Primary Care Pharmacy, LLC v. Express Scripts Holding Company, Inc. et al

Filing 57

MEMORANDUM AND ORDER :IT IS HEREBY ORDERED that Plaintiff Primary Care's Motion for Protective Order (ECF No. 46 ) is GRANTED. IT IS HEREBY ORDERED that Defendant Express Scripts, Inc.'s Motion to Compel (ECF No. 30 ) and Defendant Expre ss Scripts, Inc.'s Motion to Deem its Requests for Admission Admitted (ECF No. 33 ) are DENIED, without prejudice. The Court ORDERS the parties to revisit these issues, meet and confer, and follow the guidance outlined by the Court in this Order to resolve their discovery disputes. Signed by District Judge Ronnie L. White on 07/17/2018. (KCB)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION

PRIMARY CARE PHARMACY, LLC,
Plaintiff,

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)
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)

)

V.

EXPRESS SCRIPTS, INC.,
Defendant.

No. 4:17-CV-795 RLW

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)
)
)

MEMORANDUM AND ORDER

This matter is before the Court on Defendant Express Scripts, Inc.' s Motion to Compel
(ECF No. 30), Defendant Express Scripts, Inc.'s Motion to Deem its Requests for Admission
Admitted (ECF No. 33), and Plaintiff Primary Care's Motion for Protective Order (ECF No. 46).
BACKGROUND

In its Verified Complaint and Jury Demand (ECF No. 1, hereinafter "Complaint"),
Plaintiff Primary Care Pharmacy, LLC ("Primary Care") seeks damages because Defendant
Express Scripts, Inc. ("Express Scripts") "improperly recoup[ed] from Primary Care $520,042.83
attributable to diabetic testing strips and diabetic testing supplies, which Primary Care had
purchased and distributed to Express Scripts' members and beneficiaries." (Complaint, if 1). 1
Express Scripts is a Pharmacy Benefit Manager ("PBM").

PBMs are third-party

contractors that administer the prescription drug benefit plans of insurance carriers and Medicare
Part D plan sponsors. (Complaint, ififl2, 15). PBMs contract with a network of retail, mail
order, and specialty pharmacies, such as Primary Care, to provide and dispense covered
prescription services to members. (Complaint, ifl 7). Primary Care entered into a contract with
1

Defendant Express Scripts Holding Company, Inc. was voluntarily dismissed on May 30, 2017.
(ECF Nos. 19, 20).

Express Scripts, which consisted of a Pharmacy Provider Agreement ("Agreement") and a
Network Provider Manual ("Provider Manual").
Express Scripts conducted an audit of Primary Care beginning on March 23, 2016 to
validate that Primary Care purchased the products for which it had billed Express Scripts.
(Complaint,

~21 ).

Primary Care provided Express Scripts with numerous invoices pertaining to

Primary Care's purchase of various products, including documentation related to diabetic testing
strips and diabetic testing supplies. (Complaint,

~22).

Express Scripts also requested numbers

and proof of product origination for billed OneTouch and Freestyle products, two brands of
diabetic testing strips and testing supplies. (Complaint,

~23).

Express Scripts claimed to have

identified purchase shortages for multiple drugs, which resulted in a discrepancy of $520,042.83.
(Complaint,

~24).

Express Scripts then "recouped" this amount from Primary Care, but Express

Scripts' members and beneficiaries allegedly retained the corresponding diabetic strips and
testing supplies. (Id.) Primary Care learned that Express Scripts would not accept the purchases
made by Primary Care from wholesalers where Primary Care did not provide pedigree
information to validate its purchases.

(Complaint,

~25).

2

Primary Care asserts that Express

Scripts' full recoupment of $520,042.83 was not warranted based on Primary Care's ability to
provide documentation to validate its purchases of diabetic testing strips and testing supplies
from several wholesalers in compliance with the contracts that governed the parties' relationship.

