer protection laws of six states in a manner contrary to binding 11 authority in those states, it would have said so. Rather, the Ninth Circuit merely held that a genuine 12 issue of material fact exists for trial, such that summary judgment should not have been granted 13 against Plaintiffs, even though the PBMs interpreted the contracts as the same way CVS did. The 14 Ninth Circuit did not hold that if Plaintiffs prove the HSP price was the U&C price, Plaintiffs have 15 automatically proven CVS committed deceptive or unfair acts, or any other prima facie elements of 16 their claims. That issue was not before the Ninth Circuit, which was reviewing this Court's grant 17 of summary judgment in CVS's favor on the ground that the PBMs' testimony defeated Plaintiffs' 18 claims. And any such holding would have been directly contrary to governing state law. 19 Instructively, the Ninth Circuit's opinion did not cite any case law from the six states construing 20 their consumer protection statutes. 21 Finally, this key instruction to Plaintiffs' approach—"[i]f you find that the CVS-PBM 22 contracts required CVS to report the HSP price as the usual and customary price, then this [deceptive 23 and unfair conduct] element is satisfied for all states"—was not included in the draft instructions 24 submitted in support of their second and third motions for class certification. Nor was Plaintiffs' 25 present instruction on "Materiality" submitted; that instruction also attempts to use evidence of a 26 breach of contract to satisfy an element of a consumer protection claim ("If. . . it would have been 27 28 118 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 important for Plaintiffs to know that CVS's contracts with PBMs required it to submit. . ."). These 2 examples refute Plaintiffs' argument that their Proposed Instruction No. 32 is "substantially similar 3 in. . . content" to the draft instructions they submitted in support of their motions for class 4 certification. 5 2. A Misrepresentation is Required; a Failure to Disclose is Insufficient. 6 Plaintiffs' proposed instruction fails to advise the jury of two other well-established legal 7 propositions governing the claims in this case: (1) a misrepresentation is required for Plaintiffs to 8 prove a violation of the consumer protection statutes, and (2) CVS's mere failure to affirmatively 9 disclose to class members the existence of the HSP program and/or its relationship to their insurance 10 copayments is not a basis to find CVS liable. 11 The first proposition has been established since the Court's ruling on the original motion to 12 dismiss in March 2016. See, e.g., Corcoran, 169 F. Supp. 3d at 988 n.14 ("The Court rejects 13 Defendants' argument that the terms or substance of the fraudulent misrepresentations were not 14 conveyed to Plaintiffs.") (emphasis added). Then, at summary judgment, the Court based its 15 decision entering summary judgment for CVS on the absence of a misrepresentation. Corcoran v. 16 CVS Health Corp., No. 4:15-cv-03504, 2017 WL 3873709, at *20 (N.D. Cal. Sept. 5, 2017) 17 ("Plaintiffs' claims of misrepresentation rely on defendants breaching their contract with the PBMs 18 and TPPs by submitting false U&C prices.") (emphasis added). Although Plaintiffs appealed from 19 the Court's conclusion that there was no dispute of fact that CVS had made a misrepresentation, 20 Plaintiffs did not argue on appeal that no proof of a misrepresentation was required. Nor did the 21 Ninth Circuit hold that Plaintiffs do not need to prove a misrepresentation; rather, it held that the 22 PBM testimony by itself did not foreclose their claims, "[g]iven the extrinsic evidence proffered by 23 plaintiffs to support their reasonable interpretation of the U & C language in the PBM contracts." 24 Corcoran, 779 F. App'x at 433. 25 The second proposition (that a failure to disclose is not sufficient for liability) also comes 26 directly from the Court's original motion to dismiss opinion, which found no "duty [to disclose] on 27 pharmacists as a matter of law which encompasses matters of drug pricing." Corcoran, 169 F. Supp. 28 119 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 3d at 989. Plaintiffs argue this holding applied only to their dismissed claim of constructive fraud, 2 and does not apply to their consumer protection claims. Yet Plaintiffs, strikingly, cite no authority 3 for the proposition that state consumer protection statues impose on CVS a duty to disclose 4 information about drug pricing (e.g. the HSP price, the relationship of that price to insurance 5 copayments) that does not otherwise exist under the law. This is because consumer protection 6 statutes do not themselves impose duties to disclose. See, e.g., In re NJOY, Inc. Consumer Class 7 Action Litig., No. CV1400428MMMJEMX, 2015 WL 12732461, at *14 (C.D. Cal. May 27, 2015) 8 ("Where an [Florida Deceptive Unfair Trade Practice Act] claim is based on an omission, and the 9 defendant had no duty to disclose the purportedly withheld information, the claim fails as a matter 10 of law."); In re Sony Gaming Networks & Customer Data Sec. Breach Litig., 996 F. Supp. 2d 942, 11 991 (S.D. Cal. 2014), order corrected, No. 11MD2258 AJB (MDD), 2014 WL 12603117 (S.D. Cal. 12 Feb. 10, 2014) ("To be actionable under all three California consumer protections statutes, an 13 omission must be contrary to a representation actually made by the defendant, or an omission of a 14 fact the defendant was obliged to disclose. A duty to disclose may arise: (1) when the defendant is 15 in a fiduciary relationship with the plaintiff; (2) when the defendant had exclusive knowledge of 16 material facts not known to the plaintiff; (3) when the defendant actively conceals a material fact 17 from the plaintiff; or (4) when the defendant makes partial representations but also suppresses some 18 material fact.") (internal quotations omitted). 19 3. CVS's Instruction Distinguishes What Elements of Plaintiffs' Claims are Common to the 20 Class vs. Individual to the Named Plaintiff. CVS's proposed instruction is superior for the additional 21 reason that it succinctly and clearly identifies for the jury which elements can be determined for the 22 entire class and which can be determined only at the individual class-member level. 23 Plaintiffs dispute that any elements of their claims raise individual issues, but that position 24 is incorrect because their claims include elements such as materiality, reliance, and proximate 25 causation, which depend in part upon what the individual class members knew at the time of their 26 allegedly overpriced purchase. For example, the element of causation cannot possibly be established 27 if a customer was aware that he was paying more than the HSP program price. See Hutson v. Rexall 28 120 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 Sundown, Inc., 837 So. 2d 1090, 1093 (Fla. 4th DCA 2003) ("[A] person who had actual knowledge 2 of the [truth] would not have suffered any damages as a result of the alleged deceptive trade practice 3 and, therefore, would have no cause of action."). The same applies to the statute of limitations for 4 certain states, whose triggering event is tethered to what the individual class member knew or should 5 have known. These are problems, for example, for the nearly 100,000 members of Plaintiffs' classes 6 here who were also enrolled in the HSP program, most of whom were HSP members before or 7 contemporaneously with their purchases that qualify them for the class. See Expert Decl. of Brett 8 Barlag (June 20, 2017) ¶¶ 30–31. For the reasons described more fully in the Proposal for 9 Adjudication of Individualized Issues (submitted with these proposed instructions), only certain 10 elements of Plaintiffs' claims are capable of class-wide determination, while others must be 11 determined in individualized adjudications. CVS's instructions carefully identify each issue for the 12 jury and provide a helpful roadmap for the jury's deliberations by explaining element-by-element 13 whether the determination is class-wide or individualized. 14 4. CVS's State-by-State Instructions Accurately Communicate the Distinct Elements of 15 Each Statutory Claim; Plaintiffs' Instructions Oversimplify and Misstate the Law. CVS's 16 instructions are drawn from each state's pattern instructions, where available, and from caselaw 17 interpreting the elements of the particular state laws. CVS's proposal thereby seeks to ensure that 18 the instructions account for the meaningful "nuance[s]" in the elements across "differing judicial 19 formulations" and any important "subordinate concepts." Matter of Rhone-Poulenc Rorer, Inc., 51 20 F.3d 1293, 1300 (7th Cir. 1995) (rejecting an instruction that "merg[ed] the negligence standards" 21 of all the states because even just "nuance can be important, and its significance is suggested by a 22 comparison of differing state pattern instructions on negligence and differing judicial formulations 23 of the meaning of negligence and the subordinate concepts"); see also, e.g., Bryant v. Serv. Corp. 24 Int'l, 2011 WL 855815, at *6 (N.D. Cal. Mar. 9, 2011) (denying class certification and reasoning, 25 in part, that "the Court would be required to instruct the jury regarding the law of varying numbers 26 of states on three distinct but partially overlapping groups of claims"); Sweet v. Pfizer, 232 F.R.D. 27 360, 372 (C.D. Cal. 2005) (same, reasoning that "the Ninth Circuit has written that when more than 28 121 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 a few state laws differ, [the] court would be faced with [the] impossible task of instructing [the] jury 2 on relevant law" (alterations in original) (citations and quotation marks omitted)).16 3 As noted in In re Rhone-Poulenc, each state's model instructions demonstrate there are 4 significant differences across the various state statutes. CVS, unlike Plaintiffs, has undertaken to 5 account for those differences. Plaintiffs instead completely ignore them and offer the type of 6 instruction warned against in In re Rhone Poulenc. 7 This approach leads to several significant substantive errors in Plaintiffs' proposed 8 instruction. 9 First, Plaintiffs would instruct that the first element of every consumer protection statute is 10 satisfied upon proof of a "false, misleading, deceptive, or unfair act or practice." Their instruction 11 is stated in the disjunctive, meaning a "false" OR "misleading" OR "deceptive" OR "unfair" practice 12 is sufficient to impose liability. Yet not every statute supports a claim predicated on each of these 13 different types of conduct. By their terms, five of the six statues at issue do not prohibit "misleading" 14 conduct. By contrast, the most common types of conduct prohibited by the statutes are "deceptive" 15 and "unfair" acts—all six statutes prohibit acts of the former variety, and four prohibit acts of the 16 latter (as discussed below). By suggesting that any of the four grounds listed in Plaintiffs' proposed 17 instruction can be actionable conduct under each statute, Plaintiffs misstate the law. 18 The one statute that does mention "misleading" statements is the CLRA. Cal. Civ. Code §§ 19 1770(a)(13), (16).17 The CLRA, though, prohibits only certain types of misleading statements that 20 are enumerated in the statute—as relevant here, such statements concerning either (1) "price 21 reductions" or (2) "that the subject of a transaction had been supplied in accordance with a previous 22 16 Zinser v. Accufix Research Inst., Inc., 253 F.3d 1180, 1190 (9th Cir. 2001) (requiring "manageable 23 trial plan adequate to deal with individualized issues and variances in state law"); id. at 1192 24 (affirming denial of class certification based on "formidable complexities [] inherent in trying [three tort] claims…with different state laws"); In re Am. Med. Sys., Inc., 75 F.3d 1069, 1085 (6th Cir. 25 1996) ("If more than a few of the laws of the fifty states differ, the district judge would face an impossible task of instructing a jury on the relevant law." (cited favorably in Zinser)). 26 17 The caselaw construing New York's statute provides that "materially misleading" statements are 27 actionable under that statute, although the phrase is not in the statute itself. 28 122 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 representation when it had not." See id.; see also Corcoran, 169 F. Supp. 3d at 992 (finding Plaintiffs 2 "claim[s] plausible under CLRA §§ 1770(a)(13) and (a)(16)"); supra Plaintiffs' Proposed Instruction 3 No. 33 (citing only these two CLRA sections in the "Authority" section); Exhibit 46 to Plfs. Am. Mot. 4 for Class Cert. at 8 (June 6, 2017) ("Plaintiffs' Trial Plan" citing only these two sections of the CLRA 5 and including them expressly in the proposed jury instructions). The fact that the CLRA prohibits only 6 misleading (or false) statements addressing certain subjects is perhaps the clearest example why the 7 Court should instruct the jury on the elements of a consumer protection claim statute by statute, not for 8 "one" element across statutes, and then to the "second" element, etc. 9 Even as to the terms "deceptive" and "unfair" conduct, Plaintiffs' instruction is an incorrect 10 oversimplification of the law. The deception concept appears in all of the statutes; unfairness is not 11 covered by the New York statute or the CLRA provisions relevant here. For this reason, then, the 12 Court cannot use Plaintiffs' proposed instruction, as it would instruct the jury on the first element 13 to potentially find CVS liable on a ground not prohibited by every state's statute. 