Physician Specialty Pharmacy, LLC v. Prime Therapeutics, LLC

Background

Physician Specialty Pharmacy, LLC sued Prime Therapeutics, LLC, asserting federal and state-law claims. The dispute concerned allegations that Prime withheld payments and removed Physician Specialty Pharmacy from its pharmacy network to benefit a partnership between Prime and Walgreens.

Prime moved to dismiss the original claims. The court recommended dismissing the federal claims for failure to state a claim and dismissing the state claims for lack of jurisdiction, while allowing Physician Specialty Pharmacy to amend its complaint. The District Judge adopted the recommendation concerning the opportunity to amend but did not decide whether to exercise supplemental jurisdiction over the state-law claims.

Before that ruling, Physician Specialty Pharmacy moved for leave to file a second amended complaint. Prime opposed the motion, primarily arguing that the proposed amendments would be futile—that is, unable to survive a motion to dismiss. Prime also argued that Physician Specialty Pharmacy had delayed bringing the motion. Prime filed a 54-page memorandum and exhibits, and Physician Specialty Pharmacy asked either that the memorandum be stricken or that it receive additional time to respond.

Analysis

Under Federal Rule of Civil Procedure 15(a)(2), a party generally needs the opposing party’s consent or the court’s permission to amend a pleading after the initial amendment period. Leave should generally be given unless there is a compelling reason to deny it, such as undue delay, bad faith, unfair prejudice, repeated failure to correct deficiencies, or futility.

The court granted leave for several reasons. First, it had already concluded that Physician Specialty Pharmacy could possibly plead enough facts to support a plausible federal antitrust claim. The District Judge had adopted that conclusion and the recommendation that Physician Specialty Pharmacy be allowed to amend. The court therefore saw no reason to change that decision.

Second, deciding whether the proposed amendments were futile would effectively require deciding a motion to dismiss. The court explained that a motion to dismiss for failure to state a claim is a dispositive motion that must be heard or reviewed by the District Judge under the district’s procedures. The court therefore allowed the amendment and left any challenge to the amended complaint for a properly filed motion to dismiss with the appropriate briefing process.

Third, Prime did not identify a compelling non-futility reason to deny amendment. The court stated that delay alone was insufficient and that Prime had not identified any unfair prejudice caused by the delay.

Order

The court GRANTED Physician Specialty Pharmacy’s Motion for Leave to File Second Amended Complaint. Physician Specialty Pharmacy was ordered to file the amended complaint within seven days of the order’s date. The April 24, 2019 motion hearing was stricken from the calendar, and prior consistent orders remained in effect.

The order did not decide whether the proposed amended complaint ultimately stated a valid claim. It allowed the amendment so that Prime could respond, including by filing a motion to dismiss if it chose to do so. The order also stated that failure to comply with the order or other consistent prior orders could result in appropriate remedies or sanctions.