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In re Lorazepam & Clorazepate Antitrust Litig.

United States District Court, District of Columbia

August 18, 2017

IN RE LORAZEPAM & CLORAZEPATE ANTITRUST LITIG.
v.
MYLAN LABS., INC., Defendants. HEALTH CARE SERV. CORP., Plaintiff, BLUE CROSS BLUE SHIELD OF MINN., BLUE CROSS BLUE SHIELD OF MASS., and FEDERATED MUT. INS. CO. Plaintiffs,
v.
MYLAN LABS., INC., et al., Defendants. Misc. No. 99-276 (TFH) Civil Action Nos. 01-2646 (TFH), 02-1299 (TFH)

          MEMORANDUM OPINION

          Thomas F. Hogan, Senior United States District Judge

         Following remand from the D.C. Circuit on jurisdictional grounds, the Court determined that nondiverse plaintiffs could be dismissed from this action pursuant to Rule 21 of the Federal Rules of Civil Procedure. See In re Lorazepam & Clorazepate Antitrust Litig., 900 F.Supp.2d 8 (D.D.C. 2012). As a result, the plaintiffs have dismissed the claims of 775 self-funded customers who are either nondiverse from the defendants or whose citizenship could not be determined. See In re Lorazepam & Clorazepate Antitrust Litig., 62 F.Supp.3d 38 (D.D.C. 2014). The plaintiffs have met their burden to establish diversity jurisdiction over all of the remaining self-funded customers, see id., and the only issue that remains to be decided is whether the Court must conduct a partial retrial on damages or whether it can enter a remittitur for the portion of the damages attributable to the dismissed parties. After careful consideration, and for the reasons detailed below, the Court concludes that remittitur is appropriate so Plaintiffs' Joint Motion for Remittitur [ECF No. 1051][1] shall be granted.

         I. Background[2]

         This action arose from alleged antitrust violations resulting from exclusive licensing agreements among the defendant pharmaceutical drug manufacturers and pharmaceutical drug ingredient manufacturers. See Third Am. Compl. [ECF No. 1066]; Fourth Am. Compl. [ECF No. 1050]. The named plaintiffs - Blue Cross Blue Shield of Minnesota ("BCBS-MN"), Blue Cross Blue Shield of Massachusetts ("BCBS-MA"), Health Care Service Corporation ("HCSC"), and Federated Mutual Insurance Company ("Federated") - are four health insurance companies that sued on behalf of themselves and as claims administrators for their self-funded customers. See Third Am. Compl. 2; Fourth Am. Compl. 2.

         Shortly before trial, the defendants challenged the plaintiffs' authority to sue on behalf of their self-funded customers. See Defs.' Mot. in Limine to Preclude Evidence of Pl's.' Claims on Behalf of Their Self-Funded Customers [ECF No. 680]. The Court found that the insurance companies were not the real parties in interest with respect to the claims for damages suffered by their self-funded customers, see Order (Mar. 7, 2005) [ECF No. 745], but it allowed the plaintiffs to seek ratification from their self-funded customers pursuant to Rule 17 of the Federal Rules of Civil Procedure, see Order (Apr. 25, 2005) [ECF No. 821]. Five self-funded customers opted out during the ratification process. See Defs.' Mot. for Remittitur Under Rule 59(e) and Mem. in Support Thereof Ex. B, Gilde Decl. ¶ 3 [ECF No. 890-3] and Ex. C, Skwara Decl. ¶ 3 [ECF No. 890-4].

         The remaining claims proceeded to trial. On June 1, 2005, the jury found in favor of all plaintiffs and against all defendants and awarded each plaintiff the precise amount of damages calculated by Dr. Atanu Saha, the plaintiffs' economic antitrust expert. See Verdict Form 4 [ECF No. 875]; see also Trial Tr. 14:9-16, 40:18-41:10 May 12, 2005 (PM); PEX 5002 ("Annual Summary of Damages by Plaintiff). The Clerk entered Judgments on the Verdict against the defendants in favor of plaintiffs Blue Cross Blue Shield ("BCBS") of Massachusetts [ECF No. 877], BCBS of Minnesota [ECF No. 878], Health Care Service Corporation ("HCSC") [ECF No. 879], and Federal Mutual Insurance Company [ECF No. 880].