14 Additionally, the test for "deception" or "unfairness" is not uniform across the six states. 15 Plaintiffs' instruction is erroneous because it would not inform the jury about these various 16 governing standards. The chart below shows the different tests, which demonstrates why state-by- 17 state instructions are necessary: 18 FL Deceptive: "[P]laintiff must prove that Unfair: "An unfair practice is one that 19 the alleged practice was likely to deceive offends established public policy and 20 a consumer acting reasonably in the one that is immoral, unethical, same circumstances." Cold Stone oppressive, unscrupulous or 21 Creamery, Inc. v. Lenora Foods I, substantially injurious to consumers." LLC, 332 F. App'x 565, 567 (11th Cir. Beale v. Biomet, Inc., 492 F. Supp. 2d 22 2009) (finding that "a consumer acting 1360, 1372 (S.D. Fla. 2007) (citations reasonably would [not] have been and quotation marks omitted). 23 deceived by" statements when "viewed 24 in light of the circumstances as a whole"). 25 IL Deceptive: "Under the CFA, a statement Unfair: "The factors to be considered in 26 is deceptive if it creates a likelihood of determining unfairness are: (1) whether deception or has the capacity to the practice offends public policy; (2) 27 28 123 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 deceive. Bober v. Glaxo Wellcome PLC, whether it is immoral, unethical, 1 246 F.3d 934, 938 (7th Cir. 2001) oppressive, or unscrupulous; (3) 2 whether it causes substantial injury to consumers." Pappas v. Pella Corp., 844 3 N.E.2d 995, 1002 (Ill. App. Ct. 2006) (noting expressly that "the statute is in 4 the disjunctive, and because the plaintiffs allege deception, not unfairness, we see 5 no need to require plaintiffs to plead the 6 elements of unfairness"). 7 MA Deceptive: "For example, conduct is Unfair: "Similarly, to determine whether 'deceptive' when 'it has the capacity to conduct is 'unfair' for purposes of 8 mislead consumers, acting reasonably Chapter 93A, courts consider several under the circumstances, to act factors: (1) whether the practice is 9 differently than they otherwise would within at least the penumbra of some 10 have acted.'" Hanrahran v. Specialized common-law, statutory, or other Loan Servicing, LLC, 54 F. Supp. 3d established concept of unfairness; (2) 11 149, 154 (D. Mass. 2014) (citations whether it is immoral, unethical, omitted) (applying Chapter 93A). oppressive, or unscrupulous; and (3) 12 whether it causes substantial injury to 13 consumers (or competitors or other businessmen). Courts must also 14 'evaluate the equities between the parties.' Both the defendant's and the 15 plaintiff's conduct, knowledge, and what they should have reasonably 16 known may be factors in determining 17 whether an act or practice is unfair. Hanrahran v. Specialized Loan 18 Servicing, LLC, 54 F. Supp. 3d 149, 154 (D. Mass. 2014) (citations omitted). 19 NY Deceptive: "The New York Court of New York's consumer protection statute 20 Appeals has adopted an objective does not proscribe or define "unfair" 21 definition of 'misleading,' under which conduct. the alleged act must be 'likely to mislead 22 a reasonable consumer acting reasonably under the circumstances.'" 23 Goldemberg v. Johnson & Johnson Consumer Cos., 317 F.R.D. 374, 388–89 24 (S.D.N.Y. 2016) (defining "materially 25 misleading" as used in New York statute), 26 27 Plaintiffs argue the Court should overlook these inaccuracies because the Court granted 28 124 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 Plaintiffs' motion for class certification, when Plaintiffs presented sample jury instructions to 2 establish that a multi-class jury trial would be "manageable" for Rule 23 purposes. Setting aside 3 that the instructions now before the Court are not the same, the Court previously did not pass on the 4 accuracy of any instructions. That was not its charge at the time. But it is now. Over the last several 5 months, CVS has invested substantial time researching jury instructions in the six states at issue 6 and, in doing so, has identified numerous ways in which Plaintiffs' proposed instructions are 7 inaccurate. 8 Second, Plaintiffs proposed instruction would combine separate and distinct elements of 9 their claims—"causation" and "injury"—into a singular element they label as "resulting harm." 10 This, too, would be legally erroneous. Each of the statutes clearly requires proof of causation and, 11 separately, injury. In most states, the pattern instructions suggest instructing separately on each of 12 those elements since they each must be found separately by the jury by a preponderance of evidence. 13 Plaintiffs' "resulting harm" element masks the fact that the jury has (among other things) two 14 questions to decide—(1) was there injury, and if there was, (2) did CVS's conduct proximately cause 15 the injury. The risk the jury will fail to appreciate there are two questions to decide is exacerbated 16 by Plaintiffs' failure to proffer any instructions explaining what proximate causation is. 17 Plaintiffs' effort to combine all of the statutes leads them to conflate causation and injury by 18 instructing the jury that proof of injury—i.e., they "were overcharged for their purchases of 19 prescription medicines"—proves "they were harmed as a result of" CVS's conduct. Plaintiffs cite 20 no authority for this proposition. Nor could they. As CVS's proposed instruction notes, judicial 21 formulations of each statute require proof of "proximate causation"—i.e., that CVS's conduct was 22 both a but-for and legal cause of Plaintiff's injury. Consider Illinois's statute, which requires a 23 plaintiff "to establish harm" by showing "that [s]he suffered substantial injury, and that [s]he could 24 not avoid this injury." Patel v. Zillow, Inc., 2018 WL 2096453, at *8 (N.D. Ill. May 7, 2018), aff'd, 25 915 F.3d 446 (7th Cir. 2019) (citations and quotation marks omitted, alterations in original). 26 Plaintiffs argue CVS's proximate causation instruction is "long" and "convoluted." In truth, 27 apart from the introduction, CVS's causation instructions span only three sentences; the first 28 125 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 sentence explains that a proximate cause is a substantial factor; the second and third sentences 2 explain for the jury how to identify a substantial factor. Plaintiffs' own instructions reference the 3 term "substantial factor," but never explain what that term means. CVS's instructions provide an 4 explanation, and that explanation comes from the Restatement and from caselaw. 5 Third, unlike CVS's instruction, Plaintiffs' instruction does not address the concept of 6 superseding cause. That doctrine applies in this case because, for example PBMs, not CVS, 7 calculated the insured customer's copayments at the direction of insurance companies that set the 8 terms of members' health plans. The jury therefore will have a basis to find that the PBMs' actions 9 were the superseding cause of any purportedly inflated copayment, and therefore that proximate 10 causation is lacking. 11 Plaintiffs argue that a superseding cause instruction is not appropriate because, under that 12 doctrine, the cause cannot have been reasonably foreseeable. This argument fails because there will 13 be evidence at trial from which the jury can conclude that intervening causal conduct by third 14 parties—the PBM or the insurer—was not reasonably foreseeable to CVS. The evidence will show 15 that CVS does not know the terms of any customer's insurance plan, including what relationship, if 16 any, the U&C price has to the customer's copayment. Only the PBM, the insurer, and the member 17 have access to the information that determines the copayment. For that reason, CVS could not 18 reasonably foresee that submitting an (allegedly) inflated U&C price to the PBM would cause the 19 customer to pay a higher copayment than the customer otherwise would pay. Further, as the PBMs' 20 employees have testified, the PBMs knew that CVS was not submitting the HSP price as the U&C 21 price. Assuming for argument's sake that Plaintiffs are right that HSP prices were U&C prices 22 under the PBM contracts, then CVS reasonably could expect the PBM to object if CVS acted in 23 contravention of the contract, but no PBM raised any such objection to CVS's non-submission of 24 HSP prices. Thus, a jury could conclude that it was not reasonably foreseeable to CVS that PBMs— 25 which have financial and customer-service incentives to make the pharmacy submit as low a price 26 as required—would fail to object and knowingly calculate inflated copayments for their customers. 27 Fourth, Massachusetts requires proof that CVS's conduct occurred in connection with 28 126 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 "trade or commerce" in Massachusetts, not the "sale or advertisement" of merchandise as Plaintiffs 2 instruction erroneously suggests. 3 Fifth, Plaintiffs acknowledge that Arizona's statute and the CLRA require reliance. Yet 4 they suggest that reliance can be proved under those statutes simply by demonstrating CVS's 5 conduct was a "substantial factor" in the class member's decision to pay for his or her prescription. 6 Plaintiffs' cited support for that proposition is a case that involves neither Arizona law nor the 7 CLRA. See, e.g., In re Tobacco II Cases, 207 P.3d 20, 39–40 (Cal. 2009) (noting that even under 8 California's UCL a plaintiffs must prove "the misrepresentation was an immediate cause of the 9 injury-producing conduct" in order to prove it is a "substantial factor"). Plaintiffs offer no further 10 guidance to the jury regarding what is, or is not, a "substantial factor" and instead assert that payment 11 of an improperly inflated charge is evidence of reliance. Again, Plaintiffs cite no Arizona law or 12 CLRA authority for this proposition. 13 Finally, Plaintiffs say the element of the Arizona and Illinois statutes that the defendant 14 "intended" to induce reliance can be demonstrated if CVS merely "[c]harg[ed] an inflated price." 15 Plaintiffs cite no authority for this proposition, which would completely eliminate the "intent" 16 requirement of the statutes. Absent evidence that CVS believed it was overcharging customers, 17 there can be no intent. 18 19 20 21 22 23 24 25 26 27 28 127 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 PLAINTIFFS' PROPOSED JURY INSTRUCTION NO. 34: STATUTE OF LIMITATIONS 2 You may have heard the phrase "statute of limitations". This refers to the fact that legal 3 claims must be brought by filing a lawsuit within a certain period of time after the harm occurred, 4 or some or all of the claims may be barred. Plaintiffs filed this lawsuit on July 30, 2015 and seek 5 damages for themselves and the class members for the period November 9, 2008 through July 31, 6 2015. CVS contends that Plaintiffs and class members are not entitled to recover damages for all of 7 that time period because some of the harms are alleged to have occurred too long before the lawsuit 8 was filed. Unlike the other claims on which I have instructed you, the statute of limitations is an 9 affirmative defense, which means that CVS, as the defendant, has the burden of establishing whether 10 any of the claims are time-barred. 11 The limitation periods under the six relevant state laws range from one to four years. This 12 means that Plaintiffs' and class members' damages claims for harms that occurred after the dates I 13 instruct you for each state, are not barred by the statute of limitations. For Plaintiffs' and class 14 members' damages claims before those dates, you must apply the following rules for each state to 15 decide if those claims are barred by the statute of limitations. 16 Arizona: Under Arizona law, claims must be brought within one year from the time that a 17 reasonable person, in the exercise of reasonable diligence, should have discovered the facts and 18 circumstances underlying their claim. Therefore, all claims by Arizona class members for damages 19 on or after July 30, 2014, are timely. For damages before July 30, 2014, if you find that CVS has 20 proven that Arizona class members with reasonable diligence should have discovered the facts and 21 circumstances underlying their claims, then damages before July 30, 2014, are barred by Arizona's 22 statute of limitations. If CVS has not proven this, then you may award damages to Arizona class 23 members for the entire class period. 24 California: Under California law, the statute of limitations is three years from the time that 25 a class member's harm occurred. Therefore, all claims by California class members for harm on or 26 after July 30, 2012, are timely. For damages before July 30, 2012, if you find that Plaintiffs have 27 proven that before July 30, 2012, a reasonable and diligent investigation would not have revealed 28 128 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 California class members' harms, then you may award damages to California class members for the 2 entire class period. If Plaintiffs have not proven this, then California class members' damages prior 3 to July 30, 2012, are barred by California's statute of limitations. 