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State v. Fournier Industrie Et Sante And Laboratories Fournier, S.A.

Court of Appeals of Louisiana, First Circuit

August 3, 2018

STATE OF LOUISIANA, BY AND THROUGH ITS ATTORNEY GENERAL JAMES CALDWELL
v.
FOURNIER INDUSTRIE ET SANTE AND LABORATORIES FOURNIER, S.A., ABBOTT LABORATORIES, ABBVIE, INC.

          Appealed from the 19th Judicial District Court In and for the Parish of East Baton Rouge State of Louisiana Case No. C637571 The Honorable Donald R. Johnson, Judge Presiding

          David L. Guerry J. Wendell Clark Baton Rouge, Louisiana William F. Cavanaugh, Jr. George A. LoBiondo New York, New York Counsel for Defendants/Appellants Abbott Laboratories and AbbVie, Inc.

          Jeff Landry Attorney General Keetsie T. Gunnels Nicholas J. Diez Stacie Deblieux Baton Rouge, Louisiana, Alejandro Perkins Baton Rouge, Louisiana Robert L. Salim Barrett Beasley Natchitoches, Louisiana John Alden Meade Adam G. Young New Orleans, Louisiana James P. Ryan Opelousas, Louisiana Jerald P. Block Thibodaux, Louisiana Counsel for Plaintiff/Appellee State of Louisiana

          BEFORE: McCLENDON, WELCH, AND THERIOT, JJ.

          THERIOT, J.

         Abbott Laboratories and AbbVie Inc. appeal the judgment of the Nineteenth Judicial District Court overruling their peremptory exceptions of no right of action and no cause of action. Abbott Laboratories and AbbVie Inc. have also filed a supervisory writ application seeking review of the same judgment.[1] For the following reasons, we deny the supervisory writ application, reverse the trial court's judgment, and render judgment dismissing the State's petition for failure to state a cause of action.

         FACTS AND PROCEDURAL HISTORY

         On March 4, 2015, the State of Louisiana, by and through its Attorney General James D. "Buddy" Caldwell[2] ("the State"), filed suit against Fournier Industrie Et Sante and Laboratories Fournier, S.A., Abbott Laboratories, and AbbVie Inc. (collectively "Defendants"), all of whom allegedly marketed and sold the pharmaceutical product Tricor in and to the state of Louisiana.[3] In its petition, the State alleged that Defendants had employed an unlawful scheme to prevent or delay a less expensive generic version of Tricor from entering the market. According to the State, this scheme included conduct such as filing fraudulent patent applications with the United States Patent and Trademark Office, unlawfully listing unenforceable patents in the FDA's Orange Book, "product hopping," and filing sham litigation against would-be competitors. The State claimed that, through this scheme, Defendants illegally maintained monopoly power in the market for fenofibrate in the United States for at least a decade, maintained the price of Tricor at supra-competitive levels, and overcharged the State millions of dollars by depriving it of the benefits of unrestricted competition and access to less expensive generic versions of fenofibrate. With regard to the overpayments, the State claimed that Defendants' alleged unlawful conduct caused the State, through the Louisiana Medicaid Program ("Medicaid"), to pay more for fenofibrate products than they otherwise would have paid. As a result, the State brought claims under the Louisiana Monopolies Act, La. R.S. 51:121, et seq, and Louisiana's Unfair Trade Practices Act ("LUTPA"), La. R.S. 51:1401, et seq. Alternatively, the State asserted that it had a claim for unjust enrichment. The State sought restitution, reimbursement for the overpayments, damages as permitted by law, reasonable attorney fees, and costs.

         On May 8, 2015, AbbVie, Inc. and Abbott Laboratories (collectively "AbbVie") filed exceptions raising objections of prescription and peremption, no right of action, and no cause of action. On August 11, 2015, the trial court sustained AbbVie's objections of prescription and peremption and dismissed the State's claims for relief. In doing so, the trial court did not take up AbbVie's exceptions of no right of action or no cause of action, but held both exceptions in abeyance pending further proceedings.

         The state subsequently appealed the trial court's judgment on AbbVie's exceptions. On December 22, 2016, this court found that the trial court erred in sustaining AbbVie's exception of prescription and peremption. State by and Through Caldwell v. Fournier Industrie et Sante and Laboratories Fournier, S.A., 2015-1353 (La.App. 1 Cir. 12/22/16); 208 So.3d 1081, 1085-86. Specifically, this court found that the trial court should have first considered whether the State was the proper party to bring its claims against Abb Vie. Id. Thus, this court vacated the trial court's judgment and remanded the case to the trial court for further proceedings. Id. at 1086.

         Following this court's ruling, the trial court considered AbbVie's objections of no right of action and no cause of action. In a supplemental brief, AbbVie argued that the only party vested with a right of action to recover for damages to Medicaid was the Louisiana Department of Health ("LDH"), meaning the Attorney General acting on behalf of the State did not have a right to recover Medicaid damages through litigation.[4] AbbVie also contended that the LUTPA claim was not viable because the State had not sought injunctive relief. As to whether the State had a cause of action, AbbVie argued that the State only asserted "indirect purchaser" claims and that Louisiana antitrust law did not provide a cause of action for indirect purchasers, nor did Louisiana antitrust law provide a cause of action for alleged antitrust violations that occurred entirely outside of Louisiana. Finally, AbbVie argued that the State had no right or cause of action to bring an unjust enrichment claim, in part because the State's damages were addressed by existing laws.

         On July 17, 2017, the trial court held a hearing on these objections. On July 31, 2017, the trial court overruled AbbVie's objections of no right of action and no cause of action. AbbVie subsequently filed this appeal and a writ application, raising the same arguments as the appeal.

         ASSIGNMENTS OF ERROR

         Appellants assign the following as error:

(1) The trial court erred when it overruled Defendants-Appellants' exception of no right of action as to all of the Petition's claims, because the real party in interest to assert the claims in the Petition is not the State of Louisiana, but rather the Louisiana Department of Health.
(2) The trial court erred when it denied Defendants-Appellants' exception of no cause of action as to the Petition's Monopolies Act claim, because the Monopolies Act does not reach the conduct alleged in the Petition.
(3) The trial court erred when it denied Defendants-Appellants' exceptions of no right or cause of action as to the Petition's unjust enrichment claim, because the Louisiana Department of Health is the only party in interest with the right of action to recover damages to Louisiana Medicaid on an unjust enrichment theory, and because an action for unjust enrichment cannot lie where express laws exist that address the complained-of conduct.
(4) The trial court erred when it overruled Defendants-Appellants' exception of no cause of action as to all of the Petition's claims, because Louisiana law does not provide a cause of action for indirect purchasers of a product.

         STANDARD OF REVIEW

         The standard of review of a ruling on an exception of no right of action, which presents a question of law, is de novo. LeCompte v. Continental Casualty Co., 2016-1359 (La.App. 1 Cir. 7/12/17); 224 So.3d 1005, 1009, writ denied, 2017-1525 (La.App. 1 Cir. 12/15/17); 231 So.3d 635. Further, appellate review of a peremptory exception of no cause of action is de novo because an exception of no cause of action presents a question of law and the trial court's decision is based only on the sufficiency of the petition. CamSoft Data Systems, Inc. v. Southern Electronics Supply, Inc., 2015-1260 (La.App. 1 Cir. 9/23/15); 182 ...


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