2

The U.S. Food and Drug Administration defines drug pedigree as a statement of origin that
identifies each prior sale, purchase, or trade of a drug, including the date of those transactions
and the names and address of all parties to them. Primary Care contends that there is no pedigree
requirement for diabetic testing strips or testing supplies because they are non-drugs.
(Complaint, ~25, n.3).

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Primary Care brings this case for Breach of Contract (Count One), Unjust Enrichment
(Count Two), and Breach of the Implied Covenant of Good Faith and Fair Dealing (Count
Three).
On June 2, 2017, Express Scripts filed its First Amended Answer and Affirmative
Defenses to Plaintiffs' Complaint and Counterclaim.

(ECF No. 21).

In its Counterclaim,

Express Scripts seeks to recover amounts owed to Express Scripts by Primary Care as a result of
Primary Care's "contractual breaches and unjust enrichment." (ECF No. 21 at 11, ifl). Express
Scripts seeks "reimbursement for claims paid to Primary Care that were subsequently reversed
by Primary Care and for amount Express Scripts, Inc. is entitled to recover due to discrepancies
identified in a field audit." (ECF No. 21 at 11, if2) Express Scripts brings claims for Breach of
Contract (Count I) and Unjust Enrichment (Count II). Express Scripts claims that "Primary Care
breached the Agreement by submitting invalid claims to Express Scripts, Inc. which Express
Scripts, Inc. paid, and by not refunding the amounts paid by Express Scripts, Inc. after Primary
Care reversed the invalid claims." (ECF No. 21at21, if59).

LEGAL STANDARD
Rule 37 of the Federal Rules of Civil Procedure governs motions to compel discovery.

See Fed. R. Civ. P. 37 (a)(l) ("On notice to other parties and all affected persons, a party may
move for an order compelling disclosure or discovery."). Likewise, Rule 26 governs the scope
of discovery in federal matters:
Unless otherwise limited by court order, the scope of discovery is as follows: Parties 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.
Information within this scope of discovery need not be admissible in evidence to be
discoverable.

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Fed.R.Civ.P. 26(b)(l).
"A party may move for an order protecting disclosure or discovery, which is granted
only upon a showing of good cause." Heller v. HRB Tax Grp., Inc., 287 F.R.D. 483, 485 (E.D.
Mo. 2012) (citing Fed.R.Civ.P. 26(c)). The party moving for the protective order has the burden
to demonstrate good cause for issuance of the order. Miscellaneous Docket Matter No. 1 v.

Miscellaneous Docket Matter No. 2, 197 F.3d 922, 926 (8th Cir. 1999).

"Because of

liberal discovery and the potential for abuse, the federal rules 'confer[ ] broad discretion on the
[district] court to decide when a protective order is appropriate and what degree of protection is
required."' Id. at 925 (quoting Seattle Times Co. v. Rhinehart, 467 U.S. 20, 34 (1984)). Jo Ann

Howard & Assocs., P.C. v. Cassity, No. 4:09CV01252 ERW, 2018 WL 2762266, at *1 (E.D.
Mo. June 8, 2018).
DISCUSSION
A. Motion for Protective Order (ECF No. 46).
Although the Motion for Protective Order was the last filed, the Court starts its discussion
with this Motion because it most clearly and efficiently disposes of the discovery issues in
dispute. As noted by Express Scripts, Primary Care's Motion for Protective Order "reargues the
issues already briefed to the Court in Express Scripts' pending motions to compel discovery."
(ECF No. 50 at 1). The Court hereby issues a global decision regarding these issues from which
the parties can extrapolate the impact on the pending Motion to Compel and Motion to Deem its
Requests for Admission Admitted.
Here, Primary Care seeks a protective order from the Court (1) precluding Express
Scripts from referencing US. v. Hanafy, 302 F. Supp. 2d 1016 (N.D. Tex. 2000) and US. v.

