In re HIV Antitrust Litigation

Opinion

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 IN RE HIV ANTITRUST LITIGATION. Case No. 19-cv-02573-EMC

8 ORDER RE CHOICE OF LAW FOR 9 UNITED’S CLAIMS 10 Docket Nos. 1721, 1723 11

12 13 14 Currently pending before the Court is a dispute between Defendants and United as to 15 which state’s laws govern United’s state law claims.1 United asserts that its claims are governed 16 by Minnesota law because it overpaid for the HIV drugs at issue from Minnesota where it is based 17 – notwithstanding the fact that many of its insureds who requested the drugs, received the drugs, 18 and used the drugs live outside of Minnesota, including in states that did not repeal Illinois Brick.2 19 Defendants argue that Minnesota law does not apply across the board and that the law that governs 20 is that of the state where a given insured lives. If Defendants are correct, then United could not 21 seek damages where its claims are related to an insured who lives in a non-repealer state. 22 Having considered the parties’ briefs and the oral argument of counsel, the Court finds 23 United’s position more persuasive and thus holds that United’s claims are governed by the law of 24 1 The Court addresses here only those claims that United brings as an indirect purchaser. United 25 has been assigned some claims by direct purchasers.

26 2 In Illinois Brick Co. v. Illinois, the Supreme Court held that only “the overcharged direct purchaser, and not others in the chain of manufacture or distribution” may bring an 27 anticompetitive conduct claim under the Clayton Act. 431 U.S. 720, 729 (1977). Some states 1 Minnesota. 2 I. FACTUAL BACKGROUND 3 United is a multinational managed healthcare and insurance company headquartered in 4 Minnesota. See United Compl. ¶ 20. United alleges that it was injured when it was made to pay 5 overcharges related to HIV drugs that were caused by Defendants’ anticompetitive conduct. See 6 id. ¶ 19. 7 According to United, when one of its insured individuals (hereinafter, a “member”) 8 receives an HIV drug from a pharmacy, the member pays only their co–pay obligation. United 9 pays for the remainder of the cost of the drug. Specifically, United receives an invoice from its 10 Pharmacy Benefits Manager (PBM), a third–party intermediary responsible for processing 11 prescription drug claims. United receives and then pays the invoice from its headquarters in 12 Minnesota, regardless of where the member received the drug. See id. ¶ 332. 13 United seeks to recover damages under the Minnesota Antitrust Act which makes “[a] 14 contract, combination, or conspiracy between two or more persons in unreasonable restraint of 15 trade or commerce . . . unlawful,” and applies to “any contract, combination, or conspiracy, 16 wherever created, formed, or entered into, . . . whenever any of the foregoing affects the trade or 17 commerce of [Minnesota].” Minn. Stat. § 325D.51; 325D.54(b). Crucially, Minnesota is a 18 repealer state. That is, unlike federal antitrust law, Minnesota law provides that indirect 19 purchasers may sue for damages under state law antitrust theories. See Minn. Stat. § 325D.57. 20 United seeks to recover only damages from the overcharges it paid from its Minnesota 21 headquarters. See United Brief at 1. It does not seek any recovery related to their members’ co– 22 pay obligations. See id. 23 II. PROCEDURAL BACKGROUND 24 In their sixth motion in limine, Defendants moved to exclude evidence and argument 25 related to damages which Defendants claimed Plaintiffs, including United, could not recover as a 26 matter of law. See Mot. at 1. According to Defendants, United’s damages claims are flawed 27 because they are based on Minnesota law applying across the board – i.e., even where United 1 contend United cannot sue as an indirect purchaser with respect to claims for drugs sent to 2 members in non-repealer states. 3 In its order on the in limine motions, the Court acknowledged that it had previously, for 4 the EPPs, rejected application of one state’s law across the board – i.e., California. But, the 5 Court explained, it had reached that conclusion based on a California choice-of-law analysis. 6 “[H]ere, there should be a choice-of-law analysis under Minnesota law,” Docket No. 1716 7 (Order at 6) (emphasis omitted), because United had initiated its lawsuit in Minnesota federal 8 court prior to transfer of the action to this Court. See Sarver v. Chartier, 813 F.3d 891, 897 (9th 9 Cir. 2016) (“Typically, ‘a federal court sitting in diversity applies the conflict-of-law rules of the 10 state in which it sits.’ However, after a transfer under 28 U.S.C. § 1404 the choice-of-law rules 11 of the transferor court apply.”). The Court ordered supplemental briefing on what result should 12 obtain under a Minnesota choice–of–law analysis. 13 III. LEGAL STANDARD 14 When conducting a conflict–of–laws analysis under Minnesota law, “a court must first 15 determine whether there is an actual conflict between the legal rules of the two states.” Nodak 16 Mut. Ins. Co. v. Am. Fam. Mut. Ins. Co., 590 N.W.2d 670, 672 (Minn. Ct. App. 1999), aff'd, 604 17 N.W.2d 91 (Minn. 2000). 18 If the court determines that there is a conflict, it next “must consider whether the rule of 19 each state may be constitutionally applied.” Id. “[F]or a State's substantive law to be selected in a 20 constitutionally permissible manner, that State must have a significant contact or significant 21 aggregation of contacts, creating state interests, such that choice of its law is neither arbitrary nor 22 fundamentally unfair.” Allstate Ins. Co. v. Hague, 449 U.S. 302, 312–13 (1981). 23 Finally, if there is an actual conflict and the candidate states’ laws can be constitutionally 24 applied, courts evaluate five “choice influencing factors” to determine which substantive law to 25 apply. Jepson v. Gen. Cas. Co. of Wisconsin, 513 N.W.2d 467, 470 (Minn. 1994). Those factors 26 are: 27 (1) predictability of result; 1 (3) simplification of the judicial task; 2 (4) advancement of the forum's governmental interest; and 3 (5) application of the better rule of law. 4 Id. In delineating the “choice influencing factors,” the Minnesota Supreme Court has stressed:

5 These factors were not intended to spawn the evolution of set mechanical rules but instead to prompt courts to carefully and 6 critically consider each new fact situation and explain in a straight– forward manner their choice of law. See Choice–Influencing 7 Considerations in Conflicts Law at 281–82; Conflicts Law: More on Choice–Influencing Considerations at 1598. The lower courts need 8 to wrestle with each situation anew. While prior opinions may be helpful to a court's deliberations, the court's obligation is to be true 9 to the method rather than to seek superficial factual analogies between cases and import wholesale the choice of law analysis 10 contained therein. 11 Id. 12 IV. DISCUSSION 13 A. Existence of a Conflict of Law 14 In the instant case, the first step in the choice–of–law analysis is to determine whether 15 there is an actual conflict between the law of Minnesota and the laws of the other states where 16 United’s members live. Under Minnesota law, “[a]n actual conflict exists if choosing the rule of 17 one state or the other is ‘outcome determinative.’” Nodak, 590 N.W.2d at 672 (quoting Myers v. 18 Government Employees Ins. Co., 225 N.W.2d 238, 241 (Minn.1974)). The parties have identified 19 three potential conflicts of law. Those potential conflicts relate to Illinois Brick, enhanced 20 damages, and statutes of limitations. 21 For purposes of this order, the Court need only consider the first potential conflict.3 The 22 parties agree that there is an actual conflict, not just a potential one, with respect to Illinois Brick. 23 Minnesota is a repealer state, and thus if its laws were to apply, United (as an indirect purchaser) 24

25 3 Although the Court addresses only the Illinois Brick conflict here, it notes that it did find conflicts in state law with respect to enhanced damages and statutes of limitation when doing a 26 California choice–of–law analysis for the EPPs’ claims. See Docket No. 1388 (Order at 21) (in considering only the laws of states that had repealed Illinois Brick, noting that there were conflicts 27 with respect to “the length of the statute of limitations and the damages available (e.g., whether 1 could bring a claim for damages based on an alleged antitrust violation. In contrast, at least some 2 of the states where United’s members live are not repealer states; if those states’ laws were to 3 apply, then United (as an indirect purchaser) could not bring a claim for damages based on an 4 alleged antitrust violation. Clearly, choosing the law of Minnesota over the laws of the non- 5 repealer states would be outcome determinative. 