UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
MDL Docket No. 1290 (TFH/JMF)
Misc. No. 99-276 (TFH)
IN RE LORAZEPAM & CLORAZEPATE
ANTITRUST LITIG.
HEALTH CARE SERV. CORP.,
Plaintiff,
v_ Civil Action No. 01-2646 (TFH)
MYLAN LABS., INC., et al.,
Defendants.
BLUE CROSS BLUE SHIELD OF MINN.,
BLUE CROSS BLUE SHIELD OF MASS.,
and FEDERATED MUT. INS. CO.
Plaintiffs,
Civil Action No. 02-1299 (TFH)
v.
MYLAN LABS., INC., et al.,
Defendants.
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MEMORANDUM OPINION
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.
20l2). 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 plaintiffshave 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. Background2
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 Pls.’ Claims on Behalf of
l The plaintiffs’ motion Was initially filed as “Plaintiffs’ Joint Motion to Dismiss Claims and
for Remittitur.” By order dated July 29, 2014, the Court granted Plaintiffs’ Joint Motion to Dismiss
Claims and deferred ruling on the plaintiffs’ request for a remittitur. See In re Lorazepam &
Clorazepate Antitrust Litig., 62 F. Supp. 3d 38 (D.D.C. 2014). The issues currently before the Court
do not involve plaintiff Federated Mutual Insurance Company because it does not have any self-
funded customers See ECF No. 1006 at 2 n.l.
2 For an account of the complex procedural history and factual background of this case, see,
e.g., In re Lorazepam & Clomzepate Antitrust Litigation opinions: 631 F.3d 537 (D.C. Cir. 2011);
900 F. Supp. 2d 8 (D.D.C. 2012); 467 F. Supp. 2d 74 (D.D.C. 2006); and 295 F. Supp. 2d 30 (D.D.C.
2003)
_2-
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 l7 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. jj 3 [ECF No. 890-3] and Ex. C, Skwara Decl. 11 3 [ECF No. 890-4].
The remaining claims proceeded to trial. On June l, 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. l4:9-l6, 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 Judgm-ent 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 l6, 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
_ 3 _
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-
fi,lnded 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.” Ia’. (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 1,3 87 ~ 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.
_ 4 _
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 Colambia, 795 F.2d 116, 134 (D.C. Cir.
1986) (quoting 11 Charles Alan Wright and A. Miller, Fea'eral 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 Pls.’ 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 59(e) [ECF 890]. In connection with
their remittitur request, far from claiming that “no basis” existed to separate out the damages of those
self-funded customers, the defendants argued that
[t]he losses in this case are strictly economic and were calculated by reference to
thousands of specific identifiable pharmaceutical reimbursement transactions The
standard set forth in Carter is the one appropriate in this case_where the precise
determination of damages depends on the application of legal rules to determine
the correct amount of identifiable economic loss.
Plaintiffs themselves recognized this when they conceded that “remittitur is . . .
proper for the five BCBSMA and BCBSMN self-funded plans thatresponded
negatively to Plaintiffs’ Rule l7(a) ratification procedure.” Obviously, such
remittitur is not required because the verdict is “grossly excessive, inordinate,
shocking to the conscience or the court, or so high that it would be a denial of justice
to permit it to stand.” Rather, Plaintiffs agree remittitur is appropriate because
Plaintiffs were not authorized to bring these claims on behalf of those five self-
funded customers Thus, the $77,3 24 in damages incurred by those five customers
was wrongfully included in the final damages award In making that admission,
Plaintiffs implicitly accept the standard set forth in Carter that damages wrongfully
included as a matter of law should be subtracted from the final damages award
'Defs.’ Reply in Support of Defs.’ Mot. for Remittitur Under Rule 59(e) 4 [ECF No. 905] (internal
citations omitted).3 As stated, the plaintiffs did concede that the damages awarded to those five self-
funded customers should be remitted See Pls.’ Joint Opp’n to Defs’ Mot. for Remittitur Under Rule
59(e) 17-18 [ECF No. 898]. To that end, the plaintiffs submitted a declaration from their economic
antitrust expert, Dr. Saha, who explained how he calculated the damages associated with the claims
of those self~funded customers and submitted exhibits supporting his calculations See Pls.’ Joint
Opposition to Defs.’ Mot. for Remittitur Under Rule 59(e) Ex. D [ECF 898-1]. The defendants never
raised any objections to the methodology used by or the result of Dr. Saha’s remittitur calculations
The Court held that remittitur was appropriate, explaining that “[b]ecause these plans opted out, they
were ‘impermissible component[s]’ of the damage award that ‘can be identified and calculated with
precision.”’ In re Lorazepam, 531 F. Supp. 2d 82, 94 (quoting Carter, 795 F.2d at 135).
Despite their earlier confidence in this process, the defendants are now objecting to the
plaintiffs’ calculation of damages awarded to the dismissed self-funded customers and assert instead
that the “proper approach is to conduct a new trial on damages as anticipated by the D.C. Circuit.”
