Prime Aid Pharmacy Corp v. Express Scripts, Inc.

Filing 136

MEMORANDUM AND ORDER: IT IS HEREBY ORDERED that plaintiffs motion to compel compliance with subpoena duces tecum [Doc. # 65 ] is granted in part and denied in part. IT IS FURTHER ORDERED that, not later than August 14, 2017, Accredo shall produc e documents responsive to the subpoena as set forth above, with the exception of information contained within patient files, which shall be produced within 15 days of Accredo receiving patient names from plaintiff. Signed by District Judge Carol E. Jackson on 7/24/17. (JAB)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
PRIME AID PHARMACY CORP.,
Plaintiff,
vs.
EXPRESS SCRIPTS, INC.,
Defendant.

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Case No. 4:16-CV-1237 (CEJ)

MEMORANDUM AND ORDER
This matter is before the Court on plaintiff’s motion to compel compliance
with a subpoena duces tecum. Non-party Accredo Health Group, Inc. has filed a
response in opposition in which it requests an award of attorneys’ fees. All issues
are fully briefed.
I.

Background

Plaintiff Prime Aid Pharmacy Corp. is a New Jersey-based specialty
pharmacy. Defendant Express Scripts, Inc. operates as a pharmacy benefits
manager and provides mail order delivery of drugs through its own specialty
pharmacy, Accredo Health Group, Inc. On June 25, 2011, plaintiff entered into a
Provider Agreement with defendant. On August 22, 2014, defendant terminated
plaintiff from its provider network, citing plaintiff’s alleged violations of the provider
agreement. Plaintiff alleges that defendant actually terminated the agreement in
order to eliminate plaintiff as a competitor to Accredo. In this action, plaintiff
asserts claims of fraudulent misrepresentation; breach of contract; breach of
covenant of good faith and fair dealing; violation of the Missouri Prompt Pay Act;

unjust enrichment; promissory estoppel; and equitable accounting. Defendant
asserts counterclaims for breach of contract and unjust enrichment.
On December 14, 2016, plaintiff served a subpoena duces tecum on Accredo,
propounding 21 requests for documents. On January 10, 2017, Accredo objected to
all 21 requests. Counsel for plaintiff and Accredo attempted to resolve their
disagreement without success.
II.

Discussion

Under Federal Rule of Civil Procedure 26(b)(1), litigants may obtain
discovery regarding any nonprivileged matter that is relevant to any
party’s claim or defense and proportional to the needs of the case,
considering the importance of the issues at stake in the action, the
amount in controversy, the parties’ relative access to relevant
information, the parties’ resources, the importance of the discovery in
resolving the issues, and whether the burden or expense of the
proposed discovery outweighs its likely benefit.
Fed. R. Civ. P. 26(b)(1). “Information within this scope of discovery need not be
admissible in evidence to be discoverable.” Id. Relevancy in this context “has been
construed broadly to encompass any matter that bears on, or that reasonably could
lead to other matter that could bear on, any issue that is or may be in the case.” Jo
Ann Howard & Assocs., P.C. v. Cassity, 303 F.R.D. 539, 542 (E.D. Mo. 2014)
(citation and quotation omitted). Despite the broad definition of relevance and the
policy of favoring liberal discovery, district courts are empowered to limit the scope
of allowable discovery if “the discovery sought is unreasonably cumulative or
duplicative, or is obtainable from some other source that is more convenient, less
burdensome, or less expensive.” Fed.R.Civ.P. 26(b)(2)(C).
A party serving a subpoena “must take reasonable steps to avoid imposing
undue burden or expense on a person subject to the subpoena.” Fed.R.Civ.P. 45(d).

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Courts are particularly mindful of Rule 45’s undue burden and expense limitations.
Wells v. Lamplight Farms Inc., 298 F.R.D. 428, 433 (N.D. Iowa 2014) (citing
Miscellaneous Docket Matter No. 1 v. Miscellaneous Docket Matter No. 2, 197 F.3d
922, 927 (8th Cir. 1999)). And, if discovery can easily be obtained from a party, it
may be inappropriate to demand the same discovery from a nonparty. Id. (citing
American Broadcasting Co. v. Aereo, Inc., No. 13–MC–0059, 2013 WL 5276124, at
*6 (N.D. Iowa Sept. 17, 2013); Precourt v. Fairbank Reconstruction Corp., 280
F.R.D. 462, 467 (D.S.D. 2011)).
A.

Accredo’s Interactions with Government Entities

Plaintiff seeks documents relating to state and federal investigations into
Express Scripts:
16.

