PRIME AID PHARMACY CORP., v. EXPRESS SCRIPTS, INC.
OPINION. Signed by Judge John Michael Vazquez on 3/21/17. (cm, )
Not for Publication
UNITED ‘STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
PRIME AID PHARMACY CORP.,
Civil Action No. 16-2 182
EXPRESS SCRIPTS, INC.,
John Michael Vazguez, U.S.D.J.
This matter comes before the Court by way of the motion filed by Defendant Express
Scripts, Inc. (“ESI”) to transfer or in the alternative to dismiss the complaint. D.E. 11. Plaintiff
Prime Aid Pharmacy Corp. (“Prime Aid”) filed a brief in opposition to which Defendant replied.
D.E. 15, 16. The parties also submitted supplemental letters after briefing on the motion was
complete. D.E. 19, 24, 25. The Court reviewed all submissions made in support of the motion,
and considered the motion without oral argument pursuant to Fed. R. Civ. P. 78(b) and L. Civ. R.
78.1(b). For the reasons stated below, Defendant’s motion to transfer is GRANTED and this case
will be transferred to the United States District Court for the Eastern District of Missouri. Because
the case will be transferred, the Court will not address Defendant’s alternate argument that the
complaint should be dismissed.1
On September 9, 2016, Prime Aid filed a motion seeking leave to file a sur-reply in response to
ESI’s reply brief. D.E. 20. The Court has discretion to deny requests to file sur-replies when prior
submissions are deemed sufficient. See, e.g., Kearney Partners fund, LLC v. United States, No.
11-4075, 2012 WL 8134754, at *i n.y (D.N.J. July 13, 2012). Prime Aid fails to demonstrate that
FACTUAL AND PROCEDURAL BACKGROUND
Prime Aid, a specialty pharmacy located in Union, New Jersey, provides over 5,000 New
Jersey residents suffering from acute or chronic conditions with medications that are not typically
available from retail pharmacies. Compl.
1, 36, D.E. 1. ESI is one of the largest pharmacy
benefit managers (“P3Ms”) in the country, managing prescription drug programs for insurance
companies, health plans, or self-insured employers. Id.
of ESI’s network of specialty pharmacies. Id,
¶ 30, 32.
Until 2014, Prime Aid was part
In addition to acting as a PBM, ESI and its
affiliates “operate captive specialty pharmacies via mail order.” Id.
In mid-2014, ESI terminated Prime Aid from its network due to “numerous breaches” of
the Express Scripts, Inc. Pharmacy Provider Agreement (the “Agreement”) between Prime Aid
and ESI. Id.
57, 59, 61-64. In addition to dictating the parties’ relationship, the Agreement
contained a forum selection clause providing that “[a]ll litigation between the parties arising out
of or related in any way to the interpretation or performance of the Agreement shall be litigated in
the U.S. District Court for the Eastern District of Missouri.”2 Declaration of Michael C. Zogby
(“Zogby DecI.”) Ix. B,
4, D.E. 11-3. The Agreement also contained a choice of law clause
stating that Missouri law shall apply to any disputes. Id. Ex. A,
On January 11, 2016, after it was terminated from ES I’ s network, Prime Aid submitted an
application to rejoin ESI’s network. Cornpl.
ESI denied Prime Aid’s application on January
22, 2016, “on the alleged basis of a ‘Program Integrity Alert.” Id.
ESI failed to provide
a sur-reply is necessary, as the parties’ sufficiently addressed the relevant arguments in their prior
submissions and ESI’s reply brief addresses only arguments that Prime Aid raised in its opposition
brief. Consequently, Prime Aid’s motion seeking leave to file a sur-reply is denied.
The clause containing the forum selection provision appears in an amendment to the Agreement
that became effective on August 20, 2014. Zogby DecI. ¶ 3. The amendment replaced an
arbitration provision requiring the parties to submit to binding arbitration in St. Louis County,
Missouri. Id. Ex. A, §7.15.
any further explanation regarding the basis of its denial. Id.