6 B. Constitutionality of Applying the Potential Laws 7 For the second step in the choice–of–law analysis, the parties seem to have no dispute as to 8 “whether the rule of each state [at issue] may be constitutionally applied.” Nodak, 590 N.W.2d at 9 672. Indeed, it would be constitutionally permissible for Minnesota law to apply given that United 10 has a significant contact with Minnesota: it resides in the state and made the overcharge payments 11 from the state. Likewise, it would be constitutionally permissible to apply the laws of the states 12 where United’s members live. United’s members received the HIV drugs in those states, which 13 then ultimately gave rise to the overcharges. In short, the connection between the conduct that 14 gave rise to the injury in this case and each candidate state is sufficiently strong “such that choice 15 of [that state’s] law is neither arbitrary nor fundamentally unfair.” Allstate, 449 U.S. 302 at 312– 16 13. The analysis, therefore, turns on the “choice influencing factors.” Jepson, 513 N.W.2d at 470. 17 C. Choice Influencing Factors 18 The parties agree that the first, third, and fifth choice influencing factors are irrelevant in 19 this case. See United Brief at 4–7; Def. Brief at 1–2. The first factor, predictability of results, 20 “applies primarily to consensual transactions where the parties desire advance notice of which 21 state law will govern in future disputes.” Medtronic, Inc. v. Advanced Bionics Corp., 630 N.W.2d 22 438, 454 (Minn. Ct. App. 2001). “It is intended to protect the justified expectations of the parties 23 to the transaction.” Id. (internal quotation marks omitted). There is no contractual relationship in 24 this case that stipulated, in advance, the forum in which disputes arising out of that relationship are 25 to be adjudicated. 26 The third factor, simplification of the judicial task, “is often considered insignificant 27 because courts can as easily apply another state's laws as their own.” Id. at 455. United offers a 1 instead of the laws of dozens of states. See United Brief at 5. On the other hand, it may be argued 2 that “the judicial task is obviously simplified when [the court in a particular state] applies [that 3 state’s own] law.” Medtronic, 630 N.W.2d at 455 (internal quotation marks omitted). Ultimately, 4 the third factor weighs slightly in favor of applying Minnesota law uniformly. 5 The fifth factor, application of the better rule of law, has fallen out of favor in Minnesota 6 law. See In re Baycol Prod. Litig., 218 F.R.D. 197, 207 (D. Minn. 2003) (noting twenty years ago 7 that, then, “the Minnesota courts ha[d] not placed any emphasis on the fifth factor for nearly 8 twenty years”); Gruenwald v. Toro Co., 2019 WL 6524894 at *2 (D. Minn. Dec. 4, 2019) (same); 9 Nodak, 590 N.W.2d at 673 (omitting the fifth factor when listing the “choice influencing factors”). 10 The Court follows the lead of Minnesota courts and ignores the fifth factor. This leaves the 11 second and fourth factors to consider in more detail. 12 1. Factor Two: Maintenance of Interstate and International Order 13 In applying the second factor, maintenance of interstate and international order, the 14 Supreme Court of Minnesota has explained as follows:

15 [W]e are primarily concerned with whether the application of Minnesota law would manifest disrespect for [another state’s] 16 sovereignty or impede the interstate movement of people and goods. An aspect of this concern is to maintain a coherent legal system in 17 which the courts of different states strive to sustain, rather than subvert, each other's interests in areas where their own interests are 18 less strong. Robert A. Leflar, Choice–Influencing Considerations in Conflicts Law, 41 N.Y.U. L. REV. 267, 285–87 (1966). By 19 approaching choice of law questions with these considerations in mind, the opportunities for forum shopping may be kept within 20 reasonable bounds. 