Any and all non-privileged documents related to subpoenas
Accredo has received from state or federal agencies including,
but not limited to, agencies’ offices of inspectors general,
licensing boards, or prosecutors (not including Grand Jury
subpoenas).

17.

Any
and
all
documents
relating
to
non-privileged
communications between Accredo and state or federal
prosecutors, agencies, or licensing boards.

18.

Any and all documents reflecting fines paid by Accredo to State
Boards of Pharmacies, Federal or State Attorneys General
and/or the Department of Justice, or other licensing boards or
agencies, in response to State Boards of Pharmacy audits or
investigations by any authorities.

21.

Any and all non-privileged communications between Express
Scripts and Accredo relating to penalties imposed by any state
or federal agency or licensing board.

The time period for these requests is July 25, 2011, through the present.
[Doc. # 66-1 at p. 5].

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Plaintiff asserts that the requested documents are relevant to its claims for
fraudulent misrepresentation. As the Court has previously stated, plaintiff’s fraud
claim is based on defendant’s statement that it did not withhold any reimbursement
funds due to plaintiff. The information sought in the above requests is not relevant
to this claim.
Plaintiff also asserts that the requested documents are relevant to its claim
for breach of the covenant of good faith and fair dealing. Accredo argues that,
because defendant stated it was terminating plaintiff for its failure to report a fine it
paid to the state of New Jersey, the scope of these requests should be limited to
any instances when it also failed to report a disciplinary action. This is an overly
narrow characterization of plaintiff’s claim. Plaintiff alleges that defendant tolerates
misconduct from Accredo while using plaintiff’s minor breaches of the Provider
Agreement as a pretext to terminate plaintiff from the provider network. As
support, plaintiff cites reports that Accredo paid money to state and federal
authorities in settlement of claims that it participated in a kickback scheme to
receive additional patient referrals. [Doc. # 81-5]. The documents plaintiff seeks
are relevant to its claim.
Accredo objects that the requests are overly broad to the extent that they
seek “any and all documents” that reflect or relate to a topic. For example,
documents responsive to request 17 would include its response to an agency’s
request for public comment or routine correspondence regarding renewal of state
licenses. [Doc. # 76 at p. 6]. In response, plaintiff informs the Court it is willing to
limit the scope of request 17 to government inquiries into Accredo’s business
practices, as opposed to its responses to requests for public comment or other

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routine matters. [Doc. # 81 at p.3]. The remaining requests seek documents
relating to “subpoenas,” “fines,” and “penalties,” and thus are sufficiently narrow.
Accredo’s objections are overruled.
B. Accredo’s Operations in New Jersey
In the following requests, plaintiff seeks records reflecting Accredo’s
participation in the New Jersey specialty pharmacy market before and after plaintiff
was terminated from the provider network:
4.

Documents sufficient to identify the revenue generated by
Accredo for services and prescriptions it provided for patients in
New Jersey for the . . . years [2011-2016].

5.

Documents sufficient to identify the types of prescriptions filled
by Accredo for patients in New Jersey for the . . . years [20112016].

10.

Documents sufficient to identify the number of patients residing
in New Jersey for which Accredo filled prescriptions for the . . .
years [2011-2016].

11.

Any and all documents sufficient to identify Accredo’s market
share in New Jersey for the . . . years [2011-2016].

After the instant motion was filed, the Court directed defendant Express
Scripts to produce documents responsive to these requests, but for the narrower
time frame of “the six-month period preceding plaintiff’s termination from the
provider network through the six-month period after the terminations, i.e.,
February 22, 2014 through February 22, 2015.” [Doc. # 132 at pp. 3-4].
Accordingly, these requests are moot.
C.
1.

Documents Accredo Denies Exist

Documents sufficient to identify all patients, physicians, and
third parties notified that Prime Aid was terminated in 2014
from the Express Scripts Network.

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3.

Documents sufficient to identify the revenue generated by
Accredo from services and prescriptions it provided for patients
in New Jersey for the . . . years [2011-2016].

6.

Any and all documents prepared by Accredo, for Accredo, within
Accredo, or externally, announcing the termination of Prime Aid
from the Express Scripts Network in 2014.

7.

Any and all documents reflecting a written script provided to
Accredo employees to be followed by such Accredo employees
to advise patients, providers, and/or third parties about the
termination of Prime Aid from the Express Scripts Network.

8.

Copies of any and all recording or any communications with
patients, physicians, and/or third parties regarding the
termination of Prime Aid.

