CHAIRES et al v. NOVO NORDISK INC. et al
Filing
725
REDACTED OPINION re ECF No. 721 - SEALED Opinion. Signed by Judge Brian R. Martinotti on 1/24/2024. (dam)
No. 635.)
Also before the Court is Defendants’ Motion to Exclude the Expert Testimony of Plaintiffs’
expert Meredith Rosenthal, Ph.D. (the “Daubert Motion”). (ECF Nos. 593, 594.) Plaintiffs filed
an opposition (ECF No. 595), Defendants filed a reply (ECF No. 596), and Plaintiffs filed a surreply as part of an omnibus filing (ECF No. 597). Having reviewed the parties’ voluminous
submissions filed in connection with the two motions, and having held oral argument on November
28, 2023, for the reasons set forth below and for good cause having been shown, Plaintiffs’ Motion
for Class Certification is DENIED, and Defendants’ Daubert Motion is GRANTED IN PART
and DENIED IN PART.
[intentionally left blank]
2
TABLE OF CONTENTS
I.
II.
BACKGROUND ......................................................................................................................4
A.
Factual Background...............................................................................................4
B.
Procedural History...............................................................................................11
DEFENDANTS’ DAUBERT MOTION .....................................................................................13
A.
Legal Standard .....................................................................................................20
B.
Decision .................................................................................................................23
III. PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION .........................................................28
A. Legal Standard .........................................................................................................31
B. Decision .....................................................................................................................34
i.
Ascertainability ..............................................................................................35
ii.
Rule 23(a) Inquiry ..........................................................................................43
a. Numerosity..........................................................................................44
b. Commonality ......................................................................................45
c. Typicality ............................................................................................52
d. Adequate Representation ..................................................................57
iii.
Rule 23(b) Inquiry..........................................................................................60
a. Rule 23(b)(2) Inquiry .........................................................................60
b. Rule 23(b)(3) Inquiry .........................................................................66
1. Proposed Nationwide Classes and Proposed Novo Nordisk
and Sanofi New Jersey Classes ................................................73
2. Proposed Novo Nordisk and Sanofi Multi-State Classes ......98
3. Proposed Novo Nordisk and Sanofi Texas Classes,
Proposed Kansas Classes, and Proposed Utah Classes ......112
IV. CONCLUSION ......................................................................................................................120
3
I.
BACKGROUND2
A.
Factual Background
This action arises out of Plaintiffs’ challenge to Defendants’ allegedly unfair and
unconscionable pricing scheme for their analog insulin products. (See generally ECF No. 411
(Third Amended Class Action Complaint).) Plaintiffs are analog insulin consumers who filed the
Third Amended Class Action Complaint (“TAC”) on behalf of themselves and all others similarly
situated, i.e.:
All individual persons in the United States and its territories who
paid any portion of the purchase price for a prescription of Apidra,
Basaglar, Fiasp, Humalog, Lantus, Levemir, Novolog, Tresiba,
and/or Toujeo at a price calculated by reference to a list price, AWP
(Average Wholesale Price), or WAC (Wholesale Acquisition Price)
for purposes other than resale.
(ECF No. 411 ¶ 322; see also id. ¶¶ 25–185.) Defendants are manufacturers who manufacture and
sell prescription medications, including analog insulin products.3 (Id. ¶¶ 186–88.) Defendants set
the Wholesale Acquisition Cost (“WAC”4), also known as the list price, for their prescription
2
The factual and procedural backgrounds of this matter are well known to the parties and were
previously recounted by the Court in its Opinion granting in part and denying in part Defendants’
Motion to Dismiss the First Amended Complaint (ECF No. 252); the Court’s Opinion granting in
part and denying in part Defendants’ Motion to Dismiss the Second Amended Complaint (ECF
No. 304); and the Court’s Opinion granting in part and denying in part Defendants’ Motion to
Dismiss the Third Amended Complaint (ECF No. 505). Therefore, the Court includes only the
facts and procedural background relevant to the present motions.
3
Defendant Eli Lilly is incorporated in Indiana with its principal place of business in Indiana.
(ECF No. 411 ¶ 186.) Defendants Novo Nordisk and Sanofi are both incorporated in Delaware
with their principal places of business in New Jersey. (Id. ¶¶ 187–88.) Defendant Eli Lilly
manufactures the analog insulin products Humalog and Basaglar; Defendant Novo Nordisk
manufactures the analog insulin products Fiasp, Novolog, Levemir, and Tresiba; and Defendant
Sanofi manufactures the analog insulin products Apidra, Lantus, and Toujeo. (Id. ¶¶ 18688.)
4
“WAC” is defined as “Wholesale Acquisition Price” in Plaintiffs’ filings (e.g., ECF No. 411 ¶¶
202, 322; ECF No. 575 at 58) and as “Wholesale Acquisition Cost” in Defendants’ filings (e.g.,
ECF No. 576 at 16). The Court understands Wholesale Acquisition Price and Wholesale
4
drugs, including analog insulin products. (See id. ¶ 205; ECF No. 576-2, Ex. 1 (Expert Report of
Laurence C. Baker, Ph.D. (“Baker Rpt.”)) ¶ 27.) WAC is defined as “the manufacturer’s list price
for the drug or biological to wholesalers or direct purchasers in the United States, not including
prompt pay or other discounts, rebates or reductions in price[.]” 42 U.S.C. § 1395w-3a(c)(6)(B)
(2021). The WAC, or list price, serves as the reference point from which pharmacy benefit
managers (“PBMs”5) and drug manufacturers negotiate rebates. (Id. ¶ 207.) WAC is related to, but
not the same as, Average Wholesale Price (“AWP”).6 (See id. ¶¶ 202, 206.)
Acquisition Cost to be referring to the same thing—the list price Defendants set for their analog
insulin products.
5
As stated in Plaintiffs’ TAC: “PBMs effectuate the drug transactions between health insurers,
pharmacies, and drug manufacturers” and “[t]hey negotiate directly with drug manufacturers on
behalf of health insurers to determine the prices those insurers pay for the manufacturers’ drugs.”
(ECF No. 411 ¶ 4.) “Drug manufacturers and PBMs negotiate these price discounts in the form of
‘rebates’: drug manufacturers refund PBMs a portion of their drugs’ prices (the rebate)” and
“PBMs then pass on a portion of those rebates to their health insurer clients.” (Id.) Three PBMs—
CVS Health, Express Scripts, and OptumRx—“together cover over 80% of the insured market[.]”
(Id.) “When two or more branded medicines fall into the same therapeutic category and have
similar effectiveness and safety profiles (as is the case with the analog insulins), a PBM is in the
position to sometimes exclude, or place in a non-preferred position, one of the medications in favor
of another.” (Id. ¶ 5.) Thus, “the large PBMs can push significant portions of the market toward or
away from the [D]efendants’ products.” (Id.)
6
See In re Pharm. Indus. Average Wholesale Price Litig., 252 F.R.D. 83, 87 (D. Mass. 2008)
(noting “AWP” or Average Wholesale Price refers to the average price that wholesalers charge to
providers like doctors and pharmacies, which may not reflect the “true” average price charged by
wholesalers); ECF No. 575 at 19 (“AWP is WAC plus 20% due to a court order settling two
nationwide class-actions.” (citing Rosenthal Rpt. ¶ 29) (other citations omitted)); ECF No. 576 at
16 n.3 (“Some—but not all—PBMs, insurers, and pharmacies also use a figure called the Average
Wholesale Price (‘AWP’). AWP is generally calculated by increasing WAC by a fixed
percentage—often, but not always, 20%.” (citing Baker Rpt. ¶¶ 3032)); Baker Rpt. ¶¶ 3031
(“Defendant insulin manufacturers do not determine AWP and do not publish AWP; instead, AWP
is calculated and published by commercial pricing compendia, like IBM Micromedex Red Book
and Medi-span, using manufacturers’ WAC. As applicable to this case, AWP for the analog insulin
has generally, but not always, been calculated as 1.2 × WAC. AWP has been used as a benchmark
by insurance payers to determine how much to reimburse and pay for a given drug. As commonly
used today, AWP is not a measurement of actual average wholesale prices. In fact, some pricing
compendia have discontinued publishing AWP.” (footnotes omitted)).
5
Branded prescription drugs in the United States move through a complex distribution chain
where drug manufacturers typically sell their products to wholesalers at a negotiated price, who in
turn sell the products to various providers including hospitals, clinics, and retail pharmacies, who
then in turn distribute the products to patients who are prescribed those products. (Id. ¶¶ 19397,
200.) Downstream charges generally flow from the manufacturer to the wholesaler, from the
wholesaler to the retailer (or mail order), and from the “retailer (or mail order) to the health benefit
providers (in the form of ingredient cost reimbursement and dispensing fees) and [to] consumers
(in the form of coinsurance, copayment, deductible payment, and/or cash).” (Id. ¶ 198.) Upstream
charges, however, flow from PBMs and/or health benefit providers back to the manufacturers. (Id.
¶ 199.) “[U]pstream charges are price discounts the defendant drug manufacturers offer PBMs and
their health insurer clients in the form of ‘rebates’” and “typically occur well after the point-ofsale transactions.” (Id.)
This industry is unique because the way patients pay for prescription drugs vastly differs
from the way wholesalers, PBMs, and health insurers pay for those same products. (Id. ¶ 203.) The
prices for the products distributed in this chain differ for each participating entity—“different
actors pay different prices for the same drugs.” (Id. ¶ 202.) Manufacturers do not sell medications
directly to the consumers, and as such, they do not set the price the consumer pays for any
particular medication, but they do set the list price (the WAC) for their products, and consumers
usually pay for prescription drugs based on those list prices. (See id. ¶¶ 20008.) Patients typically
pay in one of a few ways based on the manufacturer’s list price. (Id. ¶ 203.) First, for insured
patients who have coinsurance, they pay a pre-set percentage of the point-of-sale purchase price.
(Id.) Second, for insured patients who have deductibles, they pay a portion of the point-of-sale
purchase price. (Id.) Insured patients may also pay a fixed or tiered co-pay for prescription
6
medications. (Id.) Third, for uninsured patients, also known as cash-paying patients, they typically
pay a usual and customary (“U&C”) price.7 (Id.)
Health insurers cover all or a portion of their insured customers’ medication costs,
submitting payments to pharmacies on behalf of their members, and their reimbursement amounts
depend on whether and where the medication falls on their PBMs’ formularies—i.e., the ranked
list of drugs an insurance plan will cover. (Id. ¶¶ 195, 207.) Formularies have different tiers that
affect the prices insured consumers pay. (See id.) “When a drug is excluded from formulary or
placed in a non-preferred position, health insurers using that formulary will make their plan
beneficiaries shoulder a greater percentage or all of the disadvantaged product’s cost.” (Id. ¶ 5.)
Insurance plans include different cost-sharing and coverage terms. (See id. ¶¶ 201, 21421,
22329.) The deductible is the amount a consumer must spend before the insurer begins sharing
in those costs. (Id. ¶¶ 214, 225.) Insured consumers pay their insurer monthly premiums that are
often based in part on the deductible level. (See id. ¶¶ 21314.) In addition to their deductibles,
insured consumers may also make co-payments or coinsurance payments for their healthcare costs.
7
See ECF No. 575 at 20 (“Specifically, an insured patient with coinsurance or deductible
requirements pays for analog insulin based on the lesser of her pharmacy’s usual and customary
price (U&C) or the reimbursement rate her pharmacy negotiated with her insurer (or, more
commonly, the insurer’s PBM). Both the U&C price and the negotiated reimbursement rate are
tied to AWP. U&C is either pegged directly to AWP or otherwise set based on AWP. And the
negotiated reimbursement rate for the analog insulins is AWP minus a fixed percentage. . . . Cash
purchasers pay U&C, which, again, is tied to WAC or AWP.” (citations omitted)); ECF No. 576
at 1920 (“One type of pharmacy cash price is the Usual & Customary (‘U&C’) price. Medicare
defines a pharmacy’s U&C price as the lowest price at which a pharmacy has made a drug ‘widely
and consistently available’ to the public. Like cash prices generally, U&C prices often do not
correlate with WACs. That is because U&C prices are affected by factors other than list prices,
such as competition between local pharmacies. Thus, U&C prices can vary substantially even
within a single pharmacy chain. Regardless, ‘very few customers actually pay the full usual and
customary price,’ because of discounts and affordability programs.” (citations omitted)); Baker
Rpt. ¶¶ 3639 (discussing U&C prices).
7
(Id. ¶ 223.) After reaching the deductible, an insured consumer may have to pay a co-payment at
a fixed dollar amount or coinsurance at a fixed percentage amount for healthcare costs including
medications being purchased. (Id. ¶ 22325.) Also, “[p]lans that cover prescription drugs right
away, not requiring patients to reach deductibles first, usually require copayments or coinsurance
contributions for every drug purchase.” (Id. ¶ 225.)
“A copayment is a fixed or tiered fee that an individual must pay for a healthcare service
at the time of care; for example, when she picks up a prescription.” (Id.) “Copayment rates vary
depending on the drug; usually drugs in preferred formulary positions have lower copays, and
drugs in disfavored formulary positions require larger copays.” (Id.) Coinsurance is “a fixed
percentage of the cost of the healthcare service provided.” (Id. ¶ 224.) Coinsurance percentages
can similarly vary, “with lower coinsurance rates for preferred drugs and higher coinsurance rates
for disfavored drugs.” (Id.) When insured patients purchase a prescription medication from a
pharmacy, their insurer pays a portion of the purchase price “based on the price its PBM negotiated
for that medication (the net price)” and the patient also usually pays a portion of the purchase price
out-of-pocket for that medication. (Id. ¶¶ 195, 201.)
Drug manufacturers may offer rebates to an insurer’s PBM to gain formulary access for
their prescription drugs. (Id. ¶¶ 8, 207.) PBMs then independently decide whether to pass along
rebates to the health insurer. (Id. at ¶¶ 4, 234; Baker Rpt. ¶ 59; id., Ex. 2 (Expert Report of Sean
Nicholson, Ph.D. (“Nicholson Rpt.”)) ¶ 28.) PBMs may retain a portion of the rebate before
passing the remainder of the cost on to the health insurer. (ECF No. 411 ¶¶ 2, 4, 364; Baker Rpt.
¶ 59.) Some health insurers who receive those rebate savings can then choose to pass along some
or all of those savings to their customers. (ECF No. 411 ¶¶ 21421, 22329; Baker Rpt. ¶ 60.)
Depending on the insurer, these savings may come in the form of lower plan premiums or reduced
8
cost-sharing obligations on consumers for prescription drugs.8 (See id.) For example, an insurer
may take rebates into account in determining a consumer’s coinsurance obligations. (Id. ¶ 86.)
Other insurers who receive manufacturer rebates may choose not to pass on the rebate savings to
their consumers. (Id.)
Here, Plaintiffs allege Defendants engaged in an unfair and unconscionable pricing scheme
by artificially inflating the list prices for their analog insulin products so they could offer “secret
rebates” to certain PBMs in exchange for preferred formulary placement, which Plaintiffs contend
caused them and the putative class members to overpay for Defendants’ analog insulin products.
(ECF No. 411 ¶¶ 13, 8; ECF No. 575 at 1, 4, 5455.) Plaintiffs contend Defendants artificially
inflated the list prices for their analog insulin products to compete for preferred positions on the
PBMs’ drug formularies9 by offering increased rebates to PBMs. (Id.) Plaintiffs claim they and the
putative class members suffered harm because they had to overpay for Defendants’ analog insulin
products, paying “based on a fraudulently inflated list price.” (ECF No. 411 ¶¶ 3, 8, 13; ECF No.
575 at 3, 1824.) Plaintiffs assert Defendants published their list prices “while concealing their net
prices, [which] has deceived the plaintiffs into believing that the list prices on which their out-ofpocket payments are based are reasonable and fair approximations of the actual cost of their analog
insulins.” (ECF No. 411 ¶ 14.) Plaintiffs premise this pricing scheme on Defendants’ alleged unfair
8
In 2020, one insurer disclosed to its plan members that for any rebate-eligible drug they purchase,
the plan members will receive most of the estimated value of the rebates which will reduce their
contribution to the cost of the drug. (Baker Rpt. ¶ 60.) Another insurer requires all rebates to be
passed on to consumers enrolled in its fully insured plans. (Id.)
9
Health insurers rely on PBMs to set and manage their drug formularies—the list of prescription
drugs for which an insurance plan offers insurance benefits. (Rosenthal Rpt. ¶ 26.) Because analog
insulins are interchangeable within their therapeutic classes, PBMs can restrict formularies to
cover only one analog insulin for each class, thereby forcing manufacturers to compete for
formulary placement. (Id. ¶¶ 46–47.)
9
and unconscionable practice of publicly reporting one price for their analog insulins while offering
a far lower price—the net price—to certain PBMs, by virtue of offering them significant rebates.10
(Id. ¶¶ 2, 23441.)
According to Plaintiffs, Defendants’ allegedly unfair and unconscionable scheme of
competing for formulary access of the largest PBMs by unjustifiably raising the list prices for their
analog insulin products so they could offer these middlemen bloated rebates—so-called “spreads”
between list prices and net prices—began (for most analog insulins) sometime between 2014 and
2015, when Defendants’ list prices began trending in a different direction from the net prices they
were offering to the PBMs and insurers. (ECF No. 575 at 2, 8, 1617.) “Net prices” refers to the
prices PBMs negotiate and pay for Defendants’ products after subtracting from the list prices the
rebate amounts Defendants issued to them in order to gain formulary placement. (ECF No. 411 ¶¶
2, 4, 78.) Net prices may fluctuate as they necessarily depend on a particular PBM’s negotiations
with Defendants. (See id.) Plaintiffs contend their proposed classes are based on the monetary
losses they suffered in overpaying for their analog insulin products as a result of Defendants’
allegedly unfair and unconscionable pricing scheme. (Id. ¶¶ 3, 1214, 19–20.) Plaintiffs further
allege whatever negotiations or transactions may or may not have taken place between
manufacturers and wholesalers or between wholesalers and pharmacies did not impact the prices
consumers paid. (Id. ¶ 439.)
10
However, Plaintiffs and Defendants both generally agree that paying rebates to PBMs in the
pharmaceutical industry is legal. (See ECF No. 576 at 2; ECF No. 577 at 1, 3940; see also ECF
No. 411 ¶ 6 (“When used correctly, rebates can significantly lower consumers’ costs. In theory,
drug manufacturers might offer PBMs discounts or rebates that lower the manufacturers’ net
selling prices while their list prices remain constant. Such rebates would serve as a legitimate basis
to confer formulary status to the least costly medication. The legitimate use of discounts and
rebates that actually reduce consumer costs is not at issue in this case.”).)
10
Plaintiffs state PBM rebates are part of an industry scheme to inflate the price of analog
insulin products, whereby the largest PBMs use their leverage to set formularies. (ECF No. 411 ¶¶
2, 364, 392.) If a drug is excluded from the formularies, consumers may be required to pay a larger
share of the cost, or even the full cost; accordingly, using formularies gives PBMs wide latitude to
extract rebates from manufacturers. (Id. ¶¶ 2, 207, 239, 277.) Plaintiffs argue Defendants offer
PBMs higher spreads in exchange for preferred positions on their drug formularies, rather than
lower their list prices for their prescription drugs. (Id.) Plaintiffs contend Defendants’ allegedly
“fraudulent conduct in artificially inflating the list prices of the analog insulins” has “directly and
proximately caused the plaintiffs and members of the class to be injured[,]” and Plaintiffs assert
they “have overpaid many hundreds of millions of dollars” based on these artificial list prices. (Id.
¶¶ 306, 377.)
B.
Procedural History
On April 20, 2021, Plaintiffs filed their Third Amended Class Action Complaint (“TAC”).
(ECF No. 411.) On June 11, 2021, Defendants filed a Partial Motion to Dismiss the TAC. (ECF
No. 422.) Plaintiffs filed an opposition (ECF No. 455), and Defendants filed a reply (ECF No.
468). On December 17, 2021, the Court granted in part and denied in part Defendants’ Motion to
Dismiss the TAC. (ECF No. 505.) The Court also directed the parties to provide a joint submission
to the Court “with an agreed upon list as to which claims fail as to certain Defendants where no
Plaintiff from the respective state purchased that Defendant’s products” (ECF No. 505 at 3435),
which the parties did on February 1, 2022 (ECF Nos. 508, 508-111).
11
Relevant to Plaintiffs’ Motion for Class Certification, Plaintiffs represented in this filing to the
Court that they are not asserting claims against Sanofi under the Kansas Consumer Protection Act
because no plaintiff is alleged to have purchased Sanofi’s product in Kansas. (See ECF No. 508
(Feb. 1, 2022 Letter from the Parties to the Court submitted in response to the Court’s Dec. 17,
2021 Order (ECF No. 506)) (attaching a chart (ECF No. 508-1) “showing which claims have been
11
On September 20, 2022, Plaintiffs filed a Motion for Class Certification. (ECF Nos. 574,
575.) Defendants filed an opposition (ECF No. 576), Plaintiffs filed a reply (ECF No. 577),
Defendants filed a sur-reply12 (ECF No. 587), and Plaintiffs filed a response to Defendants’ surreply as part of an omnibus response (ECF No. 597). On February 9, 2023, Plaintiffs filed a letter
with a notice of supplemental authority—In re Valsartan, Losartan, & Irbesartan Prods. Liab.
Litig., Civ. A. No. 19-2875, 2023 WL 1818922 (D.N.J. Feb. 8, 2023)—in further support of their
Motion for Class Certification (ECF No. 606), to which Defendants filed a letter in response (ECF
No. 607), and Plaintiffs filed a letter in reply to Defendant’s response (ECF No. 609). On May 9,
2023, Defendants separately filed a letter with an additional notice of supplemental authority—In
re Niaspan Antitrust Litig., 67 F.4th 118 (3d Cir. 2023)—in further support of its opposition to
Plaintiffs’ Motion for Class Certification. (ECF No. 635.)
On November 30, 2022, Defendants filed a Motion to Exclude the Expert Testimony of
dismissed, withdrawn, or are not asserted against a particular defendant because no plaintiff is
alleged to have purchased the defendant’s product in a given state”); ECF No. 508-1 at 7
(indicating there are no plaintiff claims against Sanofi under the Kansas Consumer Protection Act);
see also ECF No. 411 ¶¶ 72431 (noting the count (Count Twenty-Seven) alleging a violation of
the Kansas Consumer Protection Act is against Novo Nordisk).) Based on this filing, the Court
understands Plaintiffs are not currently asserting any claims against Sanofi under the Kansas
Consumer Protection Act.
12
On October 28, 2022, Defendants filed a letter attaching a sur-reply in support of their opposition
to Plaintiffs’ Motion for Class Certification and requesting that the Court consider their sur-reply
“to respond to new arguments that Plaintiffs advanced for the first time in their reply brief in
support of their motion for class certification.” (ECF No. 587 at 1.) On November 3, 2022,
Plaintiffs filed a letter in response stating if the Court permitted Defendants to file their sur‐reply,
then it should also permit Plaintiffs to submit an omnibus sur‐reply in response to both Defendants’
sur‐reply and Defendants’ Daubert Motion. (ECF No. 588.) Plaintiffs stated they did not oppose
Defendants’ request to file a sur-reply so long as they could file a sur-reply in response to
Defendants’ sur-reply, and they represented that after meeting and conferring, Defendants
consented to Plaintiffs’ request. (ECF No. 588 at 1.) On November 4, 2022, the Court granted
Defendants’ request to file a sur-reply and Plaintiffs’ request to file an omnibus sur-reply in
response. (ECF No. 589.)
12
Plaintiffs’ expert Meredith Rosenthal, Ph.D. (“Dr. Rosenthal”) (the “Daubert Motion”). (ECF No.
593.) Plaintiffs filed an opposition (ECF No. 595), Defendants filed a reply (ECF No. 596), and
Plaintiffs filed a sur-reply as part of an omnibus response (ECF No. 597).
On November 28, 2023, the Court held oral argument13 on both Plaintiffs’ Motion for Class
Certification and Defendants’ Daubert Motion. (ECF No. 713 (Sealed Tr. of Nov. 28, 2023 Oral
Arg.).) The Court addresses both Motions in turn.
II.
DEFENDANTS’ DAUBERT MOTION
Defendants move to exclude the testimony of Plaintiffs’ expert Meredith Rosenthal, Ph.D.,
a Professor of Health Economics and Policy at Harvard University’s School of Public Health (“Dr.
Rosenthal”). (ECF Nos. 593, 594.) Plaintiffs retained Dr. Rosenthal to opine on the following:
(1) describe in economic terms the [alleged] list-price increase
scheme orchestrated by the defendants, (2) assess how this scheme
benefited the defendants and other major actors in the
pharmaceutical supply chain while imposing costs on consumers,
(3) evaluate the economic impact of this scheme on class members,
(4) apply statistical methods to determine the date or dates when the
injury to class members began, and (5) calculate damages.
(ECF No. 575-2 (Decl. of Meredith Rosenthal, Ph.D. in Supp. of Class Cert. (“Rosenthal Rpt.”))
¶ 1.) Among other things, Dr. Rosenthal opines that Defendants’ alleged “list-price increase
scheme” consisted of Defendants choosing to increase rather than decrease list prices for their
analog insulin products to gain market share, and in doing so, undermined price competition and
instead competed on rebates unobserved by, and unavailable to, consumers. (Id. ¶ 2.) Dr. Rosenthal
asserts “[t]his led to a growing spread between the list prices, most of which increased faster than
13
Oral argument was originally scheduled for February 9, 2023, and was rescheduled twice before
being canceled on March 29, 2023, after the parties informed the Court about Plaintiffs’ settlement
with Eli Lilly. (See ECF Nos. 603, 605, 617, 619, 626.) Following the formation of the Insulin
Pricing MDL (MDL No. 3080), oral argument was re-scheduled to November 28, 2023. (See ECF
No. 705.)
13
they had before the class period, and net prices (prices net of rebates), which increased much less,
or even decreased.” (Id. ¶¶ 2, 4558.) Dr. Rosenthal proffers that all, or virtually all, the proposed
class members overpaid for Defendants’ analog insulin products based on the “extremely high”
list prices Defendants set for those products. (Id. ¶¶ 2, 7997.) Dr. Rosenthal states Defendants’
allegedly illegal price increases directly led to proposed class members having to overpay for
Defendants’ analog insulin products. (Id. ¶ 2.) Dr. Rosenthal concludes the estimated damages for
the Proposed Nationwide Classes total $512.9 million for Novo Nordisk and $518 million for
Sanofi, and the estimated damages for the Proposed Multi-State Classes and the other proposed
state-specific classes total $160.7 million for Eli Lilly, $237.5 million for Novo Nordisk, and
$206.9 million for Sanofi. (Id.)
In forming her opinions and reaching her conclusions, Dr. Rosenthal relied on a statistical
“trend break” test to determine “when the trend in the ratio of net and list prices is statistically
significantly different over two separate time periods.” (Id. ¶ 114.) She asserts that for each of
Defendants’ analog insulin products, “this test finds a trend break representing the point when the
ratio between net and list price increases faster than it had in the past.” (Id.) Dr. Rosenthal
determined “this trend break is the point when the challenged conduct affects prices.” (Id.) Dr.
Rosenthal labels the period before the trend break as the “pre-period,” or the period before the
challenged conduct affects prices, and she labels the period after the trend break as the “postperiod,” or the period after the challenged conduct affects prices. (Id.) Dr. Rosenthal relies on the
trend break test and uses the trend break to determine when the alleged injury to the putative class
members began (i.e., the class periods). (Id. ¶¶ 1, 77, 11417.) In other words, Dr. Rosenthal
opines the trend breaks for each of Defendants’ analog insulin products indicate the respective
14
start dates for the proposed class period for each of those products within each of Plaintiffs’ twelve
proposed classes. (Id.)
Dr. Rosenthal also contends “[l]ist prices are the basis of the price for virtually all retail
pharmaceutical transactions” and accordingly the prices the putative class members pay for
Defendants’ analog insulin prices are based on Defendants’ list prices for those products. (Id. ¶¶
8497.) To determine damages, Dr. Rosenthal created a but-for world where the trend breaks never
occurred for any of Defendants’ analog insulin products; she did this “by taking the average ratio
of the AWP to the net price in the four quarters prior to the post-period” and then applying that
ratio “to the net price in the post-period” to determine “an alternative AWP price that would have
prevailed in the post-period, but for the challenged conduct.” (Id. ¶ 118.) In Dr. Rosenthal’s butfor world, the but-for AWP “constructs a scenario in which the gains from competition are shared
with patients” and patients’ “out-of-pocket payments rise and fall together with the net price.” (Id.)
Dr. Rosenthal uses this but-for AWP to calculate but-for out-of-pocket costs. (Id. ¶ 119.)
According to Dr. Rosenthal, the damages are the difference between actual out-of-pocket costs
and the but-for out-of-pocket costs “summed up across the universe of class transactions.” (Id.;
see also id. ¶¶ 12039.)