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Hanafj;, 302 F.3d 485 (5th Cir. 2002) and pursuing additional written or deposition discovery

pertaining to these cases, (2) precluding written or deposition discovery pertaining to Primary
Care's marketing efforts and business strategies, and (3) precluding written or deposition
discovery pertaining to Primary Care's business relationship with Distinguished Pharmacy.
Express Scripts argues that these three areas of inquiry are relevant to their purported
defense that Primary Care did not comply with the Provider Agreement. (ECF No. 50 at 2).
Express Scripts claims that it raised this defense in paragraph 9 of its Affirmative Defenses
where it claimed that Primary Care's "claims are barred, in whole or in part, because [Primary
Care] previously engaged in fraudulent conduct in its submission of claims for prescription drugs
or supplies to Express Scripts, Inc." (Amended Answer, ECF No. 21, Affirmative Defenses, if9).
Express Scripts, however, never raised this defense of fraudulent conduct previously. In
fact, the parties engaged in pre-litigation contractual dispute resolution procedures3 where this
defense was never raised by Express Scripts. Likewise, Express Scripts did not mention this
allegedly fraudulent conduct as part of its Counterclaims against Primary Care. Indeed, the
Court holds that these three areas of inquiry are irrelevant to both Primary Care's claims and
Express Scripts' Counterclaims. See Miscellaneous Docket Matter No. I v. Miscellaneous
Docket Matter No. 2, 197 F.3d 922, 925 (8th Cir. 1999) (quoting Seattle Times Co. v. Rhinehart,

467 U.S. 20, 34 (1984)) ("Although the federal rules permit liberal discovery, it 'is [to be]
provided for the sole purpose of assisting in the preparation and trial, or the settlement, of
litigated disputes."'). The Court finds that discovery regarding these issues would largely detract
from the central issues at hand and lead the Court to mini-trials regarding these issues while not
3

The Court does not decide whether these contractual dispute resolution procedures were
binding on the parties. Rather, the Court finds that Express Scripts' failure to raise these issues
at that time provides evidentiary support for the Court's determination that these side issues now
raised by Express Scripts during discovery are not central to the litigation.
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making any progress in resolving the true crux of this dispute. The Court, therefore, grants
Primary Care's Motion for Protective Order. Primary Care has demonstrated good cause for the
protective order so that the litigants and the Court are not detracted from the dispute at issue by
irrelevant and extraneous points of departure.

B. Motion to Compel (ECF No. 30) and Motion to Deem Its Requests for
Admission Admitted (ECF No. 33)
In its Motion to Compel (ECF No. 30), Express Scripts asks the Court to compel Primary
Care to (1) withdraw all boilerplate objections to Express Scripts' First Set of Requests for
Production to Primary Care, (2) provide substantive responses to Requests Numbers 6, 7, 10, 11,
18-22, 24-31, 33, and 37-39, and supplement its conditional responses and withdraw its "subject
to" and "without waiving objections to Requests Numbers 2-4, 8, 9, 12-17, 23, 32, 34-36." In its
Motion to Deem Its Requests for Admission Admitted (ECF No. 33), Defendant Express Scripts
asks this Court for an Order deeming Express Scripts' First Set of Requests for Admission
Numbers 3, 5-18, 19-20, 23-48, and 49-50 admitted.
As previously stated by Express Scripts, the Motion for Protective Order largely
"reargued" the Motion to Compel and the Motion to Deem Its Requests for Admission Admitted.
Therefore, the Court denies these Motions and orders the parties to meet and confer regarding
these Motions and resolve their disputes based upon the Court's ruling.
Accordingly,

IT IS HEREBY ORDERED that Plaintiff Primary Care's Motion for Protective Order
(ECF No. 46) is GRANTED.

IT IS HEREBY ORDERED that Defendant Express Scripts, Inc.'s Motion to Compel
(ECF No. 30) and Defendant Express Scripts, Inc.'s Motion to Deem its Requests for Admission
Admitted (ECF No. 33) are DENIED, without prejudice. The Court ORDERS the parties to

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revisit these issues, meet and confer, and follow the guidance outlined by the Court in this Order
to resolve their discovery disputes.

Dated this 1J1h day of July, 2018.

~~

RONNIE L. WHITE
UNITED STATES DISTRICT JUDGE

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