21 Jepson, 513 N.W.2d at 471. United argues that applying Minnesota would not “manifest 22 disrespect for [any other state’s] sovereignty” for three reasons. Id. First, it stresses that 23 Minnesota has “beyond sufficient contacts to the facts and issues” in this case because “United is a 24 Minnesota resident seeking recovery for injury it suffered in Minnesota as the party responsible 25 for paying the relevant overcharges.” United Brief at 5. Second, United emphasizes that 26 Minnesota has expressed a legislative preference for “providing a damages right to redress such 27 anticompetitive harm that ‘affect the trade or commerce of [Minnesota].’” Id. (quoting Minn. Stat. 1 applying the law of a non–repealer state would subvert, rather than sustain, Minnesota’s well– 2 expressed desire to provide a damages remedy to Minnesota residents in antitrust actions. See 3 Jepson, 513 N.W.2d at 471. Finally, United points out that its claims are not against any 4 individual pharmacies, so applying Minnesota law would not offend the sovereignty of any of the 5 states in which the pharmacies are located. No party in a non-repealer state would bear any direct 6 economic cost were Minnesota antitrust law to apply. 7 Defendants offer two arguments in response. First, they contend that, just as Minnesota 8 has expressed a legislative preference for compensating those impacted by anticompetitive 9 conduct, non–repealer jurisdictions “can be understood as choosing to run the risk of under– 10 deterring antitrust violators over overcompensating plaintiffs and complicating antitrust 11 enforcement.” Stromberg v. Qualcomm Inc., 14 F.4th 1059, 1072 (9th Cir. 2021). This, according 12 to Defendants, is an equally legitimate policy choice that Minnesota law ought to “sustain, rather 13 than subvert.” Jepson, 513 N.W.2d at 471. Second, Defendants argue that United conceives of 14 the injury too narrowly. Whereas United conceptualizes the injury as only the overcharge 15 payments that they were forced to make, Defendants claim that “in antitrust ‘the relevant interests 16 are not simply about the benefit or harm to resident consumers or liability to resident antitrust 17 defendants; rather the relevant interests are about harm to the competitive process and in–state 18 business activity.’” Def. Brief at 3 (quoting Stromberg, 14 F.4th at 1072 (also stating that “[n]on- 19 repealer states' Illinois Brick laws are designed to regulate antitrust enforcement by allocating 20 recoverable antitrust damages in a way those states think best promotes market competition”). 21 Therefore, they argue, the laws of the states in which the transactions actually took place (i.e., 22 where United members received the drugs) should be shown special solicitude. See id. 23 Although a close call, the Court finds that the second factor weighs slightly in favor of 24 applying Minnesota law. As an initial matter, the Court takes into account that, as indicated 25 above, factor (2) is designed to “maintain a coherent legal system in which the courts of different 26 states strive to sustain, rather than subvert, each other's interests in areas where their own interests 27 are less strong.” Jepson, 513 N.W.2d at 471. Here, Minnesota has a strong interest in having its 1 overcharges, happened in Minnesota. The economic harm to United of the alleged antitrust 2 violations is felt directly within Minnesota. It is true, as Defendants argue, that much of the 3 preceding conduct (the alleged anticompetitive conduct, the distribution of the drugs, the payment 4 of the member’s co–pay) happened outside of Minnesota, but because United is not suing 5 derivatively on behalf of its members, United did not sustain a legally cognizable injury unless 6 and until it paid the invoice from its headquarters in Minnesota. 7 Several courts have emphasized this very point in concluding that the law of the insurer’s 8 home state should apply (although, admittedly, these cases do not involve a choice–of–law 9 analysis under Minnesota law). In In re K–Dur Antitrust Litig., for example, two TPPs (third- 10 party payors) that provided healthcare benefits to members brought an antitrust action against 11 manufacturers of potassium supplements. 2008 WL 2660783 (D.N.J. March 19, 2008). The 12 district court conducted a choice–of–law analysis under New Jersey principles, explaining:

