Opinion
NUMBER 2015 CA 1413
04-15-2016
THE STATE OF LOUISIANA, EX. REL. JAMES D. "BUDDY" CALDWELL v. TAKEDA PHARMACEUTICALS AMERICA, INC.; TAKEDA PHARMACEUTICALS U.S.A., INC.; TAKEDA GLOBAL RESEARCH & DEVELOPMENT CENTER, INC.; TAKEDA PHARMACEUTICAL COMPANY LIMITED; TAKEDA PHARMACEUTICALS INTERNATIONAL, INC.; ELI LILLY AND COMPANY; AND LILLY USA, LLC
James D. "Buddy" Caldwell Nicholas J. Diez Keetsie Gunnels Elizabeth Baker Murrill Stacie deBlieux Baton Rouge, LA and W. Daniel "Dee" Miles C. Lance Gould Romas A. Shaul Alison D. Hawthorne Montgomery, AL and Allan Kanner Conlee S.Whitely Deborah R. Trotter John R. Davis Jerald P. Block Thibodaux, LA Luke A. Hasskamp New Orleans,LA and T. Allen Usry New Orleans, LA and Domoine D. Rutledge Baton Rouge, LA Attorneys for Appellant Plaintiff - State of Louisiana Martin A. Stern E. Paige Sensenbrenner New Orleans, LA and Kellen Mathews Baton Rouge, LA and Frederick Robinson Washington, DC and R. Jeffrey Layne Benjamin Koplin Austin, TX Attorneys for Appellee Defendants - Takeda Pharmaceuticals America, Inc.; Takeda Pharmaceuticals U.S.A., Inc., Takeda Global Research & Development Center, Inc.; Takeda Pharmaceutical Company Limited; Takeda Pharmaceuticals International, Inc.; Eli Lilly and Company and Lilly USA, LLC
NOT DESIGNATED FOR PUBLICATION
Appealed from the 19th Judicial District Court In and for the Parish of East Baton Rouge, Louisiana
Trial Court Number 637447, Section 24 Honorable R. Michael Caldwell, Judge James D. "Buddy" Caldwell
Nicholas J. Diez
Keetsie Gunnels
Elizabeth Baker Murrill
Stacie deBlieux
Baton Rouge, LA
and
W. Daniel "Dee" Miles
C. Lance Gould
Romas A. Shaul
Alison D. Hawthorne
Montgomery, AL
and
Allan Kanner
Conlee S.Whitely
Deborah R. Trotter
John R. Davis
Jerald P. Block
Thibodaux, LA Luke A. Hasskamp
New Orleans,LA
and
T. Allen Usry
New Orleans, LA
and
Domoine D. Rutledge
Baton Rouge, LA Attorneys for Appellant
Plaintiff - State of Louisiana Martin A. Stern
E. Paige Sensenbrenner
New Orleans, LA
and
Kellen Mathews
Baton Rouge, LA
and
Frederick Robinson
Washington, DC
and
R. Jeffrey Layne
Benjamin Koplin
Austin, TX Attorneys for Appellee
Defendants - Takeda Pharmaceuticals
America, Inc.; Takeda Pharmaceuticals
U.S.A., Inc., Takeda Global Research &
Development Center, Inc.; Takeda
Pharmaceutical Company Limited; Takeda
Pharmaceuticals International, Inc.; Eli
Lilly and Company and Lilly USA, LLC BEFORE: WHIPPLE, C.J., WELCH, AND DRAKE, JJ. WELCH, J.
The State of Louisiana, through its Attorney General, James D. "Buddy" Caldwell, (the "State") appeals a judgment partially sustaining a peremptory exception raising the objection of no cause of action. We reverse the judgment of the trial court, in part, and remand for further proceedings.
BACKGROUND
On February 27, 2015, the State filed the instant suit for damages, naming as defendants: Takeda Pharmaceuticals America, Inc.; Takeda Pharmaceuticals U.S.A., Inc.; Takeda Global Research & Development Center, Inc.; Takeda Pharmaceutical Company Limited; Takeda Pharmaceutical International, Inc.; Eli Lilly and Company; and Lilly USA, Inc. According to the petition, the defendants are in the business of researching, designing, developing, licensing, manufacturing, packaging, labeling, marketing, promoting, distributing, and selling the prescription drug known as Actos and other pioglitazone hydrochloride-containing medicines, which are used for the treatment of Type 2 Diabetes Mellitus. The defendants marketed, promoted, distributed, and sold Actos in Louisiana, and the State, through its Medicaid program, purchased and reimbursed Actos, which had been prescribed for and dispensed to Louisiana Medicaid recipients.