9.

Any and all copies of any electronic communications regarding
the termination of Prime Aid from the Express Scripts Network.

12.

Any and all business strategy plans involving Accredo and
Express Scripts relating to patients, physicians, and geographic
areas previously serviced by Prime Aid.

13.

Any and all documents reflecting instances of Express Scripts
terminating, suspending, or modifying Accredo’s rights to
participate in an Express Scripts Networks as a result of
Accredo’s failure to timely reverse payments.

14.

Any and all non-privileged documents reflecting denials of rights
to Accredo to participate in an Express Scripts network.

15.

Any and all documents relating to efforts by Accredo or Express
Scripts to transfer Prime Aid’s patients to Accredo to fill former
Prime Aid patients’ prescriptions after August 22, 2014.

Accredo asserts that many of these requests are directed to plaintiff’s theory
that there was an organized campaign at Accredo to target Prime Aid and its
patients. Accredo further asserts that it “is not aware of any responsive documents
regarding such a campaign.” Prime Aid counters that it is inappropriate for Accredo
to limit its responses to the above requests in this manner. The Court agrees, and

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to the extent that Accredo relied on this limitation when searching for responsive
documents, it is instructed to undertake a new review of its documents.
Plaintiff challenges Accredo’s claim that it does not have documents
responsive to requests regarding plaintiff’s former patients. Plaintiff asserts that
under the laws of New Jersey (plaintiff’s principal place of business) and Tennessee
(Accredo’s principal place of business), when a patient is transferred from one
pharmacy to another, the receiving pharmacy is required to keep detailed records
of the transfer, including information from the previous pharmacy. [Doc. # 66 at
pp. 6-7]. Accredo does not directly address this argument,1 but states that it
maintains the requested information in patient files. See Affidavit of Victor Perini
(information is not maintained in a central location or indexed by transferring
physician or pharmacy). [Doc. # 77 at ¶11]. Accredo suggests that the requested
information could be located if plaintiff gave it the name of patients it transferred to
Accredo. The Court finds this to be a reasonable resolution of the issue and will
direct Accredo to provide the requested information within 15 days of receiving
patient names from plaintiff. The Court also agrees with Accredo that information
regarding patients who transferred to Accredo before plaintiff’s termination is not
relevant.
D.
19.

Documents Created by Defendant

Any and all communications from Express Scripts to Accredo
reflecting requests for additional information from Express
Scripts in connection with Accredo’s claims for reimbursement.

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Plaintiff quotes portions of Tennessee’s Standards of Practice, Rule 1140-030.03(7)(b) and
New Jersey’s Administrative Code, § 13:39-7.8. The plain language of the quoted portions
refers to transferred “prescriptions,” not “patients,” and thus would not seem to apply to all
instances of a patient ceasing to use one pharmacy and starting at another.

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20.

Any and all communications from Express Scripts to Accredo
regarding denials of Accredo’s claims for reimbursement.

21.

Any and all non-privileged communications between Express
Scripts and Accredo relating to penalties imposed by any state
of federal agency, or licensing board.

Accredo objects to producing documents that are equally obtainable from
defendant. In response, plaintiff argues that it is justified in seeking these
documents from Accredo because defendant has improperly withheld responsive
documents. If that is the case, then the plaintiff’s remedy is to seek an order
compelling defendant to produce the documents.
E.

Sanctions

Accredo argues that it is entitled to sanctions under Rule 45(d), which
provides: “[a] party or attorney responsible for issuing and serving a subpoena
must take reasonable steps to avoid imposing undue burden or expense on a
person subject to the subpoena.” Fed. R. Civ. P. 45(d)(1). “The court for the district
where compliance is required must enforce this duty and impose an appropriate
sanction — which may include lost earnings and reasonable attorney’s fees — on a
party or attorney who fails to comply.” Id. Because the Court finds that Accredo
improperly withheld some responsive documents, no sanctions will be imposed on
plaintiff.
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Accordingly,
IT IS HEREBY ORDERED that plaintiff’s motion to compel compliance with
subpoena duces tecum [Doc. # 65] is granted in part and denied in part.
IT IS FURTHER ORDERED that, not later than August 14, 2017,
Accredo shall produce documents responsive to the subpoena as set forth above,
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with the exception of information contained within patient files, which shall be
produced within 15 days of Accredo receiving patient names from plaintiff.

CAROL E. JACKSON
UNITED STATES DISTRICT JUDGE
Dated this 24th day of July, 2017.

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