Opinion
No. 94-C-897
February 9, 2000
MEMORANDUM OPINION
Before the Court are the parties' briefs on whether in light of the Seventh Circuit's recent opinion on the liability of the Manufacturer Defendants to the Class Plaintiffs, the Manufacturer Defendants are entitled to file renewed motions for summary judgment pursuant to Federal Rule of Civil Procedure 56 against the Individual Plaintiffs. See In re Brand Name Prescription Drugs Antitrust Litigation, 186 F.3d 781 (7th Cir. 1999). For the reasons set forth below, we believe renewed summary judgment motions are not appropriate.
BACKGROUND
The plaintiffs in the various actions consolidated before us in this multi-district antitrust litigation are tens of thousands of retail pharmacies of various sizes. The defendants are virtually all of the leading manufacturers and wholesalers of brand name prescription drugs.
A. History of Class Litigation
Plaintiffs have split into two distinct groups: a nationwide class ("the Class") and those claimants exercising their right to opt-out of the class and pursue their own individual claims ("the Individual Plaintiffs"). After an extensive amount of discovery and settlement with numerous defendants the Class presented their case to a jury in this Court. Following eight weeks of testimony in support of the Class' liability case, in November of 1998, we granted judgment as a matter of law for Defendants finding that "the evidence of an industry-wide conspiracy between the Manufacturers and Wholesalers to deny retail pharmacies discounts on brand name prescription drugs is meager at best and the evidence as to the Individual Defendants paltry." In re Brand Name Prescription Drugs Antitrust Litigation, 1996 WL 167350 at *16 (N.D.Ill. January 19, 1999). The Class filed an appeal with the Seventh Circuit.
On appeal, Judge Posner affirmed this Court's ruling that the Class failed to present sufficient direct evidence proving the Manufacturer Defendants had colluded to deny discounts to them. See In re Brand Name Prescription Drugs Antitrust Litigation, 186 F.3d at 785. The Court, however, remanded the case on the basis that there was a triable issue of fact with respect to an alleged agreement among drug manufacturers to peg future price increases to the Consumer Price Index. In remanding the case as to the CPI charges, Judge Posner suggested that before proceeding to trial on the CPI issue, this Court require the Class to show that they have a viable theory of damages. Id. at 789.
B. History and Current Status of the Individual Plaintiffs' Cases
Our attention currently is focused on the cases of the Individual Plaintiffs. In April of 1996, we denied the Manufacturer Defendants' motions for summary judgment against the Individual Plaintiffs, concluding that "the record finds substantial support for each manufacturer's participation in the alleged conspiracy." See In re Brand Name Prescription Drugs Antitrust Litigation, 1996 WL 167350 at *19 (N.D.Ill. April 4, 1996). On May 17, 1996, we denied the motion for reconsideration of this decision filed by Defendant Upjohn. See In re Brand Name Prescription Drugs Antitrust Litigation, 1996 WL 267753 at *1 (N.D.Ill. May 17, 1996). To date, none of the Individual Plaintiffs have tried their cases before a jury.
In light of the Seventh Circuit's most recent opinion in the Class case, on September 10, 1999, we requested that the Individual Plaintiffs and Manufacturer Defendants brief the issue of whether the Manufacturer Defendants should be allowed to file renewed summary judgment motions. The parties were encouraged to address the res judicata, collateral estoppel, or any other effect of the Seventh Circuit's recent decision.
DISCUSSION
The sole issue before the Court is whether the Manufacturer Defendants should be permitted to file renewed summary judgment motions against the Individual Plaintiffs. It is unquestionably within the discretion of the district court to allow a party to renew a previously denied motion for summary judgment, or file a successive motion for summary judgment. See Whitford v. Boglino, 63 F.3d 527, 530 (7th Cir. 1995). Absent a compelling reason, district courts should not change their summary judgment rulings. See Blue Cross Blue Shield United of Wis. v. Marshfield Clinic, 152 F.3d 588 (7th Cir. 1998) (Posner, C.J.); Carr v. O'Leary, 167 F.3d 1124, 1126 (7th Cir. 1999) (Posner, C.J.). Put more precisely, "[a] renewed or successive summary judgment motion is appropriate especially if one of the following grounds exists: `(1) an intervening change in controlling law; (2) the availability of new evidence, or an expanded factual record; and (3) need to correct a clear error or prevent manifest injustice.'" See Whitford, 63 F.3d at 530 (quoting Kern-Tulare Water Dist. v. City of Bakersfield, 634 F. Supp. 656, 665 (E.D.Cal. 1986) aff'd in part, rev'd in part on other grounds, 828 F.2d 514 (9th Cir. 1987)).