4 Florida: Under Florida law, the statute of limitations is four years from the date a Florida 5 class member was harmed. Therefore, all claims by Florida class members for damages on or after 6 July 30, 2011, are timely. For damages before July 30, 2011, if you find that Plaintiffs have proven 7 that CVS wrongfully concealed facts giving rise to class members' claims in such a manner as to 8 prevent the class members from reasonably discovering their claims existed prior to July 30, 2011, 9 then you may award damages to Florida class members for the entire class period. If Plaintiffs have 10 not proven this, then Florida class members' damages prior to July 30, 2011, are barred by Florida's 11 statute of limitations. 12 Illinois: Under Illinois law, the statute of limitations is three years from the time a class 13 member discovers their harm and the causal connection to the wrongful conduct. Therefore, all 14 claims by Illinois class members for damages on or after July 30, 2012, are timely. For damages 15 before July 30, 2012, if you find that CVS has proven that Illinois class members, before July 30, 16 2012, discovered or reasonably could have discovered both their harms and the causal connection 17 between their harms and CVS's wrongful conduct, then Illinois class members' damages before July 18 30, 2012, are barred by Illinois's statute of limitations. If CVS has not proven this, then you may 19 award damages to Illinois class members for the entire class period. 20 Massachusetts: Under Massachusetts law, the statute of limitations is four years from the 21 date an event or events occurred that were reasonably likely to put Massachusetts class members on 22 notice that someone may have caused them harm. Therefore, all claims by Massachusetts class 23 members for damages on or after July 30, 2011, are timely. For damages before July 30, 2011, if 24 you find that CVS has proven an event or events occurred prior to July 30, 2011, that were 25 reasonably likely to put Massachusetts class members on notice that someone may have caused them 26 harm, then Massachusetts class members' damages before July 30, 2011, are barred by 27 Massachusetts's statute of limitations. If CVS has not proven this, then you may award damages to 28 129 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 Massachusetts class members for the entire class period. 2 New York: Under New York Law, the statute of limitations is three years from the class 3 member's harm, except in cases where the Defendant wrongfully deceived or misled class members 4 in order to conceal the existence of class members' claims. Therefore, all claims by New York class 5 members for damages on or after July 30, 2012, are timely. For damages before July 30, 2012, if 6 you find that Plaintiffs have proven that CVS wrongly deceived or misled the New York class 7 members in order to conceal the existence of their claims, then you may award damages to 8 Massachusetts class members for the entire class period. If Plaintiffs have not proven this, then New 9 York class members' damages before July 30, 2012, are barred by New York's statute of limitations. 10 11 AUTHORITY: 12 Arizona. Kisner v. Broome, No. 1 CA-CV 16-0502, 2017 WL 6462245, at *5 (Ariz. Ct. 13 App. Dec. 19, 2017) (quoting Anson v. Am. Motors Corp., 155 Ariz. 420, 426 (Az. App. 1987)) 14 (Arizona discovery rule and fraudulent concealment); see also id. at *8 ("It is also consistent with 15 case law recognizing partial survival of claims otherwise time-barred where the underlying acts arise 16 from continuing duties and discrete instances of performance") (citations omitted). 17 California. Judicial Council of California Civil Jury Instructions No. 454 (Affirmative 18 Defense—Statute of Limitations) (modified) & No. 455 (Statute of Limitations—Delayed 19 Discovery) (modified); Cal. Civ. Code § 1783 (three year statute of limitations); Keegan v. Am. 20 Honda Motor Co., 284 F.R.D. 504, 543 (C.D. Cal. 2012) ("The discovery rule tolls the statute of 21 limitations for CLRA claims…."); Aryeh v. Canon Bus. Sols., Inc., 292 P.3d 871, 880 (Cal. 2013) 22 ("Generally speaking, continuous accrual applies whenever there is a continuing or recurring 23 obligation: 'When an obligation or liability arises on a recurring basis, a cause of action accrues 24 each time a wrongful act occurs, triggering a new limitations period.'") (quoting Hogar Dulce 25 Hogar v. Cmty. Dev. Comm'n, 110 Cal. App. 4th 1288, 1295 (Cal. Ct. App. 2003)). 26 Florida. Fla. Stat. § 95.11(3) (four year limitations period); In re Takata Airbag Prod. Liab. 27 Litig., 193 F. Supp. 3d 1324, 1344 (S.D. Fla. 2016) ("The doctrine of fraudulent concealment will 28 130 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 operate to toll the statute of limitations when it can be shown that fraud has been perpetrated on the 2 injured party sufficient to place him in ignorance of his right to a cause of action or to prevent him 3 from discovering his injury.") (quoting Am. Home Assur. Co. v. Weaver Aggregate Tramp., Inc., 4 990 F. Supp. 2d 1254, 1272 (M.D. Fla. 2013)) (internal quotation marks omitted)); Am. Home Assur. 5 Co. v. Weaver Aggregate Transp., Inc., 990 F. Supp. 2d 1254, 1272 (M.D. Fla. 2013) ("To establish 6 fraudulent concealment, a claimant must allege and establish: '(1) successful concealment of the 7 cause of action, (2) fraudulent means to achieve that concealment, and (3) plaintiff exercised 8 reasonable care and diligence in seeking to discover the facts that form the basis of his claim."") 9 (citations omitted); Grove Isle Ass'n, Inc. v. Grove Isle Assocs., LLLP, 137 So. 3d 1081, 1095 (Fla. 10 Ct. App. 2014) (holding that association charging dues in excess of agreement not barred by the 11 statute of limitations under the continuing harm doctrine:"[W]here an obligation is continuing in 12 nature, a party's 'ongoing nonperformance constitute[s] a continuing breach while the contract 13 remain[s] in effect.'... If the [defendant] breached the Declaration within the five-year limitations 14 period, i.e., in or after July 2004, the [plaintiff]'s breach of contract claim for payment made on or 15 after that date would not be barred by the statute of limitations.") (citations omitted); Pearson v. 16 Ford Motor Co., 694 So. 2d 61, 68 (Fla. Ct. App. 1997) (whether continuing harm doctrine applies 17 is a question for the jury). 18 Illinois. 815 ILCS § 505/10a(e) (three year statute period); Kopley Grp. V., L.P. v. Sheridan 19 Edgewater Properties, Ltd., 876 N.E.2d 218, 231 (Ill. App. 2007) ("The discovery rule applies to 20 actions brought under the Consumer Fraud Act…. The statute starts to run when a person knows or 21 reasonably should know of his injury and also knows or reasonably should know that it was 22 wrongfully caused.") (citations omitted); Troya Int'l, Ltd. v. Bird-X, Inc., No. 15 C 9785, 2017 WL 23 6059804, at *9 (N.D. Ill. Dec. 7, 2017) (new statute of limitations for each breach of continuing 24 duty) (collecting cases). 25 Massachusetts. Mass. Gen. Laws Ch. 260 § 5A (four-year period); First Choice Armor & 26 Equip., Inc. v. Toyoba Am., Inc., 717 F. Supp. 2d 156, 162–63 (D. Mass. 2010) (statute begins to 27 run "when an event or events have occurred that were reasonably likely to put the plaintiff on notice 28 131 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 that someone may have caused [its] injury."); Callender v. Suffolk Cty., 783 N.E.2d 470, 473 (Mass. 2 Ct. App. 2003) (recognizing that each breach of a continuing duty is a new claim with a new statute 3 of limitations). 4 New York. Marshall v. Hyundai Motor Am., 51 F. Supp. 3d 451, 459 (S.D.N.Y. 2014) 5 (citing N.Y. C.P.L.R. § 214(2)) (three-year period); Gaidon v. Guardian Life Ins. Co. of Am., 750 6 N.E.2d 1078, 1083 (N.Y. 2001) ("In general, a cause of action accrues, triggering commencement 7 of the limitations period, when all of the factual circumstances necessary to establish a right of action 8 have occurred, so that the plaintiff would be entitled to relief…."); Kotlyarsky v. New York Post, 9 757 N.Y.S.2d 703, 707 (N.Y. Sup. Ct. 2003) ("Equitable tolling … is applicable where the defendant 10 has wrongly deceived or misled the plaintiff in order to conceal the existence of a cause of action."). 11 "With regard to the New York class, each breach is a separate instance commencing a new 12 statute of limitations period. Here, the relevant agreements impose a continuing duty not to 13 charge insured customers more than the HSP price." Corcoran v. CVS Health, No. 15-cv-3504- 14 YGR, 2019 WL 6250972, at *5-6 (N.D. Cal. Nov. 22, 2019) (emphasis added), citing Fed. Hous. 15 Fin. Agency for Fed. Home Loan Mortg. Corp. v. Morgan Stanley ABS Capital I Inc., 59 Misc. 3d 16 754, 778, 73 N.Y.S. 3d 374, 393 (N.Y. Sup. Ct. 2018) ("As the Court of Appeals has explained, 17 where a contract provides for a continuing obligation, the statute of limitations 'run[s] separately 18 for the damages occasioned each time a breach of the obligation. . . occur[s].'" (quoting Bulova 19 Watch Co. v. Celotext Corp., 389 N.E.2d 130, 130 (N.Y. 1979)). 20 21 22 23 24 25 26 27 Date Submitted: May 5, 2020 28 132 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 CVS'S PROPOSED JURY INSTRUCTION NO. 34: STATUTE OF LIMITATIONS 2 I have instructed you on the elements of each consumer protection statute and general 3 principles to keep in mind when deciding whether the Named Plaintiffs have proved their claims 4 under those statutes. If you find that a particular Named Plaintiff has proved a violation of a 5 particular consumer protection statute, then you must determine whether CVS has proven the 6 affirmative defense of the statute of limitations for claims under that statute.A statute of limitations 7 is a law that bars claims after a specified period; specifically, it is a statute establishing a time limit 8 for filing a civil lawsuit based on the date when the claim "accrues." 9 For each State and Named Plaintiff below, I will instruct you concerning the standard that 10 determines when a Named Plaintiffs' claim accrued, thereby starting the statute of limitations. I 11 will also instruct you about the length of that State's statute of limitations. It will be your job to 12 determine whether this lawsuit was filed before the statute of limitations on the Named Plaintiffs' 13 claim had expired. You are instructed that all Named Plaintiffs filed this lawsuit on July 30, 2015. 14 If you find that the statute of limitations for any claim expired before the lawsuit was filed, then you 15 must find for CVS on that claim. 16 Arizona's statute of limitations is one year. That period started running on the date Arizona 17 Named Plaintiff Darlene McAfee discovered, or with reasonable diligence could have discovered, 18 her alleged injury. If you find that CVS has proven that Ms. McAfee, prior to July 30, 2014, 19 discovered or with reasonable diligence could have discovered she had been injured, then you must 20 find her claim is barred by Arizona's statute of limitation. 21 California's statute of limitations is three years. That period started running on the date 22 California Named Plaintiff Tyler Clark was first allegedly injured. If you find that CVS has proven 23 Mr. Clark was first injured prior to July 30, 2012, then you must find his claim is barred by 24 California's statute of limitations. 25 Florida's statute of limitations is four years. That period started running on the dates Florida 26 Named Plaintiffs Debbie Barrett and Robert Jenks were first allegedly injured. If you find that CVS 27 has proven Ms. Barrett was first injured prior to July 30, 2011, then you must find her claim is barred 28 133 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 by Florida's statute of limitations. If you find that CVS has proven Mr. Jenks was first injured prior 2 to July 30, 2011, then you must find his claim is barred by Florida's statute of limitations. 3 Illinois's statute of limitations is three years. That period started running on the dates 4 Illinois Named Plaintiffs Robert Jenks and Carl Washington discovered, or reasonably could have 5 discovered, both their alleged injury and the causal connection between the alleged injury and the 6 wrongful conduct. If you find that CVS has proven that Mr. Jenks, prior to July 30, 2012, 7 discovered or reasonably could have discovered both his injury and the causal connection between 8 his injury and the wrongful conduct, then you must find his claim is barred by Illinois's statute of 9 limitations. If you find that CVS has proven that Mr. Washington, prior to July 30, 2012, 10 discovered or reasonably could have discovered both his injury and the causal connection between 11 his injury and the wrongful conduct, then you must find his claim is barred by Illinois's statute of 12 limitations. 13 Massachusetts's statute of limitations is four years. For Massachusetts Named Plaintiff 14 Robert Garber, that period started running on the date an event or events occurred that were 15 reasonably likely to put Mr. Garber on notice that someone may have caused him injury. If you 16 find that CVS has proven an event or events occurred prior to July 30, 2011, that were reasonably 17 likely to put Mr. Garber on notice that someone may have caused him injury, then you must find 18 his claim is barred by Massachusetts's statute of limitations. 19 New York's statute of limitations is three years. That period started running the date New 20 York Named Plaintiff Stephen Sullivan was first allegedly injured. If you find that CVS has proven 21 Mr. Sullivan was first injured prior to July 30, 2012, then you must find his claim is barred by New 22 York's statute of limitations. 