249 So. 3d 38
La. Ct. App.2018Background
- Louisiana (Attorney General) sued AstraZeneca alleging the company delayed generic approval for Toprol-XL to limit competition, causing Louisiana (Medicaid and other state programs) to pay higher drug reimbursements; claims under the Louisiana Monopolies Act, LUTPA, and unjust enrichment.
- Defendant moved peremptory exceptions of no cause of action and no right of action; the trial court sustained both and dismissed the State's suit with prejudice without taking evidence.
- On appeal the State argued the Attorney General has authority to bring LUTPA and related claims on behalf of the State and that many asserted theories arise from the same operative facts.
- AstraZeneca argued (1) any Medicaid-related claims belong solely to the Louisiana Department of Health (LDH), not the State; (2) the State is an indirect purchaser and thus lacks standing under antitrust principles; and (3) some alleged conduct occurred outside Louisiana so Monopolies Act/LUTPA claims fail.
- The Court of Appeal reversed the trial court: it held the Attorney General has a statutory right under LUTPA to sue for the State, overruled the no-right-of-action exception, and overruled the no-cause-of-action exception (without deciding separable questions about LDH ownership of specific funds or prescription of claims).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the AG/State has a right to bring these claims (vs. LDH) | AG has statutory authority under LUTPA and general authority to protect State interests; Medicaid funds belong to the State so State may sue | LDH is a corporate body empowered to "sue and be sued" and statutory steward of Medicaid funds, so LDH—not the State—holds any exclusive claim | Reversed trial court: State has a right of action under LUTPA; exception overruled. Court did not resolve ownership of specific Medicaid funds or whether some claims belong solely to LDH. |
| Whether State (an indirect purchaser) may maintain antitrust/related claims | State may sue under LUTPA (statutory right) regardless of indirect purchaser status; Illinois Brick need not be decided here | As an indirect purchaser, State lacks standing under antitrust law (Illinois Brick) and cannot recover under Monopolies Act or LUTPA tied to passed-on overcharges | Court declined to decide whether Illinois Brick bars recovery by indirect purchasers under Louisiana law because State has an independent LUTPA statutory right; exception overruled. |
| Whether claims based on conduct outside Louisiana (patent suits, filings) can support Monopolies Act/LUTPA claims | State argued operative effects (higher prices/reimbursements) occurred in Louisiana, supporting claims | Defendant argued Monopolies Act and LUTPA require a Louisiana nexus and alleged wrongful acts occurred in other states | Court overruled no-cause exception on these grounds too, finding LUTPA authority and that claims arise from same operative facts; did not decide merits or geographic nexus. |
| Whether unjust enrichment claim can survive given antitrust/LUTPA limits | Unjust enrichment is pleaded as subsidiary remedy for State losses from defendant’s alleged scheme | If antitrust/LUTPA claims fail because of indirect-purchaser rule or lack of Louisiana nexus, unjust enrichment cannot be used to circumvent that bar | Court overruled no-cause exception as to unjust enrichment as pleaded; did not resolve whether unjust enrichment is available on the merits. |
Key Cases Cited
- Badeaux v. Southwest Computer Bureau, Inc., 929 So.2d 1211 (La. 2006) (distinguishes exceptions of no right of action and no cause of action and sets review standards)
- State ex rel. Dep’t of Highways v. City of Pineville, 403 So.2d 49 (La. 1981) (political subdivisions with power to sue and be sued may be sole parties to enforce certain rights)
- Illinois Brick Co. v. Illinois, 431 U.S. 720 (U.S. 1977) (only direct purchasers may recover under federal antitrust law)
- California v. ARC Am. Corp., 490 U.S. 93 (U.S. 1989) (federal law does not preempt state statutes that allow indirect purchaser recovery)
- State v. Abbott Laboratories, Inc., 208 So.3d 384 (La. App. 1 Cir. 2016) (recognized Attorney General’s LUTPA authority; discussed agency-vs.-state standing; partially relied on by parties and the court)