United States District Court, W.D. Wisconsin
OPINION AND ORDER
D. Peterson, District Judge.
Compliant Pharmacy Alliance Cooperative is a buying
cooperative based in Stoughton, Wisconsin that has more than
1, 700 member pharmacies. Since 2009, the Cooperative's
members have been buying generic drugs from defendant
AmerisourceBergen Drug Corporation, which is a drug
distributor and subsidiary of defendant AmerisourceBergen
Corporation. (The court will refer to both defendants
collectively as “Amerisource” unless otherwise
noted.) Under its purchasing agreement with the Cooperative,
Amerisource negotiates a price with drug manufacturers and
then sells the drugs to the Cooperative's members with an
added service fee.
impetus for this lawsuit relates to the pricing for drugs
obtained from BluePoint Laboratories, which is also a
subsidiary of AmerisourceBergen Corporation. The Cooperative
alleges that BluePoint prices are “artificially
inflated” because Amerisource has refused to negotiate
a “competitive” price with BluePoint. Dkt. 20,
¶¶ 6, 21.
Cooperative is asserting three claims related to prices under
the BluePoint label. First, the Cooperative says that
Amerisource has breached its duty of good faith and fair
dealing by failing to negotiate a competitive price on
BluePoint drugs. Second, the Cooperative says that
Amerisource fraudulently induced the Cooperative to renew
their agreement in 2016 by promising to negotiate better
prices on those products. Third, the Cooperative says that
Amerisource may be held liable under the Racketeer Influenced
and Corrupt Organizations Act because it created an
“enterprise” with BluePoint and repeatedly
committed mail fraud when its “contracts and billings .
. . intentionally misled [the Cooperative] about the manner
in which [Amerisource] computed prices.” Id.,
¶ 113. The Cooperative is also asserting a separate
breach of contract claim because Amerisource allegedly
increased its service fee without complying with the
requirements for doing so in the purchase agreement.
has filed a motion for judgment on the pleadings as to all of
the Cooperative's claims. Dkt. 47. Amerisource raises
numerous arguments in its motion, but there is a threshold
question that the court must resolve before the others.
opening brief, Amerisource frames this issue as a failure to
state a claim: each of the Cooperative's claims requires
proof of damages and the Cooperative has conceded in its
complaint that it did not incur damages because its members
and not the Cooperative itself paid the allegedly inflated
prices for BluePoint drugs. Dkt. 48, at 34, 41, 48. In its
reply brief, Amerisource reframes the issue as one of
constitutional standing: this court does not have subject
matter jurisdiction over the case because the Cooperative
hasn't alleged that it suffered any harm. Dkt. 67, at 4.
But the basis for both arguments is the same: it is the
Cooperative's members rather than the Cooperative that
allegedly have been injured.
response, the Cooperative does not deny that it is suing for
the injuries of its members rather than its own injuries. But
it alleges that it is entitled to do that because “it
is the assignee of its members' claims.” Dkt. 58,
at 16 (citing Dkt. 20, ¶ 24). Amerisource says that the
Cooperative's allegation is insufficient because it
doesn't include details about the assignments. But at the
pleading stage it is reasonable to infer without more
specific allegations that a cooperative has assignments from
its members on matters related to the cooperative.
reply brief, Amerisource raises a more a substantial question
about the alleged assignments. Specifically, Amerisource says
that the Cooperative cannot rely on the assignments to show
an injury because the Cooperative is asserting a violation of
its own rights in its complaint: that Amerisource breached
its contract with the Cooperative and allegedly made false
representations to the Cooperative. It does not contend that
it is asserting the rights of its members. The Cooperative
cites no authority for the view that it is entitled to assert
its own rights but still collect damages for its members. So
it is not clear how the assignments address the issue that
Amerisource did not raise this issue until its reply brief,
the court cannot ignore the issue because it implicates the
court's jurisdiction. But it would be unfair to decide
the issue in Amerisource's favor without giving the
Cooperative an opportunity to respond.
is what the court will do. The Cooperative must either: (1)
explain why it is entitled to assert its own rights but rely
on the injuries of third parties for the purpose of standing
and proving damages; or (2) file an amended complaint that
asserts the rights of the Cooperative's members rather
than the Cooperative itself.
ORDERED that plaintiff Compliant Pharmacy Alliance
Cooperative may have until February 20, 2019, to file either:
(1) a supplemental brief in which it explains why it is
entitled to assert its own rights but rely on the injuries of
third parties for the purpose of both standing and proving
damages; or (2) an amended complaint that asserts the rights
of the Cooperative's members rather than the ...