55. E$I later suggested that its
refusal to accept Prime Aid’s 2016 application was due to numerous breaches of the Agreement in
2014, which had resulted in Prime Aid’s termination. Id.
57. Prime Aid contends that ESI’s
stated reason is a pretext. Prime Aid believes that ESI rejected the application to drive patients to
ESI’s captive specialty pharmacy instead of Prime Aid. Id.
¶I 5, 35.
Prime Aid filed suit on April 19, 2016, alleging that ESI’s refusal to admit Prime Aid in its
network violates New Jersey’s Any Willing Provider laws (“AWP”)3 and constitutes anticompetitive behavior in violation of New Jersey and federal antitrust laws. In lieu of an answer,
ESI filed this motion seeking to transfer the case, pursuant to 28 U.S.C.
1404(a), due to the forum
selection clause in the Agreement. In the alternate, ESI argues that the court should dismiss the
complaint in its entirety pursuant to Fed. R. civ.
12(b)(6). D.E. 11. As will be explained below,
the court finds that transfer to the Eastern District of Missouri is appropriate under Section
1404(a). Therefore, it will not address ESI’s alternate arguments regarding dismissal.
MOTION TO TRANSFER STANDARD
When a matter is filed in a proper venue, a federal district court may transfer the case to a
different venue pursuant to 28 U.S.C.
1404(a). Lasoffv. Amazon.com, Inc., 15-2886, 2016 WL
355076, at *2 (D.N.J. Jan. 28, 2016). Section 1404(a) provides that “[for the convenience of the
The AWP statute states, in relevant part, that
no pharmacy or pharmacist shall be denied the right to participate as a preferred
provider or as a contracting provider, under the same terms and conditions currently
applicable to all other preferred or contracting providers, if the contract provides
for coverage by contracted or preferred providers for pharmaceutical services,
provided the pharmacy or pharmacist is registered pursuant to R.S. 45:14-1 et seq.,
and accepts the terms and conditions of the contract.
parties and witnesses, in the interest ofjustice, a district court may transfer any civil action to any
other district or division where it might have been brought or to any district or division to which
all parties have consented.” 2$ U.S.C.
A forum selection clause “may be enforced through a motion to transfer under [Section]
1404(a).” Ad. Marine Const. Co., Inc. v. US. Dist. Court for the WD. Tex., 134 S. Ct. 568, 579
(2013). Because a valid forum selection clause “should be given controlling weight in all but the
most exceptional cases,” the traditional Section 1404(a) analysis is altered if there is an operative
forum selection clause.4 Id. at 581-53. First, “the plaintiff’s choice of forum merits no weight.”
Id. at 581. Instead, the plaintiff must demonstrate why the court should not transfer the case to the
contractually agreed upon forum. Id. at 582. Second, the court should not consider the private
interest factors, as they “weigh entirely in favor of the preselected forum.” Id. Finally, “a [Section]
1404(a) transfer of venue will not carry with it the original venue’s choice-of-law rules.” Id.
1. Applicability of the Forum Selection Clause
ESI contends that this matter should be transferred pursuant to Section 1404(a) due to the
forum selection clause in the Agreement.
Def’s Br. at 9-12.
Prime Aid counters that the
Agreement does not govern this dispute, therefore, the forum selection clause is inapplicable. P1? s
Br. at 5-9, D.E. 15.
The parties do not dispute the validity of the Agreement or the forum selection clause itself.
Def’s Br. at 9; P1? s Br. at 7. There is also no dispute that the Agreement was terminated in 2014
For a Section 1404(a) analysis that does not involve a forum selection clause, a court weighs
multiple private and public interest factors. MaxLite, Inc. v. A TG Elecs, Inc., 193 F. Supp. 3d 371,
392 (D.N.J. 2016). Moreover, a plaintiff’s choice of forum, a private interest factor, “should rarely
be disturbed.” Id. at 393 (quoting Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 508 (1947)).
and the parties are not currently bound by any other contract. See Compi.
¶ 57. Consequently, the
only issue before the Court is whether the forum selection clause is applicable to the claims raised
by Prime Aid.