The Manufacturer Defendants cite three reasons why they should be permitted to re-open summary judgment; (1) renewed summary judgment motions are needed to give stare decisis effect to the Seventh Circuit's opinion in the Class case; (2) renewed summary judgment motions would enable the Court to give effect to the Seventh Circuit's opinion in Marshfield Clinic, 152 F.3d at 588; and (3) renewed summary judgment motions will further the multi-district litigation policies and prevent manifest injustice. We shall consider each in turn.
I
Manufacturer Defendants' first claim is that they should be allowed to file a second set of summary judgment motions as a vehicle to give stare decisis effect to the recent Seventh Circuit opinion in the Class case. Stare decisis means that courts should abide by previously decided cases. See Black's Law Dictionary 1406 (6th ed. 1990). The doctrine of stare decisis is a vital social policy utilized by courts to provide predictability, continuity, and consistency in the law so that the populace may expect courts to apply the same or similar legal maxims to similar factual scenarios. See Helvering v. Hallock, 309 U.S. 106, 119, 60 S.Ct. 444 (1940); Premier Electric Const. Co. v. Natl. Electrical Contractors Ass'n, Inc., 814 F.2d 358, 367 (7th Cir. 1987). Simply put, " [s]tare decisis means that like facts will receive like treatment in a court of law." Flowers v United States, 764 F.2d 759, 761 (11th Cir. 1985). Stare decisis is related to collateral estoppel (issue preclusion), but whereas collateral estoppel applies to issues of fact, stare decisis applies only to issues of law. See Meredith v. Beech Aircraft Corp., 18 F.3d 890, 895 (10th Cir. 1994). Contrary to the Manufacturer Defendants' suggestion, stare decisis is not a rigid doctrine to be mechanically applied. See Glidden Co. v. Zdanok, 370 U.S. 530, 543, 82 S.Ct. 1459 (1962); Helvering, 309 U.S. at 119.
Manufacturer Defendants cite Premier Electric in support of their argument that stare decisis compels the Court to allow them to file renewed summary judgment motions. In Premier Electric, the Seventh Circuit was presented with the reverse situation of the facts at bar. There, an opt-out plaintiff was seeking to apply to its case a prior class victory against the same defendant in a different jurisdiction (i.e. "offensive, non-mutual collateral estoppel"). See Premier Electric, 814 F.2d at 362. As an initial matter the Seventh Circuit held that issue preclusion did not apply, concluding that "class members who opt out may not claim the benefits of the class' victory." Id. at 367.
The Court then set forth the language advanced by the Manufacturer Defendants in support of their argument:
To say that issue preclusion does not apply is not to say that this case must follow the dreary course of many antitrust matters and bury the court under mountains of documents, to be followed by an interminable trial. Preclusion is not an all-or-nothing matter; there are degrees. The doctrine of stare decisis supplies some of the lesser degrees. A decision by the Supreme Court that the Agreement [at issue] violates the Sherman Act would be authoritative, precluding further contention in Chicago . . . The application of stare decisis will produce most of the judicial economy the district court sought to achieve. The value of the first decision as a prediction of how other courts will act produces part of the savings. If the class wins, the opting-out plaintiff should expect to win for the same reasons that persuaded the first court. If the class loses, the opting-out plaintiff should meet the same fate. He may drop the suit; if he presses the suit, the earlier decision again shortens the path to disposition of the second case. Stare decisis should be particularly potent in cases suitable for class treatment. The conclusion of the first court that certification of a class is proper, if correct, means that there will be few significant differences between the class suit and the opt-out suit. The second litigation may safely concentrate on those differences, whether or not issue preclusion comes into play.
Id. at 367 (emphasis added).
We do not believe stare decisis applies to shackle the Individual Plaintiffs with the Class' defeat. Manufacturer Defendants admit that they cannot achieve this result through issue preclusion, as Judge Easterbrook made perfectly clear in Premier Electric. See Premier Electric, 814 F.2d at 362. However, by discussing the availability of stare decisis as a means of issue preclusion, Judge Easterbrook sought to allow a party to accomplish what it could not achieve with "traditional" issue preclusion; namely the gutting or dismissal of the opt-out plaintiffs' cases following an adverse verdict against the Class.