Dr. Rosenthal argues she can calculate damages on a class-wide basis using common
evidence for the following putative class members: (1) uninsured, “cash-paying consumers who
paid based on list price”; (2) “insured consumers (either by commercial insurance or Medicare
Part D plans) who paid coinsurance (i.e., a specified percentage of the pharmacy reimbursement)”;
and (3) “insured consumers (again, either by commercial insurance or Medicare Part D plans) who
paid all or part of the price of the drug with a deductible payment.” (Id. ¶¶ 83, 11039; see also
id. ¶¶ 98109 (describing how putative class members were allegedly injured).) Dr. Rosenthal
15
excludes the following from Plaintiffs’ proposed classes: (1) “purchases in which the consumer
paid a co-pay (i.e., a flat dollar amount that is the same regardless of the price of the drug)” because
that consumer’s payment “would have been the same even if the total retail price had been lower”
and therefore was “not calculated by reference to a list price” (id. ¶ 80); (2) “transactions in which
the consumer used a co-pay coupon” (id. ¶ 81); (3) “transactions reimbursed by Medicaid” (id. ¶
82); and (4) transactions “where the consumer paid nothing” (id.).
Defendants argue Dr. Rosenthal’s opinions are inadmissible under FRE 702 and Daubert
and should be excluded because her apparent novel14 methodology is not reliable—it cannot
reliably identify whether Defendants’ pricing for analog insulin is “unfair” or “unconscionable”
and likewise cannot reliably measure injury or damages for putative class members. (ECF No. 594
at 14; see also id. at 1331.) Defendants further contend Dr. Rosenthal’s methodology: (1) “lacks
any ‘objective and verifiable indicia of reliability[,]” (2) does not reliably measure any “unfair or
unconscionable” conduct, (3) does not reliably measure either injury or damages for proposed class
14
Defendants state Dr. Rosenthal’s methodology in this case “by her own admission has never
been used before and no court has ever approved[.]” (ECF No. 594 at 12.) Defendants claim Dr.
Rosenthal “is not using any recognized economic approach to detecting supposedly ‘unfair’ or
‘unconscionable’ pricing, or any settled principle for measuring damages from allegedly illegal
pricing under state consumer protection laws[,]” and that she “invented” this methodology for this
case, which methodology “rests solely on her say-so that prices after a certain statistical inflection
point are ‘unlawful.’” (Id. at 2; see also id. at 8 (“Here, ‘there is simply too great an analytical gap
between the data’ that Prof. Rosenthal analyzed to find purported statistical ‘trend breaks,’ and
‘the opinion proffered’ that these changes in trends equate to unfair or unconscionable pricing—
a methodology no court has ever accepted before.” (citing Gen. Elec. Co. v. Joiner, 522 U.S. 136,
146 (1997)); id. at 813; ECF No. 596 at 2 (“Without disputing Defendants’ showing that a trend
break test is not a ‘recognized economic approach to detecting supposedly “unfair” or
‘unconscionable’ pricing’, Plaintiffs mischaracterize this argument as a claim that trend break tests
cannot be used for any purpose. But the relevant question under Daubert is whether the expert’s
method is ‘reliably applied’ to this case. Plaintiffs never answer this question. No established
liability theory or economic doctrine holds that a trend break establishes if price-setting conduct
is ‘fair’ or ‘unfair.’ The only link between those concepts is Prof. Rosenthal’s say-so.” (citations
omitted)).)
16
members, (4) “does not correspond in any meaningful way to the prices that consumers actually
pay[,]” (5) does not attempt to measure whether Defendants caused any injury, and (6) “does not,
and cannot, reliably measure damages for any putative class member.” (Id. at 14.) Defendants
maintain Plaintiffs cannot point to any evidence showing Defendants’ behavior, decision, or
conduct through which their prices for their analog insulin products allegedly changed from lawful
to unlawful and instead rely on Dr. Rosenthal “to draw that line for them.” (Id. at 1.) Defendants
assert Dr. Rosenthal, like Plaintiffs, does not use any specific price, price increase, rebate increase,
or rebate percentage to determine what is “fair” versus “unfair” pricing; rather, she “employs an
improvised methodology of comparing ratios ‘to decide [] the specific start date’ on which the
alleged ‘unfair’ and ‘unconscionable’ conduct ‘began’ as to each Defendant’s insulin products and
then estimate class-wide damages.” (Id.)
In opposition, Plaintiffs argue the structural break test Dr. Rosenthal uses in her opinion is
a “widely accepted method” to detect the point at which some trend over time changes in a
significant way. (ECF No. 595 at 9–20.) Plaintiffs contend courts have allowed experts in class
actions in antitrust cases to rely on structural break analyses “as evidence of the class period,
damages, or causation[,]” which Plaintiffs state is the same purpose Dr. Rosenthal offers here,
(even though this is not an antitrust case)—she uses the structural break test to determine when the
effects of the alleged conduct occurred; she does not opine on the legal question of whether
Defendants’ conduct was fair. (Id. at 917.) In other words, Dr. Rosenthal’s methodology
“analyzes the effects of conduct, not the conduct itself.” (Id. at 15; see also ECF No. 577 at 3839
(“The structural break (or trend break) analysis does not attempt to determine the unfairness or
lawfulness of defendants’ actions. The jury will decide that. What the structural break test does is
determine the class period. Several courts have upheld the test for this purpose. . . . Plainly,
17
something changed about the way in which defendants price insulin. . . . The structural break test
simply measures with scientific precision when that change occurred. The jury may then
investigate what the defendants did to cause that trend break and can decide the lawfulness of that
conduct from there.”).) Further, Plaintiffs assert Defendants misrepresent the results of Dr.
Rosenthal’s trend break analysis, but even assuming their interpretation is true, this goes to the
weight, not the admissibility, of Dr. Rosenthal’s testimony. (ECF No. 595 at 1721.)
Plaintiffs also submit Defendants do not challenge Dr. Rosenthal’s methods employed in
her damages model but instead claim they can prove her model as unreliable by identifying “flaws”
or “mistakes” in her results and/or by showing her model yields “nonsensical,” “arbitrary,” or
“inconsistent” results. (Id. at 21–25.) But Plaintiffs state, even assuming this is true, their claim is
based on “unfair practices, not unfair prices” and therefore, “class membership does not depend
on the patient having paid some threshold amount; it depends on whether the patient paid a price
inflated by defendants’ conduct.” (Id. at 22.) In other words, Plaintiffs concede it is possible two
people paid nearly identical sums for the same insulin but one of them falls into one of Plaintiffs’
proposed classes and the other does not, because their membership in a class is based on
Defendants’ conduct with respect to those members, not the member’s actual payment. (See id.)
According to Plaintiffs, this is “an expected consequence where injury flows from the unlawful
conduct, and not the other way around.” (Id. at 23.) Lastly, Plaintiffs submit Defendants had sole
control over the list prices of their analog insulin products, which Plaintiffs claim “confirms that
only they could cause the injuries relevant here[,]” and therefore Dr. Rosenthal’s damages model
does not need to account for alternative causes related to putative class members’ overpayment of
those products. (Id. at 3, 26–28.) Plaintiffs also contend Dr. Rosenthal’s model can accurately
measure damages—the alleged overpayments putative class members paid for Defendants’ analog
18
insulin products—because Defendants’ list price has a direct effect on pharmacy prices. (Id. at 26
(citing Rosenthal Rpt. ¶ 123).)
In reply, Defendants contend: (1) trend breaks cannot reliably measure “unfair” or
“unconscionable” pricing; (2) Dr. Rosenthal’s trend break analysis cannot reliably determine when
Defendants’ conduct allegedly became unfair or unconscionable; (3) Plaintiffs cannot defend Dr.
Rosenthal’s “arbitrary methodological choices or the nonsensical results her method generates”;
and (4) Dr. Rosenthal fails to reliably measure causation and injury. (ECF No. 596 at 215.)
Defendants argue Dr. Rosenthal’s trend break analysis is Plaintiffs’ “sole evidence to delineate
lawful and unlawful pricing: a break, they claim, “demarcates the ‘pre-period’—when the
defendants’ behavior was not unlawful—from the ‘post-period’—when defendants’ behavior
was unlawful.” (Id. at 1 (quoting ECF No. 575 at 74).) Defendants contend “no court or objective
independent source has ever endorsed using a trend break for such a purpose[,]” and that “[n]o
established liability theory or economic doctrine holds that a trend break establishes if price-setting
conduct is ‘fair’ or ‘unfair’”—Dr. Rosenthal’s opinion is the only link between those concepts.
(Id. at 12.)
Defendants also assert (1) Plaintiffs do not respond to their argument “that there was ‘no
empirical foundation’ for the claim that ‘faster’ increases in spreads between prices cause prices
to become ‘unfair’ or ‘unconscionable’ under any objective standard or case law”; (2) Plaintiffs
“cannot identify any expert who has used a trend break analysis for that purpose”; (3) Dr.
Rosenthal herself “admits she has never used this method in her nearly two dozen expert
engagements”; and (4) one of Defendants’ experts, Professor Laurentius Marais, stated he “has
never seen ‘a structural break model like Dr. Rosenthal’s model here used to detect and measure
the effect of allegedly unfair and unconscionable pricing.’” (Id. at 4 (citing Rosenthal Dep. at
19
269:11-269:18; Marais Rpt. ¶¶ 1, 12).) Defendants also state Plaintiffs do not address Defendants’
contention that Dr. Rosenthal’s method “lacks any relationship to the amounts consumers pay,
Plaintiffs’ allegations, or the evidence” and that Plaintiffs do not dispute the nonsensical results
her method generates (e.g., “under her model, the same cost to a consumer can be fair one month
but unfair the next”; “a higher consumer cost can be fair while a lower cost can be unfair”;
“identical alleged conduct corresponds to ‘trend breaks’ years apart”; and “a product whose price
‘follows’ another product’s price has an ‘unfair’ cost a year before the product it follows”). (Id. at
1.)
Defendants also argue Dr. Rosenthal’s failed attempts to accurately estimate even one
proposed class member’s injury shows the unreliability of her method for proving class-wide
impact. (Id. at 2, 1415.) Defendants further contend Dr. Rosenthal fails to account for alternative
causes of injury despite admitting “the prices consumers pay for Defendants’ products ‘depend
greatly’ on alternative causes like ‘consumer’s plan terms’—never mind the countless decisions
by insurers and PBMs ‘that affect how much patients pay.’” (Id. at 1314 (citations omitted).)
In their sur-reply, Plaintiffs contend Defendants “still fail[] to grapple with Dr. Rosenthal’s
damages model” and reiterate Defendants’ Daubert motion should be denied. (ECF No. 597 at
2425.) Plaintiffs claim Defendants attempt to frame Dr. Rosenthal’s damages model as unreliable
based on “a single data entry error” but argue this does not undermine “the wealth of data inputs
Dr. Rosenthal would rely on to calculate damages for a certified class.” (Id. at 24 (citing ECF No.
596 at 1415).) Plaintiffs do not substantively address Defendants’ other arguments in support of
their Daubert motion.
A.
Legal Standard
The Third Circuit has held that Federal Rule of Evidence 702 (“FRE 702”) and Daubert v.
20
Merrell Dow Pharms., Inc., 509 U.S. 579 (1993) apply at the class certification stage. In re Blood
Reagents Antitrust Litig., 783 F.3d 183, 187 (3d Cir. 2015) (holding “a plaintiff cannot rely on
challenged expert testimony, when critical to class certification, to demonstrate conformity with
Rule 23 unless the plaintiff also demonstrates, and the trial court finds, that the expert testimony
satisfies the standard set out in Daubert”). FRE 702 governs the admissibility of expert testimony.
Daubert, 509 U.S. at 588. FRE 702 provides:
A witness who is qualified as an expert by knowledge, skill,
experience, training, or education may testify in the form of an
opinion or otherwise if the proponent demonstrates to the court that
it is more likely than not that:
(a) the expert’s scientific, technical, or other specialized
knowledge will help the trier of fact to understand the
evidence or to determine a fact in issue;
(b) the testimony is based on sufficient facts or data;
(c) the testimony is the product of reliable principles and
methods; and
(d) the expert’s opinion reflects a reliable application of the
principles and methods to the facts of the case.
Fed. R. Evid. 702. FRE 702 “embodies three distinct substantive restrictions on the admission of
expert testimony: qualifications, reliability, and fit.”15 Karlo v. Pittsburgh Glass Works, LLC, 849
F.3d 61, 80 (3d Cir. 2017) (quoting Elcock v. Kmart Corp., 233 F.3d 734, 741 (3d Cir. 2000)).
Pursuant to Daubert, “district courts perform a gatekeeping function to ensure that expert
testimony meets the requirements of [FRE] 702.” Karlo, 849 F.3d at 80. District courts, in
exercising their gatekeeping function, “must ensure that any and all scientific testimony or
evidence admitted is not only relevant, but reliable.” In re Paulsboro Derailment Cases, 746 F.
App’x 94, 98 (3d Cir. 2018) (quoting Daubert, 509 U.S. at 589). This gatekeeping function
15
Of these three elements required for the admissibility of expert testimony, Defendants appear to
only be contesting the reliability element with respect to Dr. Rosenthal’s expert testimony, so the
Court only addresses this element here.
21
“extends beyond scientific testimony to ‘testimony based on “technical” and “other specialized”
knowledge.’” In re Processed Egg Prods. Antitrust Litig., 81 F. Supp. 3d 412, 415 (E.D. Pa. 2015)
(quoting Kumho Tire Co. v. Carmichael, 526 U.S. 137, 141 (1999)). “The test of admissibility is
not whether a particular scientific opinion has the best foundation, or even whether the opinion is
supported by the best methodology or unassailable research.” De La Cruz v. Virgin Islands Water
& Power Auth., 597 F. App’x 83, 91 (3d Cir. 2014) (quoting In re TMI Litig., 193 F.3d 613, 665
(3d Cir. 1999), as amended, 199 F.3d 158 (3d Cir. 2000)). “Rather, the test is whether the particular
opinion is based on valid reasoning and reliable methodology.” Id. In other words, courts look to
“whether the expert’s testimony is supported by ‘good grounds.’” Karlo, 849 F.3d at 81 (citations
omitted). The party offering the expert’s testimony bears the burden of establishing admissibility
by a preponderance of the evidence. Padillas v. Stork-Gamco, Inc., 186 F.3d 412, 418 (3d Cir.
1999).
The standard for reliability is “not that high.” In re Paoli R.R. Yard PCB Litig., 35 F.3d
717, 745 (3d Cir. 1994). For an expert’s testimony to be reliable under FRE 702, “the expert’s
opinion must be based on the methods and procedures of science rather than on subjective belief
or unsupported speculation; the expert must have good grounds for his or her belief.” Calhoun v.
Yamaha Motor Corp., U.S.A., 350 F.3d 316, 321 (3d Cir. 2003) (quotations and citations omitted).
In determining whether a proposed expert’s testimony is reliable, courts must consider the
following factors:
(1) whether a method consists of a testable hypothesis; (2) whether
the method has been subjected to peer review; (3) the known or
potential rate of error; (4) the existence and maintenance of
standards controlling the technique’s operation; (5) whether the
method is generally accepted; (6) the relationship of the technique
to methods which have been established to be reliable; (7) the
qualifications of the expert witness testifying based on the
22
methodology; and (8) the non-judicial uses to which the method has
been put.
Oddi v. Ford Motor Co., 234 F.3d 136, 145 (3d Cir. 2000) (quoting In re Paoli R.R., 35 F.3d at
742 & n.8). “[T]he reliability analysis applies to all aspects of an expert’s testimony: the
methodology, the facts underlying the expert’s opinion, the link between the facts and the
conclusion, et alia.” Heller v. Shaw Indus., Inc., 167 F.3d 146, 155 (3d Cir. 1999).
“[A] model purporting to serve as evidence of damages in [a] class action must measure
only those damages attributable to that theory.” Comcast Corp. v. Behrend, 569 U.S. 27, 35 (2013).
At the class certification stage, while damages calculations need not be exact, “any model
supporting a ‘plaintiff’s damages case must be consistent with its liability case[.]’” Id. (citations
omitted). “The first step in a damages study is the translation of the legal theory of the harmful
event into an analysis of the economic impact of that event.” Id. at 38 (citation omitted).
B.
Decision
The trend break test, also known as the structural break test, is a statistical test used to
detect a point in time when a particular variable increases or decreases at a rate significantly
different than it had in the past. See, e.g., In re Broiler Chicken Antitrust Litig., Civ. A. No. 168637, 2022 WL 1720468, at *9 (N.D. Ill. May 27, 2022). As such, the use of a trend break test to
determine a point in time when some trend changed in a significant way is not unreliable. For
example, in In re Broiler Chicken Antitrust Litigation, the court noted plaintiffs’ expert did not
state anywhere “that his structural break test is intended to identify a cause of the decrease in the
rate of production.” In re Broiler Chicken Antitrust Litig., 2022 WL 1720468, at *9. Rather, the
court said the structural break test “is simply intended to confirm whether the readily apparent
decrease is truly statistically significant, such that it makes sense to investigate its cause in the first
place[;]” it “is not intended to identify causes, collusive or otherwise.” Id. The court also noted the
23
expert thoroughly considered alternative causes in his regression analysis, which made up the
second part of his analysis, “[s]o, the fact that [the expert] did not consider non-collusive causes
at that point in his analysis is not a reason to find his method unreliable.” Id.
Similarly, in In re Namenda Direct Purchaser Antitrust Litigation, the defendants
complained that the expert’s “structural break test fail[ed] because it [did] not isolate the cause of
the February 2014 break.” 331 F. Supp. 3d 152, 178 (S.D.N.Y. 2018). However, the expert testified
the structural break test was not designed to do so and “that ‘[the test] is not able to tease out where
the source of the structural break comes from by itself[;]’” rather, “[o]ne has to implement it
because one believes that there is some event which leads to a structural break.” Id. In other words,
the expert’s “test demonstrate[d] that there was a ‘structural break’ in February 2014, which
happened to be the date when the hard switch was announced.” Id. The Namenda court stated
“[c]orrelation does not prove causation, but the coincidence in timing between the announcement
and the structural break shown by the data is some evidence of causation in support of Plaintiffs’
theory.” Id. The court noted that “[p]erhaps other things were happening in the market in February
2014, and [defendants] may go into them to undercut [the expert’s] data” but “[f]or the purposes
of Daubert, [the expert’s] analysis passes muster.” Id. at 178–79. At most, the court concluded the
defendants’ arguments concerning the expert’s assumptions in his analysis “go to its weight, not
[the] admissibility of that testimony.” Id. at 179 (citation omitted).
Here, Dr. Rosenthal relies on the statistical trend break test, or structural break test, to (1)
define the class periods for each of Defendants’ analog insulin products within each of Plaintiffs’
twelve proposed classes (i.e., indicating when the alleged injury to the putative class members
began) and (2) calculate aggregate damages based on Plaintiffs’ and the putative class members’
alleged overpayments for Defendants’ analog insulin products. In other words, Dr. Rosenthal uses
24
the trend break test to identify when the effects of the alleged conduct occurred in order to support
Plaintiffs’ theory that that trend break is when Defendants’ conduct allegedly began causing injury
to the putative class members. But Dr. Rosenthal does not use the trend break test to measure any
specific conduct or event or whether Defendants’ conduct was unfair or unconscionable and when
that conduct became unfair or unconscionable. Indeed, Dr. Rosenthal does not identify any strategy
or decision by Defendants that began the allegedly unlawful conduct and likewise does not opine
on when specifically Defendants allegedly began the unlawful conduct. Rather, as in In re Broiler
Chicken Antitrust Litigation, her methodology simply shows something happened at a particular
point of time for each of Defendants’ analog insulin products at issue—a so-called trend break
where the ratio between the list prices and the net prices for those products increased faster than it
had previously.
Dr. Rosenthal’s opinion based on her trend break analysis does not establish (1) whether
Defendants’ conduct caused the trend break, (2) whether Defendants’ conduct constitutes “unfair
practices” or was unconscionable, (3) when Defendants’ conduct allegedly became unfair or
unconscionable, or (4) whether Defendants’ conduct caused injury to the putative class members;
rather, these are legal questions for the fact finder and on which Plaintiffs bear the burden of proof.
Dr. Rosenthal’s method simply helps identify for the fact finder when the supposed trend breaks
occurred with a reasonable degree of scientific precision. See Comcast, 569 U.S. at 35; see also In
re Broiler Chicken Antitrust Litig., 2022 WL 1720468, at *9 (“[T]he structural break test is not
intended to identify causes, collusive or otherwise.”); Int’l Union of Operating Engineers Loc. No.
68 Welfare Fund v. Merck & Co., 929 A.2d 1076, 1088 (N.J. 2007) (stating “[t]o the extent that
plaintiff intends to rely on a single expert to establish a price effect in place of a demonstration of
an ascertainable loss or in place of proof of a causal nexus between defendant’s acts and the
25
claimed damages, however, plaintiff’s proofs would fail” as “[t]hat proof theory would indeed be
the equivalent of fraud on the market, a theory we have not extended to [NJ]CFA claims”).
Plaintiffs themselves admit Dr. Rosenthal uses the trend break test to determine when the effects
of the alleged conduct occurred (i.e., the trend break), not the conduct itself, and that Dr. Rosenthal
does not opine on the legal question of whether Defendants’ conduct was unfair or unconscionable
under the applicable state law (the jury will decide this).16 (See ECF No. 595 at 1317; ECF No.
577 at 3839.)
It is possible that other variables, or a combination of variables, caused the significant
divergence between the list prices and net prices for Defendants’ analog insulin products or that
Defendants’ conduct did not in fact cause harm to Plaintiffs. However, this fact does not render as
unreliable. Dr. Rosenthal’s methodology of relying on a trend break test to determine when the
trend in the ratio of net prices and list prices became “statistically significantly different.”
Additionally, Dr. Rosenthal’s model appears consistent with Plaintiffs’ liability case. See Comcast,
569 U.S. at 35 (citations omitted).
At the class certification stage, the Court need not determine whether Dr. Rosenthal’s
opinion is correct and/or what facts and assumptions are or were appropriate for her to include in
her model. See Daubert v. Merrell Dow Pharms., Inc., 43 F.3d 1311, 1318 (9th Cir. 1995) (“[T]he
test under Daubert is not the correctness of the expert’s conclusions but the soundness of his
16
Defendants argue Plaintiffs solely rely on Dr. Rosenthal’s opinion regarding when the effects of
the alleged conduct occurred (i.e., the trend breaks) for each of Defendants’ analog insulin products
to argue these trend breaks are when Defendants’ conduct allegedly became unlawful, i.e., unfair
or unconscionable, with respect to each of their insulin products, and that this alleged conduct
caused Plaintiffs and the putative class members harm. These are legal arguments Plaintiffs will
have to prove but, in their words, are not Dr. Rosenthal’s testimony; therefore, the Court need not
address this for purposes of deciding Defendants’ Daubert Motion.
26
methodology.”). Rather, the Court must simply determine whether her testimony is reliable. See
In re Paoli R.R., 35 F.3d at 744 (“The evidentiary requirement of reliability is lower than the merits
standard of correctness. Daubert states that a judge should find an expert opinion reliable under
Rule 702 if it is based on ‘good grounds,’ i.e., if it is based on the methods and procedures of
science. A judge will often think that an expert has good grounds to hold the opinion that he or she
does even though the judge thinks that the opinion is incorrect. As Daubert indicates, ‘[t]he focus
. . . must be solely on principles and methodology, not on the conclusions that they generate.’ The
grounds for the expert’s opinion merely have to be good, they do not have to be perfect.”
(alterations and citations omitted)).
Mindful that the standard for reliability is “not that high,” In re Paoli R.R., 35 F.3d at 745,
the Court finds Dr. Rosenthal’s methodology to be sufficiently reliable to survive Defendants’
Daubert challenge at the class certification stage because it is based on the scientific trend break
method. See Calhoun, 350 F.3d at 321; cf. Sheet Metal Workers Loc. 441 Health & Welfare Plan
v. GlaxoSmithKline, PLC, Civ. A. No. 04-5898, 2010 WL 3855552, at *30 (E.D. Pa. Sept. 30,
2010) (“The plaintiffs contend, and [defendant] disputes, that Dr. Rosenthal’s yardsticks provide
a common method capable of showing damages across the class. The court does not need to resolve
this issue, having already decided certification is inappropriate[.] . . . That being said, I believe the
plaintiffs’ methodology is insufficient because the calculations were made using average prices.
This evidence says nothing about the actual price paid by each purported class member. Average
prices falter as a method for proving class-wide injury, because ‘averaging “by definition glides
over what may be important differences.”’” (citation omitted)).
Therefore, Defendants’ Motion to Exclude the Expert Testimony of Dr. Meredith
Rosenthal (ECF No. 593) is GRANTED IN PART and DENIED IN PART. To the extent
27
Plaintiffs intend to rely on Dr. Rosenthal’s testimony to establish whether Defendants’ conduct in
setting list prices for their analog insulin products was unfair or unconscionable under the
applicable state law, Defendants’ Daubert Motion is GRANTED because Dr. Rosenthal’s
methodology is not reliable in determining this question of law. The parties have not cited, and the
Court has not otherwise found, any case where the trend break test was used to establish whether
price-setting conduct is unfair or unconscionable. Defendants’ Daubert Motion is otherwise
DENIED.
III.
PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION
Plaintiffs seek to certify a total of fifteen classes under Federal Rule of Civil Procedure 23
(“Rule 23”)—specifically under Rule 23(a), Rule 23(b)(2), and Rule 23(b)(3). (ECF Nos. 574,
575.) Plaintiffs first seek to certify two nationwide classes—one against Novo Nordisk and the
second against Sanofi—for alleged unconscionable acts under the New Jersey Consumer Fraud
Act (“NJCFA”) (the “Proposed Novo Nordisk Nationwide Class” and the “Proposed Sanofi
Nationwide Class”; collectively, the “Proposed Nationwide Classes”). (ECF No. 574 at 23; ECF
No. 575 at 4179.) Separately, Plaintiffs also seek to certify thirteen state-specific classes for
alleged “unfair” acts under various state consumer protection laws prohibiting unfair or
unconscionable conduct, as follows: (1) three multi-state classes—each comprised of sixteen state
consumer protection statutes17 (all of which Plaintiffs assert apply the Federal Trade Commission
17
Plaintiffs assert the claims for these classes are brought under the following sixteen state statutes:
(1) Colorado Consumer Protection Act, Colo. Rev. Stat. § 6-1-101 et seq.; (2) Connecticut Unfair
Trade Practices Act, Conn. Gen. Stat. § 42–110a et seq.; (3) Delaware Consumer Fraud Act, Del.
Code Tit. 6, § 2511 et seq.; (4) Florida Deceptive and Unfair Trade Practices Act, Fla. Stat. §
501.201 et seq.; (5) Illinois Consumer Fraud and Deceptive Business Practices Act, 815 Ill. Comp.
Stat. 505/1 et seq.; (6) Indiana Deceptive Consumer Sales Act, Ind. Code § 24-5-0.5-1 et seq.; (7)
Iowa Private Right of Action for Consumer Frauds Act, Iowa Code §§ 714H.1 et seq.; (8)
Louisiana Unfair Trade Practices and Consumer Protection Law, La. Rev. Stat. § 51:1401 et seq.;
(9) Maine Unfair Trade Practices Act, Me. Rev. Stat. Ann. Tit. 5, § 205-A et seq.; (10) Maryland
28
(“FTC”) three-part “substantial injury” test for unfairness to determine whether an act is
“unfair”)—one against each of the three Defendants for alleged “unfair” acts (the “Proposed Novo
Nordisk Multi-State Class,” the “Proposed Sanofi Multi-State Class,” and the “Proposed Eli Lilly
Multi-State Class”; collectively, the “Proposed Multi-State Classes”); (2) three New Jerseyspecific classes—one against each of the three Defendants—for alleged “unconscionable” acts
under the New Jersey Consumer Fraud Act, N.J. Stat. Ann. § 56:8-1 et seq. (the “Proposed Novo
Nordisk New Jersey Class,” the “Proposed Sanofi New Jersey Class,” and the “Proposed Eli Lilly
New Jersey Class”; collectively, the “Proposed New Jersey Classes”18); (3) three Texas-specific
classes—one against each of the three Defendants—for alleged “unconscionable” acts under the
Texas Deceptive Trade Practices Consumer Protection Act, Tex. Bus. & Com. Code § 17.41 et
seq. (the “Proposed Novo Nordisk Texas Class,” the “Proposed Sanofi Texas Class,” and the
“Proposed Eli Lilly Texas Class”; collectively, the “Proposed Texas Classes”); (4) two Kansasspecific classes—one against Novo Nordisk and one against Sanofi—for alleged “unconscionable”
acts under the Kansas Consumer Protection Act, Kan. Stat. § 50-623 et seq. (the “Proposed Novo
Nordisk Kansas Class” and the “Proposed Sanofi Kansas Class”; collectively, the “Proposed
Consumer Protection Act, Md. Code Ann., Com. Law § 13-301 et seq.; (11) Massachusetts
Consumer Protection Act, Mass. Gen. Laws Ch. 93A, § 1 et seq.; (12) North Carolina Unfair and
Deceptive Trade Practices Act, N.C. Gen. Stat. § 75-1.1 et seq.; (13) North Dakota Consumer
Fraud Act, N.D. Cent. Code § 51-15-01 et seq.; (14) Oklahoma Consumer Protection Act, Okla.
