MEMORANDUM OPINION AND ORDER
Thе plaintiffs, third party payers, sued the defendants, Knoll Pharmaceutical Co. [“Knoll”], BASF Corporation [“BASF”], Boots Pharmaceuticals, Inc. [“Boots”], and individual defendants alleging federal and state claims relating to the marketing and sale of the drug Synthroid. The plaintiffs move to certify a class of all insurance providers and other third party payers, including self-funded plans but excluding governmental agencies, that paid Synthroid expenses incurred by any consumer in the United States and Puerto Rico from January 1, 1990 to the present time. For the following reasons, the motion for class certification is granted except with respect to the plaintiffs’ common law claims.
Background,
Synthroid is the brand name for a synthetic thyroid medication containing levothyroxine. In 1997, after the Judicial Panel on Multidistrict Litigation transferred numerous consumer cases involving Synthroid to this court for consolidated pretrial proceedings, a grоup of consumers filed a master class action complaint. The master consumer complaint alleges that the defendants con
Various groups of third party payers intervened in the consumer proceedings, alleging that they were injured when as a result of the defendants’ fraudulent scheme they paid more for Synthroid on behalf of insured consumers. Blue Cross and Blue Shield of Alabamа [“Alabama Blue Cross”], Louisiana Health Service & Indemnity Company d/b/a Blue Cross Blue Shield of Louisiana [“Louisiana Blue Cross”], Aetna U.S. Healthcare Inc., Aetna Life Insurance Co., and Corporate Health Insurance Co., Inc. [“Aetna”], and Brokerage Concepts, Inc. [“Brokerage Concepts”] [collectively “the plaintiffs”] move for class certification on their claims under the Sherman Antitrust Act, 15 U.S.C. §2 et seq., the Federal Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. § 1961 et. seq. [“RICO”], various state consumer protection statutes including the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 ILCS 505/1 et seq. [“ICFA”], and the common law. The plaintiffs do not move for class certification on antitrust damages claims.
Class Certification
Under Fed.R.Civ.P. 23(a), a proposed class must meet four preliminary requirements: “(1) the class is so numerous that joiner of all members is impracticable, (2) there are questions of law or fact common to thе class, (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class, and (4) the representative parties will fairly and adequately protect the interests of the class.” The proposed class also must meet one of the requirements set forth in Fed.R.Civ.P. 23(b). The plaintiffs first seek certification under Rule 23(b)(3), which allows class actions where “questions of law or fact common to the members of the class predominate over any questions affecting individual members, and ... a class action is superior to other available methods for the fair and efficient adjudication of the controversy.” The plaintiffs also seek certification pursuant to Rule 23(b)(2), which authorizes class actions where “the party opposing the class has acted or refused to act on grounds generally applicable to the class, thereby making appropriate final injunctive relief----” The plaintiffs must show that the proposed class is appropriate for certification. Retired Chicago Police Ass’n v. City of Chicago,
When evaluating a motion for class certification, a court must accept the allegations in support of certification as true. Hardin v. Harshbarger,
A. Rule 23(a)
1. Numerosity
Under Rule 23(a), a class must be so numerous that joinder is impracticable. The plaintiffs allege that the proposed class includes thousands of third party payers, and therefore the numerosity requirement is met.