23 24 AUTHORITY 25 Cal. Civ. Code § 1783 (three-year period); Fla. Stat. § 95.11(3) (four-year period); Marshall 26 v. Hyundai Motor Am., 51 F. Supp. 3d 451, 459 (S.D.N.Y. 2014) (citing N.Y. C.P.L.R. § 214(2)) 27 (three-year period); Alaface v. Nat'l Inv. Co., 892 P.2d 1375, 1380 (Ariz. App. Ct. 1995) (one-year 28 134 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 period); Doe v. Roe, 955 P.2d 951, 960 (Ariz. 1998) (discovery rule); 815 ILCS § 505/10a(e) (three- 2 year period); Ind. Tr. Corp. v. Fidelity Nat'l Title Ins. Co. of N.Y., 577 F. Supp. 2d 1023, 1041 (N.D. 3 Ill. 2008) (discovery rule); Mass. Gen. Laws Ch. 260 § 5A (four-year period); First Choice Armor 4 & Equip., Inc. v. Toyoba Am., Inc., 717 F. Supp. 2d 156, 162–63 (D. Mass. 2015) (discovery rule). 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Date Submitted: May 5, 2020 27 28 135 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 PARTIES' STATEMENT REGARDING DISPUTED JURY INSTRUCTION NO. 34 2 Plaintiffs: Plaintiffs' proposed statute of limitations instruction appropriately identifies the relevant 3 rules for each state, and explains their application to the facts of the case. In contrast, CVS's 4 proposed instruction suffers from multiple defects. 5 First, CVS's version again reads as if this were not a certified class action. CVS ignores that 6 this Court has already determined that the statute of limitations defense is not unique to named 7 plaintiffs and whether the statute of limitations will bar any class claims is likely to be proven with 8 common evidence. Therefore, the instruction should be applied to the class members, and not simply 9 to Plaintiffs. As the Court ruled: 10 However, courts find the typicality requirement satisfied where the defense of the statute of limitations is applicable to both the class representative and class members. 11 See Schofield, 2019 WL 955288 at *4 ("[I]n this case, all class members, including the named class representative, will likely face the same challenge with respect to a 12 statute of limitations defense.... In this case, it is alleged that Defendant's conduct at issue was uniform, and hence whether Defendant procured consumer reports and 13 when members should have learned of the report is likely to turn on common evidence or patterns of evidence. For this reason, [class representative] faces the 14 same challenges as the class members and is therefore typical."); W. States Wholesale, Inc. v. Synthetic Indus., Inc., 206 F.R.D. 271, 276-77 (C.D. Cal. 2002) 15 ("Similarly in this case, the statute of limitations defense is not unique to [class representative]. Other class members may also be subject to a statute of limitations 16 given the fact that [class representative] challenges advertisements dating back to 1983 and ... shorter statute of limitations could be applicable to other class member's 17 claims than is applicable to [class representative's] claim."); Beck-Ellman v. Kaz USA, Inc., 283 F.R.D. 558, 566 (S.D. Cal. 2012) (substantively similar). 18 19 Here, while defendants aver that both McAfee and Sullivan are subjected to the relevant statute of limitations, defendants make no actual showing that McAfee 20 and Sullivan are uniquely subjected to the statute of limitations. The Class Period runs from November 2008 to July 31, 2015. As discussed below, given the lengthy 21 class period, other class members in the New York and Arizona classes are very likely to be subjected to the same statute of limitations defense as both McAfee and 22 Sullivan. That is all that is required to satisfy the typicality requirement. See Fitzhenry-Russel v. Dr. Pepper Snapple Group, Inc., 326 F.R.D. 592, 608 (N.D. Cal. 23 2018) ("To be typical, a class representative need not prove that she is immune from any possible defense.... Instead, she must establish that she is not subject to a defense 24 that is not typical of the defenses which may be raised against other members of the proposed class." (internal quotation marks omitted)). 25 Corcoran v. CVS Health, No. 15-cv-3504-YGR, 2019 WL 6250972, at *5-6 (N.D. Cal. Nov. 22, 26 2019) (emphasis added). The Court's reasoning with regard to the Arizona and New York classes 27 28 136 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 applies with equal force to the other state classes as well. 2 Second, CVS's instruction disregards the continuing harm (or continuing obligation) 3 doctrine. As this Court explained, however, under this rule "each breach is a separate instance 4 commencing a new statute of limitations period … Here, the relevant agreements impose a 5 continuing duty not to charge insured customers more than the HSP price." Corcoran, 2019 WL 6 6250972, at *6 (emphasis added). While the Court's discussion focused on New York's law, as 7 Plaintiffs' authorities demonstrate, each of the six states' laws are similar in this regard. Thus, all 8 class members' claims for damages occurring within the limitations periods—regardless of the 9 discovery rule or fraudulent concealment—are timely. Because CVS's instruction is silent on this 10 rule, it misstates the governing law and is likely to confuse and mislead the jury. Plaintiffs' 11 instruction correctly explains that class members' damages occurring after the limitations period 12 date are timely, and that CVS's statute of limitations defense potentially applies only to earlier 13 damages. 14 Third, CVS's instruction effectively ignores the availability of the discovery rule and 15 fraudulent concealment doctrines. As Plaintiffs' instructions explain, these doctrines can render 16 Plaintiffs' and class members' earlier damages claims timely. And the Court already has found their 17 potential application to both named plaintiffs and class members. Corcoran, 2019 WL 6250972, at 18 *5-6. Plaintiffs' instruction and the authorities on which Plaintiffs rely accurately set forth how these 19 two doctrines can be applied under the relevant states' laws. CVS's omission of these doctrines 20 further underscores that its instruction is incomplete and misleading. 21 22 CVS: CVS's statute of limitations defense necessarily raises individualized issues, since one cannot 23 know the date on which the limitations period began to run for an individual class member without 24 knowing facts about that particular class member. For this reason, CVS's Proposed Jury Instruction 25 No. 34 would have the Court instruct the jury on the statute of limitations as concerns only the 26 Named Plaintiffs' claims, not the entire class's claims. CVS's proposed instruction accurately 27 identifies the duration of the limitations period in all six states, the triggering event for that period 28 137 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 under state law, and the date of such event as applied to each Named Plaintiff. By contrast, 2 Plaintiffs' proposed instruction improperly attempts to make the statute of limitations a class-wide 3 issue, by means of tolling doctrines that have no factual or legal basis. 4 The parties agree on the length of the limitations period under each state's statute. They also 5 agree upon the triggering date for that period: either (1) the date the class member knew or should 6 have known through reasonable diligence certain information concerning a potential claim (Arizona, 7 Illinois, and Massachusetts); or (2) the date the class member was injured (California, Florida, and 8 New York). Under either scenario, the jury must know information about the specific class member. 9 For those class members in Group (1), the jury must consider what the person knew or should have 10 known about, for example, the HSP program on the date of the alleged overcharge, as well as what 11 steps the person took to investigate, including what questions they asked CVS about the price they 12 were charged. For those class members in Group (2), the only thing that matters is the date when 13 CVS allegedly overcharged the class member. 14 The statute of limitations cannot be determined for class members in Group 1 on a class- 15 wide basis, since different individuals had different levels of knowledge concerning relevant facts. 16 For example, some class members were not aware of the HSP program when they made their 17 relevant purchases; some class members were enrolled in HSP while having insurance at the same 18 time; and yet others who did not enroll in HSP, knew of the program through CVS's website and 19 marketing materials. See Expert Decl. of Brett Barlag (June 20, 2017) ¶¶ 30–31 (noting nearly 20 100,000 class members were enrolled in HSP during the class period, with the majority being HSP 21 enrollees before or contemporaneous with their class-qualifying insurance purchases). Different 22 class members also had different levels of understanding about the terms of their insurance. Given 23 this, the jury cannot decide CVS's defense of the statute of limitations for the entirety of the Arizona, 24 Illinois, and Massachusetts classes. 25 A different issue affects Group 2. Because (1) the statute of limitations in California, 26 Florida, and New York runs from the date when CVS allegedly overcharged the class member and 27 (2) that date is known, the law is clear that CVS cannot be liable for Florida purchases dated before 28 138 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 July 30, 2011, or California and New York purchases dated before July 30, 2012. But Plaintiffs' 2 instructions do not so reflect as much; instead, they attempt to invoke various tolling doctrines that, 3 they claim, would make their pre-2011 or pre-2012 claims timely. 4 There is no basis for any such tolling instructions here, and certainly not on a class-wide 5 basis. A jury instruction must have factual support in the record. See Don Burton, Inc. v. Aetna Life 6 & Cas. Co., 575 F.2d 702, 706 (9th Cir. 1978) ("[I]t is unnecessary to give instructions unsupported 7 by the evidence…."); Williams v. D.C., 818 F. Supp. 2d 202, 205 (D.D.C. 2011) ("[I]t is well- 8 established that a trial judge should refuse to instruct the jury on matters that are not supported by 9 the evidence."). Under California law, the delayed discovery rule requires proof of "(1) the time 10 and manner of discovery [of the wrongdoing] and (2) the inability to have made earlier discovery 11 despite reasonable diligence." Yumul v. Smart Balance, Inc., 733 F. Supp. 2d 1134, 1141 (C.D. Cal. 12 2010). The record here contains no evidence of the "time and manner" of the class members' or 13 Named Plaintiffs' discovery of the supposed wrongdoing, nor of their "inability" to discover the 14 alleged wrongdoing sooner. Further, Plaintiffs' proposed instruction for California does not even 15 incorporate each of these distinct elements of the test for tolling. 16 The Florida class, too, has no basis for a tolling instruction based on "fraudulent 17 concealment." That doctrine requires "(1) successful concealment of the cause of action; (2) 18 fraudulent means to achieve that concealment and (3) that the plaintiff exercised reasonable care 19 and diligence in seeking to discover the facts that form the basis of the claim." Razor Capital, LLC 20 v. CMAX Fin. LLC, 2017 WL 3481761, at *4 (S.D. Fla. Aug. 14, 2017). This test requires proof of 21 defendant's conduct "beyond mere non-disclosure" and a party seeking to invoke the doctrine must 22 come forward with "active and willful concealment." Id. at *5. In this case, Plaintiffs have no 23 evidence that CVS "active[ly] . . . concealed" anything, much less "fraudulent means" when doing 24 so. Furthermore, by definition, the third element of the test is an individualized issue not capable 25 of being resolved on a class-wide basis. 26 The New York class cannot invoke "equitable tolling" to save untimely claims. Under that 27 doctrine, Plaintiffs bear the burden of showing both their own diligence in pursuing their claims, 28 139 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 and that CVS "wrongfully deceived or misled them in order to conceal the existence of a claim." 2 Kotlyarsky v. New York Post, 757 N.Y.S.2d 703, 707–08 (Sup. Ct. 2003) (finding "equitable tolling" 3 doctrine inapplicable). This deception or concealment must be over-and-above the wrongful 4 conduct giving rise to the underlying claim. See, e.g., Joseph L. Balkan, Inc. v. City of New York, 5 838 N.Y.S.2d 34, 35 (2007) ("Plaintiff is not entitled to an equitable toll of the statutory period 6 because the City did not make an affirmative misrepresentation that induced plaintiff to forgo the 7 commencement of a timely lawsuit and plaintiff did not exercise reasonable diligence."); Guerrero 8 v. Gates, 442 F.3d 697, 706 (9th Cir. 2006) ("Equitable estoppel, also termed fraudulent 9 concealment, halts the statute of limitations when there is 'active conduct by a defendant, above and 10 beyond the wrongdoing upon which the plaintiff's claim is filed, to prevent the plaintiff from suing 11 in time.'" (citation omitted)). Here again, there is no evidence of CVS's conduct (or of any class 12 member's diligence) that could meet this standard. 13 This is not a situation where even though a party's proposed instruction lacks a factual basis, 14 it would be harmless to read the instruction to the jury. Plaintiffs' instructions make it difficult to 15 keep straight who bears the burden of proof on what issue, and what each party must prove. In each 16 state, the statute of limitations is an affirmative defense for which CVS obviously bears the burden 17 of proof. Plaintiffs, by contrast, bear the burden of proving any tolling doctrine applies, a point 18 made only subtly in Plaintiffs' proposed instructions. Consider how this would play out at trial: For 19 Arizona, for example, the jury must determine whether CVS has proved, as of a given date, whether 20 the plaintiff's claim was known or reasonably knowable with reasonable diligence; if so CVS wins. 21 For California, though, claims dated before July 30, 2012 are automatically time barred unless 22 Plaintiffs have proved tolling applies, which depends on (among other things) the reasonable 23 diligence by California class members. In a case already as complex as this, the Court should be 24 loath to read the jury extra instructions that have no factual basis. 