MSP Recovery Claims, Series LLC v. Jazz Pharmaceuticals, PLC

Background

MSP Recovery Claims, Series LLC alleged that Jazz Pharmaceuticals, PLC; Jazz Pharmaceuticals, Inc.; Jazz Pharmaceuticals Ireland, Ltd.; Express Scripts and related entities; Caring Voice Coalition; and Adira Foundation participated in a scheme involving the prescription drugs Xyrem and Prialt. According to the complaint, Jazz funded assistance programs administered by Caring Voice Coalition so patients could receive help paying copayments for Jazz’s drugs. MSP alleged that this increased prescriptions, drug prices, and payments by Medicare and insurance companies.

MSP claimed rights through assignments from SummaCare, Inc., a health care insurance company, and additional unnamed assignors. It alleged that SummaCare paid more than $700,000 in claims for the drugs from 2001 through the present. The complaint asserted a claim under 18 U.S.C. § 1962 and claims under various state consumer-protection laws. Jazz and Express Scripts filed motions to dismiss.

Court’s Analysis

The court dismissed the action solely because MSP failed to plead an injury-in-fact sufficient for Article III standing. Article III standing requires a plaintiff to show a concrete and particularized injury, a connection between that injury and the challenged conduct, and the likelihood that a favorable decision would remedy the injury.

The court held that MSP could not establish standing on behalf of unidentified and unenumerated assignors because it had not identified specific facts showing that a named assignor assigned its claims through a valid assignment agreement. As to SummaCare, the court found that the complaint did not adequately identify when SummaCare experienced the alleged injury. The complaint referred to different possible periods for the alleged scheme, including 2011 through 2014 and 2011 through 2016, but relied on drug-claim payments spanning 2011 to the present without identifying which payments occurred during the relevant period.

The court also found that MSP did not explain whom SummaCare paid the alleged $700,000. A chart attached to the complaint contained unexplained numbers and abbreviations and did not clarify whether the payments went to any identified defendant. The court concluded that the allegations did not give the defendants adequate notice of the injuries for which MSP sought recovery.

The court stated that MSP was not required to plead facts solely within the defendants’ possession. It required MSP, however, to allege facts showing when SummaCare was injured, what injury it experienced during the relevant period of alleged unlawful conduct, and to whom SummaCare paid the $700,000 forming the basis of the claimed injury.

Disposition

Judge Edward J. Davila granted the defendants’ motions to dismiss with leave to amend. The court did not rule on the defendants’ additional arguments, including arguments concerning the assignment contract, pleading defects, timeliness, personal jurisdiction, and failure to state a claim. The court stated that any amended complaint had to be filed by January 5, 2024.