Stat. Tit. 15, § 751 et seq.; (15) South Carolina Unfair Trade Practices Act, S.C. Code Ann. § 395-10 et seq.; and (16) Tennessee Consumer Protection Act, Tenn. Code Ann. § 47-18-104, 47-18101 et seq. (ECF No. 574 at 34 n.1; see also ECF No. 411 ¶¶ 64580, 696723, 73263, 82237,
84757, 87490 (Counts 18 (Colorado), 19 (Connecticut), 20 (Delaware), 21 (Florida), 24
(Illinois), 25 (Indiana), 26 (Iowa), 28 (Louisiana), 29 (Maine), 30 (Maryland), 31 (Massachusetts),
40 (North Carolina), 41 (North Dakota), 43 (Oklahoma), 46 (South Carolina), and 47 (Tennessee).)
18
To avoid potential duplication, the Court assumes for purposes of this Opinion that Plaintiffs
intend for the Proposed Novo Nordisk New Jersey Class and the Proposed Sanofi New Jersey
Class to be sub-classes of the Proposed Nationwide Classes since both of these proposed sets of
classes are based on claims asserted under the NJCFA.
29
Kansas Classes”); and (5) two Utah-specific classes—one against Novo Nordisk and one against
Sanofi—for alleged “unconscionable” acts under the Utah Consumer Sale Practices Act, Utah
Admin. Code § 13-11-1 et seq. (the “Proposed Novo Nordisk Utah Class” and the “Proposed
Sanofi Utah Class”; collectively, the “Proposed Utah Classes”). (ECF No. 574 at 314; ECF No.
575 at 79–99.)
Plaintiffs assert their proposed classes “include only those cash, coinsurance, deductible,
or Medicare Part D patients who paid based on WAC or AWP.” (ECF No. 575 at 19.) Plaintiffs
exclude the following from all of their proposed classes: (1) “purchases where a manufacturer
coupon was applied” (ECF No. 574 at 14); (2) “purchases (or receipt of) insulin through a
Medicaid program” (id.); (3) “each [D]efendant and any entity in which it has a controlling interest,
and their legal representatives, officers, directors, assignees, and successors” (id. at 1415); and
(4) “any co-conspirators and their officers, directors, management, employees, subsidiaries, and
affiliates.” (id. at 15; see also ECF No. 575 at 1920, 64 (“The method for ascertaining class
members will exclude those who did not pay for their prescribed analog insulins based on the
defendants’ list prices. . . . The plaintiffs will obtain [] information, which will allow Dr. Rosenthal
and claims administrators to identify every single analog insulin purchase made with a coupon so
that it can be excluded from the class.” (footnotes omitted)).)
At oral argument, Plaintiffs represented that Eli Lilly is not part of their Motion for Class
Certification (ECF No. 713 at 11), presumably because of the pending Motion for Preliminary
Approval of a Class Action Settlement with Eli Lilly (see ECF No. 639). Therefore, the Court
assumes for purposes of this Opinion that Plaintiffs are not seeking to certify their three proposed
classes against Eli Lilly—the Proposed Eli Lilly Multi-State Class, the Proposed Eli Lilly New
Jersey Class, and the Proposed Eli Lilly Texas Class—and accordingly DENIES WITHOUT
30
PREJUDICE Plaintiffs’ motion to certify these three classes. The Court addresses Plaintiffs’
request to certify the remaining twelve proposed classes not involving Eli Lilly.
A.
Legal Standard
A class action under Federal Rule of Civil Procedure 23 (“Rule 23”) is “an exception to
the usual rule that litigation is conducted by and on behalf of the individual named parties only.”
Wal-Mart Stores v. Dukes, 564 U.S. 338, 348 (2011) (citing Califano v. Yamasaki, 442 U.S. 682,
700–01 (1979)). “To invoke this exception, every putative class action must satisfy the
requirements of Rule 23(a) and the requirements of either Rule 23(b)(1), (2), or (3).” Marcus v.
BMW of N. Am., LLC, 687 F.3d 583, 590 (3d Cir. 2012). A party seeking class certification must
first demonstrate the proposed class satisfies the four requirements of Rule 23(a):
(1) the class is so numerous that joinder of all members is
impracticable;
(2) there are questions of law or fact common to the class;
(3) the claims or defenses of the representative parties are typical of
the claims or defenses of the class; and
(4) the representative parties will fairly and adequately protect the
interests of the class.
Fed. R. Civ. P. 23(a). These four requirements are customarily referred to as: (1) numerosity, (2)
commonality, (3) typicality, and (4) adequate representation, respectively. Dukes, 564 U.S. at 349.
In addition to satisfying these four Rule 23(a) requirements, a party seeking class certification must
also show that the requirements of Rule 23(b)(1), 23(b)(2), or 23(b)(3) are met. Amchem Prods.,
Inc. v. Windsor, 521 U.S. 591, 614 (1997).
Under Rule 23(b)(2), a class action may be maintained if “the party opposing the class has
acted or refused to act on grounds that apply generally to the class, so that final injunctive relief or
corresponding declaratory relief is appropriate respecting the class as a whole.” Fed. R. Civ. P.
31
23(b)(2). The Third Circuit has regularly held certification pursuant to Rule 23(b)(2) requires
cohesiveness of class claims among the class members. Barnes v. Am. Tobacco Co., 161 F.3d 127,
142 (3d Cir. 1998). The Third Circuit articulated the following two reasons for the cohesiveness
requirement. Id. at 143. “First, unnamed members with valid individual claims are bound by the
action without the opportunity to withdraw and may be prejudiced by a negative judgment in the
class action.” Id. Second, “the suit could become unmanageable and little value would be gained
in proceeding as a class action . . . if significant individual issues were to arise consistently.” Id.
In other words, “the court must ensure that significant individual issues do not pervade the entire
action because it would be unjust to bind absent class members to a negative decision where the
class representative[’s] claims present different individual issues than the claims of the absent
members present.” Id. Therefore, Rule 23(b)(2) is not appropriate where “significant individual
liability or defense issues . . . would require separate hearings for each class member in order to
establish defendants’ liability.” Santiago v. City of Philadelphia, 72 F.R.D. 619, 627 (E.D. Pa.
1976).
Under Rule 23(b)(3), a class action may be maintained if “the court finds that the questions
of law or fact common to class members predominate over any questions affecting only individual
members, and that a class action is superior to other available methods for fairly and efficiently
adjudicating the controversy.” Fed. R. Civ. P. 23(b)(3). These requirements are known as
“predominance” and “superiority,” respectively. In re Hydrogen Peroxide Antitrust Litig., 552
F.3d 305, 310 (3d Cir. 2008), as amended (Jan. 16, 2009). The issues pertinent to these findings
include:
(A) the class members’ interests in individually controlling the
prosecution or defense of separate actions;
(B) the extent and nature of any litigation concerning the
controversy already begun by or against class members;
32
(C) the desirability or undesirability of concentrating the litigation
of the claims in the particular forum; and
(D) the likely difficulties in managing a class action.
Fed. R. Civ. P. 23(b)(3). Superiority “asks the court ‘to balance, in terms of fairness and efficiency,
the merits of a class action against those of “alternative available methods” of adjudication.’” In
re Prudential Ins. Co. Am. Sales Prac. Litig. Agent Actions, 148 F.3d 283, 316 (3d Cir. 1998)
(quoting Georgine v. Amchem Prods., Inc., 83 F.3d 610, 632 (3d Cir. 1996)). “Predominance ‘tests
whether proposed classes are sufficiently cohesive to warrant adjudication by representation,’ a
standard ‘far more demanding’ than the commonality requirement of Rule 23(a)[.]” In re
Prudential, 148 F.3d at 31011 (quoting Amchem, 521 U.S. at 62324). The Third Circuit has held
that for proposed classes under Rule 23(b)(3), there is an “implicit requirement that class members
be ascertainable,” meaning a plaintiff’s proposed class must be “currently and readily ascertainable
based on objective criteria.” In re Niaspan, 67 F.4th at 12930, 133 (quoting Hargrove v. Sleepy’s
LLC, 974 F.3d 467, 477 (3d Cir. 2020)).
“Class ‘certification is proper only if the trial court is satisfied, after a rigorous analysis’
that all of the necessary Rule 23 requirements have been fulfilled.” Ferreras v. Am. Airlines, Inc.,
946 F.3d 178, 183 (3d Cir. 2019) (quoting Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 350-51
(2011)). “The party seeking certification bears the burden of establishing each element of Rule 23
by a preponderance of the evidence.” Marcus, 687 F.3d at 591 (citing In re Hydrogen Peroxide,
552 F.3d at 307). The Third Circuit has set forth “three key aspects of class certification
procedure.” In re Hydrogen Peroxide, 552 F.3d at 307. First, the court’s decision to certify a class
requires factual determinations in support of each Rule 23 requirement by a preponderance of the
evidence, “not merely a ‘threshold showing’ by a party.” Id. “Second, the court must resolve all
factual or legal disputes relevant to class certification, even if they overlap with the merits—
33
including disputes touching on elements of the cause of action.” Id. Lastly, “the court’s obligation
to consider all relevant evidence and arguments extends to expert testimony, whether offered by a
party seeking class certification or by a party opposing it.” Id. “An overlap between a class
certification requirement and the merits of a claim is no reason to decline to resolve relevant
disputes when necessary to determine whether a class certification requirement is met.” Id. at 316.
To determine whether the Rule 23 class certification requirements are satisfied, the Third Circuit
has stated that district courts may “delve beyond the pleadings” where appropriate, and their
certification analysis may include a “preliminary inquiry into the merits.” Sullivan v. DB Invs.,
Inc., 667 F.3d 273, 306 (3d Cir. 2011) (quoting Newton v. Merrill Lynch, Pierce, Fenner & Smith,
Inc., 259 F.3d 154, 167 (3d Cir. 2001), as amended (Oct. 16, 2001)). However, “plaintiffs need
not actually establish the validity of claims at the [class] certification stage.” Sullivan, 667 F.3d at
306. “[T]rial courts ‘must engage in a rigorous analysis and find each of Rule 23[]’s requirements
met by a preponderance of the evidence before granting certification[,]” even if this “involves
judging credibility, weighing evidence, or deciding issues that overlap with the merits of a
plaintiff’s claims.” In re Niaspan, 67 F.4th at 130 (quoting Harnish v. Widener Univ. Sch. of Law,
304 (3d Cir. 2016)).
B.
Decision19
The Court first addresses below whether Plaintiffs’ twelve proposed classes20 satisfy the
19
The Court has jurisdiction over Plaintiffs’ Motion for Class Certification under the Class Action
Fairness Act of 2005 (“CAFA”). See 28 U.S.C. § 1332(d). CAFA confers jurisdiction on federal
district courts over certain class actions where the following requirements are met: (1) the amount
in controversy exceeds $5,000,000, as aggregated across all individual claims; (2) the citizenship
of at least one plaintiff differs from that of any defendant, i.e., there is minimal diversity; and (3)
the class consists of at least 100 members. See 28 U.S.C. § 1332(d).
20
This refers to Plaintiffs’ twelve proposed classes not involving Eli Lilly—i.e., the Proposed
Nationwide Classes, the Proposed Novo Nordisk Multi-State Class, the Proposed Sanofi MultiState Class, the Proposed Novo Nordisk New Jersey Class, the Proposed Sanofi New Jersey Class,
34
ascertainability requirement for class actions and then analyzes whether each of Plaintiffs’ twelve
proposed classes meets the requirements under Rule 23(a), Rule 23(b)(2), and Rule 23(b)(3). For
purposes of this class certification analysis, the Court assumes Plaintiffs’ allegations as true.
i.
Ascertainability
The Third Circuit has held that for proposed classes under Rule 23(b)(3), there is an
“implicit requirement that class members be ascertainable,” meaning a plaintiff’s proposed class
must be “currently and readily ascertainable based on objective criteria.” In re Niaspan, 67 F.4th
at 12930, 133 (quoting Hargrove v. Sleepy’s LLC, 974 F.3d 467, 477 (3d Cir. 2020)).
“Ascertainability functions as a necessary prerequisite (or implicit requirement) because it allows
a trial court effectively to evaluate the explicit requirements of Rule 23.” Byrd v. Aaron’s Inc., 784
F.3d 154, 162 (3d Cir. 2015), as amended (Apr. 28, 2015). “In other words, the independent
ascertainability inquiry ensures that a proposed class will actually function as a class.” Id. To
satisfy this ascertainability requirement, “[p]laintiffs must show that ‘(1) the class is defined with
reference to objective criteria; and (2) there is a reliable and administratively feasible mechanism
for determining whether putative class members fall within the class definition.’” In re Niaspan,
67 F.4th at 130 (alteration in original) (quoting Hargrove, 974 F.3d at 46970). “A plaintiff must
propose a classification method with evidentiary support to meet the ascertainability requirement.”
In re Niaspan, 67 F.4th at 130. In demonstrating ascertainability, plaintiffs do not have to be able
to identify all potential class members at the class certification stage; rather, they “need only show
that ‘class members can be identified.’” Id. (quoting Byrd, 784 F.3d at 163). “If class members are
the Proposed Novo Nordisk Texas Class, the Proposed Sanofi Texas Class, the Proposed Kansas
Classes, and the Proposed Utah Classes. (ECF No. 575 at 41, 79–80; see also ECF No. 574 at
214.)
35
impossible to identify without extensive and individualized fact-finding or ‘mini-trials,’ then a
class action is inappropriate.” Marcus, 687 F.3d at 593. The burden is on the plaintiff to show “by
a preponderance of the evidence that there is a reliable and administratively feasible method for
ascertaining the class.” Hayes, 725 F.3d at 356.
Here, Plaintiffs claim all their proposed classes meet both prongs of the ascertainability
test because: (1) they are defined with reference to objective criteria—namely, data that can show
whether the individual paid any portion of the purchase price for one or more of Defendants’
analog insulin products at issue in this case “at a price calculated by reference to a list price, AWP
(Average Wholesale Price), and/or WAC (Wholesale Acquisition Price) for purposes other than
resale”; and (2) there is a reliable and administratively feasible mechanism for determining
whether class members fall within the definitions of each of their proposed classes—namely, by
using a combination of electronically stored records of certain PBMs, retail pharmacies, insurers,
and drug coupon administrators to identify putative class members during the various applicable
proposed class periods. (ECF No. 575 at 56, 5768, 87.) Plaintiffs argue these electronically
stored records can identify the putative class members who “purchased the relevant insulins in the
class period[s] at a price calculated by reference to a list price.” (Id. at 6061.) Plaintiffs also
submit there is no requirement stating they must use a single, centralized source of data to identify
putative class members (ECF No. 577 at 47), and the wealth of detailed PBM and pharmacy
transactional data can be used to exclude any transactions that fall outside the definitions of their
twelve proposed classes (id. at 44–48). Plaintiffs contend they can use transactional data to remove
consumers who received manufacturer coupons (which they exclude from their proposed classes),
but state consumers who used pharmacy coupons need not be removed because pharmacy
programs do not shield consumers from the inflated list prices. (Id. at 49–50.) Plaintiffs also assert
36
their proposed classes are ascertainable, regardless of whether factors other than the list price
affected the purchase price, because the proposed classes include transactions where any portion
of the purchase price is set by reference to the list prices. (Id. at 52–53.)
However, Defendants contend none of Plaintiffs’ proposed classes are ascertainable
because they are “complex” and “reflect arbitrary exclusions,” and Plaintiffs fail to present an
administratively feasible method for identifying those who belong in their various putative classes.
(ECF No. 576 at 73–75.) Defendants further assert there is no single dataset identifying all insulin
purchases fitting the definitions of Plaintiffs’ proposed classes, and speculation of uncollected data
to potentially identify class members is insufficient to demonstrate ascertainability. (Id. at 75–76.)
More specifically, Defendants argue Plaintiffs have failed to show they have an administratively
feasible or reliable method for identifying insured and uninsured consumers who fit Plaintiffs’
class definitions, no administratively feasible means for establishing that each insured and
uninsured consumer paid a price set “by reference to the list price,” and no reliable method for
excluding insured consumers who fall outside Plaintiffs’ class definitions. (Id. at 76–86.) Rather,
Defendants state Plaintiffs “instead try to cobble together ‘samples’ of PBM and pharmacy data
that reflect some insulin purchases during the class period[s]” but which “records lack essential
information needed to identify putative class members[.]” (Id. at 75.)
Defendants note Plaintiffs’ proposed method of identifying proposed uninsured class
members is based on a combination of electronic records from (1) certain PBMs, (2) certain
insurers, (3) certain retail pharmacies, and (4) drug coupon administrators. (Id. at 76 (citing ECF
No. 575 at 5).) But Defendants argue three of these four sets of records cannot identify uninsured
consumers; Defendants state the data from PBMs and insurers can only identify insured
consumers, not uninsured consumers, and drug coupon administrator records can only be used to
37
(Average Wholesale Price), and/or WAC (Wholesale Acquisition [Cost]) for purposes other than
resale” during certain specified time periods that vary depending on the analog insulin product
being referenced. (ECF No. 575 at 34, 19, 5758; see also ECF No. 574.) To show their proposed
classes are ascertainable, Plaintiffs must show their proposed classes are defined with reference to
objective criteria and that they have a reliable and administratively feasible mechanism for
determining whether putative class members fall within their various class definitions.
Here, Plaintiffs have proposed using a combination of records from certain PBMs, retail
pharmacies, insurers, and drug coupon administrators to identify putative class members—i.e.,
cash, coinsurance, deductible, and Medicare Part D patients who paid any portion of the purchase
price of one or more of Defendants’ analog insulin products at a price calculated by reference to
list price (or AWP or WAC). Plaintiffs claim Dr. Rosenthal can, using the PBM data, “identify
which insured individuals purchased the analog insulins at a price calculated by reference to list
price and were therefore injured.” (ECF No. 575 at 62 (citing Rosenthal Rpt. ¶ 132).) Plaintiffs
assert they can also use the retail pharmacy data to ascertain uninsured consumers and “the exact
amount” consumers paid for their analog insulin, as well as to determine which consumers paid
coinsurance or co-pays and “which consumer[s] paid with reference to list price.” (Id. at 63 (citing
Rosenthal Rpt. ¶¶ 132 & n.155, Part VII.D; Ex. 6 ¶¶ 6, 1011, 14, 21.).) Plaintiffs obtained
declarations from several PBMs confirming the data they maintain can be used to separate
ineligible members who paid fixed co-pays from eligible members who paid coinsurance—the
former being excluded from Plaintiffs’ proposed classes and the latter falling within Plaintiffs’
proposed classes. (Id. at 6263 (citing Ex. 7 ¶ 9
); Ex. 10 ¶ 5 (
); Ex. 8 ¶¶ 6-7
); Ex. 9 ¶ 6
)).) Plaintiffs also submit a declaration from an insurer
claims data firm representing that claims data can be used to identify analog insulin purchases
41
made during the deductible period of a consumer’s benefits plan, as well as analog insulin
purchases made with coinsurance. (Id. at 6465 (citing Ex. 5 ¶¶ 7, 10–13).) Moreover, Plaintiffs
indicate they are in the process of obtaining records from two third-party vendors that administer
all of Defendants’ coupon programs and that this data will permit Dr. Rosenthal and claims
administrators “to identify every single analog insulin purchase made with a coupon so that it can
be excluded from the class.” (Id. at 64 (citing Rosenthal Rpt. ¶¶ 109, 135; Ex. 6 ¶ 14; Ex. 5 ¶ 14).)
To the extent Defendants claim Plaintiffs have yet to identify all putative class members,
Plaintiffs are not required to identify every class member at the class certification stage. See
Hargrove, 974 F.3d at 480 (explaining plaintiffs “do not have to prove at this stage that each
proposed class member was indeed [a member of the proposed class], but only that the members
can be identified”). Additionally, to the extent Defendants contend Plaintiffs’ proposed classes are
not ascertainable because there is no single dataset of all insulin purchases (ECF No. 576 at 75),
Defendants do not cite any authority supporting the proposition that only a single, centralized
source of data can be relied upon to identify class members. Rather, Plaintiffs are required to show
their “purported method for ascertaining class members is reliable and administratively feasible,
and permits a defendant to challenge the evidence used to prove class membership.” Carrera, 727
F.3d at 308. Plaintiffs have done so by utilizing a combination of data sources to identify eligible
consumers and exclude ineligible consumers in accordance with the definitions of their proposed
classes. See Afzal v. BMW of N. Am., LLC, Civ. A. No. 15-8009, 2020 WL 2786926, at *8 (D.N.J.
May 29, 2020) (finding plaintiffs “can use a combination of records, such as those from the
defendant as well as public records” to satisfy ascertainability). Plaintiffs propose an
administratively feasible method to identify class members using evidentiary support including
data sets produced by PBMs, insurers, retail pharmacies, and coupon administrators as well as
42
declarations from claims administrators with experience in distributing damages based on the
produced data sets, and industry experts culling and interpreting this data. See City Select Auto
Sales, Inc. v. BMW Bank of N. Am., Inc., 867 F.3d 434, 441 (3d Cir. 2017) (“Affidavits, in
combination with records or other reliable and administratively feasible means, can meet the
ascertainability standard.”). As such, Plaintiffs’ proposed method permits Defendants to challenge
the evidence used to prove class membership. See Carrera, 727 F.3d at 307 (“Ascertainability
provides due process by requiring that a defendant be able to test the reliability of the evidence
submitted to prove class membership.”).
Therefore, the Court finds Plaintiffs’ proposed classes satisfy the ascertainability
requirement.
ii.
Rule 23(a) Inquiry
Plaintiffs argue the Court should certify all twelve of their proposed classes because they
all satisfy each of the four Rule 23(a) requirements—numerosity, commonality, typicality, and
adequate representation. (ECF No. 575 at 2.) Specifically, Plaintiffs assert each of their twelve
proposed classes: (1) meet Rule 23(a)’s numerosity requirement because “around seven million
Americans take the analog insulins at issue in this lawsuit”; (2) meet Rule 23(a)’s commonality
requirement “because common issues of law and fact regarding defendants’ liability abound”; (3)
meet Rule 23(a)’s typicality requirement because the class representatives’ claims “mirror those
of all class members” in that they are based on Defendants’ alleged “unconscionable and unfair
conduct and the [purported] resulting financial losses”; and (4) meet Rule 23(a)’s adequate
representation requirement because the proposed “class representatives have shown dogged
commitment to their representation of the classes over the past five years” in that “they have sat
43
for depositions, gathered extensive medical documentation, and demonstrated no conflicts with
the classes.” (Id.)
Defendants contend Plaintiffs have failed to adequately meet their burden to satisfy the
four Rule 23(a) requirements for their proposed classes because: (1) “Plaintiffs cannot identify
common questions whose answers would drive resolution of this litigation” in that Plaintiffs’
proposed questions would not generate common answers; (2) “even if any classes could be
certified (they cannot), insured proposed class representatives are not typical of uninsured
consumers—whose costs are not based on formularies and rebates—meaning that classes with
only insured class representatives cannot represent uninsured consumers” because “there is a
fundamental difference in the ‘individual factual circumstances’ underlying putative class
members’ claims, depending on whether each individual is insured or uninsured”; and (3) “under
this Court’s prior rulings, no proposed class representative can adequately represent individuals
who purchased different analog insulin products, further circumscribing any classes.” (ECF No.
576 at 9298.)
The Court addresses each of Rule 23(a)’s four requirements—numerosity, commonality,
typicality, and adequate representation—in turn.
a.
Numerosity
Plaintiffs argue they satisfy Rule 23(a)’s numerosity requirement for each of their twelve
proposed classes. (ECF No. 575 at 2, 50–51, 8788 (citations omitted).) To satisfy Rule 23(a)’s
numerosity requirement, “a plaintiff must show by a preponderance of the evidence that ‘the class
is so numerous that joinder of all members is impracticable.’” Zangara v. Zager Fuchs, P.C., Civ.
A. No. 17-06755, 2019 WL 6310056, at *2 (D.N.J. Nov. 25, 2019) (quoting Fed. R. Civ. P.
23(a)(1)). “No minimum number of plaintiffs is required to maintain a suit as a class action, but
44
generally if the named plaintiff demonstrates that the potential number of plaintiffs exceeds 40,
the [numerosity requirement] of Rule 23(a) has been met.” Stewart v. Abraham, 275 F.3d 220,
226–27 (3d Cir. 2001) (citation omitted). However, a plaintiff must present evidence for the court
to make a factual determination on whether the numerosity requirement is met. See Marcus, 687
F.3d at 595. When plaintiffs attempt to certify both nationwide classes and state-specific
subclasses, as Plaintiffs seek here, “evidence that is sufficient to establish numerosity with respect
to the nationwide class[es] is not necessarily sufficient to establish numerosity with respect to the
state-specific subclass[es].” Id. Plaintiffs cannot “simply rely on the nationwide presence of [a
defendant] to satisfy the numerosity requirement without [state]-specific evidence.” Id.
Here, Plaintiffs assert Rule 23(a)’s numerosity requirement for all of their proposed classes
is met because there are thirty-nine named class representatives and around seven million
Americans who take analog insulin every day. (ECF No. 575 at 50–51 (citing William Cefalu et
al., Insulin Access and Affordability Working Group: Conclusions and Recommendations, 41
Diabetes Care 1299 (2018); Flory Rpt. ¶¶ 57, 59).) Plaintiffs do not specify how numerosity is met
for each of their twelve proposed classes individually, but presumably this requirement is met for
each of Plaintiffs’ proposed classes, and joinder of this number of plaintiffs would be
impracticable. Defendants do not appear to contest numerosity for Plaintiffs’ proposed classes (see
ECF Nos. 576, 587), and at oral argument, conceded numerosity is not an issue (see ECF No. 713
at 35).
Therefore, the Court finds Plaintiffs have satisfied Rule 23(a)’s numerosity requirement
for their twelve proposed classes.
b.
Commonality
Plaintiffs likewise contend they satisfy Rule 23(a)’s commonality requirement for each of
45
their twelve proposed classes. (ECF No. 575 at 2, 5154, 8788.) Commonality under Rule 23(a)
requires there to be “questions of law or fact common to the class.” Fed. R. Civ. P. 23(a)(2). “The
threshold for establishing commonality is straightforward: ‘The commonality requirement will be
satisfied if the named plaintiffs share at least one question of fact or law with the grievances of the
prospective class.’” In re Schering Plough Corp. ERISA Litig., 589 F.3d 585, 596–97 (3d Cir.
2009) (quoting Baby Neal v. Casey, 43 F.3d 48, 56 (3d Cir. 1994)). Indeed, as the Third Circuit
recognized, “[i]t is well established that only one question of law or fact in common is necessary
to satisfy the commonality requirement, despite the use of the plural ‘questions’ in the language
of Rule 23(a)(2).” In re Schering Plough, 589 F.3d at 597 n.10 (citations omitted). There is a low
threshold for satisfying Rule 23(a)’s commonality requirement. Newton, 259 F.3d at 183. “The bar
for establishing commonality is ‘not high’ and is ‘easily met.’” In re Pharmacy Benefit Managers
Antitrust Litig., Civ. A. No. 03-04730, 2017 WL 275398, at *23 (E.D. Pa. Jan. 18, 2017) (first
quoting In re Cmty. Bank of N. Va. Mortg. Lending Pracs. Litig., 795 F.3d 380, 397 (3d Cir. 2015),
and then quoting Reyes, 802 F.3d at 486); see also In re Sch. Asbestos Litig., 789 F.2d 996, 1010
(3d Cir. 1986) (citations omitted) (noting the “threshold of commonality is not high”). However,
a bald assertion that all putative class members suffered a violation of the same law is generally
insufficient to satisfy the commonality requirement. See, e.g., Dukes, 564 U.S. at 34950
(“Commonality requires the plaintiff to demonstrate that the class members ‘have suffered the
same injury’ . . . [but t]his does not mean merely that they have all suffered a violation of the same
provision of law. Title VII, for example, can be violated in many ways—by intentional
discrimination, or by hiring and promotion criteria that result in disparate impact, and by the use
of these practices on the part of many different superiors in a single company. Quite obviously,
the mere claim by employees of the same company that they have suffered a Title VII injury, or
46
even a disparate-impact Title VII injury, gives no cause to believe that all their claims can
productively be litigated at once. Their claims must depend upon a common contention—for
example, the assertion of discriminatory bias on the part of the same supervisor. That common
contention, moreover, must be of such a nature that it is capable of classwide resolution—which
means that determination of its truth or falsity will resolve an issue that is central to the validity of
each one of the claims in one stroke.” (citations omitted)). Cf. Griffin v. Zager, Civ. A. No. 161234, 2017 WL 3872401, at *45 (D.N.J. Sept. 1, 2017) (finding commonality where the court
determined that “[f]actually, [the plaintiff] and all class members would have to prove that
[defendant] sent out [a] letter” and “the common legal question underlying [the plaintiff’s] and
class members’ claims is whether [defendant] violated the [Fair Debt Collection Practices Act] by,
among other things, falsely representing or implying its letter was a communication from an
attorney” and that the defendant’s conduct in sending out this letter containing false representations
“was common as to all of the class members”); A & L Indus., Inc. v. P. Cipollini, Inc., Civ. A. No.
