City of Huntington, West Virginia v. AmerisourceBergen Drug Corporation et al

Filing 1281

MEMORANDUM OPINION AND ORDER denying Plaintiffs' 1006 MOTION in Limine to exclude references to payments received from collateral sources, as more fully set forth herein. Signed by Senior Judge David A. Faber on 4/20/2021. (cc: counsel of record who have registered to receive an electronic NEF) (mkw)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF WEST VIRGINIA
THE CITY OF HUNTINGTON,
Plaintiff,
v.

Civil Action No. 3:17-01362

AMERISOURCEBERGEN DRUG
CORPORATION, et al.,
Defendants.
v.

Civil Action No. 3:17-01665

CABELL COUNTY COMMISSION,
Plaintiff,
v.

AMERISOURCEBERGEN DRUG
CORPORATION, et al.,
Defendants.
MEMORANDUM OPINION AND ORDER
Pending before the court is plaintiff’s motion in limine to
exclude references to payments received from collateral sources.
(ECF No. 1006.)

For the reasons that follow, the motion is

DENIED.
I.

Background
Defendants intend to introduce evidence at trial that

government funds or programs have paid and will continue to pay
for medical treatment that the opioid crisis has necessitated in

plaintiffs’ communities.

Plaintiffs say that such evidence is

irrelevant and inadmissible under West Virginia’s robust
collateral source rule.

Defendants disagree, arguing that the

collateral source rule does not apply to (1) payments to
nonparties from nonparties or (2) claims for equitable relief
only.

They also say that equity favors consideration of this

evidence.
In reply, plaintiff say that defendants’ argument regarding
nonparties is legally incorrect.

As to whether the collateral

source rule applies to equitable claims, plaintiffs argue that
because the policy considerations are the same, and because the
rule itself is an equitable one, the court should not create an
exception to the rule where the Supreme Court of Appeals of West
Virginia has not done so.

Plaintiffs also suggest that

defendants’ arguments are better understood as challenges to
whether plaintiffs have a cause of action for public nuisance
and standing to bring it.
II.

Discussion
Under West Virginia law, “[t]he collateral source rule

excludes payments from other sources to plaintiffs from being
used to reduce damage awards imposed upon culpable defendants.”
Kenney v. Liston, 760 S.E.2d 434, 440 (2014).

Where the rule

applies, it precludes defendants from offering evidence of such
payments.

Id. at 441.

This is because such evidence tends to
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be irrelevant.

See Schwartz v. Hasty, 175 S.W.3d 621, 627 (Ky.

Ct. App. 2005).

Such evidence also may lead juries to apply

improper offsets.

Kenney, 760 S.E.2d at 441 (2014).

Plaintiffs correctly point out that the collateral source
rule is both one of evidence and of damages.

While the motion

asks for an evidentiary ruling, it implicates the larger issue
of whether (and to what extent) the rule applies to this case
substantively.

The parties agree that West Virginia case law

has not answered the precise question, but they characterize the
potential application of the rule to these facts quite
differently.
From plaintiffs’ point of view, not to apply the collateral
source rule here would amount to a retreat from Kenney, which
confirmed the rule’s strength in West Virginia.

Plaintiffs

frame the rule as a default one that applies unless there is an
exception, and they argue that there is no exception under West
Virginia law for claims not seeking the remedy of money damages.
To apply the rule here is thus to tread conservatively with
state law, say plaintiffs.

Defendants, by contrast, see the

application of the rule here as a significant extension of the
rule, and one that should give the court serious pause.
The collateral source rule’s application in cases seeking
only equitable relief is far from clear.

Plaintiffs cite very

little persuasive authority to show that it applies in such
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cases.

They mainly point to the Seventh Circuit’s approval of

the rule’s application in a case involving a public nuisance
under Wisconsin law.

See Town of E. Troy v. Soo Line R. Co.,

653 F.2d 1123, 1126 (7th Cir. 1980).

There, a train crash and

consequential chemical spill poisoned the water supply of the
small town of Troy.

Id. at 1125-26.

In response, the town

established a clean water supply by tapping into “a deep aquifer
separated by an impermeable layer of shale from the contaminated
aquifer from which the individual property owners obtained their
water.”

Id. at 1126.

The trial court had applied the

collateral source rule to exclude evidence of a $500,000
government grant the town had received for the water project.
Id.

