In re HIV Antitrust Litigation
- Edward Chen
- 3:19-cv-02573
- U.S. District Court · Northern District of California
- 5
In re HIV Antitrust Litigation: Judge Chen granted plaintiffs’ motion to exclude Medicare Part D set-off testimony from the jury trial, while preserving possible later court consideration.
The ruling affects the plaintiffs and defendants in the litigation: defendants cannot present Medicare Part D payments to the jury as a set-off to plaintiffs’ damages, but the court may later decide the issue in a limited bench trial if plaintiffs prevail.
What happened
In In re HIV Antitrust Litigation, plaintiffs asked the court to prevent defendants’ damages expert, Dr. Jena, from testifying that government Medicare Part D payments should reduce plaintiffs’ damages. The request followed an updated damages report from plaintiffs’ expert.
The court rejected plaintiffs’ argument that allowing the set-off would interfere with Medicare’s reconciliation process because plaintiffs had not provided a sufficient legal basis or briefing for that theory. But the court agreed with plaintiffs that the common-law collateral source rule generally prevents a wrongdoer from benefiting from payments that reduce a victim’s losses, and that the relevant state statutes did not clearly override that rule.
Judge Chen granted plaintiffs’ motion. Defendants may not present Medicare payments as a set-off to the jury during the trial, although the court may later hold a limited trial before the judge on Medicare payments and set-offs if plaintiffs prevail.
The detailed version
- In re HIV Antitrust Litigation · No. 3:19-cv-02573
- Edward Chen
- May 23, 2023
Background
Plaintiffs moved to limit testimony and evidence from defendants’ damages expert, Dr. Jena. In a supplemental report, Dr. Jena stated that plaintiffs’ damages expert, D. Frank, had failed to account for government payments for some Medicare Part D prescriptions. Dr. Jena characterized those payments as a set-off—that is, an amount deducted from claimed damages.
The court had previously declined to exclude evidence about Medicare payments, explaining that the parties disputed whether those payments could be allocated as a set-off and that the issue appeared to present a factual question. Plaintiffs renewed the issue by making two legal arguments: first, that using Medicare payments as set-offs would interfere with Medicare’s regulatory reconciliation process; and second, that the common-law collateral source rule barred the set-offs in most of the relevant states.
The Court’s Analysis
The court rejected the reconciliation-process argument. Plaintiffs had not identified a legal basis giving the court authority to reject set-offs under an interference theory. To the extent plaintiffs intended to raise a federal preemption argument, the court found that they had not sufficiently briefed it. The court also noted that allowing a set-off would not clearly prevent the government from pursuing amounts reflecting an overpayment from Gilead.
The court accepted plaintiffs’ collateral-source argument. It explained that the collateral source rule generally prevents a wrongdoer from benefiting because the injured party later received compensation or otherwise avoided some consequences of the harm. The court also reasoned that the rule comes from common law and that state statutes generally do not change common-law rules unless the legislature clearly intends that result. The court concluded that references in many relevant state statutes to “actual damages” did not, by themselves, clearly show an intent to override the collateral source rule.
The court recognized that the ruling did not completely prevent defendants from raising Medicare payments as set-offs. Plaintiffs acknowledged that some relevant states do not follow the collateral source rule, while others apply it only in limited circumstances. The court stated that it, rather than the jury, would decide how Medicare payments should be treated for those states.
Disposition
The court granted plaintiffs’ motion. For purposes of the jury trial, defendants may not raise Medicare payments as a set-off to plaintiffs’ damages. If plaintiffs prevail at trial, the court may conduct a limited bench trial—a trial before the judge—on Medicare payments and set-offs. The order states that it disposes of Docket No. 1849.
Read the full 5-page opinion on CourtListener, the free public archive maintained by the Free Law Project.