13 The [TPPs] are not suing derivatively for alleged injury to their members—they are asserting claims on their own behalf for the 14 damages they allegedly suffered. Under these circumstances, neither the residence of TPP participants nor the location of their purchases 15 is determinative of the law governing the claims asserted by a TPP on its own behalf. On the contrary . . . the state with the greatest 16 interest in a TPP's claims brought on its own behalf is the state where the TPP has its principal place of business and from 17 which it presumably paid the allegedly supracompetitive prices. . . Accordingly, I conclude that the claims of the [TPPs] arise under 18 and are governed by New York and Michigan law, respectively. 19 Id. at *5; see also In re Rezulin Prod. Liab. Litig., 392 F. Supp. 2d 597, 611 n.85 (S.D.N.Y. 2005) 20 (in applying New York choice–of–law principles, emphasizing that because a TPP was “not suing 21 derivatively for injury to its members” that “only injury asserted here—namely the loss [the TPP] 22 allegedly suffered when it overpaid for diabetes drugs—occurred in New York,” the location of 23 the TPP). 24 To be sure, there is also authority that reaches the opposite conclusion on which state has 25 the greatest interest. See, e.g., In re Restasis (Cyclosporine Ophthalmic Emulsion) Antitrust Litig., 26 335 F.R.D. 1, 35 (E.D.N.Y. 2020) (in applying the choice–of–law rules of California, New York, 27 and Texas, stating that “the consumer’s antitrust injury or consumer protection injury takes place 1 would not be injured . . . [so] the state that would be most impaired if its laws were not applied, 2 the state with the greatest contacts, and the state with the most significant interest in preventing 3 antitrust and consumer protection violations is the state in which a TPP’s insured consumer 4 purchased [the drug]”); In re Wellbutrin XL Antitrust Litig., 282 F.R.D. 126, 135 (E.D. Pa. 2011) 5 (“The place of purchase is where the relationship between the parties is centered; it is where the 6 transaction with the alleged overcharge actually occurs. A place-of-purchase rule protects justified 7 expectations because an in-state transaction will be governed by the antitrust laws and/or 8 consumer protection laws of that state and not by the chance location of the TPP's principal place 9 of business, the location of the TPP's PBM, or an individual purchaser's residence.”). 10 But those cases are largely inapposite, particularly because Minnesota choice–of–law 11 analysis is somewhat unique. Although factor (2) does take into consideration which state has the 12 strongest interest, the Minnesota Supreme Court has emphasized that, for this factor, “we are 13 primarily concerned with whether the application of Minnesota law would manifest disrespect for 14 [another state’s] sovereignty or impede the interstate movement of people and goods.” Jepson, 15 513 N.W.2d at 471 (emphasis added). Absent such “manifest disrespect,” deference is afforded to 16 Minnesota law; these is not the same kind of neutral balancing of competing sovereign interests as 17 obtains under more traditional conflict of law analysis. In the case at bar, applying Minnesota law 18 would not constitute a manifest disrespect of the sovereignty of the other states because Minnesota 19 does have a strong interest in having its law apply and there would be no direct interference with 20 the law of non-repealer states where United’s members happen to live. 21 Defendants argue that applying Minnesota law would “manifest disrespect” for the 22 sovereignty of other states because doing so would effectively subvert the legislative decision of 23 those other states not to allow indirect purchasers to bring suit in antitrust actions. For this 24 proposition, Defendants rely on the Ninth Circuit’s decision in Stromberg v. Qualcomm Inc. 14 25 F.4th 1059 (9th Cir. 2021). In Stromberg, the Ninth Circuit explained that applying the law of a 26 single state (there, California) to transactions that occurred in non-repealer states would undermine 27 the legislative choice of those states “to run the risk of under-deterring antitrust violators over 1 California would be permitted to “set antitrust enforcement policy for the entire country.” Id. at 2 1074. 