State v. Abbott Laboratories
2012 WI 62
| Wis. | 2012Background
- State sued Pharmacia for inflated AWPs causing Medicaid overpayments; trial produced mixed testimony on reimbursement mechanisms and AWP reliability.
- Jury found DTPA and Medicaid fraud violations and awarded $9 million total, including 1,440,000 alleged violations.
- Circuit court vacated the 1,440,000 figure and reduced violations to 4,578, with $4,578,000 forfeiture, after post-trial proceedings.
- Court of Appeals certified three questions: right to a jury trial, damages speculative, and reduction of violations; Wisconsin Supreme Court affirmed and remanded on certified issues.
- State and Pharmacia cross-appealed on liability and damages, with the court addressing the certified issues and remanding for the rest.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Right to a jury trial for the claims | State entitled to jury trial under Village Food test | Pharmacia argued no jury right under previous tests | State had a jury trial on both DTPA and Medicaid fraud claims |
| Damages were impermissibly speculative | State presented credible evidence of overpayments and potential reductions | Pharmacia claimed damages were speculative due to political process | Damages not impermissibly speculative; based on credible evidence and reasonable inferences |
| Number of Medicaid fraud violations properly reduced | 1,440,000 was the correct count | Zero or far fewer violations | Circuit court properly reduced to 4,578 violations (and $1,000 per violation) |
| Whether circuit court acted within §805.16(3) timing | Order fall within permissible post-verdict proceedings | Timing violated 805.16(3) when reducing to 4,578 | Circuit court acted within the statute; 90-day timing not violated |
Key Cases Cited
- Village Food & Liquor Mart v. H&S Petroleum, Inc., 254 Wis. 2d 478 (Wis. 2002) (two-prong Village Food test for jury trial right)
- Harvot v. Solo Cup Co., 320 Wis. 2d 1 (Wis. 2009) (analysis of modern social legislation in jury-trial context)
- Bornstein, United States v., 423 U.S. 303 (U.S. 1976) (forfeiture analysis tied to the defendant's conduct specific to the fraud)
- Ehrlich, United States v., 643 F.2d 634 (9th Cir. 1981) (forfeiture determinations in False Claims Act context)
- Menard, Inc. v. State, 121 Wis. 2d 199 (Wis. Ct. App. 1984) (forfeiture/violation counting aligned with defendant's actions)
- Kalal v. Circuit Court for Dane Cnty., 271 Wis. 2d 633 (Wis. 2004) (statutory interpretation guiding permissible counting of violations)