850 N.W.2d 682
Minn.2014Background
- Funds (health & welfare plans) sue Minnesota pharmacies for not passing on generic price savings as required by Minn. Stat. § 151.21, subd. 4; case involves 2003–present transactions and alleged overcharges.
- Pharmacies allegedly concealed acquisition costs and overcharged the Funds for generic drugs.
- District court dismissed both the private action under § 151.21, subd. 4, and CFA claim; appellate court split on CFA claim but affirmed dismissal of private action.
- Legislature authorized enforcement through Board and criminal penalties; no implied private action under § 151.21, subd. 4; CFA may provide a private action for non-disclosure under certain conditions.
- Funds asserted CFA claim under Minn. Stat. § 8.31, subd. 3a (Private AG Statute) to recover damages for alleged § 151.21, subd. 4 violations; court analyzed omission-based CFA claim and duties to disclose.
- Court ultimately held § 151.21, subd. 4 does not create a private action and CFA claim fails due to lack of duty to disclose or material omission under the CFA.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether § 151.21, subd. 4 creates a private right of action | Funds advocate implied private action | Pharmacies: no private right; statute silent | No private action under § 151.21, subd. 4 |
| Whether Funds adequately plead a CFA claim | Omissions in pricing violate CFA | CFA requires duty to disclose for omissions | CFA claim fails for lack of duty to disclose; omissions not actionable absent special circumstances |
Key Cases Cited
- Becker v. Mayo Found., 737 N.W.2d 200 (Minn. 2007) (implied private action requires clear legislative intent; avoid reading into statute)
- Krueger v. Zeman Constr. Co., 781 N.W.2d 858 (Minn. 2010) (read statute for explicit/implicit private rights; cannot add words not supplied)
- Premier Bank v. Becker Dev., LLC, 785 N.W.2d 753 (Minn. 2010) (legislative intent dispositive; cannot imply private action)
- Klein v. First Edina Nat’l Bank, 293 Minn. 418, 196 N.W.2d 619 (Minn. 1972) (duty to disclose exists under special circumstances)
- U.S. Bank N.A. v. Cold Spring Granite Co., 802 N.W.2d 363 (Minn. 2011) (statutory interpretation; common law principles preserved)