25 Finally, Plaintiffs raise a red herring in mentioning "the continuing harm (or continuing 26 obligation) doctrine." CVS's proposed instruction "misstates the governing law," Plaintiffs argue, 27 because the instruction is "silent on this rule." Yet Plaintiffs do not explain how the proposed 28 140 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 instruction's "silence" on the rule renders it an inaccurate or incomplete statement of law. Nor do 2 Plaintiffs identify which states (apart from New York) apply this rule. 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 141 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 PLAINTIFFS' PROPOSED JURY INSTRUCTION NO. 35: DAMAGES—PROOF 2 It is the duty of the Court to instruct you about the measure of damages. By instructing you 3 on damages, the Court does not mean to suggest for which party your verdict should be rendered. 4 If you find for the plaintiff classes, you must determine their damages. The plaintiffs have 5 the burden of proving damages by a preponderance of the evidence. Damages means the amount of 6 money that will reasonably and fairly compensate the plaintiff classes for any injury you find was 7 caused by the defendant. 8 In this case, plaintiffs and the classes they represent seek to recover the difference between 9 (1) the amount CVS actually charged the plaintiff classes for certain generic prescription drug 10 purchases (the "qualifying transactions") and (2) the HSP price for those same generic prescription 11 drugs at the time of purchase, which, Plaintiffs claim, CVS should have reported as its U&C prices. 12 It is for you to determine what damages, if any, have been proved. 13 Massachusetts statutory damages. If a plaintiff in the Massachusetts class has suffered an 14 injury and his or her actual damages amount to less than $25, then you shall award that plaintiff 15 damages in the amount of $25. 16 New York statutory damages. If a plaintiff in the New York class has suffered an injury 17 and his or her actual damages amount to less than $50, then you shall award that plaintiff damages 18 in the amount of $50. In addition, each plaintiff in the New York class may also recover treble 19 damages up to $1,000 if the defendant knowingly or willfully violated the statute. 20 Your award must be based upon evidence and not upon speculation, guesswork or 21 conjecture. 22 23 AUTHORITY 24 Ninth Circuit Model Civil Jury Instruction No. 5.1 [Modified] and 5.2 [Modified]. 25 Mass. Consumer Protection Act - Chapter 93a, Mass. Super. Ct. Civil Practice Jury 26 Instructions 16.1 §§ 16.7.4 (modified), 16.7.5 (modified), 16.7.11 (modified), & 16.7.12 (modified). 27 N.Y. G.B.L. § 349(h); N.Y. Pattern Jury Instruction 3:20 ("Under GBL § 349(h), a plaintiff 28 142 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 may recover the greater of $50 or actual damages. The plaintiff may also recover treble damages 2 up to $1,000 if the defendant "knowingly" or "willfully" violated the statute."); Def's Proposed Jury 3 Instructions, Osian's Connoisseurs of Art Pvt. Ltd. v. Christie's, Inc., No. 09-CV-9673(SHS), 2010 4 WL 4889504 (S.D.N.Y. Oct. 15, 2010); Pltfs' Proposed Jury Instructions, In re AMLA Litig., No. 5 16-cv-6593(JSR), 2019 WL 649380 (S.D.N.Y. Jan. 15, 2019). 6 The jury may treble damages up to $1,000 for each violation. E.g., Koch v. Greenberg, 14 7 F. Supp. 3d 247, 278-79 (S.D.N.Y. 2014) (discussing a case in which there were 24 separate 8 violations: "the maximum civil penalty for willful deceptiveness under the GBL is $1,000 per 9 violation, which here was $24,000"). 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 Date Submitted: May 5, 2020 28 143 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 CVS'S PROPOSED JURY INSTRUCTION NO. 35: DAMAGES 2 It is the duty of the Court to instruct you about the measure of damages applicable to the 3 Named Plaintiffs' claim. You will not be determining damages for class members other than the 4 Named Plaintiffs. By instructing you on damages, the Court does not mean to suggest for which 5 party your verdict should be rendered. 6 If you find that the Plaintiffs have not proved (1) that members of the Classes are third-party 7 beneficiaries of a CVS-PBM contract; (2) that CVS breached its contracts with the PBMs; or (3) 8 that CVS violated a given state's consumer protection statute, then you need not consider damages 9 with respect to any Named Plaintiff's claim relating to that CVS-PBM contract or arising under that 10 state's consumer protection statute. Also, if you find that Plaintiffs did prove those three 11 requirements, but you nonetheless determine that a Named Plaintiff's claim under a given state's 12 consumer protection statute is barred by the state's statute of limitations, then you need not consider 13 damages with respect to that Named Plaintiff's claim under that state's consumer protection statute. 14 If you find that a Named Plaintiff has proved his or her claim, and find the claim is not barred 15 by the statute of limitations, then you must determine what damages, if any, that Named Plaintiff 16 has proven for himself or herself. The Named Plaintiff has the burden of proving damages by a 17 preponderance of the evidence. 18 In this lawsuit, a Named Plaintiff must prove the "actual damages" he or she suffered as a 19 result of CVS's deceptive or unfair acts under the relevant state's consumer protection statute. 20 Actual damages are generally understood to be the pecuniary, or financial, loss directly caused by 21 the alleged wrongful conduct. 22 Any damages award must be based upon evidence and not upon speculation, guesswork, or 23 conjecture. 24 You are not to award damages for any injury or harm to any Named Plaintiff unless it has 25 been established by a preponderance of the evidence in the case that such injury or harm was 26 proximately caused by CVS's deceptive or unfair conduct. 27 28 144 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 AUTHORITY 2 Ninth Circuit Model Civil Jury Instructions No. 5.1 ("Damages-Proof") [Modified]; Krueger 3 v. Wyeth, Inc., 396 F. Supp. 3d 931, 949–50 (S.D. Cal. 2019) ("out of pocket" damages); Sprint 4 Nextel Corp. v. Thuc Ngo, 2014 WL 869486, at *3 (N.D. Cal. Mar. 3, 2014) ("reasonable certainty" 5 as to amount); Peery v. Hansen, 585 P.2d 574, 578 (Ariz. Ct. App. 1978) ("limited to the recovery 6 of actual damages suffered as a result of such unlawful act or practice"); Cal. Civ. Code § 1780(a)(1) 7 ("[a]ctual damages"); Fla. Stat. § 501.211 ("actual damages"); Rollins, Inc. v. Butland, 951 So. 2d 8 860, 873 (Fla. DCA 2006) (nominal, etc., damages not available under the FDUTPA); 815 ILCS 9 505/10a ("actual damages" and "actual economic damages"); Mass. Gen. Law Ch. 93A § 9(3) 10 ("amount of actual damages"); N.Y. Gen. Bus. Law § 349(h) ("actual damages"). 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Date Submitted: May 5, 2020 27 28 145 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 PARTIES' STATEMENT REGARDING DISPUTED JURY INSTRUCTION NO. 35 2 Plaintiffs: CVS's proposed damages instruction suffers from the same central defect as its 3 instructions regarding the UDAP claims: it reads as if the case were not a certified class action at 4 all. CVS's instruction speaks only to the damages of the individual Named Plaintiffs. But this Court 5 certified the classes for liability and damages purposes. And the Ninth Circuit concluded that "the 6 named plaintiffs were injured in the same manner as the absent class members and they suffered 7 the same type of damages, i.e., the delta between the actual copayment and the HSP price." 8 Corcoran, 779 F. App'x at 434 (emphasis added). CVS's damages instruction disregards the Court 9 of Appeals' holding entirely. 10 11 CVS: CVS's Proposed Jury Instruction No. 35 should be adopted because it accurately and briefly 12 instructs the jury on the measure of damages in the event CVS is found liable in this case. First, for 13 the reasons described more fully in CVS's Proposal for Adjudication of Individualized Issues, 14 CVS's instructions accurately inform the jury that its damages determination will be limited to the 15 Named Plaintiffs. Second, CVS's instruction is drawn largely from the Ninth Circuit's model 16 instructions on damages, ensuring that the instruction properly states the Plaintiffs' burden and the 17 relevant principles for the jury to consider. To the extent CVS's proposal deviates from the Model 18 Instruction, the modifications are designed to tailor the instruction to the facts of this case (e.g., the 19 fourth paragraph explaining that only "actual" or "statutory" damages are available) and to help the 20 jury by explaining how the instructions are tied to the relevant portions of the verdict form (e.g., the 21 second paragraph). 22 CVS's instruction makes clear that Plaintiffs may recover only "actual" damages or 23 "statutory" damages in this action. As Plaintiffs' instruction appears to acknowledge, putting aside 24 the punitive damages that Plaintiffs seek (which are disputed and are addressed separately below in 25 Instruction No. 36), Plaintiffs may not recover any damages other than the amount of their alleged 26 overpayments. See supra Plfs. Proposed Instruction No. 35 (seeking "to recover the difference 27 between (1) the amount CVS actually charged…and (2) the HSP price…"); see also, e.g., Expert 28 146 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 Report of Dr. Joel Hay ¶ 76 (Dec. 9, 2016) (calculating "damages" by finding the "overcharge"— 2 i.e., the difference between "actual copayments" and HSP prices). Thus, Plaintiffs may not recover 3 nominal damages, or damages for non-pecuniary injury like pain and suffering. Finally, CVS's 4 proposal accurately states that the Massachusetts and New York consumer protection statutes 5 provide for alternative "statutory" damages of $25 and $50, respectively, if the consumer's damages 6 are less than those amounts. 7 Plaintiffs' proposal mirrors CVS's in most respects, but Plaintiffs deviate significantly from 8 CVS's proposal, and from the law, when they propose to instruct on New York's "trebling" 9 provision. First, the decision whether to increase damages up to three-times the compensatory 10 award is reserved for the Court, not the jury. The statute itself reads in relevant part, "The court 11 may, in its discretion, increase the award of damages to an amount not to exceed three times the 12 actual damages up to one thousand dollars, if the court finds the defendant willfully or knowingly 13 violated this section." N.Y. Gen. Bus. Law § 349(h) (emphasis added). There is, accordingly, no 14 need to instruct the jury on this issue. 15 Even if the jury were to decide the issue, Plaintiffs' instruction is still improper for several 16 reasons. First, it is likely to confuse the jury because Plaintiffs' treatment of the New York 17 "multiple" damages provision is different from Plaintiffs' treatment of the Massachusetts "multiple" 18 damages provision. Plaintiffs simply state here, alongside the compensatory damages instructions, 19 that the jury may treble New York damages up to $1,000 if CVS acted knowingly or willfully. On 20 the other hand, Plaintiffs separately instruct on the analogous provision in the Massachusetts statute, 21 and with much more detail and guidance for the jury. Plaintiffs' inconsistent treatment of the 22 analogous provisions runs the risk of confusing, rather than helping the jury. Second, Plaintiffs do 23 not identify the burden of proof they must meet in order to demonstrate CVS acted "willfully" or 24 "knowingly." In the context of punitive damages generally, New York case law suggests that a 25 party seeking exemplary damages generally must prove their entitlement and the amount of those 26 damages by clear and convincing evidence. See infra CVS's Proposed Jury Instruction No. 36. The 27 same standard of proof should apply to multiple damages, which like punitives are a deterrent, non- 28 147 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 compensatory remedy. Third, Plaintiffs offer no guidance to the jury on the meaning of "willful" 2 or "knowing" as used in New York's statute. Fourth, similar to Plaintiffs' requests for punitive 3 damages, there simply is no evidence in the record to suggest that CVS is properly subject to these 4 exemplary damages. See infra CVS's Proposed Jury Instruction No. 36. 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 148 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 PLAINTIFFS' PROPOSED INSTRUCTION NO. 36: PUNITIVE DAMAGES 2 If you decide that Plaintiffs have proven their claim against CVS, in addition to any actual 3 damages that you award, you may, for all states other than Florida, assess additional damages to 4 punish CVS or to deter CVS and others from similar misconduct in the future. Such damages are 5 called "punitive" damages. 