Corcoran v. CVS Health Corp.
169 F. Supp. 3d 970
N.D. Cal.2016Background
- Plaintiffs allege CVS overcharged them for generic drugs by reporting inflated usual and customary prices, while offering lower HSP program prices.
- CVS Health seeks dismissal for lack of California personal jurisdiction; CVS Pharmacy seeks dismissal for failure to state a claim; plaintiffs move to appoint interim class counsel; CVS moves to transfer venue to Rhode Island.
- The HSP program provides discounted generics; for 2008–2010 members paid a $9.99/90-day price, later raised to $11.00, while enrollment fees rose from $10 to $15 annually.
- CVS allegedly continued to report the HSP drugs’ full U&C price to third-party payors, creating inflated copays for insured customers compared to HSP prices.
- Plaintiffs, as class members, purchased HSP generics from CVS between 2008 and SAC filing and allege damages from inflated copays.
- The court allowed interim class counsel appointment, denied transfer to Rhode Island, and granted in part CVS Health’s and CVS Pharmacy’s 12(b)(2)/(6) motions, with leave to amend limited to Count 12.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether CVS Health is subject to personal jurisdiction in California | CVS Health has extensive California presence and agency/alter ego theories apply. | CVS Health has no sufficient contacts and cannot be at home in California; no agency/alter ego attach. | No prima facie personal jurisdiction over CVS Health; claims dismissed. |
| Whether the SAC states plausible fraud and misrepresentation claims under Rule 9(b) and related reliance | SAC provides detailed who/what/when/where/how and supports direct and indirect reliance. | Claims lack Rule 9(b) specificity and misrepresentations were not communicated to plaintiffs. | Rule 9(b) adequacy affirmed; reliance theory viable; claims survive for now. |
| Whether constructive fraud claim survives (duty to disclose) | Pharmacists/defendants owe a duty to disclose pricing information relevant to consumers. | No legal duty to disclose pricing under the circumstances; not cognizable as constructed. | Constructive fraud claim dismissed. |
| Whether unjust enrichment claim is duplicative and should be dismissed | Restitution is pleaded in the alternative under Rule 8; not duplicative at pleading stage. | Unjust enrichment duplicative of other claims. | Unjust enrichment claim survives (pleaded in the alternative). |
| Whether RIDTPA and other state statutory claims lack standing or applicability | Non-residents can pursue RIDTPA claims in a nationwide class context where applicable. | Non-residents lack standing and RIDTPA should not apply extraterritorially. | RIDTPA standing granted/claims dismissed based on standing; more generally, several state claims survive or are dismissed as noted in order. |
Key Cases Cited
- Daimler AG v. Bauman, 134 S. Ct. 746 (2014) (limits general jurisdiction; at-home standard)
- Goodyear Dunlop Tires Operations, S.A. v. Brown, 131 S. Ct. 2846 (2011) (specific jurisdiction framework)
- Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797 (9th Cir. 2004) (three-prong test for specific jurisdiction)
- Ranza v. Nike, Inc., 793 F.3d 1059 (9th Cir. 2015) (agency/alter ego considerations in jurisdiction)
- Bridge v. Phoenix Bond & Indem. Co., 553 U.S. 639 (2008) (reliance through third party communications recognized)