“[W]hether or not a forum selection clause applies depends on what the specUic clause at
Wyeth & Brother Ltd. v. Cigna Int’l Corp., 119 f.3d 1070, 1075 (3d Cir. 1997)
(emphasis in original). In other words, courts look to the language of the clause at issue to
determine its scope. Language in a forum selection clause such as “related to,” “concerning,” or
“with respect to” is broadly construed to encompass any claim, not just one for breach of the
contract in which the clause is contained. See, e.g., Carlyle mv. Mgmt. LLC v. Moonmouth Co.
SA, 779 F.3d 214, 220 (3d Cir. 2015); Lasoff 2016 WL 355076, at *3 for example, in Wyeth &
Brother Ltd., a forum selection clause that covered disputes “arising in relation to” applied to any
dispute that had “some logical or causal connection to” the agreement at issue. 119 F.3d at 1074;
see also Bense v. Interstate Battery Sys. of Am., Inc., 683 f.2d 718, 720 (2d Cir. 1982) (forum
selection clause covering suits “arising directly or indirectly” from the agreement was enforceable
in antitrust case because “the gist of [plaintiffs] claim is that [defendant] wrongfully terminated
the agreement”). Another example is found in Car/vie, in which two agreements, each with a
separate forum selection clause, were reviewed. The first clause governed claims “with respect
to” the agreement. 779 F.3d at 220. The Third Circuit found that the “with respect to” language
was interpreted broadly and meant “connected by reason of an established or discoverable
relation.” Id. (citation omitted). The second forum selection clause pertained to any dispute
“rising out of relating in any way to” the second agreement. Id. at 222. The court in Carlyle found
this language to be even broader than the “with respect to” requirement. Id.
The forum selection clause at issue here reads as follows:
Dispute Resolution. Except as provided herein, prior to either party taking any legal
action in connection with this Agreement, both parties agree to meet in good faith to resolve
any claim or controversy (“Claim”), whether under federal or state statutory or common
law, brought by either ESI or [Prime Aid] against the other. arising from or relating in
Alt litigation between
any way to the interpretation or performance of this Agreement.
the parties arising ottt of or related in aity way to the interpretation or performance of
the Agreement shall be litigated in the U.S. District Court for the Eastern District of
Zogby DecI. Ex. B,
§ 4 (emphasis added). The language of the forum selection clause is clear and
unambiguous; the clause applies to all litigation that is related in any way to the interpretation or
performance of the contract. See Wyeth & Brother Ltd. v. Cigna Int’l Corp., 119 f.3d at 1074-75
(finding forum selection clause governing disputes that arose “in relation to” an agreement to be
unambiguous). In addition, the clause applies to “all litigation,” as opposed to merely claims
arising from the Agreement itself. Cf Id. at 1074 (observing that forum selection clause was not
merely limited to “claims” under an agreement but to all “disputes” arising therefrom). Therefore,
the Court must determine whether the Complaint is related in any way to the interpretation or
performance of the Agreement. At the outset, the Court notes that the language in the Agreement
is akin to the broader language discussed by the Third Circuit in Carlyte.
Prime Aid maintains that its AWP and antitrust claims against ESI “require no
interpretation or analysis of either parties’ contractual perfonnance” and the Agreement is “legally
irrelevant.” Plfs Br. at 6, 8. The Court disagrees. First, despite Prime Aid’s argument that the
Agreement is not relevant, Prime Aid repeatedly refers to ES I’s termination of the Agreement.
¶J 57, 59, 61-64. Critically, Prime Aid argues that ESI’s termination of the Agreement in
2014 was essentially in bad faith and was used as a pretext to deny Prime Aid’s 2016 application.
ESI denied Prime Aid’s 2016 application due to a “Program Integrity Alert.” Compl.
Although the denial “was devoid of any explanation,” ESI later suggested that the denial was due
to “numerous breaches” of the Agreement in 2014, which led to the Agreement’s termination. Id.