6 WRONGFUL CONDUCT (ALL STATES BUT FLORIDA) 7 You may award punitive damages against CVS if you find either that 8 1. CVS intended to harm the rights of the plaintiffs and class members; or 9 2. CVS acted in knowing and willful disregard or indifference for the rights of plaintiffs 10 and class members. 11 DESPICABLE CONDUCT (CALIFORNIA ONLY) 12 For the California plaintiffs and class members, if you find that CVS did not intend to harm 13 the rights of plaintiffs, but did act with knowing and willful disregard or indifference to their rights, 14 then you can award punitive damages to the California plaintiffs if you also find that CVS's conduct 15 was despicable. Despicable means conduct that is so vile, base, or contemptible that it would be 16 looked down on and despised by reasonable people. 17 CONDUCT AUTHORIZED BY CORPORATE DECISIONMAKERS 18 (CALIFORNIA AND ILLINOIS) For the California and Illinois plaintiffs and class members, you may only award punitive 19 damages if you also find that CVS's wrongful conduct was committed or authorized by CVS's 20 officers, directors, or managers with corporate policy and decision-making authority. 21 CLEAR AND CONVINCING EVIDENCE (ARIZONA AND CALIFORNIA) 22 In addition, for the Arizona and California plaintiffs and class members, you may award 23 punitive damages against CVS only based on clear and convincing evidence. Clear and convincing 24 evidence is evidence that persuades you that a particular fact is highly probable. This burden of 25 proof is more demanding than the burden of proof of "more probably true than not true," which 26 applies to all other claims in this case, but it is less demanding than the burden of proof of "beyond 27 28 149 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 a reasonable doubt," which is used in criminal cases. 2 DETERMINING AMOUNT OF PUNITIVE DAMAGES (ALL STATES BUT FLORIDA) 3 There is no fixed formula for determining the amount of punitive damages, and you are not 4 required to award any punitive damages. If you decide to award punitive damages, you should 5 consider all of the following factors in determining the amount: 6 1. How reprehensible was CVS's conduct? You may consider whether it caused harm or 7 disregarded the health and safety of others; whether plaintiffs and class members were 8 financially weak or vulnerable and whether CVS took advantage of them; the frequency 9 of CVS's conduct and whether it involved a pattern or practice; and whether CVS acted 10 with trickery or deceit. 11 2. Is there a reasonable relationship between the amount of punitive damages and the 12 plaintiffs' and class members' harm? 13 3. In view of CVS's financial condition, what amount is necessary to punish it and 14 discourage future wrongful conduct? You may not increase the punitive award above an 15 amount that is otherwise appropriate merely because CVS has substantial financial 16 resources. Punitive damages may not be used to punish CVS for the impact of its alleged 17 misconduct on persons other than the plaintiffs and class members. 18 For the Massachusetts class members only, your punitive damages award must be at least 19 double the actual damages you have awarded, but cannot be more than treble the actual damages 20 you have awarded. 21 22 AUTHORITY 23 Arizona. Revised Arizona Jury Instructions (Civil) 5th Personal Injury Damages 4 (Punitive 24 Damages) [Modified] and Commercial Torts 22 (Measure of Damages; Private Cause of Action) 25 (Comment: "Punitive damages may be awarded to private litigants for violations of the Arizona 26 Consumer Fraud Act where the defendant's conduct is wanton or reckless, shows spite or ill will, 27 or where the conduct demonstrates a reckless indifference to the interests of others. Holeman v. 28 150 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 Neils, supra. See RAJI (CIVIL) 5th Personal Injury Damages 4 (Punitive Damages) for guidance 2 applicable to such an instruction."). 3 W. Constructors, Inc. v. S. Pac. Co., 381 F.2d 573, 576 (9th Cir. 1967) ("The Arizona 4 Supreme Court has recently defined 'wanton' negligence as conduct which 'not only creates an 5 unreasonable risk of bodily harm * * * but also involves a high degree of probability that substantial 6 harm will result. * * * Wantonness implies a reckless indifference to the results of an act.'") (quoting 7 Nichols v. Baker, 101 Ariz. 151, 153, 416 P.2d 584 (1966)). 8 Harrelson v. Dupnik, 970 F. Supp. 2d 953, 975 (D. Ariz. 2013) ("In order to state a claim 9 for gross negligence, Plaintiff must allege that [defendant] acted or failed to act when it knew or had 10 reason to know facts which would lead a reasonable person to realize that its conduct not only 11 created an unreasonable risk of bodily harm to others but also involve a high probability that 12 substantial harm would result." Nichols v. Baker, 101 Ariz. 151, 153, 416 P.2d 584 (1966); Walls v. 13 Arizona Dept. of Public Safety, 170 Ariz. 591, 595, 826 P.2d 1217 (App.1991)." 14 California. Judicial Council of California Civil Jury Instructions No. 3945 (Punitive 15 Damages—Entity Defendant—Trial Not Bifurcated) (Modified). 16 Illinois. 35.01 Punitive/Exemplary Damages--Willful and Wanton Conduct [Modified]; 17 35.02 Punitive/Exemplary Damages--Willful and Wanton Conduct--Corporate Defendant's 18 Liability [Modified]. Wendorf v. Landers, 755 F. Supp. 2d 972, 981 (N.D. Ill. 2010) (Punitive 19 damages may be awarded for violations of the Illinois Consumer Fraud Act based on unfair conduct 20 in cases where the defendant acts maliciously or with deliberate indifference.). 21 Massachusetts. Mass. Consumer Protection Act - Chapter 93a, Mass. Super. Ct. Civil 22 Practice Jury Instructions 16.1 §§ 16.7.4 (modified), 16.7.5 (modified), 16.7.11 (modified), & 23 16.7.12 (modified). 24 Full Spectrum Software, Inc. v. Forte Automation Systems, Inc., 858 F.3d 666, 675-78 (1st 25 Cir. 2017) (holding that the Seventh Amendment allows jury trials in Ch. 93A cases alleging 26 deception seeking actual and punitive damages despite the contrary statutory language). 27 New York. New York Pattern Jury Instruction—Civil 2:278 (Damages—Punitive) 28 151 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 (modified). The burden of proof for proving elements necessary to establish punitive damages is a 2 preponderance of the evidence. See Simpson v. Pittsburgh Corning Corp., 901 F.2d 277, 282-83 (2d 3 Cir. 1990) (rejecting an argument that punitive damage claims require more than a preponderance 4 of the evidence); Greenbaum v. Svenska Handelsbanken, N.Y., 979 F. Supp. 973, 981-82 (S.D.N.Y. 5 1997) (Sotomayor, J.) ("Simpson's acceptance of the preponderance standard as a fundamental 6 premise underlying its opinion, coupled with its rejection of the appellant's (and the instant 7 defendant's) argument that federal due process requires a higher standard, leaves this Court with a 8 clear directive: apply preponderance of the evidence with respect to New York law on punitive 9 damages."). 10 See N.Y. Pattern Jury Instruction 3:20 ("Under GBL § 349(h), a plaintiff may recover the 11 greater of $50 or actual damages. The plaintiff may also recover treble damages up to $1,000 if the 12 defendant "knowingly" or "willfully" violated the statute. In addition, a plaintiff may seek punitive 13 damages") (citation omitted). Bueno v. LR Credit 18, LLC, 269 F. Supp. 3d 16, 21-22 (E.D.N.Y. 14 2017). 15 16 17 18 19 20 21 22 23 24 25 26 27 Date Submitted: May 5, 2020 28 152 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 CVS'S PROPOSED JURY INSTRUCTION NO. 36: PUNITIVE DAMAGES 2 [DISCLAIMER: CVS does not believe there is any proper basis to submit the issue of punitive 3 or multiple damages to the jury in this case. Nonetheless, CVS proposes this instruction solely 4 as an alternative to Plaintiffs' punitive damages instructions in the event the Court concludes 5 the issue should be submitted to the jury. But the company does so expressly without prejudice 6 to its position that punitive or multiple damages should not go to the jury at trial.] 7 8 If you find for a Named Plaintiff on his or her claims, you may, but are not required to, award 9 punitive damages for his or her claims under the consumer protection statutes in Arizona, California, 10 Illinois, and New York, and you may, but are not required to, award multiple damages for claims 11 under the consumer protection statute in Massachusetts. The purposes of punitive and multiple 12 damages are to punish a defendant and to deter similar acts in the future. Punitive and multiple 13 damages may not be awarded to compensate a plaintiff. If you award punitive damages, you are 14 awarding them only on the basis of the individual Named Plaintiff's claim, not on any claims of that 15 individual's state class. 16 You are further instructed that any amount of punitive damages must bear a reasonable 17 relationship to the amount of actual damages you have awarded to that Named Plaintiff and must 18 not be the product of passion or prejudice. 19 Regarding the claims under the consumer protection statutes in Arizona, California, and New 20 York, the Plaintiffs have the burden of proving by clear and convincing evidence that punitive 21 damages should be awarded and, if so, the amount of any such damages. 22 Regarding the claims under the consumer protection statutes in Illinois and Massachusetts, 23 the Plaintiffs have the burden of proving by a preponderance of the evidence that punitive damages 24 or multiple damages should be awarded and, if so, the amount of any such damages. 25 Each state has different requirements for whether punitive or multiple damages should be 26 awarded and, if so, in what amount. I will now instruct you on the particular requirements of each 27 state. 28 153 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 AUTHORITY 2 Ninth Circuit Model Civil Jury Instruction No. 5.5 ("Punitive Damages") [Modified]; see 3 also id. Comment to Ninth Circuit Model Civil Jury Instruction No. 5.5 ("In diversity cases, look to 4 state law for an appropriate instruction."); State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 5 408, 426 (2003) ("In sum, courts must ensure that the measure of punishment is both reasonable and 6 proportionate to the amount of harm to the plaintiff and to the general damages recovered."). 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 154 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 1. Arizona 2 To recover punitive damages, Arizona Named Plaintiff Darlene McAfee has the burden of 3 proving by clear and convincing evidence, either direct or circumstantial, that CVS engaged in the 4 misconduct with one or more of the following states of mind: 5 1. CVS intended to cause Ms. McAfee's injury; or 2. CVS was motivated by spite or ill will; or 6 3. CVS acted to serve its own interests, having reason to know and 7 consciously disregarding a substantial risk that its conduct might significantly injure the rights of others. 8 9 To prove this required state of mind by clear and convincing evidence, Ms. McAfee must 10 persuade you that the punitive damages claim is highly probable. This burden of proof is more 11 demanding than the burden of proof of "more probably true than not true," which applies to all other 12 claims in this case, but it is less demanding than the burden of proof of "beyond a reasonable doubt," 13 which is used in criminal cases. 14 The law provides no fixed standard for the amount of punitive damages you may assess, if 15 any, but leaves the amount to your discretion. 16 You are instructed that you must not award any punitive damages unless Ms. McAfee has 17 proved CVS engaged in aggravated and outrageous conduct and that the aggravated and outrageous 18 conduct proximately caused harm to Ms. McAfee. 19 20 AUTHORITY 21 Revised Arizona Jury Instructions (Civil) Commercial Torts 22 Comment ("Punitive 22 damages may be awarded to private litigants for violations of the Arizona Consumer Fraud Act 23 where the defendant's conduct is wanton or reckless, shows spite or ill will, or where the conduct 24 demonstrates a reckless indifference to the interests of others. Holeman v. Neils, supra. See RAJI 25 (CIVIL) 5th Personal Injury Damages 4 (Punitive Damages) for guidance applicable to such an 26 instruction."); Revised Arizona Jury Instructions (Civil) Personal Injury Damages 4 ("Punitive 27 Damages") [Modified]; Olson v. Walker, 781 P.2d 1015, 1020–21 (Ariz. Ct. App. 1989) (punitive 28 155 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 damages may not bear an "unreasonable" relationship to actual damages); Hudgins v. Sw. Airlines, 2 Co., 212 P.3d 810, 824 (Ariz. Ct. App. 2009) (aggravated and outrageous conduct required). 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 156 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 2. California 2 You may award punitive damages against CVS only if California Named Plaintiff Tyler 3 Clark proves that CVS acted with malice, oppression, or fraud. To do this, Mr. Clark must prove 4 by clear and convincing evidence that CVS's conduct was authorized by one or more officers, 5 directors, or managing agents of CVS. 6 "Malice" means that CVS acted with intent to cause injury or that CVS's conduct was 7 despicable and was done with a willful and knowing disregard of the rights or safety of another. A 8 person acts with knowing disregard when he or she is aware of the probable dangerous consequences 9 of his or her conduct and deliberately fails to avoid those consequences. 10 "Oppression" means that CVS's conduct was despicable and subjected Mr. Clark to cruel 11 and unjust hardship in knowing disregard of his rights. 