The appeals court affirmed.

Id. at 1134.

The key difference between Troy and this case is that, in
Troy, the town apparently sought money damages, not abatement,
under a Wisconsin statute that provided for either remedy.
at 1127.

Id.

What is more, the town had already incurred the

expenses and was obligated to do so.

Id. at 1128.

(“Nonetheless, this gap in the record does not restrain us from
concluding that the Town was, indeed, obligated to act as it
did.”).

Accordingly, Troy does not show that the collateral

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source rule applies here, or outside the realm of money damages
at all. 1
At least one district court in this circuit has limited the
full force of the collateral source rule’s effect in determining
a remedy of an equitable nature.

See Szedlock v. Tenet, 139 F.

Supp. 2d 725, 736 (E.D. Va. 2001) (“In this case, as in Fariss,
equitable principles require an appropriate offset to ensure
that plaintiff is only made whole and is not awarded a
windfall.”), aff’d, 61 F. App’x 88 (4th Cir. 2003).

Citing its

punitive nature, other courts have refused to apply the rule to
cases sounding in contract.

See e.g., Bramalea California, Inc.

v. Reliable Interiors, Inc., 14 Cal. Rptr. 3d 302, 305 (2004).
Additionally, Judge Polster appears to have acknowledged
that funding from collateral sources is relevant to determining
whatever equitable relief may be appropriate under Ohio law:
As stated above, abatement is an equitable remedy.
The Court agrees with Plaintiffs that testimony
regarding the “full cost of abating the public
nuisance” is relevant and will help the Court
understand the scope of what it will take to remedy
the opioid crisis.
City of Milwaukee v. NL Industries, 762 N.W.2d 757 (Ct. App.
Wis. 2008), is likewise unavailing. Although the city there did
seek abatement of a public nuisance, the opinion speaks in terms
of damages. Id. at 762, 764, 779, 780, 781 (“The City’s
argument is based on the premise that the social utility of
nuisance-causing conduct is irrelevant in a cause of action for
damages.”) (emphasis added). Also, after a grant of summary
judgment as to future damages, the trial was limited to damages
for reimbursement of funds that the city had already spent. Id.
at 762, 764.
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To the extent the Court determines this scope is
narrowed by other programs already in place in Summit
and Cuyahoga County, and/or additional sources of
funding that may exist, the Court can exercise its
equitable powers to deviate from the full costs of
abatement to a more just and appropriate amount.
Thus, Plaintiffs’ experts’ failure to consider other
sources of funding and their consideration of national
data does not make their opinions any less relevant.
In re Nat’l Prescription Opiate Litig., No. 1:17-MD-2804, 2019
WL 4043938, at *3 (N.D. Ohio Aug. 26, 2019).
The court need not decide today whether and how the
collateral source rule applies here.

Sufficient doubt surrounds

its application such that the evidence plaintiffs seek to
exclude is at least conditionally relevant. 2

There being no jury

to confuse, the path of allowing the evidence here is the
obvious one.

Plaintiffs present a colorable argument that the

evidence is irrelevant, but the risk of admitting irrelevant
evidence is less than the risk of wrongfully blocking relevant
evidence that defendants say is integral to their theory of the
case.
Moreover, the evidence may be relevant (and thus,
admissible) even if the collateral source rule applies.
Application of the rule would make the evidence irrelevant
insofar as defendants would not be entitled to an offset.

But

The court does not reject, but need not reach, defendants’
argument that the payments here are not properly understood as
collateral sources because they are to and from nonparties.
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defendants plausibly say this evidence goes to their overall
contention that plaintiffs are not entitled to the remedy they
seek and to the battle of the parties’ experts regarding the
necessary scope of abatement.

Such use is different than using

collateral source payments to seek an offset or to mislead a
jury.
III. Conclusion
For the reasons expressed above, plaintiffs’ motion in
limine regarding references to payments received from collateral
sources (ECF No. 1006) is DENIED. 3
The Clerk is directed to send a copy of this Memorandum
Opinion and Order to those counsel of record who have registered
to receive an electronic NEF.
IT IS SO ORDERED this 20th day of April, 2021.
ENTER:
David A. Faber
Senior United States District Judge

Again, the parties are free to continue their efforts to
convince the court that the collateral source rule does or does
not apply as a substantive rule of damages in this case.
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