3 But Stromberg involved materially distinguishable facts. There, “the nationwide class 4 consist[ed] of downstream consumers—individuals who bought cellphones [containing 5 Qualcomm chips] from various retailers located throughout the fifty states.” Id. at 1073. The 6 class members alleged that the prices they paid for the cell phones were inflated as a result of 7 Qualcomm’s monopoly over the chips. Id. at 1064. Crucially, the transaction that gave rise to a 8 plaintiff’s injury (acquisition of the cell phone) and the plaintiff’s actual injury (payment for that 9 cell phone) occurred in the same state – typically, where the plaintiff lived. Thus, if the 10 acquisition of and payment for the cell phone took place in a state other than California, 11 application of California law to the plaintiff’s claim would have had a direct impact on the 12 plaintiff’s state. Not so here; while the end-user of the HIV drug typically seeks and receives the 13 drug in the state in which they reside, United’s injury is its payment of the invoice, a step which 14 takes place exclusively in Minnesota. Therefore, the Ninth Circuit’s conclusion in Stromberg that 15 “California's interest is attenuated where its law is applied to consumers purchasing cellphones in 16 non-repealer states” is inapplicable. Id. at 1074. Again, United is seeking only its overcharge, not 17 any overcharge claimed by individual consumer. 18 At oral argument, when the Court pressed Defendants on precisely what harm would be 19 imposed on non-repealer states if Minnesota law were to apply to all of United’s claim (citing 20 antitrust law’s concern with competition), Defendants argued that drug manufacturers may be 21 deterred from doing business with United (and other insurance companies in Minnesota) because 22 they do not want to be subject to Minnesota’s repealer law in all fifty states, particularly the non- 23 repealer states. See Oral Arg. Tr. at 26: 13–20. This, Defendants argued, would create a 24 “constraint on supply in those other states” because fewer insurance companies would be available 25 to provide coverage to end-users in those other states. Id. at 26:21–25. 26 The Court is unpersuaded by Defendants’ arguments. The asserted harm to competition is 27 indirect, unproven, and speculative. Defendants obviously knew that indirect purchasers bringing 1 damages, yet Defendants have not pointed to any evidence that they have backed away from doing 2 business with end-users in those repealer states. 3 As a final point, the Court notes that, under factor (2), “[e]vidence of forum shopping or 4 evidence that application of one state's law would promote forum shopping would be an attempt to 5 evade and would indicate disrespect for [other states’] law.” Danielson v. Nat'l Supply Co., 670 6 N.W.2d 1, 7–8 (Minn. Ct. App. 2003). Cf. Nw. Airlines, Inc. v. Astraea Aviation Servs., Inc., 111 7 F.3d 1386 (8th Cir. 1997) (“Minnesota law is more favorable to [plaintiff] than Texas law, a 8 situation which could lead to forum shopping”). But there is no evidence of forum shopping here. 9 United is headquartered in Minnesota, the original forum state. This is not a situation where 10 Plaintiffs were possibly selected from certain states in order to bring suit in particular venues in 11 order to obtain a favorable forum. 12 These considerations tip the second choice influencing factor in favor of United. 13 2. Factor Four: Advancement of the Forum’s Governmental Interest 14 The fourth factor speaks to which law would “most effectively advance a ‘significant 15 interest of the forum’ state.” Medtronic, 630 N.W.2d at 455 (quoting Jepson, 513 N.W.2d at 472). 16 Significantly, this factor is Minnesota-centric; it considers only which law would most advance 17 the interests of Minnesota. See In re Levaquin Prod. Liab. Litig., No. CIV., 2010 WL 7852346 at 18 *9 (D. Minn. Nov. 9, 2010) (“[u]nlike the analyses adopted by other states, Minnesota choice of 19 law analysis does not require a comparison between Minnesota's interest with the governmental 20 interest of the other state”). As United argues, in most instances, this would inherently seem to 21 favor application of Minnesota law. Cf. Danielson, 670 N.W.2d at 8 (“[t]his factor is designed to 22 assure that Minnesota courts do not have to apply rules of law that are inconsistent with 23 Minnesota's concept of fairness and equity”) (internal quotation marks omitted). There have, 24 however, been a few instances in which Minnesota’s interests will be best advanced by application 25 of a different state’s law. See SCM Corp. v. Deltak Corp., 702 F. Supp. 1428, 1431–32 (D. Minn. 26 1988) (“Generally, this factor will weigh towards application of Minnesota law, but in some cases 27 the choice of another forum's law has been found to better advance Minnesota’s interest”) (citing 1 victims fully compensated furthered by application of Iowa law); Standal v. Armstrong Cork Co., 2 356 N.W.2d 380, 382 (Minn. Ct. App. 1984) (Minnesota's interest in providing compensation for 3 resident tort victims furthered by application of Pennsylvania law)). 