12 "Despicable conduct" is conduct that is so vile, base, or contemptible that it would be looked 13 down on and despised by reasonable people. 14 "Fraud" means that CVS intentionally misrepresented or concealed a material fact and did 15 so intending to harm Mr. Clark. 16 An employee is a "managing agent" if he or she exercises substantial independent authority 17 and judgment in his or her corporate decision-making such that his or her decisions ultimately 18 determine corporate policy. 19 There is no fixed formula for determining the amount of punitive damages, and you are not 20 required to award any punitive damages. If you decide to award punitive damages, you should 21 consider all of the following factors in determining the amount: 22 (a) How reprehensible was CVS's conduct? In deciding how reprehensible CVS's conduct was, you may consider, among other 23 factors: 24 1. Whether the conduct caused physical harm; 2. Whether CVS disregarded the health or safety of others; 25 3. Whether Mr. Clark was financially weak or vulnerable and 26 CVS knew Mr. Clark was financially weak or vulnerable and took advantage of him; 27 28 157 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 4. Whether CVS's conduct involved a pattern or practice; and 1 5. Whether CVS acted with trickery or deceit. 2 (b) Is there a reasonable relationship between the amount of punitive 3 damages and the Mr. Clark' harm? (c) In view of CVS's financial condition, what amount is necessary to 4 punish it and discourage future wrongful conduct? You may not 5 increase the punitive award above an amount that is otherwise appropriate merely because CVS has substantial financial resources. 6 7 Punitive damages may not be used to punish CVS for the impact of its alleged misconduct 8 on persons other than Mr. Clark. 9 10 AUTHORITY 11 California Civil Jury Instructions 3945 ("Punitive Damages-Entity Defendant-Trial Not 12 Bifurcated") [Modified]. 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 158 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 3. Illinois 2 In addition to actual damages, Illinois law permits you under certain circumstances to award 3 punitive damages. If you find that CVS was liable to Illinois Named Plaintiffs Robert Jenks or Carl 4 Washington, and that (1) CVS's conduct was willful and wanton and proximately caused injury to 5 Mr. Jenks or Mr. Washington, as the case may be; (2) that conduct was authorized by CVS's 6 management; and if you believe (3) that justice and the public good require it, you may award an 7 amount of money which will punish CVS and discourage it and others from similar conduct. 8 If you find in favor of Mr. Jenks or Mrs. Washington on their claims under the Illinois 9 consumer protection statute, and find that CVS, through its management, authorized the acts that 10 violated the Illinois consumer protection statute, then you may award punitive damages. In arriving 11 at your decision as to the amount of punitive damages, you should consider the following three 12 questions. The first question is the most important to determine the amount of punitive damages: 13 1. How reprehensible was CVS's conduct? On this subject, you should consider the following: 14 a) The facts and circumstances of CVS's conduct; 15 b) The financial vulnerability of Mr. Jenks and Mr. Washington; 16 c) The duration of the misconduct; 17 d) The frequency of CVS's misconduct; 18 e) Whether the harm was physical as opposed to economic; 19 f) Whether CVS tried to conceal the misconduct; 20 2. What actual and potential harm did CVS's conduct cause to Mr. Jenks and Mr. Washington in this case? 21 3. What amount of money is necessary to punish CVS and discourage CVS and others from future wrongful conduct? 22 23 The amount of punitive damages must be reasonable and in proportion to the actual and 24 potential harm suffered by the plaintiff. 25 26 AUTHORITY 27 Illinois Pattern Instructions 35.01 ("Punitive/Exemplary Damages-Willful and Wanton 28 159 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 Conduct") [Modified]; Illinois Pattern Instructions 35.02 ("Punitive/Exemplary Damages-Willful 2 and Wanton Conduct-Corporate Defendant's Liability") [Modified]. 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 160 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 4. Massachusetts (Multiple Damages) 2 If CVS's actions were deceptive or unfair, then you must go on to decide whether CVS 3 willfully or knowingly committed that unfair or deceptive act or practice. Massachusetts Named 4 Plaintiff Robert Garber has the burden of proving, by a preponderance of the evidence, that CVS 5 had a subjectively culpable state of mind. 6 "Willful" or "knowing" requires something more than mere negligence. 7 Because Mr. Garber's claim under the Massachusetts consumer protection statute relies upon 8 allegations that CVS made misrepresentations, you are instructed that a deceptive or unfair 9 statement or representation is "willful" if the speaker represents a fact to be true without knowing 10 whether it is true or not and with reckless disregard for whether it is true or not. An unfair or 11 deceptive statement is "knowing" if the speaker represents a fact to be true while knowing that it is 12 not true. 13 If you have found that CVS committed an unfair or deceptive act or practice willfully or 14 knowingly then Mr. Garber is entitled to an award of up to three times, but no less than two times, 15 the actual damages you have determined Mr. Garber to have sustained. You must, therefore, 16 determine whether the damage caused by CVS's unfair or deceptive act or practice should be 17 doubled or trebled. 18 AUTHORITY 19 Massachusetts Superior Court Civil Practice Jury Instructions (MCLE, Inc. 2020) Instruction 20 No. 16.7.4 ("Willful or Knowing") [Modified]; Instruction No. 16.7.5 ("Willful or Knowing-If 21 Representations Are Involved") [Modified]; Instruction No. 16.7.12 ("Multiple Damages") 22 [Modified]; Wasserman v. Agnastopoulos, 497 N.E.2d 19, 25 (Mass. App. Ct. 1986) ("sharp 23 practices" example of knowing or willful violation). 24 25 26 27 28 161 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 5. New York 2 [DISCLAIMER: New York law does not allow punitive damages for consumer protection 3 claims brought under N.Y. Gen. Bus. Law § 349. See discussion infra. Nonetheless, CVS 4 proposes this instruction solely as an alternative to Plaintiffs' punitive damage instruction 5 under New York law in the event the Court holds otherwise and finds the issue should be 6 submitted to the jury. But the company does so expressly without prejudice to its position 7 that punitive damages are not an available remedy under N.Y. Gen. Bus. Law § 349.] 8 If you find for New York Named Plaintiff Stephen Sullivan on his claim under the New 9 York consumer protection statute, in addition to awarding damages to compensate Mr. Sullivan for 10 his injuries, you may, but you are not required to, award Mr. Sullivan punitive damages if you find 11 by clear and convincing evidence that the acts of CVS that caused the injury complained of were 12 wanton and reckless or malicious. Punitive damages may be awarded for conduct that represents a 13 high degree of immorality and shows such wanton dishonesty as to imply a criminal indifference to 14 civil obligations. The purpose of punitive damages is not to compensate the plaintiff but to punish 15 the defendant for wanton and reckless or malicious acts and thereby to discourage CVS and other 16 companies from acting in a similar way in the future. 17 An act is malicious when it is done deliberately with knowledge of the plaintiff's rights, and 18 with the intent to interfere with those rights. 19 An act is wanton and reckless when it demonstrates conscious indifference and utter 20 disregard of its effect upon the health, safety and rights of others. 21 If you find that CVS's acts were not wanton and reckless or malicious, you need proceed no 22 further in your deliberations on this issue. 23 On the other hand, if you find that CVS's acts were wanton and reckless or malicious, you 24 may award Mr. Sullivan punitive damages. In arriving at your decision as to the amount of punitive 25 damages you should consider the nature and reprehensibility of what CVS did. That would include 26 the character of the wrongdoing, such as: whether CVS's conduct demonstrated an indifference to, 27 28 162 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 or a reckless disregard of, the health, safety or rights of others; whether the acts were done with an 2 improper motive or vindictiveness; whether the act or acts constituted outrageous or oppressive 3 intentional misconduct; how long the conduct went on; CVS's awareness of what harm the conduct 4 caused or was likely to cause; any concealment or covering up of the wrongdoing; and how often 5 CVS had committed similar acts of this type in the past and the actual and potential harm created 6 by CVS's conduct. 7 The amount of punitive damages that you award must be both reasonable and proportionate 8 to the actual and potential harm suffered by Mr. Sullivan, and to the actual damages you awarded 9 Mr. Sullivan. The reprehensibility of CVS's conduct is an important factor in deciding the amount 10 of punitive damages that would be reasonable and proportionate in view of the harm suffered by 11 Mr. Sullivan and the actual damages you have awarded Mr. Sullivan. 12 In reporting your verdict, you will state the amount awarded by you as punitive damages. 13 14 AUTHORITY 15 N.Y. Pattern Jury Instr.--Civil 2:278 ("Damages-Punitive") [Modified]. 16 17 18 19 20 21 22 23 24 25 26 27 Date Submitted: May 5, 2020 28 163 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 PARTIES' STATEMENT REGARDING DISPUTED JURY INSTRUCTION NO. 36 2 Plaintiffs: Plaintiffs' proposed punitive damages instruction, like their instruction on the elements 3 of their claims, carefully groups the common elements of the relevant states' punitive damages law, 4 while also addressing the small number of state-specific elements required for the jury to find to 5 award such damages. Plaintiffs object to CVS's instruction, which suffers from many of the same 6 defects as do CVS's other instructions. It is excessively wordy and complicated, and thus violates 7 this Court's Standing Pretrial Order. It disregards the common elements among the states' punitive 8 damages law. And it reads as if the case is not a certified class action, only addressing the individual 9 named Plaintiffs, not the classes as a whole. 10 With respect to New York, CVS is incorrect that New York General Business Law § 349 11 does not allow for punitive damages beyond the statutory trebling provision. As explained in detail 12 in Bueno v. LR Credit 18, LLC, 269 F. Supp. 3d 16, 21-22 (E.D.N.Y. 2017), multiple state and 13 federal courts, including the Second Circuit, have concluded that both treble damages and punitive 14 damages are available for section 349 claims: 15 Wilner, in which the New York Appellate Division, Second Department, 16 affirmed, inter alia, the trial court's refusal to dismiss the plaintiffs' claim for 17 punitive damages on their section 349 claim. 71 A.D.3d at 158, 893 N.Y.S.2d 208. The Wilner court held that "[u]nder General Business Law § 349 consumers 18 may recover actual damages in any amount," that they "may recover treble damages under General Business Law § 349(h) up to $1,000," and, critically, 19 that they "may seek both treble damages and punitive damages." Id. at 167, 893 N.Y.S.2d 208, 218 (citations omitted). The Second Circuit subsequently 20 adopted Wilner in Barkley v. Olympia Mortgage Co. (Barkley II), 557 Fed. 21 Appx. 22 (2d Cir. 2014). Specifically, the Barkley II court determined that "punitive damages may be awarded for a violation of GBL § 349, and the setoff 22 calculation was correct for the reasons set out in the district court's January 27, 2012 Memorandum & Order." Id. at 26 n.1. The district court order to which 23 Barkley II refers had opined that "GBL § 349(h) restricts the court's award of treble damages, but does not govern the award of punitive damages, which plaintiffs may 24 seek in addition to treble damages," and proceeded to award punitive damages in 25 excess of $1,000.00 … Consistent with this rationale, federal courts within the Second Circuit, as 26 well as state courts, have adopted Wilner. See, e.g., Cohen v. Narragansett Bay Ins. Co., 14–CV–3623, 2014 WL 4701167 (E.D.N.Y. Sept. 23, 2014) (Chen, J.) 27 (holding "there is no precise limit on the amount of punitive damages" a plaintiff 28 164 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 may collect under section 349 and arguments asserting any such limit "stemmed 1 from [a] misreading of the statutory language with respect to treble damages, given 2 that noting in the statute 'govern[s] the award of punitive damages' " (second alteration in original) (quoting Barkley I, 2012 WL 2357295, at *17 n.16)); Koch 3 v. Greenberg, 14 F. Supp. 3d 247, 278–79 (S.D.N.Y. 2014) (Oetken, J.) (holding that, "while the $1,000–per-violation cap of the GBL claims' exemplary provision 4 provides a comparative measure, it is clear that in New York the GBL's treble damages provision does not proscribe an additional award of punitive 5 damages."). 