In the petition, the State asserted that research and studies had revealed that Actos significantly increased the risk of bladder cancer and that the defendants knew or should have known of these risks. Despite this knowledge, the State claimed that the defendants undertook a campaign of fraud and misrepresentation to mislead the State for years, including Louisiana's Pharmacy and Therapeutics Committee ("P & T Committee"), the State entity responsible for managing Louisiana's Medicaid prescription drug formulary. The State further claimed that relying on the defendants' misrepresentations, omissions, and unlawful measures, the P & T Committee maintained Actos on its "Preferred Drug List" instead of demoting Actos to the "Prior Authorization List." The State also claimed that had it and its consumers, physicians, health care providers, and prescribers known the increased risk of bladder cancer associated with Actos, the medication would not have been prescribed in the quantity that it was, and the State would not have reimbursed or paid for Actos in the quantity that it did. Based on these allegations, the State sought to recover damages based on various theories of legal recovery including fraud; redhibition; unjust enrichment; and violations of the Louisiana Unfair Trade Practices Act ("LUTPA"), set forth in La. R.S. 51:1405, et seq., and the Louisiana Medical Assistance Programs Integrity Law ("MAPIL"), set forth in La. R.S. 46:437.1, et seq.
In response to the petition, the defendants filed peremptory exceptions raising the objections of no cause of action, res judicata, and no right of action, and dilatory exceptions raising the objections of vagueness or ambiguity and non-conformity of the petition with the requirements of La. C.C.P. art. 891. After a hearing, the trial court rendered judgment overruling the dilatory exceptions raising the objections of vagueness or ambiguity and non-conformity of the petition and overruling the peremptory exceptions raising the objections of res judicata and no right of action. With respect to the peremptory exception raising the objection of no cause of action, the trial court overruled that objection with regard to the State's claim of fraud, and it sustained the objection and dismissed the redhibition, unjust enrichment, LUTPA, and MAPIL claims. A judgment in accordance with the trial court's ruling was signed on August 14, 2015, and it is from this judgment that the State has appealed.
We note that the August 14, 2015 judgment is a partial final judgment because it sustained an exception in part, as to one or more but less than all of the claims, demands, issues or theories and that those portions of the judgment sustaining the objection of no cause of action were designated as final judgments subject to immediate appeal. See La. C.C.P. art. 1915(B). Based on our de novo review of the matter in light of the factors set forth in R.J. Messinger, Inc. v. Rosenblum, 2004-1664 (La. 3/2/05), 894 So.2d 1113, 1122-23, we find that the trial court properly certified those portions of the judgment as final for purposes of an immediate appeal. Notably, the trial court did not dismiss the State's claim for fraud against the defendants; however, fraud is an essential element to the State's claims based on MAPIL, LUTPA, and redhibition. If the State had not been able to challenge the dismissal of those claims, then there would have been the possibility that the State would have to litigate fraud issues twice—first, when it litigated the fraud claim that was not dismissed by the trial court, and then again, if it successfully challenged the trial court's ruling dismissing the MAPIL, LUTPA, and redhibition claims. Hence, there is no just reason to delay reviewing the trial court's judgment.
On appeal, the State contends that the trial court erred in sustaining the peremptory exception raising the objection of no cause of action and dismissing its claims against the defendants based on LUTPA, MAPIL, and redhibition.
On appeal, the State has not challenged the dismissal of its claim based on unjust enrichment. --------
NO CAUSE OF ACTION
The function of the peremptory exception raising the objection of no cause of action is to test the legal sufficiency of the petition by determining whether the law affords a remedy based on the facts alleged in the pleading. Everything on Wheels Subaru, Inc. v. Subaru South, Inc., 616 So.2d 1234, 1235 (La. 1993). No evidence may be introduced to support or controvert the objection of no cause of action. La. C.C.P. art. 931. Therefore, the court reviews the petition and accepts well-pleaded allegations of fact as true. Everything on Wheels Subaru, Inc., 616 So.2d at 1235. If the allegations of the petition state a cause of action as to any part of the demand, the exception must be overruled. Pitre v. Opelousas General Hospital, 530 So.2d 1151, 1162 (La. 1988). An appellate court conducts a de novo review of a trial court's ruling sustaining a peremptory exception raising the objection of no cause of action because the exception raises a question of law and the trial court's decision is based only on the sufficiency of the petition. Industrial Companies, Inc. v. Durbin, 2002-0665 (La. 1/28/03), 837 So.2d 1207, 1213.