Such a result, however, would defeat a potential class member's right to opt out of the class. If a prior dispositive decision of the jury, the tribunal, or appellate court in the class case is to detrimentally impact the subsequent cases of opt-out plaintiffs, they will have no choice but to join the Class to ensure that the Class case is litigated in accordance with their theory of the case and that counsel presents all of the key evidence at trial in the most compelling manner. This would effectively eliminate any choice for a potential class member on whether to join the class. She must join, or have her case impacted or destroyed, based on the application of stare decisis, by the actions of lawyers she did not hire or consult with, and similarly-situated litigants she does not know.
We do not believe that the application of stare decisis can operate to defeat the rights of opt-out plaintiffs in the circumstances of these cases. No case has been cited in which any court applied stare decisis in the manner suggested by the Manufacturer Defendants. Accordingly, we conclude that it would be unjust to allow an application of the results of the Class case to be visited on opt-out plaintiffs who had no say in the presentation or defense of evidence.
In Premier Electric, while the Seventh Circuit held that issue preclusion did not apply, it did not give stare decisis effect to the prior judgment in the Class case. See Premier Electric, 814 F.2d at 371. Thus, the passages cited by Defendants regarding stare decisis were unnecessary to support the Court's decision in the case, and hence consist primarily of dicta. Courts are not bound to give stare decisis effect to mere dicta. See 18 Moore's Federal Practice § 134.01 (Matthew Bender 3d ed). Hence, we believe that we are not bound to give stare decisis effect to the dicta in Premier Electric discussing stare decisis.
At the summary judgment stage of the two groupings of cases it was determined that the Individual Plaintiffs and the Class had tendered sufficient evidence to warrant a trial on the merits. The mere girth of the evidentiary record mandated a selection process by the Class. At trial the Class Plaintiffs presented four live fact witnesses during their case-in-chief, out of a potential 52 listed witnesses. See In re Brand Name Prescription Drugs Antitrust Litigation, 1999 WL 33889 at *2 (N.D.Ill. Jan. 19, 1999). The focus of the Class' case at trial was on evidence limited to a few significant areas: (1) the wholesalers' meeting regarding the proposed formation of buying groups by the pharmacies; (2) a melange of internal company documents on whether other pharmaceutical industry companies might grant discounts; (3)that brand name pharmaceutical drugs are discriminatorily priced to the detriment of the pharmacies; and (4) the chargeback system was designed to prevent arbitrage. See In re Brand Name Prescription Drugs Antitrust Litigation, 186 F.3d at 784-88.
The Class also presented a host of deposition testimony at trial. See In re Brand Name Prescription Drugs Antitrust Litigation, 1999 WL 33889 at *8.
The Seventh Circuit explicitly noted that none of the defendants in the Class case were at this meeting, another significant difference between that case and the Individual Plaintiffs' cases, which may effect the admissibility of certain documents.
Because the Class presented only a portion of the summary judgment record, this Court's decision to halt the Class trial was not a ruling as a matter of law that the Class could not prove the existence of a conspiracy under any circumstances. Rather, we ruled that the evidence presented by the Class at trial was insufficient to support a reasonable jury determination that the defendants illegally engaged in an antitrust conspiracy. See In re Brand Name Prescription Drugs Antitrust Litigation, 1999 WL 33889 at *17. Accordingly, any stare decisis effect of the Seventh Circuit's affirmation of our determination that the Class failed to provide a legally sufficient evidentiary basis for a reasonable jury to find that a conspiracy existed does not have the preclusive effect desired by the Manufacturer Defendants upon the Individual Plaintiff's chosen strategy of pursuing relief via the evidence we previously deemed sufficient to stave off summary judgment.
Currently then, the Individual Plaintiffs' case and the Class' case may not concern the same set of facts or evidence. As Judge Easterbrook stated in Premier Electric, the benefits of applying stare decisis in the context of a class case are particularly apparent when the cases pertain to the same set of facts. Premier Electric, 814 F.2d at 368. Courts apply stare decisis so that twin factual scenarios will receive equivalent treatment. See Flowers, 764 F.2d at 761.