Prime Aid alleges, however, that ESI’s termination of the Agreement was for
immaterial, picayune violations. Id.
59, 61-64 (explaining Prime Aid’s 2014 breaches and
why they are not legitimate reasons for the termination in 2014 or subsequent denial in 2016). In
essence, this case appears to turn on whether ESI’s 2014 termination of the Agreement was
If termination was appropriate, Plaintiffs argument that the 2016 denial was
“arbitrary” (Plf’s Br. at 20) will not likely pass muster. This analysis is entirely dependent on the
terms of, and the parties’ performance under, the Agreement. Like Wyeth, this case is clearly
related to the interpretation or performance of the Agreement because, as pled, Prime Aid’s claims
rest upon the parties’ actions pursuant to the Agreement and the related denial in 2016. The
Agreement, along with its forum selection clause, clearly has a logical relationship with the matter
pled. Consequently, the forum selection clause is applicable to this dispute.
2. Section 1404(a) Analysis
Because the forum selection clause governs this dispute, the Court will apply the modified
Section 1404(a) analysis set forth in Atlantic Marine. Lasoff 2016 WL 3555076, at *4 As a
result, the Court gives Prime Aid’s choice of forum no weight. Ad. Marine Const. Co., Inc., 134
S. Ct. at 581. In addition, the private interest factors weigh entirely in favor of the Eastern District
of Missouri and the Court will only consider the public interest factors.
The public interest factors include: (1) enforceability of the judgment; (2) practical
considerations that could make the trial easy, expeditious, or inexpensive; (3) relative
administrative difficulties in the two fora resulting from court congestion; (4) local interests in
deciding local controversies at home; (5) public policies of the fora; and (6) the familiarity of the
trial judge with the applicable state law in diversity cases. MaxLite, Inc., 193 F. Supp. 3d at 392.
The Court concludes that in this instance the public interest factors weigh in favor of
transfer. The first factor is neutral as a judgment from either district could easily be registered in
another district. See SI Power LLC v. Pathway Holdings Mgmt. V, LLC, No. 15-6101, 2016 WL
7130920, at *9 (D.N.J. Dec. 7, 2016). In addition, although Prime Aid is a New Jersey corporation,
transfer to the Eastern District of Missouri will allow for easier and economical litigation because,
in accordance with the forum selection clause at issue here, the parties are currently engaged in
litigation in the Eastern District of Missouri for breach of contract and other claims related to the
Agreement. PWs Br. at 7; see Burger King Corp. v. Stroeharnann Bakeries, Inc., 929 F. Supp.
$92, $95 n.2 (E.D. Pa. 1996) (stating that “[t]he existence of a related action in the transferor or
transforee district is a strong factor in a transfer decision where judicial economy can be achieved
The third factor is neutral because courts in either district can effectively manage this case.
The sixth factor is also neutral; although the complaint requires application of New Jersey’s
antitrust laws and the AWP, Missouri’s choice of law rules apply (see At!. Marine Const. Co., Inc.,
134 S. Ct. at 5$2) and the Agreement contains a Missouri choice of law provision. Zogby Decl.
§ 7.11. The fourth and fiflh factors, however, weigh in favor of a New Jersey forum as this
case allegedly impacts New Jersey residents’ access to medication. But these factors alone are not
enough to tip the scales in favor of retaining jurisdiction as “a valid forum-selection clause should
be given controlling weight in all but the most exceptional cases.” Ati. Marine Const. Co., Inc.,
134 S. Ct. at 581. Although the outcome of this case could affect New Jersey residents, the Court
does not believe that this necessitates flouting the parties’ clear contractual decision. As a result,
the Court concludes that transfer is appropriate under Section 1404(a).
For the reasons set forth above, Defendant’s motion to transfer is GRANTED (D.E. 11).
As a result, the Court does not reach Defendant’s motion to dismiss. Accordingly, this case shall
be transferred to the United States District Court for the Eastern District of Missouri.
appropriate Order accompanies this Opinion.
Dated: March 21, 2017
John ‘Michael VazqkJD.J.
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