833 N.W.2d 403
Minn. Ct. App.2013Background
- Appellants are union-sponsored health-benefit plans alleging pharmacists violated Minn.Stat. § 151.21, subd. 4 by not passing on cost savings from generic drugs since 2003.
- The district court dismissed for failure to show a private right of action under § 151.21, subd. 4, and for failure to plead CFA and private-attorney-general claims.
- The action originated after removal to federal court and remand to state court; the central factual theory is that pharmacies overcharged by not disclosing acquisition costs.
- Minnesota requires generic substitution when available and that cost savings from generics be passed to purchasers, which appellants allege pharmacies failed to do.
- The CFA claim was pleaded alleging misrepresentation/omission with the intent that consumers rely, and that the district court required a duty to disclose and causation that were not initially explicit.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does § 151.21, subd. 4 create a private right of action? | Appellants argue implied rights exist via statute’s text and remedies. | Respondents contend no private civil remedy is implied; statute text and related remedies show no private action. | No private right of action under § 151.21, subd. 4. |
| Did appellants plead a cognizable CFA and private-attorney-general claim? | Appellants contend omissions of acquisition costs were material and caused overcharges, satisfying CFA and 8.31(3a) elements. | Respondents argue lack of duty, lack of materiality, lack of causal nexus, and no public benefit. | Appellants pleaded a CFA and private-attorney-general claim that survive Rule 12 dismissal. |
Key Cases Cited
- Becker v. Mayo Found., 737 N.W.2d 200 (Minn. 2007) (no private action implied unless legislature intends)
- Flour Exch. Bldg. Corp. v. State, 524 N.W.2d 496 (Minn.App.1994) (implied remedies must align with statute’s purpose)
- Cort v. Ash, 422 U.S. 66 (U.S. 1975) (factors for implying a private remedy)
- American Family Ins. Grp. v. Schroedl, 616 N.W.2d 273 (Minn. 2000) (statutory remedies and civil liability standards)
- Transamerica Mortg. Advisors, Inc. v. Lewis, 444 U.S. 11 (U.S. 1979) (statutory remedies and judicial restraint in creating new actions)
- Wiegand v. Walser Auto. Grps., Inc., 683 N.W.2d 811 (Minn. 2004) (reliance not required at pleading stage for CFA damages; causal nexus standard)
- Grp. Health Plan, Inc. v. Philip Morris Inc., 621 N.W.2d 2 (Minn. 2001) (CFA elements; omission and reliance guidance)
- Doe 43C v. Diocese of New Ulm, 787 N.W.2d 680 (Minn.App.2010) (unpublished-style points; CFA-related misrepresentation elements)
- Kinetic Co. v. Medtronic, Inc., 672 F.Supp.2d 933 (D. Minn.2009) (causal nexus considerations in CFA pleading)
- Collins v. Minn. Sch. of Bus., Inc., 655 N.W.2d 320 (Minn.2003) (public-benefit inquiry under CFA private damages action)
- Ly v. Nystrom, 615 N.W.2d 302 (Minn.2000) (public benefit required for private attorney-general action)
- Palmer v. Ill. Farmers Ins. Co., 666 F.3d 1081 (8th Cir.2012) (private rights and statutory schemes; preclusion of new private actions)
- Schermer v. State Farm & Cas. Ins. Co., 702 N.W.2d 898 (Minn.App.2005) (rejecting private action premised on statutory violation)
- In re Mex. Money Transfer Litig., 267 F.3d 743 (7th Cir.2001) (floodgates concern; context of cost disclosures not identical)
- Alpine Air Prods., Inc., 490 N.W.2d 892 (Minn.App.1992) (consumer-protection statutes mean to broaden remedies)