4 “One interest which Minnesota courts have often invoked in choice of law decisions is the 5 state's interest as a ‘justice administering state.’” SCM, 702 F. Supp. At 1432 (citing Hime v. State 6 Farm Fire & Cas. Co., 284 N.W.2d 829, 833–34 (Minn. 1979); Myers v. Gov't Emp. Ins. Co., 302 7 Minn. 359, 225 N.W.2d 238, 243 (1974); Milkovich v. Saari, 203 N.W.2d 408, 417 (1973)). “This 8 interest is defined as the forum's interest in not having its courts ‘called upon to determine issues 9 under rules which, however accepted they may be in other states, are inconsistent with our own 10 concept of fairness and equity.’” Id. (quoting Milkovich, 203 N.W.2d at 417). Here Minnesota 11 made a considered policy choice. Minnesota’s repealer statute reflects a considered judgment by 12 the Minnesota legislature that indirect purchasers should be able to bring an antitrust suit for 13 seeking damages. The legislature has chosen this scheme as the best reflection of “Minnesota’s 14 concept of fairness and equity.” SCM, 702 F. Supp. At 1431–32. The Ninth Circuit in Stromberg 15 was unquestionably correct when it explained that a legislature’s decision not to repeal Illinois 16 Brick is an equally valid policy choice, but “however accepted [that policy] may be in other 17 states,” Minnesota has clearly made a different choice. Id. 18 While Defendants acknowledge that the fourth choice influencing factor asks courts to 19 focus on Minnesota’s interests, they attempt to minimize the focus on Minnesota’s interests by 20 arguing that “Minnesota’s second and fourth factors, viewed together, require the same analysis as 21 California’s governmental–interest approach.” Def. Brief at 2. That argument is unpersuasive. 22 Compare California’s governmental–interest approach as succinctly laid out by the Ninth Circuit 23 in Stromberg:

24 “[I]f there is a difference [in substantive law], the court examines each jurisdiction's interest in the application of its own law under 25 the circumstances of the particular case to determine whether a true conflict exists.” Id., 249 Cal.Rptr.3d 594, 444 P.3d at 730–31 26 (citations omitted). Finally, “if the court finds that there is a true conflict, it carefully evaluates and compares the nature and strength 27 of the interest of each jurisdiction in the application of its own law ultimately applies the law of the state whose interest would be the 1 more impaired if its law were not applied.” Id., 249 Cal.Rptr.3d 594, 444 P.3d at 731 (internal quotation marks and citations omitted). 2 3 14 F. 4th at 1068 (emphasis added). While the California test and the second factor of the 4 Minnesota test both broadly ask courts to evaluate whether a state’s legitimate interest would be 5 subverted by application of a different state’s law, California’s test does not place the thumb on 6 the scale in favor of the forum state that is embodied in the fourth factor of the Minnesota test. 7 Defendants offer no reason why applying the laws of various other states would further 8 Minnesota’s interests as required under the fourth factor. Rather, at bottom, their argument is that 9 “Minnesota’s second factor (interstate order) outweighs the fourth (the forum interest).” Def. 10 Brief at 3. Because the fourth factor clearly weighs in United’s favor, and the second at least 11 marginally so, the Court holds that the choice–of–law analysis under Minnesota law leads to the 12 application of Minnesota law for United’s claims. 13 V. CONCLUSION 14 For the foregoing reasons, the Court holds that Minnesota law applies across the board to 15 United’s claims, even if those claims are based on HIV drugs United purchased for members who 16 live in non-repealer states. The Court notes that, given this ruling, some of the IHPPs – in 17 particular, Kaiser (which is based in California) – may be inclined to seek reconsideration of the 18 Court’s ruling that California law does not apply across the board to the IHPPs’ claims. The 19 IHPPs, however, would face an uphill battle because the Court’s ruling on United is predicated on 20 the specific choice-of-law analysis required by Minnesota law which, as indicated above, differs 21 materially from that required by California law. 22 23 IT IS SO ORDERED. 24 25 Dated: April 20, 2023 26 ______________________________________ EDWARD M. CHEN 27 United States District Judge