12-07598, 2013 WL 5503303, at *2 (D.N.J. Oct. 2, 2013) (finding Rule 23(a)’s commonality prong
met where “[e]ach of the class members’ claims hinge[d] on the common contention that
Defendant engaged B2B to send the exact same illegal facsimile to each potential class member,
in violation of the [Telephone Consumer Protection Act,]” finding “that a determination as to the
legality of that single fax will resolve in one stroke the issue ‘central to the validity of each one of
the claims’”).
Rule 23(a)’s commonality requirement also does not require all putative class members to
have identical claims, see Hassine v. Jeffes, 846 F.2d 169, 176–77 (3d Cir. 1988), and “factual
differences among the claims of the putative class members do not defeat certification[,]” Baby
Neal, 43 F.3d at 56. Rather, to satisfy commonality, what matters “is not the raising of common
47
‘questions’—even in droves—but rather, the capacity of a class-wide proceeding to generate
common answers apt to drive the resolution of the litigation.” Ferreras v. Am. Airlines, Inc., 946
F.3d 178, 185 (3d Cir. 2019) (emphasis added) (quoting Wal-Mart, 564 U.S. at 350). “Even where
individual facts and circumstances do become important to the resolution, class treatment is not
precluded.” Baby Neal, 43 F.3d at 57. But dissimilarities within the proposed class “have the
potential to impede the generation of common answers.” Ferreras, 946 F.3d at 185 (quoting WalMart, 564 U.S. at 350). The Rule 23(a) commonality and Rule 23(b) predominance requirements
are “closely linked[,]” but the “predominance requirement is ‘far more demanding than the
commonality requirement[.]’” Ferreras, 946 F.3d at 185 (quoting In re Hydrogen Peroxide, 552
F.3d at 311).
Here, Plaintiffs argue Rule 23(a)’s commonality requirement is satisfied for each of their
twelve proposed classes because they share common questions of law and fact that will yield
common answers across the proposed classes. (ECF No. 575 at 2, 5154, 8788.) Plaintiffs
contend the common questions of law and fact that would generate common answers for their
Proposed Nationwide Classes include but are not limited to the following:
(i)
(ii)
(iii)
(iv)
(v)
(vi)
Whether the [D]efendants engaged in unfair and/or
unconscionable conduct;
Whether the [D]efendants controlled and inflated the list
price (WAC) of their analog insulins;
Whether the [D]efendants knew that the class members paid
based on the list price (WAC) Novo [Nordisk] and Sanofi
set;
Whether the [D]efendants knew that the increased cost of
analog insulin harmed the class members;
Whether the class members could reasonably avoid purchase
of the analog insulins they were prescribed;
Whether the [D]efendants took advantage of the class
members’ lack of capacity to forgo purchases of their analog
insulins;
48
(vii)
Whether the [D]efendants competed with one another
through rebates to PBMs and insurers rather than reductions
to list prices;
(viii) Whether the [D]efendants copied their competitors’ price
increases such that all rapid and long-acting insulins were
infected by the scheme;
(ix)
Whether the [D]efendants have lacked honesty regarding the
justifications and driving forces behind their list price
increases;
(x)
Whether the [D]efendants are liable to plaintiffs and the
class members for damages flowing from their alleged
misconduct.
(ECF No. 575 at 5253.25)
In opposition, Defendants assert Plaintiffs fail to meet Rule 23(a)’s commonality
requirement because their proposed common questions of law and fact will not generate common
answers, and even if they did, those answers would not drive the resolution of the litigation. (ECF
No. 576 at 9294.) Defendants argue some of Plaintiffs’ proposed questions—e.g., “Whether the
[D]efendants engaged in unfair and/or unconscionable conduct”—“parrot generic legal
allegations, which is ‘not sufficient to establish commonality.’” (ECF No. 576 at 93 (citing Greco
v. Grewal, Civ. A. No. 19-19145, 2020 WL 5793709, at *5 (D.N.J. Sept. 29, 2020)).) Defendants
state other of Plaintiffs’ common questions will not advance the litigation because, for example,
“[t]here is no dispute that Defendants set list prices for their insulins and ‘competed with one
another through rebates,’ among other factors.” (ECF No. 576 at 94 (quoting ECF No. 575 at
5253).)
In reply, Plaintiffs contend “[t]he central question in this case asks not whether some
threshold monetary amount to buy insulin is unfair, but whether the [D]efendants’ conduct in
25
As Defendants note (ECF No. 576 at 9293), Plaintiffs’ list of common questions of law and
fact here differ from the “[q]uestions of law and fact common to the class” they listed in the TAC
(see ECF No. 411 ¶ 332).
49
setting benchmark insulin list prices was unfair[,]” and this question “necessarily drives common
answers.” (ECF No. 577 at 5758.) In other words, Plaintiffs suggest common questions to all
potential members of each of their proposed classes include whether Defendants’ alleged conduct
in setting artificially inflated prices for their analog insulin products was unfair or unconscionable,
depending on what Defendants did and knew and when,26 and whether Defendants are liable to
Plaintiffs and the putative class members for damages flowing from this alleged conduct. (See id.)
Plaintiffs further claim the alleged harm every proposed class member suffered—overpaying for
Defendants’ analog insulin products—follows directly from Defendants’ alleged conduct because
the retail prices are based on Defendants’ list prices for those products. (Id. at 58.)
By setting the list prices for their analog insulin products, Defendants effectively set the
initial input from which all downstream prices flow. All proposed class members purchased an
analog insulin product and allegedly paid a price based on Defendants’ purportedly artificially
inflated list price for that product. Accordingly, all proposed class members allegedly suffered the
same injury because they all allegedly overpaid for their prescribed insulin based on Defendants’
purported scheme to artificially inflate the list prices for those products. See Dukes, 564 U.S. at
349–50 (citation omitted) (“Commonality requires the plaintiff to demonstrate that the class
members have suffered the same injury.”). This is not to say all putative class members actually
suffered an injury. As the Third Circuit has stated, meeting Rule 23(a)’s commonality requirement
26
Defendants state Plaintiffs rely on Dr. Rosenthal to determine when Defendants’ alleged unfair
pricing schemes began. (ECF No. 576 at 23 (citing ECF No. 575 at 1, 4; Rosenthal Dep. at 190:8–
190:20).) But Dr. Rosenthal admits her analysis is (1) “not based on ‘when’ Defendants ‘were
making decisions about rebates’” (ECF No. 576 at 23 (citing Rosenthal Dep. at 198:2–198:21))
and (2) “not about an amount per [insulin] pen paid at a particular transaction,” and “[t]he
individual transaction cost is not what’s being deemed unconscionable” (id. at 24 (alteration in
original) (citing Rosenthal Dep. 248:25–249:8, 252:15–252:22)).
50
is “easy enough.” In re Nat’l Football League Players Concussion Inj. Litig., 821 F.3d 410, 427
(3d Cir. 2016), as amended (May 2, 2016). For example, courts in this Circuit have “acknowledged
commonality to be present even when not all members of the plaintiff class suffered an actual
injury, when class members did not have identical claims, and, most dramatically, when some
members’ claims were arguably not even viable.” Id. (quoting In re Cmty. Bank of N. Va. Mortg.
Lending Pracs. Litig., 795 F.3d 380, 397 (3d Cir. 2015)). In reaching those conclusions, courts
have explained “the focus of the commonality inquiry is not on the strength of each class member’s
claims but instead ‘on whether the defendant’s conduct was common as to all of the class
members.’” In re Cmty. Bank of N. Va., 795 F.3d at 397 (quoting Sullivan, 667 F.3d at 30507).
Here, Plaintiffs and the proposed class members for each of Plaintiffs’ twelve proposed
classes all allegedly suffered the same injury—overpaying for Defendants’ analog insulin
products—and all share at least one common question of law or fact, including whether
Defendants’ alleged conduct in setting the list prices for their analog insulin products was
unconscionable and what Defendants did and knew in relation to setting these list prices, which
would generate answers common to the class.27 See In re Pharm. Indus. Average Wholesale Price
27
To the extent Defendants rely on Greco v. Grewal, the Court finds Defendants’ reliance is
misplaced. In Greco, the court found the plaintiffs failed to sufficiently raise a common question
“because the [d]efendants’ conduct would be materially different as to each plaintiff.” Civ. A. No.
19-19145, 2020 WL 5793709, at *7 (D.N.J. Sept. 29, 2020). Unlike in Greco, Defendants’
allegedly unfair conduct of inflating list prices of analog insulin products would be materially the
same as to each putative class member, even though individualized issues related to causation and
damages may remain. Cf. Eastman v. First Data Corp., 292 F.R.D. 181, 18990 (D.N.J. 2013)
(finding a lack of commonality and denying motion for class certification in a case where plaintiffs
argued defendant’s lease program was unconscionable because “it hid[] the true market value of
the equipment being financed[,]” stating “the unconscionability inquiry will require determining
the value to each individual merchant—an inquiry which cannot be determined with common
evidence” and that plaintiffs did not propose “a method by which unconscionability could be
determined with common evidence” (alterations in original) (citations and footnote omitted)).
51
Litig., 252 F.R.D. 83, 103 (D. Mass. 2008) (finding commonality and listing common factual
issues as including “whether the AWPs and wholesale list prices for the subject drugs are false”;
“whether such misrepresentations were knowing and intentional; whether the reporting of the
prices was ‘unfair’; and whether these misrepresentations caused plaintiffs harm during the class
period”).
Therefore, the Court finds Plaintiffs have satisfied Rule 23(a)’s commonality requirement
for their twelve proposed classes because each proposed class shares at least one common question
of law or fact.
c.
Typicality
Plaintiffs also argue they satisfy Rule 23(a)’s typicality requirement for each of their twelve
proposed classes. (ECF No. 575 at 2, 5455, 8788.) Typicality requires the class representative’s
claims be typical of the claims of the class. Fed. R. Civ. P. 23(a)(3). “The concepts of commonality
and typicality are broadly defined and tend to merge, because they focus on similar aspects of the
alleged claims.” Newton, 259 F.3d at 182 (citation omitted). “Both criteria seek to assure that the
action can be practically and efficiently maintained and that the interests of the absentees will be
fairly and adequately represented.” Baby Neal, 43 F.3d at 56. Like commonality, typicality is a
“low threshold” to satisfy. Newton, 259 F.3d at 183. But unlike commonality, “[t]he typicality
inquiry is intended to assess whether the action can be efficiently maintained as a class and whether
the named plaintiffs have incentives that align with those of absent class members so as to assure
that the absentees’ interests will be fairly represented.” Baby Neal, 43 F.3d at 57 (citations
omitted). The typicality requirement can be satisfied where “‘there is a strong similarity of legal
theories’ or where the claim arises from the same practice or course of conduct.” Newton, 259 F.3d
at 184 (citations omitted). “If the claims of the named plaintiffs and putative class members involve
52
the same conduct by the defendant, typicality is established regardless of factual differences.” Id.
at 18384 (citations and footnote omitted).
The Third Circuit articulated a three-prong analysis in assessing Rule 23(a)’s typicality
requirement, consisting of three distinct, yet related, concerns:
(1) the claims of the class representative must be generally the same
as those of the class in terms of both (a) the legal theory advanced
and (b) the factual circumstances underlying that theory;
(2) the class representative must not be subject to a defense that is
both inapplicable to many members of the class and likely to become
a major focus of the litigation; and
(3) the interests and incentives of the representative must be
sufficiently aligned with those of the class.
Marcus, 687 F.3d at 598 (quoting In re Schering Plough Corp., 589 F.3d at 599). In other words,
the named plaintiffs must be sufficiently similar to the rest of the proposed class “in terms of their
legal claims, factual circumstances, and stake in the litigation.” In re Schering Plough Corp., 589
F.3d at 597. Typicality acts as a bar to class certification when “the legal theories of the named
plaintiffs potentially conflict with those of the absentees.” Georgine, 83 F.3d at 631; Newton, 259
F.3d at 183. Moreover, “[i]t is well established that a proposed class representative is not ‘typical’
under Rule 23(a)(3) if ‘the representative is subject to a unique defense that is likely to become a
major focus of the litigation.’” In re Schering Plough, 589 F.3d at 598 (quoting Beck v. Maximus,
Inc., 457 F.3d 291, 301 (3d Cir. 2006)). If a class representative has a unique defense, “the
representative’s interests might not be aligned with those of the class, and the representative might
devote time and effort to the defense at the expense of issues that are common and controlling for
the class.” Beck, 457 F.3d at 297. However, plaintiffs can satisfy the typicality requirement if their
claims “arise from the same event or practice or course of conduct that gives rise to the claims of
53
the class members, and are based on the same legal theory.” Brosious v. Child.’s Place Retail
Stores, 189 F.R.D. 138, 146 (D.N.J. 1999) (alterations and citations omitted).
Here, Plaintiffs contend the class representatives’ claims are typical of the claims of the
putative class members of each of their twelve proposed classes because they arise from the same
allegedly wrongful conduct of Defendants and are based on the same legal theory, i.e., the
Defendants’ allegedly unlawful pricing scheme to artificially inflate the list prices of their analog
insulin products “to compete for formulary access through rebates[,]” which Plaintiffs assert “was
unfair and unconscionable and caused the [proposed] class[es] and representatives to overpay for
insulin.” (ECF No. 575 at 5455.)
In opposition, Defendants contend Plaintiffs fail to establish the typicality requirement
because “there is a fundamental difference in the ‘individual factual circumstances’ underlying
putative class members’ claims, depending on whether each individual is insured or uninsured” in
that “formularies and rebates apply only to purchases by insured consumers[,]” but “[u]ninsured
consumers’ transactions do not involve rebates, formularies, or PBMs.” (ECF No. 576 at 94–95.)
For example, Defendants assert Plaintiffs’ “liability theory plays out entirely differently for
uninsured individuals” in that “[i]f a manufacturer increases both its list and net prices for insured
transactions by 20% (such that the ratio remains unchanged), the uninsured would be unharmed
according to Prof. Rosenthal—even if they paid more out of pocket[,]” but “[c]onversely, if the
list price remains flat while the average rebate for insured consumers increases, then the uninsured
would experience no change in out-of-pocket-costs—but would still be injured under Plaintiffs’
theory.” (Id. at 96 (citations omitted).) Defendants state therefore that the insured proposed class
representatives are not typical of the uninsured proposed class members and “classes with no
54
uninsured proposed representatives certainly cannot include uninsured members.” (ECF No. 576
at 96.28)
In reply, Plaintiffs submit the class representatives satisfy the typicality requirement for
both insured and uninsured proposed class members because all of them can trace their injuries to
the same unlawful practices—Defendants’ alleged unlawful conduct. (ECF No. 577 at 60.)
Plaintiffs further assert “[e]ach class representative here seeks to represent only class members
who purchased insulin products in the same state from the same [D]efendant as that
representative’s purchases” and that “neither Dr. Rosenthal’s methodology for determining
damages nor the plaintiffs’ theory of unfairness and unconscionability differs as to the analog
insulin products at issue.” (Id. at 61.)
Plaintiffs allege Defendants engaged in unfair and unconscionable conduct by raising the
list prices of their analog insulin products in order to provide PBMs with larger “secret” rebates to
gain formulary access at the expense of the putative class members who allegedly paid based on
those inflated list prices. Defendants maintain the insured class representatives are not typical of
the uninsured class members because there is a fundamental difference in the individual factual
circumstances underlying the putative class members’ claims depending on whether the individual
is insured or uninsured. However, the difference in insurance status among class members does
not defeat typicality because the legal theory and claims asserted by Plaintiffs—i.e., Defendants’
alleged artificial inflation of list prices for their analog insulin products was purportedly unfair and
unconscionable, purportedly causing the proposed class members to overpay for these products—
28
Defendants note Plaintiffs lack uninsured class representatives “in, at least, Illinois, Iowa,
Maine, Massachusetts, New Jersey, and North Dakota” for Novo Nordisk and similarly lack
uninsured class representatives “in, at least, Colorado, Connecticut, Delaware, Florida, Iowa,
Massachusetts, New Jersey, North Carolina, and Texas” for Sanofi. (ECF No. 576 at 96 n.26.)
55
are the same among the putative class members, regardless of whether they are insured or
uninsured. See Newton, 259 F.3d at 183–84 (“If the claims of the named plaintiffs and putative
class members involve the same conduct by the defendant, typicality is established regardless of
factual differences.” (citations and footnote omitted)); Marcus, 687 F.3d at 598 (“If a plaintiff’s
claim arises from the same event, practice or course of conduct that gives rises to the claims of the
class members, factual differences will not render that claim atypical if it is based on the same
legal theory as the claims of the class.”). Regardless of whether an individual class member is
insured or uninsured, Plaintiffs’ and the putative class members’ claims arise from the same
alleged conduct by Defendants. Therefore, the Court concludes factual differences between
insured versus uninsured putative class members do not render Plaintiffs’ claims atypical.
Moreover, to the extent putative class members suffered harm by overpaying for
Defendants’ analog insulin products, whether they were insured or uninsured, they can trace their
injuries to the same alleged unlawful practice engaged in by Defendants. See Boley v. Universal
Health Servs., 36 F.4th 124, 134 (3d Cir. 2022) (finding typicality satisfied where each class
member could “trace his or her injury to the same [alleged unlawful] practice”); Baby Neal, 43
F.3d at 58 (“Where an action challenges a policy or practice, the named plaintiffs suffering one
specific injury from the practice can represent a class suffering other injuries, so long as all the
injuries are shown to result from the practice.”). Indeed, Plaintiffs’ alleged cause of injury for each
putative class member for each of their proposed classes all stem from Defendants’ purported
conduct of artificially inflating the list prices for their analog insulin products. To the extent
Defendants contend the alleged harm differs between insured and uninsured proposed class
members, these differences do not preclude a finding of typicality. See Boley, 36 F.4th at 134
(finding factual “differences relate[d] to degree of injury and level of recovery” will generally not
56
preclude a finding of typicality “[s]o long as the alleged cause of the injury remains the same”
(citation omitted)); In re Prudential, 148 F.3d at 311 (“‘[E]ven relatively pronounced factual
differences will generally not preclude a finding of typicality where there is a strong similarity of
legal theories’ or where the claim arises from the same practice or course of conduct.” (alteration
in original) (citation omitted)).
Therefore, the Court finds Plaintiffs satisfy Rule 23(a)’s typicality requirement for their
twelve proposed classes.
d.
Adequate Representation
Plaintiffs also argue they satisfy Rule 23(a)’s adequate representation requirement. (ECF
No. 575 at 2, 5557, 8788.) Adequate representation requires the representatives of a class to
“fairly and adequately protect the interests of the class.” Fed. R. Civ. P. 23(a)(4). “Rule 23(a)’s
adequacy of representation requirement ‘serves to uncover conflicts of interest between named
parties and the class they seek to represent.’” In re Pet Food Prods. Liab. Litig., 629 F.3d 333, 343
(3d Cir. 2010) (quoting Amchem, 521 U.S. at 625). The class representatives “must be part of the
class and possess the same interest and suffer the same injury as the class members.” Id. (quoting
Amchem, 521 U.S. at 62526). “A conflict must be ‘fundamental’ to violate Rule 23(a)(4).” Dewey
v. Volkswagen Aktiengesellschaft, 681 F.3d 170, 184 (3d Cir. 2012) (citations omitted). “A conflict
is fundamental where it touches ‘the specific issues in controversy.’” Id. (citation omitted). “A
conflict that is unduly speculative, however, is generally not fundamental.” Id. “Adequate
representation depends on two factors: (a) the plaintiff’s attorney must be qualified, experienced,
and generally able to conduct the proposed litigation, and (b) the plaintiff must not have interests
antagonistic to those of the class.” Laurens v. Volvo Car USA, LLC, Civ. A. No. 18-08798, 2020
WL 10223641, at *10 (D.N.J. Dec. 8, 2020) (quoting Wetzel v. Liberty Mut. Ins. Co., 508 F.2d
57
239, 247 (3d Cir. 1975)). “[T]he linchpin of the adequacy requirement is the alignment of interests
and incentives between the representative plaintiffs and the rest of the class.” Dewey, 681 F.3d
at183. Class representatives are “adequate” if their interests do not conflict with those of the
putative class members. See In re Prudential, 148 F.3d at 312. “[T]he adequacy requirement
assures that counsel possesses adequate experience, will vigorously prosecute the action, and will
act at arm’s length from the defendant.” In re Cmty. Bank of N. Va. Mortg. Lending Pracs. Litig.,
795 F.3d 380, 389 (3d Cir. 2015) (citation omitted). “Adequacy functions as a ‘catch-all
requirement’ that ‘tend[s] to merge with the commonality and typicality criteria of Rule 23(a).’”
Laurens, 2020 WL 10223641, at *10 (quoting Newton, 259 F.3d at 185).
Here, Plaintiffs contend they satisfy Rule 23(a)’s adequate representation requirement for
their Proposed Nationwide Classes because the proposed class representatives “will fairly and
adequately protect and represent the interests of the [proposed] classes[,]” and share coincident,
not antagonistic, interests with the proposed class members. (ECF No. 575 at 5657, 88.) Plaintiffs
also assert proposed “[c]lass counsel are experienced in the prosecution of class action litigation
and have extensive experience with class action litigation involving pharmaceutical products and
drug pricing.” (Id. at 56.)
In opposition, Defendants argue Plaintiffs fail to satisfy the adequate representation
requirement because no proposed class representative can adequately represent individuals who
purchased a different analog insulin product(s) in a different state(s) than those the class
representatives purchased, noting the Court has already ruled Plaintiffs lack standing to pursue
state law claims for insulin products they did not purchase in a particular state. (ECF No. 576 at
96–97 (citing In re Insulin Pricing Litig., Civ. A. No. 17-00699, 2019 WL 643709, at *17 (D.N.J.
Feb. 15, 2019).) Defendants contend “Plaintiffs expressly assert that Defendants’ conduct was not
58
uniform across products, and became unlawful for different products on different dates depending
on the specific relationship between each product’s list and net prices, the named plaintiffs cannot
be adequate representatives as to products that they did not purchase[,]” and therefore, “[a]ny
certified class would thus need to exclude products that the relevant state’s class representative did
not purchase.” (ECF No. 576 at 9798 (citing App., Table 1, which lists the products not purchased
by any class representative in each relevant state).)
In reply, Plaintiffs maintain Rule 23(a)’s adequacy requirement is satisfied because “[e]ach
class representative here seeks to represent only class members who purchased insulin products in
the same state from the same defendant as that representative’s purchases.” (ECF No. 577 at 61.)
Indeed, Plaintiffs admit they are not seeking to represent class members who purchased insulin
products from different Defendants or in different states than the representative. Plaintiffs further
argue “neither Dr. Rosenthal’s methodology for determining damages nor the plaintiffs’ theory of
unfairness and unconscionability differs as to the analog insulin products at issue[,]” and that “the
class periods for the various drugs differ only because the methodology and legal theories of
unfairness and unconscionability remain consistent across them.” (Id.)
Although Defendants contend “the named [P]laintiffs cannot be adequate representatives
as to products that they did not purchase” (ECF No. 576 at 97), Plaintiffs allege the same unlawful
conduct across all analog insulin products purchased, and therefore, no fundamental conflict exists
between members who purchased different analog insulin products. See Georgine, 83 F.3d at 630
(stating the adequacy of representation inquiry considers whether “the interests of the named
plaintiffs [are] sufficiently aligned with those of the absentees”); Hassine, 846 F.2d at 179 (“The
inquiry that a court should make regarding the adequacy of representation requisite of Rule
23(a)(4) is to determine that the putative named plaintiff has the ability and the incentive to
59
represent the claims of the class vigorously[.]”). Because Defendants allegedly engaged in the
same unlawful conduct with respect to all analog insulin products, the proposed class
representatives’ interests do not conflict with those of the putative class members for each of
Plaintiffs’ twelve proposed classes.
Therefore, the Court finds Plaintiffs satisfy Rule 23(a)’s adequate representation
requirement for their twelve proposed classes.
iii.
Rule 23(b) Inquiry
Because the Court concludes Plaintiffs satisfy the four threshold requirements of Rule
23(a), the Court now turns to analyzing whether Plaintiffs also satisfy the requirements for class
certification under Rule 23(b)(2) and Rule 23(b)(3) for each of their twelve proposed classes. The
Court addresses the requirements under each of these Rule 23(b) sections in turn.29
a.
Rule 23(b)(2) Inquiry
Under Rule 23(b)(2), the Court must find “the party opposing the class has acted or refused
to act on the grounds that generally apply to the class, so that final injunctive relief or
corresponding declaratory relief is appropriate respecting the class as a whole.” Fed. R. Civ. P.
23(b)(2). The Supreme Court has held the “key to the (b)(2) class is ‘the indivisible nature of the
injunctive or declaratory remedy warranted—the notion that the conduct is such that it can be
enjoined or declared unlawful only as to all of the class members or as to none of them.’” Dukes,
564 U.S. at 360 (citation omitted). In other words, certifying a Rule 23(b)(2) class “applies only
when a single injunction or declaratory judgment would provide relief to each member of the
class.” Id. Therefore, “[c]laims for individualized relief may not be certified under 23(b)(2), nor
29
Because Plaintiffs only seek to certify classes under Rule 23(b)(2) and Rule 23(b)(3) and do not
seek to certify any classes under Rule 23(b)(1) (see ECF Nos. 574, 575), the Court does not analyze
the requirements under Rule 23(b)(1).
60
may claims for monetary relief that are ‘not incidental to the injunctive or declaratory relief.’”
Lipstein v. UnitedHealth Grp., 296 F.R.D. 279, 291 (D.N.J. 2013) (quoting Dukes, 564 U.S. at
360). “Plaintiffs’ sought injunction must be more specific than merely requiring that Defendants
follow the law.” In re Processed Egg Prods. Antitrust Litig., 312 F.R.D. 124, 170 (E.D. Pa. 2015)
(citations omitted).
In addition, under Rule 23(b)(2), a plaintiff must show the class claims are cohesive among
the putative class members. See Gates v. Rohm & Haas Co., 655 F.3d 255, 26364 (3d Cir. 2011).
Cohesiveness is a primary requirement because, in a Rule 23(b)(2) action, “unnamed members are
bound by the action without the opportunity to opt out.” Barnes, 161 F.3d at 14243. “For a court
to find a class cohesive, it must find that the ‘class’s claims are common ones and that adjudication
of the case will not devolve into consideration of myriad individual issues.’” In re Processed Egg
Prods., 312 F.R.D. at 169 (quoting Newberg on Class Actions § 4:34). “‘[D]isparate factual
circumstances of class members’ may prevent a class from being cohesive and, therefore, make
the class unable to be certified under Rule 23(b)(2).” Gates, 655 F.3d at 264 (quoting Carter v.
Butz, 479 F.2d 1084, 1089 (3d Cir. 1973)). Accordingly, the Third Circuit “has held that district
courts have the discretion to deny certification under [Rule 23](b)(2) when a given case presents
‘disparate factual circumstances,’ or a prevalence of individualized issues.” In re Ford Motor Co.
E-350 Van Prods. Liab. Litig., Civ. A. No. 03-04558, 2012 WL 379944, at *38 (D.N.J. Feb. 6,
2012) (quoting Barnes, 161 F.3d at 143). “Indeed, a [Rule 23](b)(2) class may require more
cohesiveness than a [Rule 23](b)(3) class.” Gates, 655 F.3d at 264 (footnote omitted) (quoting
Barnes, 161 F.3d at 142).
Here, Plaintiffs argue certifying their twelve proposed classes under Rule 23(b)(2) is
appropriate because without certification, Defendants can continue to subject consumers to alleged
61
unconscionable pricing. (ECF No. 575 at 7779, 98.) However, Defendants contend Plaintiffs’
cursory30 request to certify injunctive classes under Rule 23(b)(2) fails because Plaintiffs do not
specify the injunctive relief they seek, Plaintiffs’ proposed classes are not sufficiently cohesive,
and the majority of the proposed class members do not face future harm. (ECF No. 576 at 98–
100.) Defendants further assert “any injunctive relief would require the Court to become the
nation’s insulin price regulator, tasked with determining what prices are ‘fair’—apparently in
perpetuity.” (Id. at 98.) Defendants also state “Plaintiffs make no attempt to account for
developments in Defendants’ pricing practices in recent years.” (Id. at 99 (emphasis omitted).)
Defendants claim they “have broadened their affordability offerings to provide relief for patients
struggling to afford insulin, with the vast majority of insulins now available for less than $50 and
many consumers paying nothing[,]” and Defendants argue “[t]hese changes moot any request for
injunctive relief.” (Id. at 99100 (emphasis and citations omitted).)
In reply, Plaintiffs clarify: (1) they are seeking to enjoin Defendants “from continuing to
report artificially inflated list prices that do not approximate their true net prices to [PBMs] CVS,
Express Scripts, and OptumRx” (ECF No. 577 at 61 (citing ECF No. 411 ¶ 269)) and this would
not “require the Court to become the nation’s insulin price regulator” because “the Court isn’t
asked to specify the prices at which insulin must be sold, but instead is asked to require the
[D]efendants to price their insulin within the boundaries of state consumer protection laws” (id. at
6162 (citations omitted)); (2) their proposed classes are sufficiently cohesive because Defendants
set the list prices which affect the prices all of them paid for Defendants’ analog insulin products
30
Defendants note Plaintiffs “spare only about two pages of their 100-page brief for this request,
and never actually try to explain how they satisfy Rule 23(b)(2).” (ECF No. 576 at 98 (citing ECF
No. 575 at 7779, 98).)
