Health Care Service Corp. v. Mylan Laboratories, Inc.

219 F.R.D. 12, 2003 U.S. Dist. LEXIS 22995
District Court, District of Columbia·Decided December 23, 2003·No. MDL No. 1290; Misc. No. 99-276 TFH/JMF; Nos. 01-2646, 02-1299 TFH/JMF·Published·Cited by 11 cases

Opinion

MEMORANDUM OPINION

FACCIOLA, United States Magistrate Judge.

Plaintiffs in this antitrust case are Blue Cross Blue Shield of Minnesota and of Massachusetts, the Federated Mutual Insurance Company, and the Health Care Service Corporation (hereafter collectively called “the Blues”). They opted out of a settlement premised on antitrust violations by the defendant, Mylan Laboratories (hereafter “My-lan”) and their complaint has now survived Mylan’s motion to dismiss. According to the Chief Judge, plaintiffs’ allegations of injury based on Mylan’s increased prices for lora-[14] zepam and clorazepate were sufficient to permit them to proceed to discovery.

I have met with counsel in an effort to find a means to resolve their discovery disputes but I obviously failed since Mylan has now moved to compel the Blues’s responses to certain interrogatories and requests to produce documents.

After Mylan moved to compel, the Blues supplemented them earlier responses. The question now presented is whether the responses as supplemented are adequate. The matters in dispute fall into four categories: (1) contracts and correspondence between the Blues and their insurers bearing on the Blues’s right to bring this lawsuit; (2) theories of damages and documents bearing on the purchase of lorazepam and clorazepate; (3) information pertaining to the Blues’s managed care strategies and (4) corporate organization information and persons identified as having knowledge.

Contracts with Insurers

Mylan initially sought the contracts, insurance policies, or plans that the Blues have with each of their customers and documents that show that the Blues are either payors of prescription drugs for their customers or have authority to bring this lawsuit on their customers’ behalf. Three of the Blues, Blue Cross Blue Shield for Massachusetts, Blue Cross Blue Shield for Minnesota, and Federated Mutual Insurance Company, produced exemplar contracts or insurance plans that they asserted were representative of their relationship with their customers. Another Blue, Health Care Service Corporation (“HCSC”), has agreed to provide documents that describe the benefits it offers under its prescription drug program, exemplars of contracts between it and its self-funded customers, and a list that will identify all of the self-funded customers and employer-sponsored health plans that contracted with HCSC to administer claims on their behalf and pursue plan-related losses.

In response, Mylan has agreed to abandon its demand for all contracts and insurance plans if it can receive a representative set of contracts for each year. Mylan also seeks a certification that all contracts that the Blues had with their customers contained the same language regarding their managed care programs and their authority to sue on their customers’ behalf. Defendants Mylan Laboratories, Inc and Mylan Pharmaceuticals, Inc. ’s Reply in Support of Their Motion to Compel Plaintiffs’ Production of Documents and Responses to Interrogatories (“Mylan Reply”) at 4-5. Mylan wants to know, of course, whether there were variations among the Blues’s customers as to these contract terms. Id. at 5.

In my view, the best solution is to relieve the Blues from producing a mountain of identical contracts while accommodating Mylan’s legitimate demand to learn the contractual relationship between the Blues and their customers that justifies the Blues’s bringing of this lawsuit. Accordingly, I will require the Blues to do the following.

For each year that the Blues claim damages from Mylan’s acts, they will provide the contract and insurance plan that they claim is representative of their contractual relationship with their customers for that year. A corporate official who has sufficient knowledge to malee the representation will certify that the contract tendered as representative was the contract that her company used with all of its customers in that year and that there were no variations, material to this lawsuit, among the customers’ contracts in that year. If the official cannot make that representation, the Blue involved will provide any other contract used that year with any customer, identifying, if it is not obvious, the customer involved. It is thus my intention that each Blue will produce all the contracts it had with its self-insured customers, using exemplars, and produce any contract where there is a material variation between the exemplar and that contract.

My disposition leaves two holes in the doughnut.

First, had I required the production of all the contracts, Mylan would simultaneously learn the names of all of the Blues’s customers because their names would be on the contracts. Since Mylan will now only receive representative contracts, it will not learn, at least from that source, the names of all the [15] Blues’s customers. In a proposed order the Blues have submitted to me, they have indicated their willingness to provide Mylan with “a list of their self-funded customers from 1996 to the present.” Blues’s Proposed Order ¶ 2. I do not know if that will suffice or whether Mylan still wants a list of all customers in light of the production I am ordering. It is unfair for me to conclude that it is does without hearing from Mylan. I will, therefore, assume the list the Blues agree to provide will suffice unless Mylan files a motion for supplemental relief. I will, of course, permit the Blues to be heard as to any such motion before ruling.

The second hole is that the order the Blues propose would require production of contracts, policies, and plans only as to self-insured customers. The Blues resist Mylan’s demand for these materials as to insured customers. I have reviewed the briefs submitted by the Blues and Mylan when Mylan moved to dismiss and have listened again to the oral argument held on Mylan’s motion to compel. I am not, however, as certain as I wish to be as to the distinction drawn and why production of the contracts, policies and plans with the insured customers is or is not necessary. The point is most significant since the Blues would be abandoning any claim of damages flowing from their relationship with their insured customers if they resist permitting Mylan to investigate that relationship. Accordingly, I will limit the production to the self-insured customers until the parties brief whether I should expand it to the insured. The order I am issuing provides deadlines for those briefs.

Theory of Liability

Mylan has demanded to have the Blues specify exactly why and how they were damaged by Mylan’s increase in the prices of the two drugs involved. Mylan protests that the Blues have responded to their discovery demands by merely paraphrasing their complaint and that this is an insufficient response. By producing the contracts involved, the Blues should educate Mylan more completely as to the legal premise for their claim because I have to suppose that the contractual terms will define the relationship between the Blues and their customers and thereby indicate the Blues’s entitlement to damages because of that relationship.

Free access — add to your briefcase to read the full text and ask questions with AI

Health Care Service Corp. v. Mylan Laboratories, Inc., 219 F.R.D. 12, 2003 U.S. Dist. LEXIS 22995 (D.D.C. 2003).

219 F.R.D. 12 (Health Care Service Corp. v. Mylan Laboratories, Inc.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

Related