810 F. Supp. 2d 366
D. Mass.2011Background
- Five-week trial with 40 witnesses and 400+ exhibits; court found fraudulent marketing under California UCL and ordered $95,286,518 restitution (Findings).
- Judgment entered February 22, 2011; defendants moved for amended/additional findings under Rule 52(b).
- Court partially grants/denies the Rule 52(b) motion, addressing issues not fully developed at trial and other clarifications.
- Kaiser Foundation Health Plan (parent) claimed standing to recover damages for subsidiaries; subsidiaries not named defendants initially.
- Court considers whether Kaiser has standing to sue for subsidiaries’ losses and whether six regional subsidiaries may be joined as plaintiffs.
- Court also addresses whether Kaiser’s subsidiaries’ damages evidence and ICD-9 code categorizations for bipolar disorder affected causation and damages conclusions.
- Court notes a correction to the record: a March 1999 Progress in Neurology mailing to all US neurologists is properly identified as a single exhibit.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing of Kaiser vs. subsidiaries | Kaiser has incurred most losses (77%) and may sue for subsidiaries. | Parent lacks standing to recover for injuries to wholly owned subsidiaries; joinder needed. | Kaiser lacks standing for subsidiary damages; but subsidiaries may be joined as plaintiffs. |
| Post-judgment joinder of subsidiaries as plaintiffs | Joinder under Rule 21 is appropriate to avoid prejudice and promote justice. | Joinder would prejudice Pfizer or alter trial posture. | Joinder allowed under Rule 21/Rule 15 principles, with no prejudice to Pfizer. |
| Relation back under Rule 15 for added plaintiffs | Relation back under Rule 15(c) applies to Rule 21 additions. | Unclear applicability after trial; risk of prejudice. | Relation-back doctrine satisfied; subsidiaries’ claims relate back and are timely. |
| Prejudice and procedural considerations of post-trial amendment | No prejudice to defendants from late addition; discovery already covered subsidiaries. | Addition late in litigation may delay or complicate proceedings. | No prejudice to Pfizer; amendments permitted to the extent justified by justice. |
Key Cases Cited
- Franchise Tax Bd. of Calif. v. Alcan Aluminium Ltd., 493 U.S. 331 (1990) (parent standing for injury to subsidiary; prudential considerations)
- Resolution Trust Corp. v. Fleischer, 848 F.Supp. 917 (D.Kan.1994) (shareholder standing—injury to corporation is not inures to shareholder)
- Canderm Pharmacal, Ltd. v. Elder Pharms., Inc., 862 F.2d 597 (6th Cir.1988) (no standing for parent founded on injury to subsidiary)
- Data Gen. Corp. v. Grumman Sys. Support Corp., 825 F.Supp. 340 (D.Mass.1993) (post-judgment joinder and amendment considerations)
- Mullaney v. Anderson, 342 U.S. 415 (1952) (relation back considerations in joinder)
- Ohio Cellular Prod. Corp. v. Adams USA, Inc., 175 F.3d 1343 (Fed.Cir.1999) (post-judgment joinder of party to avoid due process issues)
- Nelson v. Adams USA, Inc., 529 U.S. 460 (2000) (due process concerns in post-judgment amendments)
- Hillburn v. Maher, 795 F.2d 252 (2d Cir.1986) (post-trial amendment unless prejudice shown)