Because a party is not bound by a judgment in a litigation in which he is not a party, See Hansberry v. Lee, 311U.S. 32, 40, 61 S.Ct. 115 (1940), it naturally follows that an opt-out plaintiff is not bound by the strategy pursued by the Class in its trial. Rather, the Individual Plaintiffs may introduce any evidence they deem proper, considering of course the admissibility requirements of the Court. The potential factual underpinnings of the Individual Plaintiffs' cases may well differ in kind and quality from that presented to the jury by the Class. Thus, we conclude that principles of stare decisis do not compel the application of the Seventh Circuit's opinion to defeat the claims of the Individual Plaintiffs. As a result, even if we did grant the Manufacturer Defendants a second shot at summary judgment the Seventh Circuit's opinion does not defeat their cause of action, and reopening summary judgment would be a hollow exercise with a foregone conclusion. We see no need to allow the Manufacturer Defendants to pursue renewed summary judgment motions at this time.
II
Defendants' second argument is that renewed summary judgment motions would enable the Court to give effect to the Seventh Circuit's opinion in Marshfield Clinic, 152 F.3d at 588. Essentially, Defendants argue that the Individual Plaintiffs should face the same pre-trial hurdle that the Class is currently facing; namely proving they possess a viable theory of damages. The two cases, however, are at different stages of litigation. The Class, as repeatedly noted, has already been afforded a trial at which it presented eight weeks of testimony. Following a directed verdict by this Court the Seventh Circuit ruled that the only remaining potential theory of recovery for the Class was grounded in the Defendant manufacturers' decision to tie any future price increases to the Consumer Price Index ("CPI"). Following that determination the Seventh Circuit suggested that this Court require the Class to present evidence showing it possessed a viable theory of damages to circumvent a potentially-hollow retrial, wherein Defendants were found liable, but the Class could not prove that it had been damaged. See In re Brand Name Prescription Drugs Antitrust Litigation, 186 F.3d at 790.
The Individual Plaintiffs' situation substantially differs from that of the Class. Unlike the Class, the Individual Plaintiffs have not already had a trial. They are not facing a retrial, wherein their theories of recovery are severely restricted to one area (the CPI Conspiracy). Rather, the Individual Plaintiffs are free to pursue their cases through any theory they like, so long as it is properly supported by evidence. At trial Defendants may certainly seek to limit the introduction of certain evidence because it does not show that the retailers paid higher prices because of the alleged CPI Conspiracy. Following the Individual Plaintiffs' cases in chief the Manufacturer Defendants may also move that the evidence as a whole is insufficient to establish damages or liability.
In addition, while Marshfield Clinic was decided following our summary judgment decision for the Individual Plaintiffs, it did not break new ground. When Judge Posner, writing for the Court, discussed this point of law in Marshfield Clinic he was not establishing a radical departure from the prior case law of this jurisdiction, nor the Country as a whole. See Marshfield Clinic, 152 F.3d at 593. Rather, in support of the proposition that anti-trust plaintiffs must tender sufficient proof that the damages they allegedly suffered where in fact caused by the alleged Sherman Act infringements of the Defendants, Judge Posner cited a line of Seventh Circuit cases beginning in 1983. See id. Clearly, this argument was available to Defendants in 1996 and their failure to raise it at that time, standing by itself, does not warrant our granting them a second chance at doing so today. Accordingly, the Individual Plaintiffs need not undergo renewed summary judgment motions as a form of damages prove-up merely to afford the Manufacturer Defendants a second opportunity to make an argument they previously decided not to pursue, solely because the Seventh Circuit has seen fit to highlight it in the Class case.
III
Finally, the Manufacturer Defendants argue that renewed summary judgment motions will further the multi-district litigation policies and prevent manifest injustice. Defendants claim that Individual Plaintiffs are forum shopping to avoid the effect of the Seventh Circuit's recent opinion in the Class case. Having previously ruled that the decision has only a limited stare decisis effect upon the individual plaintiffs, our decision removes the thrust of the Manufacturer Defendants' argument. Because the Manufacturer Defendants failed to cite any other basis for this argument, we find that there is no manifest injustice in not permitting the Manufacturer Defendants the opportunity to file renewed summary judgment motions.
CONCLUSION
For the reasons set forth above, Defendants are not entitled to file renewed summary judgment motions.