2. Commonality
Under Rule 23(a)(2), questions of law or fact must be common to the class. Common factual and legal questions in this case include whether the defendants intentionally suppressed scientific information regarding the bioequivalency of Synthroid and other levothyroxine drags, whether and when the defendants learned that other levothyroxine drags are as effective as Synthroid, whether the defendants have continued to conceal or misrepresent the effectiveness of Synthroid, whether the defendants created and participated in a scheme to conceal material facts or make material misrepresentations regarding the bioequivalency of Synthroid and oth
S. Typicality
Under Rule 23(a)(3), the claims or defenses of the class representatives must be typical of the class. The typicality requirement is met if the plaintiffs’ claims “arise[ ] from the same event or practice or course of conduct that gives rise to the claims of other class members and [the] claims are based on the same legal theory____ [Typicality] may be satisfied even if there are factual distinctions between the claims of the named plaintiffs and those of other class members.” De La Fuente v. Stokely-Van Camp, Inc.,
According to the defendants, well after the study that they allegedly suppressed was published, Alabama Blue Cross approached Knoll to negotiate a contract whereby Alabama Blue Cross listed Synthroid as a preferred product and received volume discounts for volume purchases of Synthroid. The defendants additionally allege that three of the four named plaintiffs have continuеd to treat Synthroid as a drug for which there is no generic equivalent, and that two of the named plaintiffs apparently benefitted when their insureds filled prescriptions with Synthroid rather than other levothyroxine drugs. The plaintiffs respond that the defendants have continued to misrepresent the superiority of Synthroid, which has resulted in ongoing confusion about Synthroid and in a delay by the FDA in determining these issues.
When “a major focus of the litigation will be on an arguable defense unique to the named plaintiff ... then the named plaintiff is not a proper class representative.” Koos v. First Nat'l Bank of Peoria,
Based on the plaintiffs’ allegations, an affirmative defense of waiver would be addressed only after the plaintiffs established that there was a scheme to defraud. In. addition, the defense relates to the common questions of when and whether the defendants knew about the biоequivalency of Synthroid and other levothyroxine drugs and whether the defendants were intentionally suppressing information regarding bioequivalency. Therefore, even assuming that the defendants have an arguable defense of waiver against the named plaintiffs, such a defense would not consume the merits of this case and is not a basis for finding that the named plaintiffs’- claims are atypical.
Moreover, the complaint alleges that the plaintiffs suffered economic harm when the defendants created and participated in a scheme to suppress information and make misrepresentations regarding the bioequivalency of Synthroid and other drugs. All plaintiffs are alleged to have been injured by the same course of conduct by the defendants, and to prove their claims all class members would need to show that the defendants engaged in the same conduct. The interests оf the class representatives and the
4. Adequacy of Representation
Rule 23(a)(4) requires that the class representatives fairly and adequately protect the class interests. The plaintiffs in this case, like the putative class members, have claims for economic damages allegedly caused by the same conduct by the defendants. The plaintiffs do not apрear to have interests antagonistic to the class, and their alleged economic harm creates a sufficient interest in the outcome to litigate vigorously. Plaintiffs’ counsel are also qualified. Therefore the plaintiffs have satisfied Rule 23(b)(4).
B. Rule 23(b)(3)
The plaintiffs first move to certify their class pursuant to Rule 23(b)(3). Pursuant to Rule 23(b)(3), common issues of law or fact must predominate over individual issues, and a class action must be the superior method of adjudication.
1. Predominance
The defendants argue that class certification under Rule 23(b)(3) is precluded because individualized issues relating to causation and damages predominate over the common issues in this lawsuit. First, defendants argue that certification is precluded because plaintiffs cannot demonstrate liability and causation with class-wide proof. According to defendants, causation depends upon “individualized inquiries into decisions of consumеrs, physicians and pharmacists to purchase, prescribe and dispense Synthroid” as well as “a careful investigation of the individual facts surrounding each [plaintiffs] knowledge and policies with respect to Synthroid.” (Def.Mem. at 19-20). The plaintiffs, however, allege a pattern of standardized conduct by the defendants, consisting mainly of a fraudulent scheme to conceal scientific information regarding the bioequivalency of Synthroid and other levothyroxine drugs. These allegations involve “a common course of conduct that leads to injury of all the class members.” Toney v. Rosewood Care Ctr., Inc. of Joliet,
In support of their argument that individualized issues of liability and causаtion predominate, defendants cite to two cases from this district denying class certification in pharmaceutical marketing fraud cases, Dhamer v. Bristol-Myers Squibb Co.,
The defendants also point to conversations that took place between the plaintiffs and the defendants concerning Synthroid and the study, as well as individual practices of the plaintiffs concerning Synthroid after the study was published. Individual reliancе, however, is not an element of an ICFA claim or a RICO claim predicated on acts of mail or wire fraud.
