Plaintiffs File Opening Brief in CVS Usual and Customary Pricing Dispute

The opening brief has been filed in the appeal of Carl Washington, et al’s case against CVS Pharmacy in the Ninth Circuit. The case alleges consumer fraud and misrepresentation by CVS as to what the usual and customary pricing is for prescriptions.

The plaintiff-appellants list three major errors for the consideration of the Ninth Circuit: first, that the district court’s “no affirmative duty to disclose” jury instruction and related motion in limine ruling misstated the law, confused the jury, and caused prejudicial error; second, that the district court erred in instructing the jury that plaintiffs’ statutory consumer protection claims turned on their status as third-party beneficiaries, and third, that the district court abused its discretion in excluding evidence of other litigation against CVS.

The original complaint indicated that CVS had falsely stated what the usual and customary price was for its prescription products when reporting pricing to third party prescription drug entities. The plaintiffs accused CVS of offering a lower price to patients who participated in the CVS Health Savings Pass Programs, which the plaintiffs argue was the true “usual and customary” price for these products instead of the higher list price that CVS had quoted. The plaintiffs specifically noted that it was in fact, usual and customary in the industry for the “usual and customary” price to be the lowest of all pricing options offered by the vendor, which in this situation was the Savings Pass program pricing.

Regarding the first alleged error, the plaintiff-appellants argued that the court improperly limited the presentation of evidence by the plaintiff to the jury as a response to a motion in limine by CVS. Specifically, the plaintiffs argued that the court’s agreement with the defendants that there was no duty as a matter of law for CVS to report the lower pricing to the plaintiffs directly conflicted with the state provisions regarding deceptive omissions of information. The plaintiffs also argued that the jury instruction ruling conflicted with the literal meaning of the state consumer protection statutes that were being sued under, resulting in a confusing instruction to the jury.

As to the second error, the plaintiff-appellants argued that the court misinterpreted the standing of the plaintiffs in regards to the consumer protection claims. Specifically, the plaintiffs argued that they had direct standing to pursue the protections of the consumer protection laws and did not need to be considered third-party beneficiaries of the patients status as consumers, but could stand as beneficiaries of the law directly. The plaintiffs argue that the additional burden of proving the status of being third party beneficiaries could have confused the jury and made the burden of persuasion unfairly difficult.

Finally, regarding the third error, the plaintiff-appellants argued that the court improperly excluded evidence after the defendant CVS specifically opened the door regarding that information. The plaintiff-appellants argued that CVS’ characterization of the patient plaintiffs as “outliers” and “unusual” should have opened the door to providing evidence other lawsuits brought against the defendant by similarly situated patients who had also brought suit. 

The plaintiffs are represented by Stein Mitchell Beato & Missner, Hausfeld, and Pritzker Levine.

CVS is represented by Swanson & McNamara and Williams & Connolly.