Defs.’ Resp; to Pls.’ Mot. for Remittitur 7 [ECF No. 1052].4 The defendants also assert that the
3 The defendants are hoisted by their own petard. They claim that they “only alternatively
argu[ed] for remittitur” of the damages awarded to the five self-funded customers that opted out of
the litigation, and while the Court acknowledges that the defendants were also seeking broader post-
trial relief in the form of limitation of the duration of damages and dismissal of the claims of all of
the self-funded customers, the defendants still clearly acknowledged a basis for separating out the
damages awarded to specific self-funded customers and supported the Court’s entry of the remittitur.
4 The defendants overstate the Circuit’s commentary on damages, which observed only that the
Court may have to conduct a partial retrial on damages See In re Lorazepam, 631 F.3d at 542
(emphasis added). The Circuit’s opinion was limited to jurisdictional issues surrounding the
citizenship of the self-funded customers and did not analyze any issues related to the damages
presentation at trial or the expert calculations
_ 7 _
Court will violate their Seventh Amendment rights by entering a remittitur and not granting them a
new trial. Id.
A. Identification and Calculation of Damages Awarded To the Dismissed Self-
Funded Customers
At trial, damages were presented in the aggregate for each named plaintiff and its self-funded
customers, but, as demonstrated during the 2005 remittitur process, a methodology exists to separate
out the damages for each self-funded customer. The defendants’ concerns at this juncture are
seemingly solely related to the fact that the current remittitur calculations were not performed by
plaintiffs’ economic antitrust expert from trial, Dr. Saha. Because Dr. Saha is no longer employed by
Analysis Group, the current calculations were performed by Justin McLean, Managing Principal of
Analysis Group, who assisted Dr. Saha in preparing his expert reports on damages and performing
the 2005 remittitur calculations Mr. McLean states in a sworn declaration that, in addition to using
the exact data from Dr. Saha’s Expert Reports and the 2005 Remittitur, the methodology he
employed to calculate the current remittitur was identical to the methodology followed by Dr. Saha in
calculating the 2005 Remittitur. See McLean Decl. 1111 3-4 (Jan. 13, 2013) [ECF No. 1051-4]. The
defendants have not raised any specific challenges to McLean’s remittitur calculations or his
methodology, and the plaintiffs
have provided to defendants the program developed under Dr. Saha’s direction that
was used to calculate all of the damages for both the named plaintiffs and the self-
funded customers as well as the claims data upon which Dr. Saha’s program relied
The data provided to defendants contains a field which indicated whether an
account was a self-funded account or a fully insured “premium” account.
Defendants also had a corresponding group number, So if one knows the group
number or numbers associated with a given self-insured customer, one can simply
use Dr. Saha’s original program and the Plaintiffs’ original claim data (both of
which were produced to defendants more than seven years ago) to determine what
portions of the damages were attributed to those group numbers
_g_
Pls.’ Joint Reply [ECF No. 1016].
The defendants argue that the plaintiffs’ “remittitur approach should be rejected,” but they do
not identify any flaws in McLean’s methodology, and they fail to acknowledge that they previously
accepted this identical methodology when it was used by Dr. Saha to calculate the 2005 Remittitur.
Instead, the defendants claim that they are entitled to take discovery on McLean’s “proposed
testimony,” to challenge McLean’s methodology, and, assuming his testimony “ineets Daubert
standards,” to “challenge [McLean] before a jury and have a jury determine the factual issues
surrounding Plaintiffs’ newly disaggregated damages claims.” Defs.’ Resp. to Pls.’ Mot. for
Remittitur 7, 8 [ECF No. 1052].5 These arguments miss the mark. There is no “proposed
testimony,” and there are no factual issues to be determined by a jury. Although the defendants are
correct that “the weighing of the evidence and drawing of legitimate inferences from disputed facts
are jury functions, not those of a judge,” there are no facts in dispute or evidence to be weighed at
this point in the proceedings The damages of the dismissed self-funded customers were wrongfully
included as a matter of law and simply need to be subtracted from the final damages award
5 Summers v. Missouri Pacifzc Railroaa' System, 132 F.3d 599 (10th Cir. 1997) does not
support the defendants’ argument that reopening discovery is appropriate under these circumstances
The issue in Summers was whether the district court erred in denying the plaintiffs’ request for
additional time to obtain alternative medical testimony When the court excluded the plaintiffs’
proffered medical testimony prior to trial. Summers, 132 F.3d at 602. As the Tenth Circuit
recognized, the situation in Summers was “unique” in several respects, and it bears no relation to the
facts or posture of this case.
IV. Conclusion
F or the reasons stated above, the Court finds that entry of a remittitur is proper, and the
plaintiffs’ motion shall be granted An appropriate order accompanies this Memorandum Opinion.
August(g;, 2017 ' _aZ_/77
Thomas F.v
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