62
(id. at 6263); and (3) future harm exists because Defendants do not claim they stopped the
allegedly unlawful conduct at issue and Defendants’ affordability programs “only apply to a sliver
of the [proposed] class[es].” (Id. at 63.)
In their sur-reply, Defendants argue Plaintiffs “belatedly try to flesh out” their Rule
23(b)(2) request in their reply after treating it in a cursory manner in their opening brief. (ECF No.
587-1 at 2; see also id. at 1923.) Defendants contend Plaintiffs’ injunctive relief proposal violates
Federal Rule of Civil Procedure 65(d)’s requirements31 and “would compel Defendants to violate
federal law governing the reporting of list prices.” (Id.) Defendants also assert Plaintiffs “confirm
they can neither show the required cohesiveness among the millions of differently situated putative
class members, nor account for the substantial changes in Defendants’ pricing practices and
affordability offerings over time and in recent years.” (Id.) Specifically, Defendants: (1) reiterate
that Plaintiffs have not specified the injunctive relief they seek (id. at 20); (2) Plaintiffs have not
shown how their proposed injunctive relief would satisfy the requirements of Rule 65(d) and
“[p]utting aside that the concept of ‘true net prices’ has no nexus to Plaintiffs’ ‘trend break’ method
or any other aspect of Plaintiffs’ reformulated unfairness or unconscionability claim,” Plaintiffs’
“vague formulation does nothing to enable the Court to ‘at least conceive of an injunction that
would satisfy [the] requirements’ of Federal Rule of Civil Procedure 65(d)” (id. (citations
omitted)); and (3) Plaintiffs do not state how the Court “could enjoin Defendants from reporting
‘list prices that do not approximate their true net prices’ without violating federal law—twice over”
(id.). Defendants state federal law prohibits pharmaceutical manufacturers from reporting list
31
Federal Rule of Civil Procedure 65(d) provides “[e]very order granting an injunction and every
restraining order must: (A) state the reasons why it issued; (B) state its terms specifically; and (C)
describe in reasonable detail--and not by referring to the complaint or other document--the act or
acts restrained or required.” Fed. R. Civ. P. 65(d)(1).
63
prices that approximate net prices, and therefore, Plaintiffs are asking the Court to issue an
injunction that would require Defendants to violate federal law. (Id. at 2021 (citing 42 U.S.C. §
1395w-3a(c)(6)(B)).) Further, Defendants submit Plaintiffs’ request for injunctive relief under
Rule 23(b)(2) would also violate the Dormant Commerce Clause because “enforcing the
boundaries of some consumer-protection laws would necessarily mean determining the WAC
prices that Defendants can set for their insulins in all states (since Defendants necessarily set a
single list price for each drug, consistent with federal law).” (Id. at 21 (citation omitted).)
Additionally, Defendants argue Plaintiffs’ contention that their proposed classes are
sufficiently cohesive because Defendants’ list prices affect the prices all proposed class members
paid “ignores the myriad factors that determine how point-of-sale prices are determined for any
particular individual”—e.g., “whether an individual had insurance (and the terms of any such
coverage), the degree to which PBM rebates benefited the consumer, how the individual’s
pharmacy calculated the price he paid, whether the individual was eligible for one of Defendants’
affordability offerings, [etc.]” (Id. at 22.) Defendants contend these consumer-specific
considerations prevent finding the cohesiveness needed for Rule 23(b)(2). (Id.) Defendants further
note Plaintiffs do not dispute that Defendants’ analog insulin products are generally available for
under $50 or free for many consumers, and despite Plaintiffs’ claim that this only applies to a
“sliver” of their proposed classes, Defendants assert the analysis of their expert, Dr. Baker, shows
this is not true. (Id. (citing Baker Rpt. ¶ 107 & Ex. 4).) For example, Defendants state that, in 2018,
“coupon redemptions through Defendants’ financial-assistance initiatives accounted for more than
one-third of the analog insulin claims for uninsured and commercially insured patients recorded in
the data used by [Dr.] Rosenthal.” (Id. at 2223 (citing Baker Rpt. ¶ 107).)
64
In response, Plaintiffs argue: (1) “courts routinely hold that plaintiffs need not satisfy [Rule
65’s] requirements at the class certification stage” and whether the Court can enter an injunction
as they request “is a merits question”; (2) whether their requested relief would violate the Dormant
Commerce Clause “is a merits issue” and, in any event, they are not requesting the Court to
regulate the prices of insulin; rather they are requesting the Court enjoin Defendants from
“inflating list prices as a means of providing inflated rebates”; (3) their proposed Rule 23(b)(2)
classes are sufficiently cohesive and Defendants do not respond to Plaintiffs’ assertion that their
list prices affect the prices all consumer paid; and (4) Defendants’ financial assistance programs
do not render their Rule 23(b)(2) classes moot. (ECF No. 590 at 2124 (citations omitted).)
Tellingly, Plaintiffs do not address Defendants’ argument that their requested injunctive relief
would require Defendants to violate federal law.
Here, the Court finds none of Plaintiffs’ proposed classes are sufficiently cohesive to be
certified under Rule 23(b)(2) and are therefore not suitable for Rule 23(b)(2) relief. Plaintiffs’
unconscionability and unfairness claims raise a host of individualized issues subject to various
standards of review that could yield different results concerning the legality of Defendants’ pricing
practices related to their analog insulin products. See Santiago, 72 F.R.D. at 627 (finding Rule
23(b)(2) is not appropriate where “significant individual liability or defense issues . . . would
require separate hearings for each class member in order to establish defendants’ liability”). This
includes whether each putative class member shared in the rebate savings, the variations among
state consumer protection laws, the variations among health plans, and the different insurers and
affiliated PBMs of each class member. See In re Domestic Drywall Antitrust Litig., Civ. A. No.
13-md-02437, 2017 WL 3700999, at *16 (E.D. Pa. Aug. 24, 2017) (“[T]he same issues that
prevented certification [of damages classes], in particular the differences in factual circumstances
65
between class members, also prevent a finding of cohesiveness. The factual circumstances among
indirect purchasers vary widely. . . . It would be unfair to saddle some indirect purchasers who
may have an easier time proving causation than others with a binding negative judgment, without
the opportunity to ‘opt out.’”). Many of these individualized issues create disparate factual
circumstances among class members, and therefore fail to satisfy Rule 23(b)(2)’s cohesiveness
requirement. See, e.g., In re Managerial, Pro. & Tech. Emps., Civ. A. No. 02-02924, 2006 WL
38937, at *6 (D.N.J. Jan. 5, 2006) (declining to certify class under Rule 23(b)(2) where the court
found plaintiffs’ proposed class was not cohesive and “raise[d] a number of individualized
issues”). Additionally, the Court does not see—and Plaintiffs do not explain—how it would be
able to enjoin Defendants as Plaintiffs request without causing Defendants to violate federal law.
(See ECF No. 577 at 6163; ECF No. 587-1 at 2021; ECF No. 590 at 2124; 42 U.S.C. § 1395w3a(c)(6)(B) (“The term ‘wholesale acquisition cost’ means, with respect to a drug or biological,
the manufacturer’s list price for the drug or biological to wholesalers or direct purchasers in the
United States, not including prompt pay or other discounts, rebates or reductions in price, for the
most recent month for which the information is available, as reported in wholesale price guides or
other publications of drug or biological pricing data.”).)
Therefore, Plaintiffs’ motion to certify each of their twelve proposed classes under Rule
23(b)(2) is DENIED.
b.
Rule 23(b)(3) Inquiry
Rule 23(b)(3) provides a class action may be maintained if “the court finds that the
questions of law or fact common to class members predominate over any questions affecting only
individual members, and that a class action is superior to other available methods for fairly and
efficiently adjudicating the controversy.” Fed. R. Civ. P. 23(b)(3). These requirements are known
66
as “predominance” and “superiority,” respectively. In re Hydrogen Peroxide, 552 F.3d at 310.
“Predominance ‘tests whether proposed classes are sufficiently cohesive to warrant adjudication
by representation,’ a standard ‘far more demanding’ than the commonality requirement of Rule
23(a)[.]” Id. at 310–11 (quoting Amchem, 521 U.S. at 62324). Superiority “asks the court ‘to
balance, in terms of fairness and efficiency, the merits of a class action against those of “alternative
available methods” of adjudication.’” In re Prudential, 148 F.3d at 316 (quoting Georgine, 83 F.3d
at 632).
“The predominance inquiry ‘asks whether the common, aggregation-enabling, issues in the
case are more prevalent or important than the non-common, aggregation-defeating, individual
issues.’” Tyson Foods, Inc. v. Bouaphakeo, 577 U.S. 442, 453 (2016) (citation omitted). “An
individual question is one where ‘members of a proposed class will need to present evidence that
varies from member to member,’ while a common question is one where ‘the same evidence will
suffice for each member to make a prima facie showing [or] the issue is susceptible to generalized,
class-wide proof.” Tyson Foods, 577 U.S. at 453 (alteration in original) (citation omitted). “When
‘one or more of the central issues in the action are common to the class and can be said to
predominate,” a class can be certified under Rule 23(b)(3) “even though other important matters
will have to be tried separately, such as damages or some affirmative defenses peculiar to some
individual class members.” Id.
“To establish predominance, Plaintiffs must show that a group trial of [the] action will not
devolve into a series of mini trials concerning causation or injury.” Neale v. Volvo Cars of N. Am.,
LLC, Civ. A. No. 10-04407, 2021 WL 3013009, at *9 (D.N.J. July 15, 2021). If, on the other hand,
“proof of the essential elements of the cause of action requires individual treatment,” then
predominance is defeated, and a class should not be certified. See Newton, 259 F.3d at 172.
67
Therefore, the predominance inquiry depends upon the merits of a plaintiff’s claims, because the
“nature of the evidence that will suffice to resolve a question determines whether the question is
common or individual.” In re Hydrogen Peroxide, 552 F.3d at 311 (citations omitted).
“[A] district court must formulate some prediction as to how specific issues will play out
in order to determine whether common or individual issues predominate in a given case.” Id.
(citation omitted). For example, in Lewis v. Ford Motor Company, the court noted that to prove a
violation of the Pennsylvania Unfair Trade Practices and Consumer Protection Law, “a plaintiff
must [] show that as a result of the defendant’s fraudulent or deceptive conduct, he or she suffered
an ‘ascertainable loss of money or property.’” 263 F.R.D. 252, 263 (W.D. Pa. 2009). The Lewis
court ultimately denied plaintiffs’ motion for class certification (for a count alleging a violation of
the Pennsylvania Unfair Trade Practices and Consumer Protection Law) where the court found
plaintiffs “failed to establish by a preponderance of the evidence commonality and predominance
of common over individual issues” because “each class member would have to show not only
justifiable reliance but also loss as a result of that reliance, aspects subject to individual, rather
than common questions of law or fact” and “such lack of commonality” rendered the case
“unsuitable for class treatment.” Id. at 264, 268.
In determining whether common questions predominate, courts have focused on
defendants’ alleged liability. See Bogosian v. Gulf Oil Corp., 561 F.2d 434, 456 (3d Cir. 1977);
Smith v. Suprema Specialties, Inc., Civ. A. No. 02-168, 2007 WL 1217980, at *9 (D.N.J. Apr. 23,
2007) (citations omitted) (“The focus of the predominance inquiry is on liability, not damages.”).
Practically, this means “a district court must look first to the elements of the plaintiffs’ underlying
claims and then, ‘through the prism’ of Rule 23, undertake a ‘rigorous assessment of the available
evidence and the method or methods by which [the] plaintiffs propose to use the evidence to prove’
68
those elements.” Reinig v. RBS Citizens, N.A., 912 F.3d 115, 128 (3d Cir. 2018) (quoting Marcus,
687 F.3d at 600). “[T]he predominance requirement is met only if the district court is convinced
that ‘the essential elements of the claims brought by a putative class are ‘capable of proof at trial
through evidence that is common to the class rather than individual to its members.’” Id. at 127–
28 (quoting Gonzalez v. Corning, 885 F.3d 186, 195 (3d Cir. 2018)).
Here, Plaintiffs seek to certify twelve classes under Rule 23(b)(3), excluding the classes
involving Eli Lilly—the two Proposed Nationwide Classes, the two Proposed Multi-State Classes,
the two Proposed New Jersey Classes, the two Proposed Texas Classes, the two Proposed Kansas
Classes, and the two Proposed Utah Classes. (See ECF No. 574; ECF No. 575 at 6877, 8898.)
Plaintiffs assert if the Court certifies all twelve proposed classes, a jury need only consider three
legal standards: (1) “unconscionability” under New Jersey law; (2) a three-part FTC test for
“unfair” acts that Plaintiffs contend applies to the laws of sixteen states; and (3)
“unconscionability” under Texas law. (ECF No. 575 at 6.) Plaintiffs state the claims for the two
Proposed Kansas Classes and the two Proposed Utah Classes are explicitly reserved for the Court
to decide so those classes would not need to be presented to a jury. (Id. at 80.)
Plaintiffs argue each of their twelve proposed classes should be certified under Rule
23(b)(3) because “[c]ommon questions of law and fact predominate” and “a class action is superior
to other available methods.” (ECF No. 575 at 4150, 6977, 8898.) Plaintiffs also contend that
“[c]ommon evidence will establish that [Defendants] engaged in unconscionable conduct as to all
class members under the NJCFA[,]” and “[c]lass-wide evidence will demonstrate impact and
injury for all nationwide class members.” (Id. at 6976.) Plaintiffs assert they will be able to prove
impact and calculate aggregate damages through common evidence showing Plaintiffs and the
proposed class members overpaid for analog insulin products due to Defendants’ alleged unfair
69
and unconscionable conduct. (Id. at 7376.) Specifically, Plaintiffs state they will litigate every
nationwide class member’s claim using the same documents, data, and witnesses and, using
Defendants’ documents, will prove that Defendants understood that the coinsurance, deductible,
and cash payments for their analog insulin products were tied to list price. (Id. at 71.) To do this,
Plaintiffs submit they will rely on Dr. Rosenthal’s analysis comparing Defendants’ list prices to
certain pharmaceutical industry data on retail pharmacy prices of Defendants’ analog insulins and
applying “the Pearson correlation coefficient—a statistical test—to measure the linear correlation
between the two prices[,]” which Plaintiffs claim shows that the prices the proposed class members
paid “are nearly perfectly correlated” to Defendants’ list prices. (Id. at 72 (citations omitted).)
Plaintiffs state they will also rely on data produced by non-party insurer
which Dr.
Rosenthal analyzed and determined that “
” (Id. at 7273 (citing Rosenthal Rpt. ¶ 96, Figs. 3236).)
Regarding superiority, Plaintiffs argue a class action is superior because (1) the proposed
class members cannot afford to prosecute separate actions, and without class certification,
litigating this case would be cost-prohibitive; (2) this is the only case challenging Defendants’
alleged conduct; and (3) they will litigate the proposed class members’ claims with common
evidence. (Id. at 7677 (citations omitted).)
Moreover, Plaintiffs submit the claims of their Proposed Nationwide Classes “do not
require proof of deception, turning on individual circumstances[,]” but rather “the unlawful
conduct at issue is two centralized pricing schemes (one for Novo and one for Sanofi) that harmed
all class members in the exact same way—by increasing their payments for analog insulin (only
the amount of damages vary)” and that “[p]roof of liability will focus entirely on the [D]efendants’
70
actions.” (ECF No. 575 at 7071 (citations omitted).32) Plaintiffs also assert they will establish
damages through common evidence, stating Dr. Rosenthal “will use Xponent data and
[D]efendants’ data to calculate what the price of the at-issue insulins would have been absent the
[D]efendants’ unfair conduct” and will use this to “calculate aggregate damages.” (Id. at 53
(footnotes omitted).) Plaintiffs also claim common issues predominate for their proposed multistate classes. (Id. at 9093.) Plaintiffs state they “will prove, with common damages evidence, that
each member of [their proposed] multi-state classes suffered ‘substantial injury[,]’” “that those
substantial injuries were not reasonably avoidable[,]” and that the “injuries are not outweighed by
any benefit to consumers or competition.” (Id. at 9193.) Plaintiffs likewise argue common issues
predominate for their proposed single-state classes and that “individualized evidence will not be
required to establish liability and aggregate damages.” (Id. at 9495.)
In opposition, Defendants argue Plaintiffs do not satisfy Rule 23(b)(3)’s requirements
because Plaintiffs fail to show predominance of common questions, and even if Plaintiffs could
show this action involves a single common question, “individualized issues overwhelm any
conceivable common ones.” (ECF No. 576 at 2729; see also id. at 2973.) Defendants further
contend: (1) the unconscionability and unfairness standards of the states in Plaintiffs’ proposed
classes “require highly fact-intensive inquiries that routinely result in courts denying class
certification for lack of predominance”; (2) Plaintiffs’ Proposed Nationwide Classes fail under
Rule 23(b)(3) because “the NJCFA cannot apply to all consumers who bought [Defendants’]
32
See also ECF No. 575 at 71 (“For example, whether Novo [Nordisk] and Sanofi knew that the
class members paid based on list price will not turn on Novo[ Nordisk’s] and Sanofi’s knowledge
as to a particular individual purchaser; instead, the plaintiffs will prove—through the [D]efendants’
documents—that Novo [Nordisk] and Sanofi understood that coinsurance, deductible, and cash
payments for analog insulin are tied to list price. Every nationwide class member’s claim will be
litigated with the exact same documents, witnesses, and data.”).
71
products nationwide”; (3) Plaintiffs’ Proposed Multi-State Classes likewise fail under Rule
23(b)(3) because of “the many material differences among the sixteen states’ consumer-protection
laws”; (4) “Plaintiffs’ abandonment of their fraud theory means they can no longer establish
‘ascertainable loss’ as required by New Jersey’s and other states’ laws”; and (5) “Plaintiffs’ novel,
untested damages model fails the predominance requirement under Comcast because it does not
reliably measure any unlawful conduct or classwide injury.” (Id. at 2729.)
Defendants assert proof of the essential elements of Plaintiffs’ cause of action requires
individual treatment, regardless of whether their claim is for “unconscionability” under the laws
of New Jersey, Texas, Kansas, and Utah or for “unfairness” under sixteen other states’ consumer
protection statutes. (Id. at 29 (citing cases).) Defendants submit the relevant question in this action
“is not whether any consumer must take analog insulin, but what the consumer paid for analog
insulin and why[,]” and that “[a]ssessing the factors that impact consumers’ costs entails
individualized inquiries across millions of consumers, in different states, who used different
products at different times.” (Id. at 30 (citing In re Domestic Drywall, 2017 WL 3700999, at *15).)
For example, Defendants state some of the individualized inquiries include: (1) whether each
proposed class member’s alleged injury was “reasonably avoidable”; (2) whether each proposed
class member could limit their out-of-pocket costs using Defendants’ affordability offerings and/or
other forms of financial assistance; (3) whether proposed class members could have chosen a
different insurance plan (e.g., one with a co-pay rather than coinsurance), which “requires different
assessments at different times”; (4) whether rebates were passed to proposed class members at the
point of sale; (5) whether proposed class members suffered sufficient injury under the applicable
state laws; and (6) whether proposed class members can prove that Defendants’ conduct and not
the conduct of insurers, PBMs, pharmacies, or other non-parties caused their alleged injuries. (ECF
72
No. 576 at 2737.)
The Court addresses each of Plaintiffs’ proposed classes under Rule 23(b)(3) in turn.
1. Proposed Nationwide Classes and Proposed Novo Nordisk
and Sanofi New Jersey Classes
Plaintiffs argue the Proposed Nationwide Classes, the Proposed Novo Nordisk New Jersey
Class, and the Proposed Sanofi New Jersey Class should all be certified under Rule 23(b)(3) for
claims brought under the NJCFA because Defendants’ conduct in allegedly artificially inflating
the list prices for their analog insulin products was “unconscionable” as that term is used in the
NJCFA, common issues predominate, and a class action is superior to other methods. (ECF No.
575 at 4150.)
Plaintiffs state New Jersey adopted the Restatement (Second) Conflict of Laws’ “mostsignificant-relationship test in sections 146, 145, and 6 for deciding the choice of substantive law
in tort cases involving more than one state.” (ECF No. 575 at 43 (quoting McCarrell v. HoffmannLa Roche, Inc., 153 A.3d 207, 219 (N.J. 2017)).) Plaintiffs assert New Jersey applies the “most
significant relationship” test to determine which state’s substantive law applies, and even assuming
a conflict exists between the consumer fraud laws of New Jersey and other states, the NJCFA
should govern nationwide as to Plaintiffs’ “unconscionable” acts claim because three of the four
factors relevant to the choice-of-law analysis favor applying New Jersey law. (ECF No. 575 at
4250; see also id. at 44 (“‘Viewed through the [Second Restatement’s] section 6 prism, the state
with the strongest section 145 contacts will have the most significant relationship to the parties or
issues, and thus its law will be applied.’ Section 145(2) states that contacts to be considered
include: (a) the place where the injury occurred; (b) the place where the conduct causing the injury
occurred; (c) the domicil, residence, nationality, place of incorporation and place of business of
the parties; and (d) the place where the relationship, if any, between the parties is centered.”).)
73
Plaintiffs claim New Jersey’s substantive law—i.e., the NJCFA—should apply nationwide
because under the analysis of the applicable factors in the § 145 choice-of-law analysis, New Jersey
is (1) the place where the conduct allegedly causing injury occurred; (2) Defendants Novo Nordisk
and Sanofi are companies who have their headquarters in New Jersey; and (3) “‘the place where
the relationship, if any, between the parties is centered’ is New Jersey” because Defendants’
“allegedly unconscionable conduct occurred solely within New Jersey”; only the proposed class
members’ monetary losses occurred in other states. (Id. at 444833; see also ECF No. 713 at 46
(Plaintiffs’ counsel stating “Section 145 [of the] Restatement (Second) [of Conflict of Laws]
applies to general tort claims, our unconscionability claim here, guided by the principles of Section
6.”).)
In opposition, Defendants assert Plaintiffs’ Proposed Nationwide Classes and Proposed
Novo Nordisk and Sanofi New Jersey Classes fail under Rule 23(b)(3) because (1) individualized
questions predominate over any common questions; (2) “the NJCFA cannot apply to all consumers
who bought [Defendants’] products nationwide”; and (3) “Plaintiffs’ abandonment of their fraud
theory[34] means they can no longer establish ‘ascertainable loss’ as required by New Jersey’s and
33
Plaintiffs claim the Restatement (Second) Conflict of Laws § 146 “does not apply, because this
is not ‘an action for a personal injury’” (ECF No. 575 at 44 (quoting Restatement (Second) of
Conflict of Laws § 146 (1971))), nor does Restatement (Second) Conflict of Laws § 148 apply,
“because Plaintiffs do not claim that they and the Class members ‘suffered pecuniary harm on
account of [their] reliance on the defendant[s’] false representations’” (id. (alterations in original)
(quoting Restatement (Second) of Conflict of Laws § 148 (1971))).
34
Compare ECF No. 411 ¶¶ 56768, 570 (“Novo Nordisk and Sanofi engaged in deceptive
business practices prohibited by the NJCFA, including artificially inflating the publicly reported
list prices of their analog insulins; misrepresenting, affirmatively and/or through omission, that
their list prices were reasonable approximations of the true prices of these medicines; concealing
and/or misrepresenting the net prices of their analog insulins; concealing and/or misrepresenting
the existence and amount of the list-to-net price spreads for their analog insulins; and engaging in
other unconscionable, false, misleading or deceptive acts or practices in the conduct of trade or
commerce. In violation of the NJCFA, these acts and omissions constitute ‘unconscionable
74
other states’ laws.” (ECF No. 576 at 2729, 5962.) Defendants argue “New Jersey courts stress
that unconscionability is ‘fact-specific and applied on a case-by-case basis’” and courts have
rejected attempts to challenge broad pricing practices under the NJCFA’s unconscionability
provision. (Id. at 3839 (quoting Judge v. Blackfin Yacht Corp., 815 A.2d 537, 541 (N.J. Super.
Ct. App. Div. 2003)).) Defendants further contend the NJCFA cannot apply nationwide to
commercial practice[s], deception, fraud, false pretense, false promise, misrepresentation, or the
knowing concealment, suppression or omission of any material fact with the intent that others rely
upon such concealment, suppression or omission in connection with the sale’ and pricing of their
analog insulins. . . . By failing to disclose the net prices they offered to PBMs and by actively
concealing this pricing deceit, Novo Nordisk, and Sanofi engaged in unfair and deceptive business
practices in violation of the NJCFA. In the course of Novo Nordisk’s and Sanofi’s business, they
willfully failed to disclose and actively concealed their misrepresentations regarding list prices.”
(citing N.J. Stat. Ann. § 56:8-2)), with ECF No. 575 at 44 n.174 (“Plaintiffs do not claim that they
and the Class members ‘suffered pecuniary harm on account of [their] reliance on the defendant[s’]
false representations.’” (alterations in original) (citations omitted)); see also ECF No. 577 at 3738
(“[T]he plaintiffs’ ‘ascertainable loss’ theory here is based on the defendants’ unfair and
unconscionable conduct, not fraud on the market caused by misrepresentations. . . . [T]he plaintiffs
do not contend that the defendants defrauded the market but instead that the defendants set unfairly
inflated list prices, knowing that certain consumers—the class here—would pay those inflated
prices.”); ECF No. 713 at 50 (Plaintiffs’ counsel asserting at oral argument: “Fraud on the
market. . . . We have nothing remotely of the sort here. We haven’t argued an efficient market. We
haven’t argued fraud on the market. Our damage theory, our ascertainable loss is derived from
what they did here to set the list price which directly impacted each and every one of our
plaintiffs.”); ECF No. 576 at 72 (“[Dr. Rosenthal] concedes that she has not attempted to ‘measure
injury caused by alleged misrepresentations.’ Nor has she estimated damages by measuring the
value of any insulin ‘promised’ and ‘received’; any consumer ‘expectations about insulin pricing’;
or the ‘true’ ‘pro-rata share of the net prices of’ insulin in the absence of any supposed
misrepresentation.” (quoting Rosenthal Dep. 273:17-274:25, and then quoting In re Insulin
Pricing, 2019 WL 643709, at *1516)); ECF No. 577 at 4344 (Plaintiffs not disputing
Defendants’ argument that Dr. Rosenthal did not measure injury caused by alleged
misrepresentations but rather contending this argument is irrelevant because “[Dr. Rosenthal’s]
analysis validly rests on unfair and unconscionable conduct” as in D’Agostino v. Maldonado, 216
N.J. 168 (2013)); ECF No. 713 at 43 (Defendants’ counsel stating Plaintiffs “abandoned their fraud
theory and it’s doomed the class certification decision because . . . they’re not alleging any
misrepresentation and they’re not alleging a loss as a result of an alleged misrepresentation.” (to
which Plaintiffs did not dispute or even address)); but see ECF No. 590 at 17 (“But the plaintiffs
raise fraudulent concealment in response to the defendants’ limitations defense, not as a theory of
liability. . . . The plaintiffs do not seek class certification for misrepresentations. But that does not
constitute waiver of responding to a statute of limitations defense.”).
75
Plaintiffs’ proposed classes under the applicable conflict-of-laws analysis, and Plaintiffs’ Proposed
Nationwide Classes cannot be certified because this would require applying the differing consumer
protection laws of every state. (Id. at 4142.) Instead, Defendants submit the applicable factors for
the conflict-of-laws analysis favor applying the home state laws of each plaintiff and proposed
class members over applying the NJCFA nationwide. (Id. at 4246.) Defendants appear to agree
that the Restatement (Second) of Conflict of Laws § 145 applies but argue the Court must also
analyze the principles in § 6,35 which Plaintiffs do not address. (Id. at 4142.)
In reply, Plaintiffs reiterate the applicable factors under the choice-of-law analysis favor
applying the NJCFA nationwide here, reasoning “[a]pplication of a single law provides the best
(and most efficient) opportunity for consumers to recover nationwide” and would “further[] New
Jersey’s goal of deterring corporate misconduct in its state.” (ECF No. 577 at 1419 (citations
omitted).) Plaintiffs also contend the main cases Defendants rely on with respect to the conflictof-laws analysis predate In re Accutane Litigation, 194 A.3d 503 (N.J. 2018), “where the New
Jersey Supreme Court held that the judicial interests of certainty, predictability and ease in
applying the law are paramount in a complex case such as this.” (ECF No. 577 at 16; ECF No. 713
at 31; id. at 2930 (Plaintiffs’ counsel asserting “Accutane is the guiding case by the Supreme
Court in New Jersey on choice of law” and “in Accutane, the New Jersey Supreme Court applied
New Jersey law even though every one of those plaintiffs bought the drug somewhere else, a
pharmacy [] prescribed the drug somewhere else, and allegedly sustained an injury somewhere
35
This Court has stated the Restatement (Second) of Conflict of Laws § 6 principles are: “(1) the
interests of interstate comity; (2) the interests of the parties; (3) the interests underlying the field
of tort law; (4) the interests of judicial administration; and (5) the competing interests of the states.”