6 (alteration in original) (emphasis added) (internal footnotes excluded). CVS also is incorrect in 7 arguing that New York law applies a clear and convincing evidence standard to awarding punitive 8 damage. As Plaintiffs' authorities demonstrate, a preponderance standard governs punitive damages 9 under New York law. 10 11 CVS: There is no basis to submit the issue of punitive or multiple damages to the jury. Under no 12 possible view of the evidentiary record was CVS's conduct sufficiently flagrant and egregious to 13 warrant a punitive award. Indeed, the legality of CVS's conduct was sufficiently debatable that the 14 Court awarded summary judgment in CVS's favor as a matter of law. While the Ninth Circuit found 15 a genuine issue of material fact on the merits, there is no serious question that CVS's conduct, even 16 if a jury finds it was unlawful, was not egregiously or flagrantly so. Further, as explained more 17 below, punitive damages are not even an available remedy under New York's statute. 18 In the event that the Court disagrees with CVS and decides to instruct the jury on punitive 19 or multiple damages, however, CVS provides its Proposed Jury Instruction No. 36. CVS is 20 submitting this proposed instruction solely as a protective measure, because Plaintiffs have indicated 21 they will argue that CVS waives the right to submit such a proposed instruction if the Court later 22 holds that a punitive damages instruction is warranted. In that event, CVS's proposed instruction is 23 superior to Plaintiffs' proposed instruction, for multiple reasons. 24 First, CVS's proposal instructs the jury to decide punitive damages only as to the Named 25 Plaintiffs' claims, not for the entire class. This continues CVS's general approach to the jury 26 instructions and the fact that only as to the Named Plaintiffs will the jury decide all issues that are 27 28 165 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 in dispute. To award punitive damages, one must know the compensatory damages owed to the 2 plaintiff, which is an individual determination. There are further individualized issues to the extent 3 a particular state's law requires assessing the effect of the defendant's conduct on the plaintiff. 4 Second, CVS's proposed instruction on punitive damages sources from each state's model 5 instruction on punitive damages, where one is available, with only slight modification to account 6 for the circumstances of this case. This ensures that CVS's proposal accounts for any nuances in 7 state law and will provide the jury with full and accurate information on the relevant legal standards 8 in each state. 9 Third, the structure of CVS's proposed instruction is superior to Plaintiffs'. For example, 10 CVS's proposal would instruct the jury at the outset that two different burdens of proof apply to 11 punitive damages, depending on the state—"clear and convincing evidence" and "preponderance of 12 the evidence." CVS believes the jury should be instructed about the applicable burden of proof 13 before they are instructed on the substantive standards for an award of punitive damages. By 14 contrast, Plaintiffs' instruction would not identify the burden until after the type of conduct that is 15 punishable ("Wrongful Conduct"), which Plaintiffs' instruction says applies to "All States." That 16 sequence risks the jury failing to evaluate Plaintiffs' evidence of wrongful conduct against the two 17 different burdens of proof. 18 CVS's proposal also informs the jury at the outset of the overarching constitutional 19 requirement that punitive damages must "bear a reasonable relationship to the amount of actual 20 damages." See supra (stating principles from State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 21 408, 426 (2003). Plaintiffs, by contrast, merely suggest that Plaintiffs "should consider," but need 22 not follow, this constitutional rule when setting the amount of damages. See supra Plfs. Proposed 23 Inst. 37. Plaintiffs' instruction does not accurately state the rule. 24 CVS's instruction also recites all the relevant law for the jury before moving onto the next 25 state's law. This will ensure that the jury understands the varying substantive requirements for 26 punitive and multiple damages from state to state, consistent with Ninth Circuit precedent. 27 Fourth, Plaintiffs' instruction either misstates the law or oversimplifies it to the point of 28 166 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 distortion. To start, concerning the first element in their instruction ("Wrongful Conduct"), 2 Plaintiffs ask the jury to determine whether CVS intended or was indifferent to "the rights of 3 plaintiffs and class members." The instruction does not tell the jury what purported "right" of the 4 Plaintiffs could serve as a basis for awarding punitive damages. The jury's determination should 5 focus on the defendant's conduct, not some undefined "right" of the Plaintiff. 6 In addition, in the course of combining each states' law into one instruction per element, 7 Plaintiffs omit some requirements under certain states' laws and distort other requirements. 8 Plaintiffs omit Arizona's requirement that CVS's conduct be "aggravated and outrageous." 9 Hudgins v. Sw. Airlines, Co., 212 P.3d 810, 824 (Ariz. Ct. App. 2009). Plaintiffs also omit Illinois's 10 requirements that (1) CVS's conduct was "willful and wanton and proximately caused" the relevant 11 injury, and (2) "justice and the public good require" must warrant punitive damages. Illinois Pattern 12 Instruction 35.01. Massachusetts (among others) requires that CVS's conduct was committed 13 "knowingly" or "willfully." Massachusetts's model instruction specifically defines those terms, yet 14 Plaintiffs would not read those definitions to the jury. 15 Plaintiffs also misstate the factors relevant to determining the amount of punitive damages. 16 For example, Plaintiffs say the reprehensibility of CVS's conduct may be measured simply by 17 "whether it caused harm;" the pattern instructions in California and Illinois make clear that juries in 18 those states must consider whether the conduct caused "physical" harm specifically. See California 19 Civil Jury Instructions 3945; Illinois Pattern Instructions 35.01. That is a major misstatement, since 20 this case does not involve any physical harm. 21 Plaintiffs also say the jury should consider "CVS's financial condition" when setting the 22 amount of punitive damages. While financial condition is clearly a factor in some jurisdictions (e.g., 23 California), it is not mandated by any other state's model instruction. More importantly, insofar as 24 punitive damages are available under New York law at all (they are not, see below), that state 25 expressly prohibits the jury from seeing evidence of the defendant's financial condition until after 26 the jury has decided that punitive damages are appropriate.18 Plaintiffs have not demonstrated, 27 18 "Caveat 3: Evidence of the defendant's wealth and other evidence relevant to an award of 28 167 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 through their proposed jury instruction or otherwise, how the Court should sequence the proceeding 2 to ensure compliance with both California and New York law. 3 Finally, Plaintiffs misstate New York law because they are proposing that the jury could 4 award punitive damages for a consumer protection violation. Punitive damages are not an available 5 remedy for such a claim. 6 Under Section 349(h) of New York's General Business Law Section, the jury finds the 7 plaintiff's amount of actual damages, and then authorizes the Court (but not the jury) to award up 8 to three times those actual damages; the statute, though, does not support awarding more than this. 9 See N.Y. Gen. Bus. Law § 349(h) ("The court may, in its discretion, increase the award of damages 10 to an amount not to exceed three times the actual damages up to one thousand dollars, if the court 11 finds the defendant willfully or knowingly violated this section." (emphasis added)). These 12 multiplied actual damages, confusingly, have been called in some cases "limited punitive damages." 13 See, e.g., Karlin v. IVF Am., Inc., 712 N.E.2d 662, 666 (N.Y. 1999) ("Among the remedies available 14 to private plaintiffs are compensatory damages, limited punitive damages and attorneys' fees []." 15 (emphasis added)); Guzman v. Harris, 2017 WL 4386369, at *5 (S.D.N.Y. Sept. 29, 2017), opinion 16 adopted sub nom. Guzman v. Mel S. Harris & Assocs., LLC, 2018 WL 1665252 (S.D.N.Y. Mar. 22, 17 2018) ("As the court in Karlin, observed, private plaintiffs with GBL § 349 claims may recover only 18 'compensatory damages, limited punitive damages and attorneys' fees.' The use of the term 19 'punitive damages' may have caused some confusion in subsequent decisions, but the core holding 20 in Karlin has not been disturbed. Parties cannot recover traditional punitive damages under § 349 21 but they may recover punitive damages in a case which includes a § 349 claim provided there is a 22 separate viable claim which supports punitive damages.").19 Likewise, New York courts have 23 punitive damages should not be admitted at trial unless and until the jury has brought in a special 24 verdict that plaintiff is entitled to punitive damages against defendant, Rupert v Sellers, 48 A.D.2d 265, 368 N.Y.S.2d 904 (4th Dep't 1975)." N.Y. Pattern Jury Instr.--Civil 2:278. 25 19 See also, e.g., Leonard v. Abbott Labs., Inc., 2012 WL 764199, at *16 (E.D.N.Y. Mar. 5, 2012) 26 ("With respect to damages, '[c]itizens can enjoin an unlawful business practice, recover actual damages (or $50, whichever is greater) and obtain attorney's fees. In addition, if a defendant 27 knowingly or willfully engages in a deceptive practice, the court may, in its discretion, award treble 28 168 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 described these multiplied actual damages as not "traditional punitive damages." Guzman, 2017 2 WL 4386369, at *5. 3 Plaintiffs cite Bueno v. KR Credit 18, LLC, 2017 WL 3986577 (E.D.N.Y. Sept. 7, 2017), to 4 support their request for punitive damages. But Bueno both pre-dates Guzman and relies primarily 5 upon an sparsely-reasoned opinion for that conclusion, Wilner v. Allstate Ins. Co., 893 N.Y.S.2d 6 208 (App. Div. 2010). Wilner itself cites only two, single-paged opinions that involved punitive 7 damages, but neither was a consumer protection case. Guzman, 2017 WL 4386369, at *3. Under 8 the Guzman line of cases and the plain language of the statue, punitive damages are not an available 9 remedy. 10 11 12 13 14 15 16 17 18 19 20 21 22 damages up to a maximum of $1,000'. Stutman, 95 N.Y.2d at 29, 709 N.Y.S.2d 895–96, 731 N.E.2d 23 at 611–12 (citing General Business Law § 349(h))."); see also id. at *8 ("Under the NYCPA, the 24 treble damages available for willful and knowing misconduct are commonly referred to as a type of 'limited punitive damages'. This is because punitive damages above and beyond the trebling of 25 actual damages are not an available remedy under the statute." (citing Karlin)); Mayline Enters., Inc. v. Milea Truck Sales Corp., 641 F. Supp. 2d 304, 310 (S.D.N.Y. 2009) (citing New York state 26 court cases that "refused to award punitive damages where actual damages exceed the $1,000 cap on total damages") (granting motion to dismiss made on grounds that a "plaintiff cannot obtain 27 punitive damages for a cause of action asserted under the Act"). 28 169 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 JOINT PROPOSED JURY INSTRUCTION NO. 37: RETURN OF VERDICT 2 A verdict form has been prepared for you. [Explain verdict form as needed.] After you have 3 reached unanimous agreement on a verdict, your foreperson should complete the verdict form 4 according to your deliberations, sign and date it, and advise the clerk that you are ready to return to 5 the courtroom. 6 7 AUTHORITY 8 Ninth Circuit Model Civil Jury Instruction No. 3.5. 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 Date Submitted: May 5, 2020 28 170 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 Dated: May 5, 2020 Respectfully submitted, 2 By: /s/ Bonny Sweeney By: /s/ Grant A. Geyerman 3 Bonny E. Sweeney (Cal. Bar No. 176174) Enu Mainigi (admitted pro hac vice) 4 HAUSFELD LLP Grant A. Geyerman (admitted pro hac vice) 600 Montgomery St., Suite 3200 WILLIAMS & CONNOLLY LLP 5 San Francisco, California 94111 725 Twelfth Street, N.W. Tel: 415-633-1908 Washington, DC 20005 6 Fax: 415-358-4980 Telephone: (202) 434-5000 7 bsweeney@hausfeld.com Facsimile: (202) 434-5029 8 Richard Lewis (admitted pro hac vice) Sathya S. Gosselin (Cal. Bar No. 269171) Edward W. Swanson (Cal. Bar No. 159859) 9 HAUSFELD LLP August Gugelmann (Cal. Bar No. 240544) 1700 K St. NW, Suite 650 SWANSON & MCNAMARA LLP 10 300 Montgomery Street, Suite 1100 Washington, D.C. 20006 11 Tel: 202-540-7200 San Francisco, CA 94104 Fax: 202-540-7201 Telephone: (415) 477-3800 12 rlewis@hausfeld.com Facsimile: (415) 477-9010 sgosselin@hausfeld.com 13 Counsel for Defendant CVS Pharmacy, Inc. Robert B. Gilmore (admitted pro hac vice) 14 Edward H. Meyers (admitted pro hac vice) 15 STEIN MITCHELL BEATO & MISSNER LLP 16 901 15th St., N.W., Suite 700 Washington, D.C. 20005 17 Tel: 202-737-7777 Fax: 202-296-8312 18 rgilmore@steinmitchell.com 19 emeyers@steinmitchell.com 20 Elizabeth C. Pritzker (Cal. Bar No. 146267) Jonathan K. Levine (Cal. Bar No. 220289) 21 PRITZKER LEVINE LLP 22 1900 Powell, Suite 450 Emeryville, California 94608 23 Tel. 415-692-0772 Fax. 415-366-6110 24 ecp@pritzkerlevine.com jkl@pritzkerlevine.com 25 26 Class Counsel 27 28 171 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR 76 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 172 [COMBINED PROPOSED] JOINT JURY INSTRUCTIONS 15-CV-03504-YGR