State v. Abbott Laboratories
829 N.W.2d 753
Wis. Ct. App.2013Background
- Wisconsin Medicaid uses legislative-determined reimbursement formulas, including average wholesale price (AWP).
- State sued Pharmacia in 2004 under the Deceptive Trade Practices Act (DTPA) and Wis. Stat. § 49.49(4m)(a)2 for claiming inflated AWPs caused overpayments.
- Trial produced competing narratives: State contended officials relied on inflated AWPs and overpaid; Pharmacia claimed AWPs were benchmarks and not intended to reflect actual wholesale prices.
- Supreme Court answered three certification questions (jury trial, damages based on speculation, and reduction of violations) and remanded for decision on remaining issues; court affirms the remaining issues in light of that decision.
- Remaining issues include separation of powers/justiciability, causation, evidentiary rulings, and attorneys’ fees; circuit court’s rulings are affirmed.
- The action spans back to 1992 with the suit filed in 2004 and a 2009 trial; Statutes cited pertain to the 2009-10 version but are stated as applicable to the 2009-10 version.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Deception and causation in § 100.18 claims | State asserts Pharmacia’s AWPs were false and caused overpayments | Pharmacia argues State knew AWPs weren’t true and cannot prove deception or causation | Deception proved; causation supported; jury could rely on inflated AWPs to support damages |
| § 49.49(4m)(a)2. applicability | State contends false statements regarding rights to benefits/payments include payment amounts | Pharmacia contends statute should be strictly construed and focus on rights to benefits | § 49.49(4m)(a)2. applies to both amount and right to payment; plain language supports application |
| Separation of powers/Justiciability | State argues case does not improper override legislative decisions on reimbursement | Pharmacia asserts judicial entanglement in legislative policy decisions | Not barred; evidence showed deception affected legislative choices; no separation-of-powers violation |
| Failure to mitigate damages | State’s damages could reflect inflated AWPs even if mitigation possible | State should have alerted to inflated AWPs sooner and reduced damages accordingly | Mitigation defense rejected; damages based on inflated AWPs affirmed |
| Materiality/counting of violations (cross-appeal) | State argues broader count of violations; Supreme Court did not address materiality fully | Pharmacia argues correct counting method should be stricter | Supreme Court’s count of violations upheld; materiality interpreted in light of decision; no recount warranted |
Key Cases Cited
- State ex rel. Kalal v. Circuit Court for Dane Cnty., 271 Wis. 2d 633 (Wis. 2004) (plain-language interpretation; extrinsic sources only if ambiguous)
- Abbott Labs. v. State, 341 Wis. 2d 510 (Wis. 2012) (certified questions; damages and other issues resolved on appeal)
- Fireman's Fund Ins. Co. of Wis. v. Bradley Corp., 261 Wis.2d 4 (Wis. 2003) (lodestar methodology guidance in fee awards; sufficiency of evidence on time-tracking)