Bond v. Johnson & Johnson, Civ. A. No. 21-05333, 2021 WL 6050178, at *4 (D.N.J. Dec. 21,
2021).
76
else”).)
Plaintiffs also argue they and the putative class members suffered an ascertainable loss
under the NJCFA based on a benefit-of-the-bargain theory. (ECF No. 577 at 36, 42–44.) Plaintiffs
do not appear to contest Defendants’ claim that they abandoned their fraud theory—indeed,
Plaintiffs state they are not asserting misrepresentation or a fraud-on-the-market theory (see supra
n.34)—but Plaintiffs contend their benefit-of-the-bargain theory does not require that they suffer
an ascertainable loss as a result of deception, and instead it is sufficient if they have suffered an
ascertainable loss as a result of an “unconscionable” act, which they state they have. (ECF No. 577
at 36, 42–44; ECF No. 590 at 21 (“fraud is not required to demonstrate ascertainable losses”).)
Specifically, Plaintiffs allege Defendants set artificially inflated list prices for their analog insulin
products knowing the proposed class members would pay based on those inflated prices, and
therefore Plaintiffs assert “they were ‘unfairly deprived of the benefit of the bargain’ as they paid
more than their pro-rata share of the net prices of the subject insulin.” (ECF No. 577 at 37–38, 42
(citations omitted).) In support of their argument on this point, Plaintiffs cite to Pollard v. AEG
Live, LLC, where the court found the plaintiffs sufficiently alleged an ascertainable loss under the
NJCFA where the plaintiff alleged she overpaid for concert tickets because the defendant
“wrongfully manipulated the market for tickets to the concerts by withholding an amount of tickets
in excess of the amount permitted by [N.J. Stat. Ann. § 56:8-35:1 (since repealed)] and thus drove
up the ticket price by reducing the supply available to the general public.” (ECF No. 577 at 3738;
ECF No. 590 at 2021; Pollard v. AEG Live, LLC, Civ. A. No. 14-1155, 2014 WL 4637017, at *6
(D.N.J. Sept. 16, 2014).)
In their sur-reply, Defendants reiterate that, as this Court previously stated, a “benefit-ofthe-bargain theory requires that the consumer be misled into buying a product that is ultimately
77
worth less than the product that was promised[.]” (ECF No. 587-1 at 1819 (citing In re Insulin
Pricing, 2019 WL 643709, at *1516).) Defendants state Plaintiffs “cannot cite a single case—
from any of the twenty states for which they seek certification—where a court certified a class
based on a theory of alleged unfair or unconscionable pricing or price-setting conduct.” (Id. at 1.)
Defendants also assert Pollard is distinguishable because the plaintiff’s claims in that case “were
not for ‘unconscionable commercial practices’; [rather,] they concerned a separate statutory
provision on ticket sales[,]” which statutory provision is not at issue here. (Id. at 19 (citing Pollard,
2014 WL 4637017, at *6).)
Regarding the choice-of-law inquiry, “[a] federal court sitting in diversity applies the
choice-of-law rules of the forum state—here, New Jersey—to determine the controlling law.”
Maniscalco v. Brother Int’l (USA) Corp., 709 F.3d 202, 206 (3d Cir. 2013) (citations omitted).
“New Jersey has adopted the ‘most significant relationship’ test set forth in the Restatement
(Second) of Conflict of Laws[,]” which is a two-part test. Id. First, a court must determine whether
“an actual conflict exists between the laws of the potential forums.” Id. The New Jersey Supreme
Court specified this step is “done by examining the substance of the potentially applicable laws to
determine whether ‘there is distinction’ between them.” P.V. ex rel. T.V. v. Camp Jaycee, 962 A.2d
453, 460 (N.J. 2008) (citation omitted). If no conflict exists, “there is no choice-of-law issue to be
resolved.” Id. However, if a conflict exists, the court then proceeds to the second part of the test
and “determine[s] which jurisdiction has the ‘most significant relationship’ to the claim.”
Maniscalco, 709 F.3d at 207 (quoting Camp Jaycee, 962 A.2d at 460). In other words, “the Court
determines ‘which state has the most meaningful connections with and interests in the transaction
and the parties.’” Spence-Parker v. Del. River & Bay Auth., 616 F. Supp. 2d 509, 523 (D.N.J.
2009) (quoting NL Indus., Inc. v. Comm. Ins. Co., 65 F.3d 314, 319 (3d Cir. 1995)); see also In re
78
Accutane Litig., 194 A.3d at 519 (“In Camp Jaycee, we adopted the Restatement’s mostsignificant-relationship test set forth in sections 146, 145, and 6 as the paradigm for deciding
‘which state’s substantive law applies in personal injury cases involving more than one state.”
(citing Camp Jaycee, 962 A.2d at 45965)); Restatement (Second) Conflict of Laws §§ 6, 145,
146 (2023).
Here, the Court does not reach the more detailed conflict-of-laws analysis because even
assuming there is no conflict or that the factors in that analysis favor applying the NJCFA
nationwide, the Court finds Plaintiffs do not satisfy Rule 23(b)(3)’s predominance requirement for
either their Proposed Nationwide Classes or Proposed Novo Nordisk and Sanofi New Jersey
Classes, as further explained below.36
The NJCFA prohibits unlawful practices, which it defines as:
The act, use or employment by any person of any commercial
practice that is unconscionable or abusive, deception, fraud, false
pretense, false promise, misrepresentation, or the knowing,
concealment, suppression, or omission of any material fact with
intent that others rely upon such concealment, suppression or
omission, in connection with the sale or advertisement of any
merchandise or real estate, or with the subsequent performance of
such person as aforesaid, whether or not any person has in fact been
misled, deceived or damaged thereby[.]
N.J. Stat. Ann. § 56:8-2. The NJCFA defines “person” as including “any natural person or
his legal representative, partnership, corporation, company, trust, business entity or association,
and any agent, employee, salesman, partner, officer, director, member, stockholder, associate,
trustee or cestuis que trustent thereof[.]” N.J. Stat. Ann. § 56:8-1(d).
A plaintiff asserting an NJCFA claim must show proof of the following: “(1) unlawful
36
However, the Court notes it is not aware of any federal court in this Circuit who has certified a
nationwide class applying the NJCFA nationwide under the “most significant relationship” test.
79
conduct; (2) an ascertainable loss; and (3) a causal relationship between the defendants’ unlawful
conduct and the plaintiff’s ascertainable loss.” Neale v. Volvo Cars of N. Am., LLC, Civ. A. No.
10-4407, 2021 WL 3013009, at *9 (D.N.J. July 15, 2021) (quoting Int’l Union, 929 A.2d at 1086).
Therefore, “[t]o state a claim under the NJCFA, a plaintiff must allege that the defendant engaged
in an unlawful practice that caused an ascertainable loss to the plaintiff.” Frederico v. Home Depot,
507 F.3d 188, 202 (3d Cir. 2007) (citing Cox v. Sears Roebuck & Co., 647 A.2d 454, 462–65 (N.J.
1994)).
Regarding the first prong (proving unlawful conduct), the NJCFA proscribes three general
categories of unlawful practices: “(1) affirmative acts, (2) knowing omissions, and (3) regulation
violations.” Bianchi v. Lazy Days R.V. Ctr., Inc., Civ. A. No. 06-1979, 2007 WL 1959268, at *4
(D.N.J. July 5, 2007) (citations omitted). Unconscionable commercial practices are categorized as
“affirmative acts” under the NJCFA, and therefore “do not require a showing of ‘intent to deceive’
or ‘knowledge of the falsity of the representation.’” Katz v. Live Nation, Inc., Civ. A. No. 09-3740,
2010 WL 2539686, at *5 (D.N.J. June 17, 2010) (quoting Busse v. Homebank LLC, Civ. A. No.
07–3495, 2009 WL 424278, at *9 (D.N.J. Feb.18, 2009)); Cottrell v. Alcon Labs., 874 F.3d 154,
166 (3d Cir. 2017) (finding the NJCFA “prohibit[s] business practices that are unfair and
unconscionable”). The NJCFA “does not define ‘unconscionable commercial practice.’” Ciser v.
Nestle Waters N. Am., Inc., 596 F. App’x 157, 160 (3d Cir. 2015). Also, “[t]here is no precise
formulation for an ‘unconscionable’ act [under the NJCFA] that satisfies the statutory standard for
an unlawful practice.” D’Agostino v. Maldonado, 78 A.3d 527, 537 (N.J. 2013). Rather, “[t]he
New Jersey Supreme Court has instructed courts to ‘pour content’ into the term on a case-by-case
basis.” Ciser, 596 F. App’x at 16061 (quoting Kugler v. Romain, 279 A.2d 640, 651 (N.J. 1971)).
“The word ‘unconscionable’ must be interpreted liberally so as to effectuate the public purpose of
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the [NJ]CFA.” Assocs. Home Equity Servs., Inc. v. Troup, 778 A.2d 529, 543 (N.J. Super. Ct. App.
Div. 2001) (citing Kugler, 279 A.2d at 651). However, “[t]hough an unconscionable commercial
practice ‘is an amorphous concept obviously designed to establish a broad business ethic,’ the term
is not without limits” and “[t]he standard of conduct that the term ‘unconscionable’ implies is lack
of ‘good faith, honesty in fact and observance of fair dealing.’” Id. at 161 (quoting Cox v. Sears
Roebuck & Co., 647 A.2d 454, 462 (N.J. 1994)). “Most importantly, the New Jersey Supreme
Court has instructed that ‘[t]he capacity to mislead is the prime ingredient of all types of consumer
fraud.’” Id. (quoting Fenwick v. Kay Am. Jeep, Inc., 371 A.2d 13 (N.J. 1977)). Whether conduct
is unfair for purposes of the NJCFA is a question for the jury. Slack v. Suburban Propane Partners,
L.P., Civ. A. No. 10-02548, 2010 WL 3810870, at *5 (D.N.J. Sept. 21, 2010) (alteration in
original) (citing Hassler v. Sovereign Bank, 374 F. App’x 341, 344 (3d Cir. 2010)).
Regarding the second prong (proving an ascertainable loss), an “ascertainable loss” can be
“either [an] out-of-pocket loss or a demonstration of loss in value . . . that is quantifiable or
measurable.” Thiedemann v. Mercedes-Benz USA, LLC, 872 A.2d 783, 792–93 (N.J. 2005); see
also Hemy v. Perdue Farms, Inc., Civ. A. No. 11-00888, 2011 WL 6002463, at *18 (D.N.J. Nov.
30, 2011) (“To plead ascertainable loss under the NJCFA, a plaintiff must allege loss that is
‘quantifiable or otherwise measurable.’” (quoting Thiedemann, 872 A.2d at 792)). “Put differently,
a plaintiff is not required to show monetary loss, but only that he purchased something and received
‘less than what was promised.’” Marcus, 687 F.3d at 606 (quoting Union Ink Co., Inc. v. AT&T
Corp., 801 A.2d 361, 379 (N.J. Super. Ct. App. Div. 2002)). “[W]hat New Jersey Courts require
for [a] loss to be ‘ascertainable’ is for the consumer to quantify the difference in value between
the promised product and the actual product received.” Smajlaj v. Campbell Soup Co., 782 F. Supp.
2d 84, 99 (D.N.J. 2011). Therefore, “[a] plaintiff arguing that he suffered an ascertainable loss
81
must provide ‘evidence from which a factfinder could find or infer that the plaintiff suffered an
actual loss’” and “[s]uch a loss must be ‘quantifiable or measurable’ under New Jersey law.”
DiCuio v. Brother Int’l Corp., 653 F. App’x 109, 112 (3d Cir. 2016) (quoting Thiedemann, 872
A.2d at 79293). “When an unconscionable commercial practice has caused the plaintiff to lose
money or other property, that loss can satisfy [] the ‘ascertainable loss’ element of the [NJCFA]
claim[.]” D’Agostino, 78 A.3d at 542.
“[T]o have standing under the [NJCFA] a private party must plead a claim of ascertainable
loss that is capable of surviving a motion for summary judgment.” Dabush v. Mercedes-Benz USA,
LLC, 874 A.2d 1110, 1116 (N.J. Super. Ct. App. Div. 2005) (quoting Weinberg v. Sprint Corp.,
801 A.2d 281, 283 (N.J. 2002)). “In that connection, [p]laintiffs’ allegations must provide ‘enough
specificity as to give the defendant notice of possible damages.’” Hemy, 2011 WL 6002463, at *18
(citation omitted). For example, “when a merchant violates the [NJCFA] by delivering defective
goods and then refusing to provide conforming goods, a customer’s ascertainable loss is the
replacement value of those goods.” Furst v. Einstein Moomjy, Inc., 860 A.2d 435, 440 (2004). Cf.
Int’l Union, 929 A.2d at 1088 (concluding “to the extent that plaintiff seeks to prove only that the
price charged for [defendant’s product] was higher than it should have been as a result of
defendant’s fraudulent marketing campaign, and seeks thereby to be relieved of the usual
requirements that plaintiff prove an ascertainable loss, the theory must fail”); see also Dugan v.
TGI Fridays, Inc., 171 A.3d 620, 641–42 (N.J. 2017) (“[The plaintiffs’] proposed price-inflation
theory does not establish ascertainable loss and causation in this [NJ]CFA class action case.
Individual plaintiffs may be able to establish ascertainable loss and causation by showing that they
would not have purchased the [products] or would have spent less money on them had they been
informed of their cost. The [] plaintiffs cannot establish ascertainable loss and causation, however,
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by demonstrating that [the products’] prices were higher than they would have been had
[defendants] listed [their] prices . . . . A ‘fair’ or ‘reasonable’ price . . . is no substitute for proof of
the actual claimants’ ascertainable loss and causation. Plaintiffs’ price-inflation theory does not
globally establish those elements of the [NJ]CFA for the vast and varied class of [individuals] for
which the [] plaintiffs seek certification.”).
“The New Jersey Supreme Court has repeatedly and explicitly endorsed a benefit-of-thebargain theory under the [NJCFA] that requires nothing more than that the consumer was misled
into buying a product that was ultimately worth less to the consumer than the product he was
promised.” Smajlaj v. Campbell Soup Co., 782 F. Supp. 2d 84, 99 (D.N.J. 2011) (emphasis added)
(citations omitted). A plaintiff alleging a benefit-of-the-bargain theory under the NJCFA “states a
claim if he or she alleges (1) a reasonable belief about the product induced by a misrepresentation;
and (2) that the difference in value between the product promised and the one received can be
reasonably quantified.” See id. (emphasis added); see also Arcand v. Brother Int’l Corp., 673 F.
Supp. 2d 282, 300 (D.N.J. 2009) (“When pleading a benefit-of-the-bargain loss, the plaintiff must
allege ‘the difference between the [product] she received and the [product] as represented at
purchase.’” (alterations in original) (quoting Romano v. Galaxy Toyota, 945 A.2d 49, 57 (N.J.
Super. Ct. App. Div. 2008)). Simply “[a]lleging a ‘failure to receive the benefit of the bargain’
does not satisfy the ‘ascertainable loss’ requirement[.]” Parker v. Howmedica Osteonics Corp.,
Civ. A. No. 07-02400, 2008 WL 141628, at *3 (D.N.J. Jan. 14, 2008) (alteration and citation
omitted)). Rather, a “plaintiff must suffer a definite, certain and measurable loss, rather than one
that is merely theoretical.” Bosland v. Warnock Dodge, Inc., 964 A.2d 741, 749 (N.J. 2009).
Regarding the third and final prong (proving a causal relationship between the defendants’
unlawful conduct and the plaintiffs’ ascertainable loss), the NJCFA requires that, “in order to
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recover any damages, a plaintiff must show that she has suffered an ascertainable loss as a result
of the defendant’s unlawful commercial practice.” Cannon v. Cherry Hill Toyota, Inc., 161 F.
Supp. 2d 362, 373 (D.N.J. 2001) (citing N.J. Stat. Ann. § 56:8-19). In other words, the NJCFA
“requires a consumer to prove that [his or her] loss is attributable to the conduct that the [NJ]CFA
seeks to punish by including a limitation expressed as a causal link.” Bosland, 964 A.2d at 748;
see also Meshinsky v. Nichols Yacht Sales, Inc., 541 A.2d 1063, 1067 (N.J. 1988) (“[A] plaintiff
must establish ‘the extent of any ascertainable loss, particularly proximate to a misrepresentation
or unlawful act of the defendant condemned by the [NJCFA].’” (quoting Ramanadham v. N.J.
Mfrs. Co., 455 A.2d 1134, 1136 (N.J. Super. Ct. App. Div. 1982))). “[U]nlike common law fraud,
the NJCFA does not require proof of reliance.” Marcus, 687 F.3d at 606 (citing Gennari v.
Weichert Co. Realtors, 691 A.2d 350, 366 (1997)). But “the alleged unlawful practice must be a
proximate cause of the plaintiff’s ascertainable loss.” Marcus, 687 F.3d at 606. Plaintiffs must
show “an ascertainable loss of moneys or property, real or personal,” proximately caused by the
defendant’s allegedly unlawful conduct. Dabush, 874 A.2d at 1116.
“[T]he [NJCFA] does not provide for recovery of statutory damages where a plaintiff
cannot show actual harm.” Id. (citation omitted). “While the Attorney General does not have to
prove that the victim was damaged by the unlawful conduct in order to recover any damages, a
private plaintiff must demonstrate ‘an ascertainable loss of moneys or property, real or personal,”
as a result of the defendant’s unlawful conduct.” Id. (citation omitted). Simply showing a violation
of the NJCFA “is insufficient to entitle a private citizen to damages under the [NJCFA].” Dabush,
874 A.2d at 1116. “While obstacles to calculating damages may not preclude class certification,
the putative class must first demonstrate economic loss on a common basis.” Newton, 259 F.3d at
189.
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Here, with Plaintiffs’ apparent abandonment of their fraud theory for liability, Plaintiffs
have not sufficiently alleged a benefit-of-the-bargain theory and likewise have not shown they and
the putative class members have suffered an ascertainable loss under the NJCFA. At the motionto-dismiss stage, in considering whether Plaintiffs adequately pled an ascertainable loss under the
NJCFA, the Court found Plaintiffs’ Complaint failed to plead an “out-of-pocket-loss” theory
because it never alleged Defendants’ analog insulin products were “essentially worthless.” In re
Insulin Pricing, 2019 WL 643709, at *15 (citation omitted). However, the Court found Plaintiffs
adequately pled ascertainable loss under a “benefit-of-the-bargain” theory because Plaintiffs
“alleged that they were misled as to the difference between the benchmark prices and the ‘true
prices’ of the medications” and “that Defendants intentionally and knowingly misrepresented
material facts and thereby ‘inflated’ the price of analog insulin to the detriment of the consumers,
who ‘pay for analog insulin based on the medicines’ benchmark price.’” Id. at *16. Based on these
allegations, the Court found Plaintiffs sufficiently alleged they “were ‘unfairly deprived of the
benefit of the bargain’ as they paid more than their pro-rata share of the net prices of the subject
insulin.” Id.37
37
In its opinion for Defendants’ Motion to Dismiss the First Amended Complaint (“FAC”), the
Court also found, based on Third Circuit precedent, that the heightened pleading standard and
specificity requirement set forth in Federal Rule of Civil Procedure 9(b) applies to Plaintiffs’
NJCFA claim. In re Insulin Pricing, Civ. A. No. 17-00699, 2019 WL 643709, at *14 (D.N.J. Feb.
15, 2019). See also Argabright v. Rheem Mfg. Co., 201 F. Supp. 3d 578, 606 (D.N.J. 2016) (“The
claims under the NJCFA and the ACFA are subject to the heightened pleading standard of Fed. R.
Civ. P. 9(b), which requires particularized pleading for the conduct underlying fraud claims.”
(citing cases)). The Rule 9(b) standard requires the pleading to “state what the misrepresentation
was, what was purchased, when the conduct complained of occurred, by whom the
misrepresentation was made, and how the conduct led plaintiff to sustain an ascertainable loss.” In
re Insulin Pricing, 2019 WL 643709, at *14. The Court found Plaintiffs sufficiently alleged “the
necessary, specific allegations to withstand Defendants’ Motion to Dismiss” because they alleged
“misrepresentation in that Defendants warranted that the artificially inflated publicly reported
benchmark prices of Novolog, Levemir, Apidra, Lantus, and Toujeo were the reasonable
approximations of the true cost.” Id. Additionally, the Court concluded Plaintiffs alleged that they
85
But at the class certification stage, Plaintiffs seemingly clarify their theory is not one based
on fraud or misrepresentation but rather is based on alleged unfair and unconscionable conduct,
which they submit is sufficient to show an ascertainable loss under the NJCFA because they claim
they do not need to show any deception or fraud to bring this claim. (ECF No. 575 at 70 (“The
claims of the nationwide classes do not require proof of deception, turning on individual
circumstances.”); ECF No. 577 at 42 (“Benefit-of-the-bargain damages do not require the plaintiffs
to suffer an ascertainable loss as a result of deception; it suffices that plaintiffs suffered an
ascertainable loss as a result of an unconscionable act.”).) Essentially Plaintiffs’ theory now is that
Defendants’ alleged conduct in setting artificially inflated list prices for their analog insulin
products was an unconscionable commercial practice constituting unfair conduct under the
NJCFA, which purportedly caused injuries to the putative class members by causing them to
overpay for those products. Plaintiffs understandably may not want to focus on fraud or
misrepresentation because courts generally seem hesitant to certify classes involving allegations
of fraud, misrepresentation, or deception, as those often turn on individual circumstances. E.g.,
Kelley v. Microsoft Corp., 251 F.R.D. 544, 557 (W.D. Wash. 2008) (“Many courts have denied
class certification where plaintiffs alleged a deception-based theory of consumer fraud.” (citing
cases)); Webster v. LLR, Inc., Civ. A. No. 17-00225, 2018 WL 10230741, at *9 (W.D. Pa. Aug.
20, 2018) (“[W]hen district courts have faced the problem of nationwide classes which seek to
apply state consumer protection laws, those courts have refused to certify a class.” (citing cases)).
But abandoning their fraud theory at the class certification stage does not allow them to adequately
show an ascertainable loss for purposes of certifying a class action based on an alleged violation
“purchased the subject drugs, provide[d] allegations concerning when the conduct occurred, and
assert[ed] that the conduct led Plaintiffs to suffer a loss.” Id.
86
of the NJCFA.
While New Jersey courts have stated the NJCFA does not require proof of reliance,
Marcus, 687 F.3d at 606 (citation omitted), and that unconscionable commercial practices as
“affirmative acts” under the NJCFA “do not require a showing of ‘intent to deceive’ or ‘knowledge
of the falsity of the representation[,]’” Katz, 2010 WL 2539686, at *5 (citation omitted), New
Jersey courts have also held that a plaintiff alleging a benefit-of-the-bargain theory under the
NJCFA must allege “(1) a reasonable belief about the product induced by a misrepresentation; and
(2) that the difference in value between the product promised and the one received can be
reasonably quantified.” Smajlaj, 782 F. Supp. 2d at 99. With Plaintiffs’ apparent abandonment of
their fraud theory with respect to Defendants’ liability, they do not sufficiently allege a benefit-ofthe-bargain theory under the NJCFA and therefore do not sufficiently allege an ascertainable loss
under the NJCFA. Simply alleging a benefit-of-the-bargain loss or an unconscionable commercial
practice is insufficient to show Plaintiffs have suffered a “a definite, certain and measurable loss,
rather than one that is merely theoretical.” See Bosland, 964 A.2d at 749; Int’l Union, 929 A.2d at
1088 (concluding “to the extent that plaintiff seeks to prove only that the price charged for
[defendant’s product] was higher than it should have been as a result of defendant’s fraudulent
marketing campaign, and seeks thereby to be relieved of the usual requirements that plaintiff prove
an ascertainable loss, the theory must fail”); see also Dugan, 171 A.3d at 641–42 (“[The plaintiffs’]
proposed price-inflation theory does not establish ascertainable loss and causation in this [NJ]CFA
class action case.”). Plaintiffs have not sufficiently shown they failed to receive the benefit of the
bargain as they have not alleged that they had “a reasonable belief about the product induced by a
misrepresentation”—and in fact they have asserted the opposite, that their ascertainable loss theory
is not based on misrepresentation (see supra n.34))—or that they were misled into buying insulin
87
that was worth less than was promised. Therefore, Plaintiffs have “failed to propose a cognizable
theory of damages that is sufficiently supported by class-wide evidence.” See Harnish, 833 F.3d
at 313; cf. Dugan, 171 A.3d at 641–42 (concluding the plaintiffs’ price-inflation theory did not
establish ascertainable loss and causation under the NJCFA).
In Harnish v. Widener University School of Law, the plaintiffs’ theory of damages was a
price inflation theory where plaintiffs alleged that the defendant’s “alleged misrepresentations
inflated its tuition prices above what they should have been, and all [putative class members]
suffered damages when they paid the extra, ‘inflated’ tuition amount.” Civ. A. No. 12-00608, 2015
WL 4064647, at *6 (D.N.J. July 1, 2015). The Harnish court noted the plaintiffs “intend[ed] to
prove damages on a classwide basis by using an expert statistical analysis to quantify the alleged
tuition inflation” but found this “unacceptable” because the plaintiff’s “method of proving
classwide damages relies on a ‘fraud on the market’ theory which New Jersey courts have rejected
outside the federal securities fraud context.” Id. at *67. The Harnish court concluded the plaintiff
failed to show that the damages elements of his NJCFA claims could be established by common
proof, and hence, his proposed class could not be certified under Rule 23(b)(3). Id. at *8. The court
found the plaintiff did not satisfy Rule 23’s predominance requirement because “individual
questions predominate over common questions regarding the loss each proposed class member
sustained.” Id. at *67.
The Third Circuit affirmed the Harnish court’s decision, stating “[t]he state courts, like the
District Court in this case, have emphasized that recognizing ‘price inflation’ as a ‘cause’ of
‘ascertainable loss’ is essentially the same as extending the fraud-on-the-market presumption to
all consumer-fraud cases”; “[t]he practical effect of both [fraud-on-the-market and ‘price
inflation’] theories is indeed the same, and . . . the state courts have refused to recognize either [a
88
fraud-on-the-market or a ‘price inflation’] theory outside the federal securities fraud context.”
Harnish, 833 F.3d at 31213. The Third Circuit concluded the plaintiffs “therefore failed to
propose a cognizable theory of damages that is sufficiently supported by class-wide evidence.” Id.
at 313. See also Dugan, 171 A.3d at 626 (stating “[NJ]CFA class action jurisprudence rejects
‘price-inflation’ theories . . . as incompatible with the [NJ]CFA’s terms” and concluding based on
this jurisprudence, plaintiffs alleging a price inflation theory “have not established predominance
with respect to their [NJ]CFA claims”).
Similarly, here Plaintiffs do not have a cognizable theory of damages that is sufficiently
supported by class-wide evidence. See Harnish, 833 F.3d at 313. Plaintiffs allege a price inflation
theory—that Defendants’ engaged in unlawful conduct, a purportedly unconscionable pricing
scheme, by artificially inflating the list prices for their analog insulin products so they could offer
rebates to certain PBMs in exchange for preferred formulary placement, which allegedly caused
Plaintiffs to suffer an ascertainable loss in that they overpaid for Defendants’ analog insulin
products and accordingly were unfairly deprived of the benefit-of-the-bargain because they paid
more than their pro-rata share of the net prices of those products. However, merely “[a]lleging a
‘failure to receive the benefit of the bargain’ does not satisfy the ‘ascertainable loss’ requirement.”
Parker, 2008 WL 141628, at *3. Rather, a “plaintiff must suffer a definite, certain and measurable
loss, rather than one that is merely theoretical.” Bosland, 964 A.2d at 749.
Even assuming, arguendo, Plaintiffs sufficiently alleged an ascertainable loss under the
NJCFA, the Court finds Plaintiffs fail to satisfy Rule 23(b)(3)’s predominance requirement
because individual questions predominate over any common ones that may exist and the Court is
not convinced the essential elements of the putative class members’ NJCFA claims are capable of
proof at trial through evidence that is common to the class rather than individual to its members.
89
In particular, proof of the essential elements of Plaintiffs’ NJCFA claim (including whether each
putative class member suffered an ascertainable loss and whether Defendants’ alleged conduct
caused that loss) would require multiple fact-specific individualized inquiries and evidence
individual to its members, which would likely “devolve into a series of mini trials concerning
causation or injury[,]” which defeats predominance. See Neale, 2021 WL 3013009, at *9.
Determining Defendants’ liability under the NJCFA would require delving into evidence
individual to each putative class member and their respective factual circumstances—whether they
were insured; the terms and policies of their insurance coverage, if any; whether they benefited
from any of the rebates passed down through the PBMs and/or insurers; etc. Cf. Sheet Metal
Workers Local 441 Health & Welfare Plan v. GlaxoSmithKline, PLC, Civ. A. No. 04-5898, 2010
WL 3855552, at *31 (E.D. Pa. Sept. 30, 2010) (denying class certification in an antitrust case,
finding “that proof of antitrust impact and damages resulting from [the defendant’s] allegedly anticompetitive conduct will require evidence individual to class members” and concluding that
“plaintiffs failed to meet their burden of showing that common questions of law of fact
predominated over any questions affecting individual members”).