         Following the resolution of extensive post-trial motions, on January 24, 2008, the Court granted the plaintiffs' motions for treble damages and granted in part the defendant's motion for remittitur under Rule 59(e). In re Lorazepam & Clorazepate Antitrust Litig., 531 F.Supp.2d 82 (D.D.C. 2008). The Clerk entered an updated Judgment in a Civil Case [ECF No. 947] to reflect the amended damages awards, and the defendants appealed, see Notices of Appeal [ECF Nos. 956, 957]. On July 16, 2009, the Court adopted Magistrate Judge Kay's Report and Recommendation granting BCBS-MA, BCBS-MN, and Federated's Motion to Amend the Judgment to Include Prejudgment Interest, see Order (July 16, 2009) [ECF No. 999], so the defendants filed Amended Notices of Appeal on July 31, 2009, see Amended Notice of Appeal [ECF Nos. 1000, 1001].

         Just days prior to oral argument before the D.C. Circuit, the defendants filed a motion to dismiss for lack of subject matter jurisdiction, asserting that at least one self-funded customer shared a state of citizenship with at least one defendant. See Motion to Dismiss, In re Lorazepam, No. 08-5044 (D.C. Cir. Oct. 3, 2010). The Circuit rejected the plaintiffs' argument that the Court had supplemental jurisdiction over the self-funded customers' claims and held that the "self-funded customers must be counted as parties for diversity of citizenship purposes." In re Lorazepam, 631 F.3d 537, 540 (D.C. Cir. 2011). Because the pleadings lacked citizenship allegations for the self-funded customers, the Circuit remanded the case for an inquiry into the citizenship of the self-funded customers and a determination of whether any self-funded customers could be dismissed under Federal Rule of Civil Procedure 21. Id. at 542. The Circuit noted that "[s]ince this may also affect damages, the district court may have to conduct a partial retrial on that issue." Id. (emphasis added).

         On remand, the Court held that nondiverse self-funded customers could be dismissed under Rule 21 of the Federal Rules of Civil Procedure and denied the defendants' motion to dismiss for lack of subject matter jurisdiction. In re Lorazepam & Clorazepate Antitrust Litig., 900 F.Supp.2d 8 (D.D.C. 2012). The plaintiffs have now dismissed over half of the self-funded customers from the lawsuit - 775 out of 1, 387 - because they are either nondiverse from one defendant or their citizenship cannot be determined. See In re Lorazepam, 62 F.Supp.3d 38 (D.D.C. 2014); see also Third Am. Compl. [ECF No. 1066]; Fourth Am. Compl. [ECF No. 1050]. Because the jury's verdict included damages awarded to these dismissed self-funded customers, the Court must now decide whether a partial retrial on damages is required or whether it is appropriate to enter a remittitur.

         II. Legal Standard

         In general, remittitur is a practice by which a trial court can require a party to choose between reduction of an excessive damages award and a new trial. When a court determines that a verdict is excessive because it is more than a reasonable jury could have awarded based on the evidence presented at trial, the court must give the parties the option of a new trial in order to avoid impinging on their Seventh Amendment rights. See, e.g., Langevine v. District of Columbia, 106 F.3d 1018, 1024 (D.C. Cir. 1997) (explaining that because "the Seventh Amendment right to a jury pervades the realm of jury verdict decisions ... [a] court must be especially hesitant to disturb a jury's determination of damages in cases involving intangible or non-economic injuries."). But when "it is apparent as a matter of law that certain identifiable sums were included in the verdict that should not have been there, " it is appropriate for a district court to enter a remittitur and correct the verdict without further jury proceedings. See Carter v. District of Columbia, 795 F.2d 116, 134 (D.C. Cir. 1986) (quoting 11 Charles Alan Wright and A. Miller, Federal Practice and Procedure, § 2815, at 99 (1973)). Therefore, if a "jury's assessment of damages includes an impermissible component that can be identified and calculated with precision, " the court can enter a remittitur without encroaching on the parties' rights, and a new trial is not required. Carter, 795 F.2d at 134.

         III. Discussion

         The parties agree that the damages awarded to the nondiverse self-funded customers should not have been included in the jury's verdict because the Court did not have jurisdiction over those claims. The issue, then, is whether that "impermissible component" of the verdict can be "identified and calculated with precision" such that it is appropriate for the Court to enter a remittitur, or whether a new trial on damages is required.

         The defendants claim that a new trial is required because "there is no basis whatsoever to separate out the damages for any or all of the self-funded plaintiffs." Defs.' Resp. to Pl's.' Mot. for Remittitur 15 [ECF No. 1031 ]. But the record in this case establishes a clear basis for disaggregating the damages of the dismissed self-funded customers - a basis the defendants fervently advocated for earlier in this litigation. Shortly after trial, in June 2005, the defendants filed a motion requesting remittitur of portions of the damages awards for several reasons, one of which was that the claims of five self-funded customers that had opted out of the litigation were erroneously included in the final damages award. See Defs.' Mot. for Remittitur Under Rule ...


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