Defendants next argue that certification is precluded because of individualized issues regarding damages. According to the defendants, the plaintiffs will have to show that any injury borne by them was first passed on through wholesalers, retailers, and consumers. In support of this argument, the defendants cite to various cases denying class certification for indirect purchasers bringing antitrust claims in brand name prescription drug litigation. The plaintiffs, however, are not moving for class certification on antitrust damages claims. Instead, they are requesting an injunction on their antitrust claim, and thus are not concerned with proving the amount of damages.
As for the plaintiffs’ claims under RICO and state consumer statutes, federal courts “have consistently and firmly adhered to the principle that once liability has been demonstrated, complexity or uncertainty as to the amount of damages will not preclude recovery.” In re Folding Carton Antitrust Litig.,
2. Superiority
Pursuant to Rule 23(b)(3), a class action also must be superior to other methods of adjudicating the controversy. When making this determination, a court should consider four factors: 1) each class member’s interest in litigating their claims separatеly; 2) whether other lawsuits arising from the same controversy have been filed; 3) the desirability of concentrating the litigation in one forum; and 4) whether the class action is manageable. Fed.R.Civ.P. 23(b)(3). The defendants challenge the manageability of the proposed, national class bringing claims under numerous state consumer statutes. The defendants also argue that variations in state law preclude class certification on the plaintiffs’ common lаw claims. Furthermore, the defendants argue that the class members
According to the defendants, the plaintiffs’ state consumer fraud statute claims require the application of the laws of 50 states, and the substantive differences in the statutes preclude national certification. As the defendants argue, “ ‘ serious reservations’ have been expressed in various circuits — including the Sevеnth Circuit — about classes whose members will be governed by the tort law of 50 different states.” Garner,
Some courts have stated that non-residents are able to bring claims under the ICFA if “the ‘deceptive act or practice’ of which they complain was perpetrated in Illinois.” Hastings v. Fidelity Mortgage Decisions Corp.,
At this stage in the proceeding, however, it is impossible to resolve the choice of law issues. Many courts decline to make a choice of law determination when relying only on allegations in class certification briefs. See, e.g., Hickey v. Great Western Mortgage Corp.,
The defendants also argue that substantive differences in state law would render unmanageable a class action involving plaintiffs’ common law claims. The plaintiffs have not suggested which state’s law or laws would apply to these claims; instead, apparently conceding that numerous state laws would apply and that variations exist, they argue that any substantive differences would not predominate over the common questions. The burden is on the plaintiffs to demonstrate that a class is appropriate for certification. Retired Chicago Police Ass’n,
Defendants further argue that a class action is not a superior method of litigation because thе potential class members are so
Conclusion
For the reasons discussed above, the plaintiffs’ motion to certify a class of all insurance providers and other third party payers, including self-funded plans but excluding governmental agencies, that paid Synthroid expenses incurred by any consumer in the United States from January 1, 1990 to the present time is granted except with respect to plaintiffs’ common law claims.
Notes
. The defendants argue that reliance is an element of a common law claim for fraud, fraudulent concealment, and negligent misrepresentation. As is discussed supra with regard to Rule 23(b)(3), the plaintiffs have not analyzed state law variences with regard to these claims and have not demonstrated that such variences would be manageable. For the same reasons,
. Defendants’ argument that the class representatives lack standing to sue for antitrust damages is thus moot.
. Because the class is certifiable pursuant to Rule 23(b)(3), it is unnecessary to discuss whether the class is also certifiable pursuant to Rule 23(b)(2). It should be noted, however, that certification under Rule 23(b)(2) is appropriate only where injunctive or declaratory relief is the primaiy relief sought. See McDonald,