Plaintiffs are premising their alleged injury on being unfairly deprived of the benefit-ofthe-bargain because they and the putative class members purportedly paid more for Defendants’
analog insulin products than their pro-rata share of the net prices of those products because of
Defendants’ alleged unlawful pricing scheme. (ECF No. 577 at 42.) But multiple individualized
inquiries will be required to determine injury, causation, and damages for Plaintiffs’ alleged claims
under the NJCFA, overwhelming any common issues. Like in Dugan v. TGI Fridays, “Plaintiffs’
price-inflation theory does not globally establish those elements of the [NJ]CFA for the vast and
varied class of [individuals] for which the [] plaintiffs seek certification.” See Dugan, 171 A.3d at
90
641–42. Plaintiffs have not sufficiently shown economic loss, i.e., the fact of damage—here,
ascertainable loss and a causal relationship, “core elements of liability under the NJCFA”—on a
common basis or that this can be proven with common evidence. See Harnish, 833 F.3d at 306
(citation and quotations omitted) (“While obstacles to calculating damages may not preclude class
certification, the putative class must first demonstrate economic loss—that is, the fact of damage—
on a common basis.”).
In particular, causation will not be uniform across putative class members because whether
each consumer paid more than their pro-rata share of the net prices for Defendants’ analog insulin
products and what caused this alleged overpayment will vary depending upon each putative class
member’s individual circumstances, e.g., (1) whether the class member was insured or had the
opportunity to be insured at any point during Plaintiffs’ proposed class periods; (2) if the class
member was insured, the terms of their insurance coverage and what was their reason(s) for
choosing that insurance coverage; (3) whether the class member had options for alternative
insurance coverage at any point during Plaintiffs’ proposed class periods; and (4) what amount(s),
if any, the class member paid for which of Defendants’ analog insulin products and how the class
member’s pharmacy calculated the transaction price. To make these fact-specific determinations,
various individualized inquiries, essentially “a series of mini trials” on liability, would be required
to determine whether each putative class member in fact suffered an ascertainable loss under the
NJCFA, and if so, whether Defendants’ alleged conduct caused that class member’s loss.
Therefore, this cannot be determined with common evidence and instead will require evidence
individual to each putative class member.
Individualized inquiries will also be required to determine whether and how putative class
members benefited from the rebates. Some PBMs pass along rebates to insurers, and insurers who
91
receive those rebate savings can choose to pass along some or all (or none) of those savings to
their customers. Some insurers choose to pass along rebate savings to consumers, while others do
not. Some consumers may therefore benefit from those rebate savings through lower premiums
and/or lower deductibles and/or by having set copays rather than coinsurance. Other consumers
may benefit from those rebates through point-of-sale rebate programs aimed at helping to offset
out-of-pocket spending. Still other consumers may not benefit from those rebates at all. Therefore,
determining Defendants’ liability under the NJCFA will not be the same among putative class
members because some insured class members may have benefitted from all or some of the rebate
savings from the PBMs and insurers. Whether they benefitted depends on the specific policy (or
policies) of each putative class member’s particular insurer at any given time during the Plaintiffs’
proposed class periods, which would require individualized fact-specific inquiries and evidence.
In other words, whether an insured putative class member benefits from these rebates that make
up the difference between the list price and the net price, and if so by how much, will vary
depending on individualized issues concerning that putative class member’s insurer(s), insurance
plan(s), and affiliated PBM(s), which can all change over time.
Additional individualized inquiries would be needed to determine (1) whether the price
each putative class member paid for each of Defendants’ analog insulin product at issue was based
on list price at all relevant times within Plaintiffs’ proposed class periods; (2) whether the
pharmacies charged the U&C price for every one of Defendants’ analog insulin product at issue,
for each putative class member, every time, and if not, how else they calculated the transaction
price; (3) whether each putative class member used or could have used manufacturer coupons or
other forms of financial assistance in purchasing Defendants’ analog insulin product; (4) whether
an uninsured putative class member could have been insured and chose not to for whatever reason;
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and (5) whether insured putative class members could have changed insurance plans with different
coverage terms and options at any time during the proposed class periods.
Considering the breadth of Plaintiffs’ twelve proposed classes and the numerous
individualized inquiries that will be required to decide the factual and legal questions in this action
(e.g., whether Defendants’ conduct was unfair or unconscionable, and if so, when their conduct
supposedly became unfair and unconscionable, whether each putative class member suffered an
ascertainable loss, and if so, whether Defendants’ conduct proximately caused the class members’
losses), the Court finds common legal and factual questions do not predominate over
individualized issues. See Sanders v. Johnson & Johnson, Inc., Civ. A. No. 03-02663, 2006 WL
1541033, at *56 (D.N.J. June 2, 2006). Therefore, the Court concludes Plaintiffs fail to satisfy
Rule 23(b)(3)’s predominance requirement because of the various fact-specific, individualized
inquiries that would be required for Plaintiffs to prove the essential elements of their NJCFA claim,
which cannot be determined with common evidence or without “mini trials” but rather would
require individualized treatment, and which overwhelm any common issues, making class
certification unsuitable for Plaintiffs’ proposed classes. See Tyson, 577 U.S. at 453 (finding “[a]n
individual question is one where ‘members of a proposed class will need to present evidence that
varies from member to member,’ while a common question is one where ‘the same evidence will
suffice for each member to make a prima facie showing [or] the issue is susceptible to generalized,
class-wide proof” (alteration in original) (citation omitted)).
Because the Court is not convinced that the essential elements of the putative class
members’ NJCFA claims are “capable of proof at trial through evidence that is common to the
class rather than individual to its members,” the Court concludes the predominance requirement is
not met, and therefore certification under Rule 23(b)(3) is inappropriate as to Plaintiffs’
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Nationwide Classes and Plaintiffs’ Novo Nordisk and Sanofi Classes. See Reinig, 912 F.3d at 127–
28 (quoting Gonzalez v. Corning, 885 F.3d 186, 195 (3d Cir. 2018)).
Additionally, to the extent Plaintiffs argue the Court should certify the Proposed
Nationwide Classes and the Proposed Novo Nordisk and Sanofi New Jersey Classes for the same
reasons as the courts who granted class certification in the Valsartan and James v. Global Tel*Link
Corporation cases, the Court finds those cases are distinguishable from this action. See Valsartan,
2023 WL 1818922; James v. Global Tel*Link Corp., Civ. A. No. 13-4989, 2018 WL 3727371
(D.N.J. Aug. 6, 2018).
Valsartan was a products liability case where it was uncontested that the defendants’
products were contaminated and for which products the plaintiffs were attempting to recover the
full purchase price paid. Based on the parties’ factual and legal arguments, the Valsartan court
found it was “incontrovertible . . . that the contamination resulted from defendants’ noncompliance of cGMPs at some level[,]” and concluded “[s]ince defendants’ conduct in making
contaminated VCDs and in putting these into the U.S. drug supply chain, which plaintiffs paid for,
is incontrovertible, that singular fact grounds all of plaintiffs’ claims.” Valsartan, 2023 WL
1818922, at *14. Based on this incontrovertible fact, the Valsartan court stated the plaintiffs had
“common facts upon which to base their economic loss claims and which are ‘capable of proof at
trial through evidence that is common to the class rather than individual to its members, and which
dominate each putative class member’s claims.” Id.
In contrast, this is not a products liability case involving contaminated products; Plaintiffs
here allege an unfair pricing scheme purportedly resulting in overpayment, which Plaintiffs
contend is unconscionable conduct and which Plaintiffs are seeking to recover any portion of the
purchase price allegedly overpaid, not necessarily the full price. The Valsartan plaintiffs asserted
94
defendants’ products “were worthless because, had the contamination [of defendants’ products]
been publicly known, [they] would not have been sold, i.e., were not merchantable” and therefore
they sought “as their economic loss the full cost of their payments for their insured’s [products]
over the relevant period.” Valsartan, 2023 WL 1818922, at *20. Here, however, Plaintiffs are not
alleging any such contamination or that Defendants’ insulin products were “worthless.” Rather,
Plaintiffs allege they and the putative class members paid more than their pro-rata share for
Defendants’ insulin products.
The James case is likewise distinguishable. James involved alleged overcharges for calls
made by inmates at New Jersey prisons and jails at fees “many times greater” than the costs of
providing the inmate calling services. James, 2018 WL 3727371, at *2. The James plaintiffs
alleged a violation of the NJCFA for “charging unconscionable rates and fees” and a violation of
the Takings Clause of the Fifth Amendment and sought to certify a class action based on those two
alleged violations—a class consisting of all persons who were incarcerated in New Jersey and
made calls using the inmate calling services during the class period (or persons who funded those
calls for the inmates). Id. at *34, *10. The court noted plaintiffs’ expert “assume[d] a reasonable
calling rate of 5-cents-per-minute, based on his extensive experience in the telecommunications
industry” and on Global Tel*Link charging “roughly 5 cents per-minute for all calls[,]” but
defendants “allegedly charged between 40 cents and $1.00 per minute during the class period.” Id.
at *78. Therefore, the court found there was “no concrete evidence that such costs varied so
substantially as to make some fees unconscionable and others not.” Id. at *7. In other words,
whether the alleged overcharge was 35 cents per minute or 95 cents per minute or anywhere in
between, that did not matter because any of those would be unconscionable. See id. Also, James
was not a nationwide class action case.
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In James, the court certified a class based on claims brought under one state statute (the
NJCFA) and the Takings Clause of the Fifth Amendment, and the class was limited to New Jersey
inmates who made calls or individuals who funded those calls. In contrast, Plaintiffs here propose
certifying two separate nationwide classes in addition to multiple multi-state and state-specific
classes involving a number of different state consumer protection statutes, with numerous putative
class members across multiple states, some insured and some uninsured, who made purchases of
different insulin products with different prices at different places and at various different times. In
James, the parties put forth evidence showing concrete numbers (i.e., the cost of the calls was 5
cents per minute, yet defendants were charging between 40 cents and $1.00 per minute, which
overcharges were allegedly unconscionable) and based on this, the court found plaintiffs’ expert
could calculate damages owed to the class “even if he ha[d] not yet perfected that calculation.”
James v. Glob. Tel*Link Corp., Civ. A. No. 13-4989, 2018 WL 3727371, at *2, *8 (D.N.J. Aug.
6, 2018).
In contrast, here, Plaintiffs are not alleging that charging a specific dollar amount or
percentage (e.g., $50 or 30%) for Defendants’ insulin products is unconscionable; rather, Plaintiffs
are alleging that Defendants’ conduct in setting artificially inflated list prices for their analog
insulin products and paying rebates to PBMs and other middlemen at the expense of the consumers
is what is unconscionable. Put another way, Plaintiffs are not alleging, for example, that anything
over $50 for one of Defendants’ analog insulin products is unconscionable; instead, Plaintiffs’
theory is based on putative class members who paid any portion of the purchase price for
Defendants’ analog insulin products based on reference to Defendants’ list price.38
38
See also ECF No. 713 at 77 (counsel for Defendants stating at oral argument: “[Plaintiffs] are
clinging to the idea that if they can establish that a list price is unconscionable on some abstract
theory but then everybody that pays even the tiniest fraction of that list price, if you paid one
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Therefore, Plaintiffs’ motion to certify the Proposed Nationwide Classes,39 the Proposed
Novo Nordisk New Jersey Class, and the Proposed Sanofi New Jersey Class under Rule 23(b)(3)
is DENIED.40
percent of list, plaintiffs would say, well, that’s unconscionable even though the actual amounts
might be very small. At the same time if you’re paying a lot but you’re not paying a percentage of
list price, plaintiffs aren’t here to help. They’re defining them out of a class, so you still have the
same problem with some people that have suffered that are going to have a very hard time getting
relief.”).
39
Additionally, as Defendants note in their opposition, the Court previously ruled Plaintiffs lack
standing to pursue state law claims for Defendants’ insulin products that they did not purchase in
a particular state. (ECF No. 576 at 9697 (citing In re Insulin Pricing, 2019 WL 643709, at *17).)
Therefore, because Plaintiffs do not claim their proposed class representatives reside and/or
purchased one or more of Defendants’ analog insulin products in every US state, the Court denies
Plaintiffs’ motion to certify their Proposed Nationwide Classes on this additional basis. See In re
Insulin Pricing, 2019 WL 643709, at *17 (“Consistent with Neale [v. Volvo Cars of N. Am., LLC,
794 F.3d 353 (3d Cir. 2015)], district courts within the Third Circuit and throughout the nation
have held that named plaintiffs in a class action ‘lack standing to bring claims on behalf of putative
classes under the laws of states where no named plaintiff is located and where no named plaintiff
purchased the product at issue.’ Indeed, the Complaint includes seventeen counts in which no
named plaintiff resides in such state, nor is there any allegation of injury in such state. This runs
afoul of the Supreme Court’s holding in DaimlerChrysler, as well as the rules promulgated by
courts of this Circuit.” (quoting In re: Niaspan Antitrust Litig., Civ. A. No. 13-md-02460, 2015
WL 8150588, at *3 (E.D. Pa. Dec. 8, 2015))).
40
Because the Court denies Plaintiffs’ motion to certify their proposed classes under Rule 23(b)(3),
it does not address the separate issue of whether Plaintiffs’ class periods for each of their proposed
classes—which extend “through the date on which the class is certified” (see ECF No. 574)—is
appropriate. See In re Domestic Drywall, 2017 WL 3700999, at *10 (“[Indirect Purchaser Plaintiffs
(‘IPPs’)] include in their definition of a class member anyone who is an ‘end user’ of drywall ‘to
the present time.’ This open-ended timeframe is not warranted here, and further complicates
ascertainability. This is not a case of an alleged ‘continuing violation’ which may allow damages
to be awarded for a time period after the complaint was filed. Indeed, very few cases have facts
which qualify for damages ‘up to the present time.’ . . . It was the responsibility of counsel for IPP
to limit the class in an ascertainable way, and by including the open-ended timeframe in the
definition, IPPs have provided an additional reason to find that the class is not ascertainable. The
Court concludes that IPPs have not met their burden to show that their proposed class is
ascertainable.”). The Court also notes Plaintiffs have not analyzed any potential effects any or all
of the following may have on their putative classes as currently proposed: (1) President Biden’s
Inflation Reduction Act; (2) Novo Nordisk’s MyInsulinRx program for its analog insulin products,
which became effective on September 13, 2023; and (3) Sanofi’s price changes and cap for certain
of its analog insulin products, which became effective on January 1, 2024.
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2. Proposed Novo Nordisk and Sanofi Multi-State Classes
Plaintiffs argue both the Proposed Novo Nordisk Multi-State Class and the Proposed
Sanofi Multi-State Class should be certified under Rule 23(b)(3) for claims brought under the
consumer protection statutes of sixteen states (see supra n.17) because: (1) all sixteen states
prohibit unfair or unconscionable practices and variations in these states’ laws do not defeat
commonality or predominance; (2) common issues predominate because all sixteen states apply
the same three-part FTC test for determining whether an act or practice is “unfair”; and (3) they
will prove impact and damages using class-wide, common evidence. (ECF No. 575 at 8086,
8898.) Plaintiffs argue the three-part FTC test for determining whether an act or practice is unfair
requires showing that the challenged conduct: (1) caused a substantial injury, (2) that is not
reasonably avoidable by consumers, and (3) is not outweighed by the benefits to consumers or
competition. (Id. at 7, 80 (citation omitted).) Plaintiffs contend certifying their Proposed MultiState Classes under Rule 23(b)(3) is appropriate because they will use common evidence to
establish Defendants’ conduct in setting the list prices for their analog insulin products was
“unfair” under this three-part test, which Plaintiffs allege caused all putative class members to
suffer monetary losses. (Id. at 88–97.) Plaintiffs maintain this showing will not require any
individualized evidence because they can calculate the alleged overcharges using common
evidence and “[i]ndividual reliance is not required for claims of unconscionable and unfair acts
under the laws of the [] states at issue.” (Id. at 9598.)
In opposition, Defendants contend certification of Plaintiffs’ Proposed Novo Nordisk and
Sanofi Multi-State Classes is not appropriate because variations among the unfairness and
unconscionability standards of the sixteen states’ consumer protection statutes require highly
individualized and fact-intensive inquiries that overwhelm any common issues and defeat
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predominance.41 (ECF No. 576 at 29–37, 48–58.) First, Defendants argue even assuming putative
class members were injured, the Court would have to engage in individualized inquiries to
determine whether the injury was “reasonably avoidable,” which “requires analyzing each
person’s decision-making and options for avoiding the cost she paid” for Defendants’ analog
insulin product at any given time during Plaintiffs’ proposed class periods—e.g., whether the
consumers used, or could have used one of Defendants’ affordability offerings or manufacturer
coupons, or whether the consumers otherwise limited, or could have limited, their out-of-pocket
costs by using other forms of assistance programs offered by other entities, such as insurers,
pharmacies, and state government agencies.” (Id. at 3132 (citations omitted).) In support,
Defendants cite evidence showing some named Plaintiffs used Defendants’ affordability offerings
and others chose not to. (Id. at 31 (citations omitted).) Additionally, Defendants argue each
putative class member has a distinctive set of insurance options, which “are not set in stone; they
can change any time a consumer (or family member) changes jobs, insurance plans, or insurers[,]”
and “[t]hus, a consumer’s ability to avoid higher costs requires different assessments at different
times.” (Id. at 32 (citing Baker Rpt. ¶ 102).) Defendants assert since some putative class members
“‘could—and did—purchase’ alternative products, depending on their particular circumstances,”
this undermines their claim that all class members “had no meaningful opportunity to avoid paying
the higher retail price, and thus, whether or not a class member could have avoided the defendants’
41
Defendants also note: (1) certain states (including Louisiana, North Carolina, Iowa, and
Maryland) “have developed their own jurisprudence on what makes conduct unfair”; (2) other
states (including Massachusetts) “impose more specific requirements on what qualifies as ‘unfair’
conduct”; and (3) the law is not settled in all sixteen states—“Plaintiffs recognize that no court has
decided what standard applies in Colorado and Indiana, which lack codified definitions of
unfairness. Likewise, no North Dakota court has applied that state’s unfairness provision since its
adoption.” (ECF No. 576 at 5253 (citing ECF No. 575 at 8586 & n.329).)
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conduct is an individualized question of fact.” (ECF No. 576 at 3334 (quoting Siegel v. Shell Oil
Co., 612 F.3d 932, 936 (7th Cir. 2010)).).
Second, Defendants also submit Plaintiffs cannot show through common proof that each
putative class member suffered a substantial injury, stating the individual amount consumers paid
for Defendants’ analog insulin products—their alleged injury—is person-specific. (Id. at 34.)
Additionally, Defendants contend “rebates may have lowered a consumer’s costs in ways not
reflected in the transaction price” because “the insulin may have been on a more favorable
formulary tier (meaning the consumer paid a lower price) because rebates were paid”; (2) “the
insurer may have used the rebate to lower premiums or deductibles” for the consumer; or (3) “the
insurer may have passed along the rebate to the consumer at the point of sale.” (Id. (citing Baker
Rpt. ¶¶ 5760, 224; Anthem Cert. at 69).) Defendants state these individualized issues cannot be
proven using common evidence. (Id. (citation omitted).)
Third, Defendants assert Plaintiffs also cannot establish causation on a class-wide basis by
simply alleging they suffered a loss because of Defendants’ conduct. (Id. at 34.) Rather,
Defendants argue Plaintiffs “must prove that Defendants’ conduct—not the conduct of PBMs,
insurers, pharmacies, or any other third party—caused each putative class member’s allegedly
‘excessive’ costs” and this “requires a case-by-case inquiry.” (Id. at 3435 (citing ECF No. 575 at
47).)
Fourth, Defendants contend that analyzing whether Defendants’ conduct was “outweighed
by the benefits to consumers or competition” is likewise overrun by individual questions that
Plaintiffs do not explain how they would address with common proof. (ECF No. 576 at 36.)
Defendants submit Plaintiffs do not have any class-wide means to assess the benefits of rebates
and their expert Dr. Rosenthal conceded ‘consumers differentially benefit from rebates or the lack
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of them.’” (Id. at 3637 (citing Rosenthal Dep. at 223:11–223:16).) Defendants also state that,
because they “offered different rebates for different products, different PBMs, and different
formularies, the benefits to consumers from this rebate competition will necessarily vary.” (Id. at
36 (citing Baker Rpt. ¶¶ 23435).) In contrast to the AWP wholesale price litigation involving
misrepresentation-based claims that manufacturers reported fictitious and artificial AWPs,
Plaintiffs seem to no longer be alleging fraud or misrepresentation (see supra n.34) and “do not
dispute that Defendants’ list prices are what they claim to be: the prices Defendants charge
wholesalers, exclusive of rebates and discounts, as defined by federal law.” (Id. (citations
omitted).)
Fifth, and finally, Defendants argue the sixteen states in Plaintiffs’ Proposed Novo Nordisk
and Sanofi Multi-State Classes do not apply the “exact same” unfairness standard. Even assuming
they did, Plaintiffs do not address the variations in the other elements (e.g., scienter, causation, and
statutes of limitations) of the consumer protection statutes of those states. (ECF No. 576 at 5354.)
In reply, Plaintiffs (1) maintain common issues predominate as to whether Plaintiffs and
the putative class members could reasonably avoid the harm because “where the basis for all retail
prices (WAC) is the same everywhere, the consumer couldn’t have avoided it as a matter of fact”;
(2) contend Defendants’ arguments “present common issues on the merits under an objective,
reasonable person standard” because “[a] jury may decide using common proof whether it’s
reasonable to expect the average consumer to avoid an [alleged] overcharge by altering their
physician’s prescribed treatment, buying different insurance, or scouring the market for discounts
only available to the select few”; (3) reiterate the three-part “substantial injury” test for unfairness
applies under the laws of the sixteen states at issue; (4) state Defendants misread the case law in
asserting “many states have developed their own jurisprudence on what makes conduct unfair”;
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(5) assert the Defendants err in asserting the Court cannot decide whether the three-part FTC test
applies in Colorado, Indiana, and North Dakota, arguing that, “[w]hile no higher court in these
states has explicitly outlined a test for unfair conduct, that fact does not bar certification because:
([a]) it’s a common issue of law as to what test should apply; and ([b]) there are reasons to suggest
each state would apply the three-part FTC test”; and (6) argue the other state law elements and
state-specific issues Defendants identified do not preclude certification under Rule 23(3)(b). (ECF
No. 577 at 311, 2132 (citations omitted).)
In their sur-reply, Defendants contend, among other things, Plaintiffs’ reply introduces a
“new argument that all sixteen state laws in the putative multi-state classes turn on a singular
assessment of what is ‘reasonably avoidable’ under an ‘objective reasonable person standard’” but
submit this is not the test and Plaintiffs do not cite any cases from any of the sixteen states
supporting that proposition. (ECF No. 587-1 at 8 (citations omitted).)
In their response to Defendants’ sur-reply, Plaintiffs assert class-wide evidence shows
Defendants “proffered means of avoiding overpayment were unreasonable for all class members”
and maintain they can prove substantial injury and causation with class-wide evidence and that
this evidence will show the substantial injuries suffered are not outweighed by any countervailing
benefits. (ECF No. 590 at 419.) Plaintiffs also assert Defendants’ purported benefits of rebates
are “speculative” and “indirect” and constitute payments by collateral sources. (Id. at 813.)
Further, Plaintiffs claim even assuming these rebates are relevant, “whether their collateral benefits
to class members factually mitigate the grossly inflated prices that class members pay . . . is an
affirmative defense.” (Id. at 9.)
For many of the same reasons the Court denies certification of Plaintiffs’ Proposed
Nationwide Classes and Proposed New Jersey Classes, the Court likewise concludes certification
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of Plaintiffs’ Proposed Multi-State Classes is inappropriate because individual questions
predominate over any common ones that may exist and the Court is not convinced the essential
elements of the putative class members’ claims brought under the consumer protection laws of
sixteen states are capable of proof at trial through evidence that is common to the class rather than
individual to its members, as discussed more fully below.
The FTC Act defines the term “unfair or deceptive acts or practices” as including such acts
“that (i) cause or are likely to cause reasonably foreseeable injury within the United States; or (ii)
involve material conduct occurring within the United States.” 15 U.S.C. § 45(a)(4)(A). However,
the FTC Act also states the FTC “shall have no authority . . . to declare unlawful an act or practice
on the grounds that such act or practice is unfair unless the act or practice causes or is likely to
cause substantial injury to consumers which is not reasonably avoidable by consumers themselves
and not outweighed by countervailing benefits to consumers or to competition.” Id. § 45(n). In
other words, “the FTC Act defines ‘unfair acts or practices’ as those that ‘cause[ ] or [are] likely
to cause substantial injury to consumers which [are] not reasonably avoidable by consumers
themselves and not outweighed by countervailing benefits to consumers or to competition.’”
F.T.C. v. Wyndham Worldwide Corp., 10 F. Supp. 3d 602, 613 (D.N.J. 2014), aff’d, 799 F.3d 236
(3d Cir. 2015) (quoting 15 U.S.C. § 45(n)).
Here, Plaintiffs maintain they can prove Defendants are liable for alleged “unfair” acts
under the sixteen states’ consumer fraud laws by using common evidence to show that each
putative class members suffered (1) a substantial injury, (2) that was not reasonably avoidable, and
(3) was not outweighed by benefits to consumers or competition. However, setting aside potential
issues with the differences in the sixteen different states’ consumer fraud laws themselves, and
assuming for purposes of this Opinion that each of these sixteen states would apply the FTC’s
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three-part test, the Court finds that, as with Plaintiffs’ NJCFA claims, determining Defendants’
liability under this test would similarly require multiple fact-specific, individualized inquiries and
evidence individual to each putative class member. The Court is not convinced that common
evidence can be used to prove whether each putative class member suffered a substantial injury
that was not reasonably avoidable and that was not outweighed by countervailing benefits, as well
as whether Defendants’ alleged conduct caused or was likely to cause this alleged substantial
injury.
For example, individualized inquiries would be required to determine (1) whether each
putative class member benefitted from any rebates that may have been passed down from PBMs
and/or insurers, and (2) whether putative class members used (or chose not to use for whatever
reason) prescription assistance plans, manufacturer coupons, pharmacy coupons, and/or other
form(s) of financial assistance, both of which are relevant to whether each putative class member
suffered a substantial injury that was not reasonably avoidable. See, e.g., Siegel, 612 F.3d at 936
(“[W]hether or not a class member could have avoided the defendants’ conduct is an individualized
question of fact.”); Porsche Cars N. Am., Inc. v. Diamond, 140 So.3d 1090, 1099 (Fla. Dist. Ct.
App. 2014) (explaining “[c]onsumers may act to avoid injury before it occurs if they have reason
to anticipate the impending harm and the means to avoid it, or they may seek to mitigate the
damage afterward if they are aware of potential avenues toward that end” (quoting In re Orkin
Exterminating Co., 108 F.T.C. 263 (1986), aff’d, 849 F.2d 1354 (11th Cir. 1988))). When
Defendants issue rebates to PBMs for formulary placement for their analog insulin products, the
PBMs independently decide whether to pass along those rebate savings along to the insurers. In
turn, the insurers then likewise independently decide whether to pass along all or a portion of those
rebate savings to their insured consumers, e.g., in the form of lower plan premiums or reduced
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cost-sharing obligations for prescription drugs. Some putative class members may have benefitted
from these downstream rebate savings making up the so-called spread between the list price and
the net price that Plaintiffs assert constitutes evidence of an unfair and unconscionable pricing
scheme. Some insurers pass along these rebate savings and others do not.
Further, the cost an insured consumer pays for an analog insulin product will vary
depending on whether his or her PBM placed the product in a more favorable formulary tier
because of the rebates issued by Defendants. Not all insured consumers within each of Plaintiffs’
proposed classes have the same insurance plan (e.g., insurance plans and terms vary in their
coverages, deductible amounts, coinsurance percentages, etc.) or the same PBM, and not all PBMs
maintain the same formularies. A consumer who purchased a Defendant’s analog insulin product
where his or her insurer’s PBM places that product in a higher formulary tier would pay less than
another consumer with a different insurer with a different PBM that places the same analog insulin
product in a lower formulary tier. Accordingly, if a PBM placed an analog insulin product on a
more favorable formulary tier because of the rebates they received from Defendants, the consumer
would pay a lower fixed percentage for the product than another consumer whose PBM placed the
product on a less favorable formulary tier and accordingly would benefit from that rebate. Both
consumers could fall within the definitions of Plaintiffs’ proposed classes while raising factintensive, individualized questions concerning their alleged injury and the alleged unfairness of
Defendants’ conduct. For these reasons, Plaintiffs’ argument that PBMs and insurers are not
relevant in assessing Defendants’ liability is unpersuasive. Defendants’ conduct cannot be
determined to be unfair or unlawful unless their conduct “causes or is likely to cause substantial
injury . . . which is not reasonably avoidable by consumers themselves and not outweighed by
countervailing benefits.” See 15 U.S.C. § 45(n) (emphasis added). And determining Defendants’
105
liability under this test—i.e., whether Defendants’ conduct caused or was likely to cause
substantial injury to the putative class members that was not reasonably avoidable and was not
outweighed by countervailing benefits—cannot be determined without delving into multiple
individualized inquiries and evidence individual to each putative class member. These
individualized inquiries overwhelm any common ones and defeat predominance.