As previously noted, in the judgment on appeal herein, the trial court overruled the objection of no cause of action with respect to the State's fraud claim and it sustained the objection and dismissed the redhibition, unjust enrichment, LUTPA and MAPIL claims. Hence, the judgment on appeal is a judgment partially sustaining a peremptory exception raising the objection of no cause of action.
Generally, an exception of no cause of action should not be maintained in part; the purpose of this general rule is to prevent a multiplicity of appeals that forces an appellate court to consider the merits of the action in a piecemeal fashion. Everything on Wheels Subaru, Inc., 616 So.2d at 1236. If there are two or more items of damages or theories of recovery that arise out of the operative facts of a single transaction or occurrence, a partial judgment on an exception of no cause of action should not be rendered to dismiss an item of damages or theory of recovery. Everything on Wheels Subaru, Inc., 616 So.2d at 1239. In such a case, there is truly only one cause of action, and a judgment partially maintaining the exception is generally inappropriate. Id. However, if two or more actions are cumulated that could have been brought separately because they were based on operative facts of separate and distinct transactions or occurrences, a partial judgment may be rendered to dismiss one action on an exception of no cause of action, while leaving the other actions to be tried on the merits. Id. In such a case, there are truly several causes of action, and a judgment maintaining the exception as to one separate and distinct cause of action is generally appropriate. Id.
Thus, in considering an exception of no cause of action in multi-claim litigation in which the court might rule in favor of the exceptor on less than all claims or on the rights of less than all parties, the court must first determine whether (1) the petition asserts several demands or theories of recovery based on a single cause of action arising out of one transaction or occurrence; or (2) the petition is based on several separate and distinct causes of action arising out of separate and distinct transactions or occurrences. Everything on Wheels Subaru, Inc., 616 So.2d at 1242. If the former, then the court should overrule the exception of no cause of action when the petition states a cause of action as to any demand or theory of recovery; if the latter, then the court should maintain the exception in part. Id.
In this case, the State's claims against the defendants are based on the factual allegations that the defendants knew or should have known of the increased risk of bladder cancer associated with Actos, and that they fraudulently misrepresented and misled the State for years regarding the drug, which caused the State to reimburse and pay for a larger quantity of the drug than it would have had it not been misled. The State then asserts that it is entitled to damages from the defendants based on four distinct possible theories of recovery—fraud, redhibition, and violations of LUTPA and MAPIL. The trial court found, and we agree, that the State has stated a cause of action against the defendants based on fraud, and the defendants have not challenged this ruling on appeal. Furthermore, based on our de novo review of the State's petition, we find that the claims against the defendants arise out of the same operative facts of a single transaction or occurrence.
Since the State asserted a cause of action for fraud, we must conclude that a judgment partially maintaining an exception of no cause of action with respect to the State's redhibition, LUTPA and MAPIL claims was improper. The exception of no cause of action should have been overruled; therefore, we reverse the judgment of the trial court insofar as it sustained the exception of no cause and dismissed the State's claims based on redhibition and violations of LUTPA and MAPIL.
CONCLUSION
For all of the above and foregoing reasons, we find that the trial court improperly sustained a partial exception of no cause of action, and that portion of the August 14, 2015 judgment of the trial court sustaining the peremptory exception raising the objection of no cause of action and dismissing the State's claims based on redhibition, and violations of LUTPA and MAPIL is reversed. This matter is remanded to the trial court for further proceedings.
All costs of this appeal are assessed against the defendants, Takeda Pharmaceuticals America, Inc.; Takeda Pharmaceuticals U.S.A., Inc.; Takeda Global Research & Development Center, Inc.; Takeda Pharmaceutical Company Limited; Takeda Pharmaceutical International, Inc.; Eli Lilly and Company; and Lilly USA, Inc.
REVERSED IN PART; REMANDED.