While Plaintiffs contend all class members belong to a captive market because they can
only choose between Defendants’ products, which are all subject to the same scheme, and
therefore, common issues predominate (ECF No. 577 at 3–6), this misconstrues the specific
inquiry required by Rule 23(b)(3). “[T]he [Rule 23(b)(3)] predominance requirement is met only
if the district court is convinced that ‘the essential elements of the claims brought by a putative
class are ‘capable of proof at trial through evidence that is common to the class rather than
individual to its members.’” Reinig, 912 F.3d at 127–28 (citation omitted). See also id. at 128 (“[A]
district court must look first to the elements of the plaintiffs’ underlying claims and then, ‘through
the prism’ of Rule 23, undertake a ‘rigorous assessment of the available evidence and the method
or methods by which [the] plaintiffs propose to use the evidence to prove’ those elements.”); Neale,
2021 WL 3013009, at *9 (“To establish predominance, Plaintiffs must show that a group trial of
[the] action will not devolve into a series of mini trials concerning causation or injury.”); Smith,
2007 WL 1217980, at *9 (“The focus of the predominance inquiry is on liability, not damages.”).
Plaintiffs have not satisfied the predominance requirement as to their Proposed Novo Nordisk and
Sanofi Multi-State Classes because whether each putative class member suffered a substantial
injury caused by Defendants’ conduct, which was not reasonably avoidable and not outweighed
by any countervailing benefits, raises multiple fact-intensive individualized questions that
overwhelm any common ones and cannot be proven with common evidence.
106
Even assuming putative class members suffered a substantial injury that was reasonably
avoidable and not outweighed by countervailing benefits, other fact-specific individualized
inquiries would be required to determining whether Defendants’ conduct caused or was likely to
cause that injury. Plaintiffs’ proposed classes include insured consumers with deductible and
coinsurance obligations but exclude consumers with flat co-payment plans. Consumers have
options when choosing an insurance plan and might, and in some cases did, elect trade-offs such
as selecting a higher premium plan for lower deductible or a plan with co-payment obligations
rather than coinsurance obligations. (See ECF No. 576 at 3233 (citing evidence showing some
proposed class members “declined insurance coverage knowing they would bear higher out-ofpocket costs” or “consciously chose to trade lower premiums for higher out-of-pocket costs on
prescription drugs”).) For each putative class member, the reasons for selecting a particular
insurance plan and the ability to elect or switch to a different insurance plan at any time during the
proposed class periods raises fact-intensive, individualized questions relevant to determining
whether they suffered a substantial injury that was reasonably avoidable. Additionally, some
members may not have known they would be exposed to the inflated list prices while others may
have known but accepted the trade-offs in exchange for paying lower premiums and/or lower
deductibles or coinsurance, among other reasons specific to them. See Porsche Cars, 140 So.3d at
1099 (“When the individual knowledge and experience of the consumer is an important element
of the cause of action and its defense, there can be no class-wide proof that injury was not
reasonably avoidable.”)
Where the class members are insured through different insurers offering various benefits
plans, an individualized inquiry is necessary to determine whether the cost each class member paid
was reasonably avoidable. Adelson v. U.S. Legal Support, Inc., 715 F. Supp. 2d 1265, 1278 (S.D.
107
Fla. 2010) (finding “individualized inquiry is necessary to determine whether the [] charges were
reasonably known and avoidable”). Plaintiffs’ argument that a jury can decide whether it is
reasonable to expect consumers to change their benefits plan further highlights this point—
common questions do not predominate because individualized inquiries are required to determine
whether or not a class member had the ability to reasonably avoid a substantial injury. Even
assuming Plaintiffs could show this, additional individualized inquiries would also be required to
determine whether Defendants’ alleged conduct caused those injuries and that those injuries were
not outweighed by any benefit to consumers or competition.
The availability of cost-saving options each putative class member may or may not have
had further complicates class treatment. For uninsured class members, some may have been
eligible for financial assistance programs while others may not have been. Some pharmacies offer
coupons or discount cards to reduce the cost to consumers, while other pharmacies do not. A
determination into whether each putative class member could have availed himself or herself of
these and other cost-saving programs to avoid or mitigate their costs stemming from the allegedly
inflated list prices would likewise require an individualized inquiry into the circumstances of each
putative class member.
The financial cost a putative class member experiences based on those rebates is relevant
in assessing whether that class member suffered a substantial injury that was not reasonably
avoidable and whether Defendants’ conduct in setting the list prices for their analog insulin
products was unfair or unconscionable. Further, pharmacies also play a role in the purchase price
for Defendants’ analog insulin products, “
(ECF No. 576 at 35 (quoting Thompson Decl. ¶
108
13 (Ex. 55)).) Therefore, whether each putative class member benefitted from these rebates
requires various individualized inquires, and, additionally, a consumer who benefited from
Defendants’ rebates raises individualized questions different from those of consumers who did not
benefit from Defendants’ rebates.
Plaintiffs’ argument that Defendants fail to prove that passed-through rebates offset any
class member’s losses (see ECF No. 577 at 7–8) misses the point. Plaintiffs’ unfair practices theory
is based on Defendants allegedly artificially inflating the list prices for their analog insulin
products to offer PBMs rebates at the expense of consumers. But if all or some of those rebates
are passed along to consumers, this raises individualized questions concerning whether they
suffered a “substantial injury,” whether those injuries were reasonably avoidable, and whether
those injuries were outweighed by any benefit to them. This also raises individualized questions
regarding whether Defendants’ conduct caused those injuries and accordingly whether
Defendants’ conduct constitutes an unfair act under the FTC’s three-part test. Because these
essential elements of the putative class members’ claims under the sixteen states’ consumer fraud
statutes cannot be proved at trial through evidence that is common to the class rather than
individual to its members, predominance is defeated with respect to Plaintiffs’ Proposed Novo
Nordisk and Sanofi Multi-State Classes.
The individualized issues among putative class members are further compounded by
variations among the sixteen state consumer protection statutes encompassed in Plaintiffs’
Proposed Multi-State Classes. The differences among the sixteen state consumer protection laws
present individualized issues that overwhelm common questions of law and fact and defeat
predominance. See Grandalski v. Quest Diagnostics Inc., 767 F.3d 175, 180 (3d Cir. 2014) (noting
“[i]n a multi-state class action, variations in state law may swamp any common issues and defeat
109
predominance” in a case where the plaintiffs, like Plaintiffs here, proposed nationwide classes for
purposes of trial, not settlement, and stating settlement classes “do not pose the types of
management problems that can arise in a nationwide class action trial” because courts “are not as
concerned with formulating some prediction as to how [variances in state law] would play out at
trial” and accordingly “need not inquire whether the varying state treatments of indirect purchaser
damage claims at issue would present the type of ‘insuperable obstacles’ or ‘intractable
management problems’ pertinent to certification of a litigation class” (quoting Sullivan, 667 F.3d
at 30304)).
Indeed, the consumer protection statutes of different states require the consideration of
different factors in assessing unfair conduct. For example: (1) Louisiana’s consumer protection
statute extends only to “egregious actions,” see Cheramie Servs. v. Shell Deepwater Prod., 35 So.
3d 1053, 1060 (La. 2010) (noting “the range of prohibited practices under LUTPA is extremely
narrow” and concluding “only egregious actions involving elements of fraud, misrepresentation,
deception, or other unethical conduct will be sanctioned based on LUTPA”)42; (2) Iowa’s
consumer protection statute considers whether an ordinary consumer would anticipate a factor that
contributes to assessing an unavoidable injury, see State ex rel. Miller v. Vertrue, Inc., 834 N.W.2d
12, 37 (Iowa 2013) (“A course of conduct contrary to what an ordinary consumer would anticipate
contributes to a finding of an unfair practice.”)43; (3) Maryland’s consumer protection statute “still
42
To the extent Plaintiffs contend the Louisiana statute still prohibits substantially injurious
conduct and therefore Louisiana’s bar on egregious actions does not create disparities among the
state consumer protection laws (see ECF No. 577 at 22), that argument is unpersuasive because a
jury could find Defendants engaged in unfair conduct that substantially injured class members but
was not egregious.
43
Plaintiffs contend there is no disparity among the state consumer protection statutes because
Iowa’s statute applies the same three-part test for unfair acts. (ECF No. 577 at 23.) While true that
Iowa’s statute applies the same three-part test for unfair acts, Iowa law considers a unique
110
applies a stricter ‘unsophisticated consumer’ standard” as opposed to the reasonable consumer
standard under the three-part FTC test, see Luskin’s, Inc. v. Consumer Prot. Div., 726 A.2d 702,
708 (Md. 1999); (4) Massachusetts’s consumer protection statute recognizes adherence to industry
standards or customs as one factor supporting a finding of no unfairness, see James L. Miniter Ins.
Agency, Inc. v. Ohio Indem. Co., 112 F.3d 1240, 1251 (1st Cir. 1997); and (5) Maine’s consumer
protection statute “expressly does not apply to conduct in compliance with the orders or rules of,
or a statute administered by, a federal, state or local governmental agency,” see Laing v. Clair Car
Connection, Civ. A. No. 01-516, 2003 WL 1669624, at *3 (Me. Super. Ct. Jan. 29, 2003) (citation
omitted). To the extent Plaintiffs argue these are merits issues irrelevant at the class certification
stage, a “court must resolve all factual or legal disputes relevant to class certification, even if they
overlap with the merits—including disputes touching on elements of the cause of action.” In re
Hydrogen Peroxide, 552 F.3d at 307; see also In re Warfarin Sodium Antitrust Litig., 391 F.3d
516, 529 (3d Cir. 2004) (“[T]he district court must determine whether variations in state laws
present the types of insuperable obstacles which render class action litigation unmanageable.”).
The consumer protection statutes of the sixteen states encompassed in Plaintiffs’ Proposed
Novo Nordisk and Sanofi Multi-State Classes contain are not uniform in determining whether
conduct constitutes “unfair” acts or practices. Several courts considering putative multi-state
classes that implicated various consumer protection statutes have similarly concluded the laws
vary in significant ways. See, e.g., Vista Healthplan, Inc. v. Cephalon, Inc., Civ. A. No. 06-01833,
2015 WL 3623005, at *36 (E.D. Pa. June 10, 2015) (“[C]ourts in this circuit confronted with
proposed multi-state consumer protection classes have concluded that the laws vary in significant
contributing factor to a finding of an unfair practice. See State ex rel. Miller v. Cutty’s Des Moines
Camping Club, Inc., 694 N.W.2d 518, 530 (Iowa 2005) (considering conduct an ordinary
consumer would not anticipate as a factor contributing to the unavoidable injury).
111
ways.”); Karnuth v. Rodale, Inc., Civ. A. No. 03-742, 2005 WL 1683605, at *4 (E.D. Pa. July 18,
2005) (“The consumer fraud statutes of the various states are not uniform.”); Lyon v. Caterpillar,
Inc., 194 F.R.D. 206, 219 (E.D. Pa. 2000) (“State consumer protection acts vary on a range of
fundamental issues.”). The disparities among the states in defining “unfair” acts presents
individualized questions that overwhelm common issues and defeat predominance. Therefore,
class certification of Plaintiffs’ Proposed Novo Nordisk and Sanofi Multi-State Classes is
inappropriate because variations among state consumer protection laws do not satisfy the
predominance requirement. In re EpiPen Mktg., Sales Pracs. & Antitrust Litig., Civ. A. No. 17md-02785, 2020 WL 1873989, at *57 (D. Kan. Feb. 27, 2020) (holding “the variations among
state consumer protection laws preclude predominance and thus make it inappropriate to certify
the state consumer protection claims as a class action under Rule 23(b)(3)”).
Therefore, Plaintiffs’ motion to certify the Proposed Novo Nordisk Multi-State Class and
the Proposed Sanofi Multi-State Class under Rule 23(b)(3) is DENIED.
3. Proposed Novo Nordisk and Sanofi Texas Classes, Proposed
Kansas Classes, and Proposed Utah Classes
Plaintiffs argue the Proposed Novo Nordisk Texas Class, Proposed Sanofi Texas Class, the
Proposed Kansas Classes, and the Proposed Utah Classes should all be certified under Rule
23(b)(3) for alleged unconscionable acts under the respective statutes of those states. (ECF No.
575 at 88, 9495.) Plaintiffs contend common issues predominate under the laws of Kansas and
Utah because the unconscionability standards under those laws “will not require any individualized
evidence (other than the class members’ individual damages)” and “[D]efendants’ conduct is
identical as to all class members.” (Id. at 94 (citations omitted).) Plaintiffs likewise assert
individualized evidence will not be required to prove liability and aggregate damages under the
Texas Deceptive Trade Practices Act, which they state can be shown with common evidence. (Id.
112
at 9495 (citations omitted).) Plaintiffs submit the cases Defendants cite to in opposition are wrong
and do not defeat predominance. (ECF No. 577 at 1314, 3335; ECF No. 597 at 1417.) Plaintiffs
further claim class certification is appropriate for these state-specific classes because all proposed
class members belong to a captive market and Defendants’ pricing scheme was uniform for all
proposed class members. (ECF No. 577 at 13–14.)
Defendants argue the Proposed Novo Nordisk and Sanofi Texas Classes, the Proposed
Kansas Classes, and the Proposed Utah Classes should not be certified under Rule 23(b)(3) because
they all fail to satisfy the predominance requirement as “proof of the essential elements of the
cause of action requires individual treatment.” (ECF No. 576 at 29 (citing cases).) Defendants
contend Plaintiffs’ unconscionability claims require highly individualized inquiries into the
specific facts underlying each proposed class member’s claim, including the consumer’s individual
circumstances, the context of their purchases of Defendants’ analog insulin products, “whether the
consumer was in fact injured, whether a particular Defendant’s conduct caused any such injury (as
opposed to third parties or other factors), whether the consumer had options to avoid that injury,
and whether the consumer realized countervailing benefits from rebates.” (Id. at 29, 38–41,
5659.) Defendants assert Plaintiffs’ unconscionability theory under the laws of Texas, Kansas,
and Utah cannot be adjudicated on a class-wide basis. (Id. at 29, 3841.)
Defendants further claim other state-specific issues prevent these classes from being
certified. For example, Defendants state Utah does not authorize monetary relief in class actions.
(Id. at 57 (citing Miller v. Corinthian Colls., Inc., 769 F. Supp. 2d 1336, 1342 (D. Utah 2011)).)
Defendants also note a Texas district court, in an insulin pricing case similar to the one here,
recently dismissed a claim under the Texas Deceptive Trade Practices Act (“TDTPA”) because it
found the plaintiffs’ allegations “‘masquerade[d]’ as ‘consumer protection’ claims despite
113
mirroring ‘prohibited antitrust’ claims under federal law” in an apparent attempt to avoid the
indirect purchaser bar. Harris Cnty. v. Eli Lilly & Co., Civ. A. No. 19-4994, 2022 WL 479943, at
*13 (S.D. Tex. Feb. 16, 2022).
The TDTPA prohibits “[f]alse, misleading, or deceptive acts or practices in the conduct of
any trade or commerce” and provides “[a] consumer may maintain an action where any of the
following constitute a producing cause of economic damages or damages for mental anguish . . .
(3) any unconscionable action or course of action by any person[.]” Tex. Bus. & Com. Code Ann.
§ 17.46(a) (2019); id. § 17.50 (2005). The TDTPA defines an “[u]nconscionable action or course
of action” as “an act or practice which, to a consumer’s detriment, takes advantage of the lack of
knowledge, ability, experience, or capacity of the consumer to a grossly unfair degree.” Id. §
17.45(5). “The term ‘gross’ should be given its ordinary meaning, and therefore, the resulting
unfairness must be ‘glaringly noticeable, flagrant, complete and unmitigated.’” Lon Smith &
Assocs. v. Key, 527 S.W.3d 604, 623 (Tex. App. 2017) (quoting Dwight’s Disc. Vacuum Cleaner
City, Inc. v. Scott Fetzer Co., 860 F.2d 646, 650 (5th Cir. 1988)). “For an action to be
unconscionable under the [T]DTPA definition as a matter of law in a class-action lawsuit, the
action would have to be detrimental to every class member no matter the circumstances presented.”
Peter G. Milne, P.C. v. Ryan, 477 S.W.3d 888, 914 (Tex. App. 2015). Unconscionability “requires
proof of each consumer’s knowledge, ability, experience, or capacity.” Lon Smith & Assocs., 527
S.W.3d at 624.
The Kansas Consumer Protection Act (“KCPA”) proscribes “supplier[s]” from engaging
“in any unconscionable act or practice in connection with a consumer transaction.” Kan. Stat. Ann.
§ 50-627(a) (1998). The KCPA provides the question of whether an act or practice is
unconscionable is a question for the court. Id. § 50-627(b). While the KCPA does not define
114
unconscionability, it lists examples of certain circumstances a court should consider in determining
whether an act or practice is unconscionable.44 State ex rel. Stovall v. DVM Enters., Inc., 62 P.3d
653, 657 (Kan. 2003). The Kansas Supreme Court also identified ten relevant factors courts could
consider in determining whether conduct is unconscionable.45 Tomlinson v. Ocwen Loan
44
In determining whether an act or practice is unconscionable, courts shall consider circumstances
including but not limited to the following:
(1) The supplier took advantage of the inability of the consumer reasonably to
protect the consumer’s interests because of the consumer’s physical infirmity,
ignorance, illiteracy, inability to understand the language of an agreement or similar
factor; (2) when the consumer transaction was entered into, the price grossly
exceeded the price at which similar property or services were readily obtainable in
similar transactions by similar consumers; (3) the consumer was unable to receive
a material benefit from the subject of the transaction; (4) when the consumer
transaction was entered into, there was no reasonable probability of payment of the
obligation in full by the consumer; (5) the transaction the supplier induced the
consumer to enter into was excessively onesided in favor of the supplier; (6) the
supplier made a misleading statement of opinion on which the consumer was likely
to rely to the consumer’s detriment; and (7) except as provided by K.S.A. 50-639,
and amendments thereto, the supplier excluded, modified or otherwise attempted
to limit either the implied warranties of merchantability and fitness for a particular
purpose or any remedy provided by law for a breach of those warranties.
Kan. Stat. Ann. § 50-627(b) (1998).
45
These ten factors include:
(1) The use of printed form or boilerplate contracts drawn skillfully by the party in
the strongest economic position, which establish industry wide standards offered
on a take it or leave it basis to the party in a weaker economic position [citations
omitted]; (2) a significant cost-price disparity or excessive price; (3) a denial of
basic rights and remedies to a buyer of consumer goods [citation omitted]; (4) the
inclusion of penalty clauses; (5) the circumstances surrounding the execution of the
contract, including its commercial setting, its purpose and actual effect [citation
omitted]; (6) the hiding of clauses which are disadvantageous to one party in a mass
of fine print trivia or in places which are inconspicuous to the party signing the
contract [citation omitted]; (7) phrasing clauses in language that is
incomprehensible to a layman or that divert his attention from the problems raised
by them or the rights given up through them; (8) an overall imbalance in the
obligations and rights imposed by the bargain; (9) exploitation of the
115
Servicing, LLC, Civ. A. No. 15-1105, 2015 WL 7853957, at *4 (D. Kan. Dec. 3, 2015) (citing
DVM Enters., 62 P.3d at 658). “When evaluating whether conduct is unconscionable under [the
KCPA], courts consider whether the sale price of the product at issue grossly exceeded the price
at which similar products were readily obtainable and whether the consumer was able to receive a
material benefit from the subject of the transaction.” Nieberding v. Barrette Outdoor Living, Inc.,
302 F.R.D. 600, 609 (D. Kan. 2014). Determining unconscionability under the KCPA “ultimately
depends upon the facts in a given case.” DVM Enters., 62 P.3d at 657.
The Utah Consumer Sales Practices Act (“UCSPA”) prohibits unconscionable acts or
practices “by a supplier in connection with a consumer transaction . . . whether it occurs before,
during, or after the transaction. Utah Code Ann. § 13-11-5(1) (1973). Whether an act or practice
is unconscionable is a question for the court, and, in determining this, “the court shall consider
circumstances which the supplier knew or had reason to know.” Id. §§ 13-11-5(2), -5(3); see also
Gallegos v. LVNV Funding LLC, 169 F. Supp. 3d 1235, 1245 (D. Utah 2016) (noting “[t]he
standard for proving unconscionability [under the UCSPA] is high”). “The UCSPA aims to
‘protect consumers from suppliers who commit deceptive and unconscionable sales practices’ and
‘to encourage the development of fair consumer sales practices.’” Cotte v. CVI SGP Acquisition
Tr., Civ. A. No. 21-00299, 2022 WL 464307, at *2 (D. Utah Feb. 15, 2022) (quoting Utah Code
Ann. § 13-11-2(2)-(3)). The doctrine of unconscionability under contract law is applicable in
assessing unconscionability under the UCSPA. See Wade v. Jobe, 818 P.2d 1006, 1017 (Utah
1991); see also In re Zetia Ezetimibe Antitrust Litig., Civ. A. No. 18-2836, 2019 WL 1397228, at
underprivileged, unsophisticated, uneducated and the illiterate [citation omitted];
and (10) inequality of bargaining or economic power.
DVM Enters., 62 P.3d at 658 (alterations in original).
116
*32 (E.D. Va. Feb. 6, 2019) (noting that Utah courts interpret “unconscionable” conduct under the
UCSPA using contract law definitions). “Procedural unconscionability focuses on the manner in
which the contract was negotiated and the circumstances of the parties, . . . and can be characterized
as the ‘absence of meaningful choice’ and a ‘gross inequality of bargaining power.’” Wade, 818
P.2d at 1017 (citing Res. Mgmt. Co. v. Weston Ranch & Livestock Co., 706 P.2d 1028, 1041–42
(Utah 1985)). “Substantive unconscionability examines the relative fairness of the obligations
assumed; it requires terms ‘so one-sided as to oppress or unfairly surprise an innocent party,’ . . .
or ‘an overall imbalance in the obligations and rights imposed by the bargain.’” Id. (quoting Res.
Mgmt., 706 P.2d at 1041; Bekins Bar V Ranch v. Huth, 664 P.2d 455, 462 (Utah 1983)).
For many of the same reasons Rule 23(b)(3)’s predominance requirement is not satisfied
for Plaintiffs’ Proposed Nationwide Classes and Proposed Novo Nordisk and Sanofi Multi-State
Classes, Plaintiffs likewise do not satisfy predominance for their Proposed Novo Nordisk and
Sanofi Texas Classes, Proposed Kansas Classes, and Proposed Utah Classes because individual
questions predominate over any common ones that may exist and the Court is not convinced the
essential elements of the putative class members’ claims brought under these states’ individual
consumer protection laws are capable of proof at trial through evidence that is common to the class
rather than individual to its members. Determining whether Defendants engaged in unconscionable
acts or practices requires an individualized inquiry into the specific facts of each putative class
member’s particular circumstances. See, e.g., DVM Enters., 62 P.3d at 657 (“Generally, whether
an action is unconscionable under the KCPA is a question of law subject to unlimited review.
However, the determination of unconscionability ultimately depends upon the facts in a given case.
Thus, to a great extent, the determination is left to the sound discretion of the trial court to be
determined on the peculiar circumstances of each case.”); Ryan, 477 S.W.3d at 91314 (reversing
117
class certification of TDTPA unconscionability claim because “determining whether [defendant’s]
actions were unconscionable requires evaluation of each member’s individual circumstances”);
see also Res. Mgmt., 706 P.2d at 1041 (finding for unconscionability, “a court must assess the
circumstances of each particular case”); Frederick v. S. Star Cent. Gas Pipeline, Inc., Civ. A. No.
10-1063, 2011 WL 3880902, at *3 (D. Kan. Sept. 2, 2011) (“There are significant distinctions
among class members that render the question of unconscionability one that is individual to each
purported class member rather than common to the group. . . . ‘A question is not common . . . if
its resolution turns on a consideration of the individual circumstances of each class member.’”
(quoting Hershey v. ExxonMobil Oil Corp., No. 07-1300, 2011 WL 1234883, at *5 (D. Kan. Mar.
31, 2011))); Haskins v. First Am. Title Ins. Co., Civ. A. No. 10-05044, 2014 WL 294654, at *15
(D.N.J. Jan. 27, 2014) (denying motion for class certification after finding the putative class was
“not readily ascertainable and that individualized fact-finding [would] overwhelm issues common
to the proposed class”); In re Copley Pharm., Inc., 161 F.R.D. 456, 458 (D. Wyo. 1995) (noting
“individual issues of causation and damages were present and that those issues were not proper for
class adjudication”); In re Katrina Canal Breaches Consol. Litig., 258 F.R.D. 128, 132, 134 (E.D.
La. 2009) (finding individual issues predominated over those common to the proposed class where
the court found “that individual issues exist[ed] with regards to damages, affirmative defenses, and
causation” and noting “[t]he weight of the Fifth Circuit’s case law holds that where damages
cannot be calculated using a mechanical formula, but instead require individualized assessment,
predominance generally does not exist”); Adams v. Fed. Materials Co., Civ. A. No. 05-90-R, 2006
WL 3772065, at *6 (W.D. Ky. Dec. 19, 2006) (“Courts have found that individual issues of
damages need not defeat predominance. However, significant individual issues of causation and
affirmative defenses, combined with individual issues of damages, may defeat any claims of
118
predominance of common issues. Where the individualized issues will destroy the utility of a class
adjudication and necessitate “mini trials” to determine issues relevant to each class member,
common issues do not predominate. Combined individual issues of proof regarding liability,
causation, defenses, and damages may also defeat predominance. In particular, serious individual
issues of causation make a case unsuitable for class adjudication.” (citations omitted)).
Assessing each putative class member’s claim and determining Defendants’ liability under
these state statutes would require delving into various individualized factual issues including but
not limited to (1) the role that a particular member’s insurer and affiliated PBM played in allocating
rebate savings; (2) the decisions a particular member made when selecting an insurance plan(s),
or choosing not to be insured, at any time during the applicable class period; (3) the list price at
the time of a consumer’s purchase, the corresponding net price, and the ultimate purchase price
the consumer paid, minus any rebates, coupons, discounts, or other financial assistance; and (4)
whether the consumer could have reasonably avoided allegedly overpaying for Defendants’ analog
insulin products. Setting aside the issue of individual damages (which would likewise require
multiple fact-specific individualized inquiries to determine), the Court cannot conceive how
Plaintiffs can prove Defendants’ liability under the applicable state consumer protection statutes
with common evidence and without delving into evidence individual to each putative class
member’s claims. Accordingly, the Court finds predominance is defeated as to Plaintiffs’ Proposed
Novo Nordisk and Sanofi Texas Classes, Proposed Kansas Classes, and Proposed Utah Classes,
making class certification for these classes under Rule 23(b)(3) unsuitable.46
Therefore, Plaintiffs’ motion to certify the Proposed Novo Nordisk Texas Class, the
46
Having determined Plaintiffs fail to satisfy Rule 23(b)(3)’s predominance requirement for all of
their proposed classes, the Court need not address Rule 23(b)(3)’s superiority requirement.
119
Proposed Sanofi Texas Class, the Proposed Kansas Classes,47 and the Proposed Utah Classes under
Rule 23(b)(3) is DENIED.
IV.
CONCLUSION
For the reasons set forth above, Defendants’ Motion to Exclude the Expert Testimony of
Dr. Meredith Rosenthal (ECF No. 593) is GRANTED IN PART and DENIED IN PART, and
Plaintiffs’ Motion for Class Certification pursuant to Federal Rule of Civil Procedure 23 (ECF No.
574) is DENIED. An appropriate Order follows.
/s/ Brian R. Martinotti
HON. BRIAN R. MARTINOTTI
UNITED STATES DISTRICT JUDGE
Dated: January 24, 2024
47
Notwithstanding the present analysis, although Plaintiffs seek certification of single-state classes
under the Kansas statute, as Defendants note (ECF No. 576 at 3940 n.8), the TAC asserts no
unconscionability claim under Kansas law, and the Court cannot certify a class regarding claims
not pled. (ECF No. 411 ¶¶ 724–31 (alleging “deceptive conduct” and “deceptive practices” in
violation of the Kansas CPA).) See also Anderson v. U.S. Dep’t of Hous. & Urban Dev., 554 F.3d
525, 529 (5th Cir. 2008) (“The district court’s authority to certify a class under Rule 23 does not
permit it to structure a class around claims not pled.”); Simington v. Lease Fin. Grp., LLC, 2012
WL 6681735, at *8 (S.D.N.Y. Dec. 14, 2012) (“This Court cannot certify a class to litigate a claim
not pled.”). Additionally, based on the parties’ joint filing at ECF Nos. 508 and 508-1, the Court
understands Plaintiffs are not currently asserting any claims against Sanofi under the Kansas
Consumer Protection Act; therefore, the Court has no basis upon which to grant class certification
as to Plaintiffs’ Proposed Sanofi Kansas Class. Accordingly, Plaintiffs motion to certify the
Proposed Kansas Classes is also denied for these additional reasons.
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