Opinion ID: 1819124
Heading Depth: 3
Heading Rank: 1

Heading: Common question of law or fact

Text: The pharmaceutical manufacturers argue that consolidation of these cases for trial under Rule 42(a), Ala. R. Civ. P., was inappropriate because, they say, there is no common question of law or fact. Novartis's petition at 11. They also argue that this case share[s] none of the characteristics with those in which this Court has[, in the past,] endorsed consolidation. GSK's petition at 6. Rule 42(a), Ala. R. Civ. P., provides: When actions involving a common question of law or fact are pending before the court, it may order a joint hearing or trial of any or all the matters in issue in the actions; it may order all the actions consolidated; and it may make such orders concerning proceedings therein as may tend to avoid unnecessary costs or delay. We have said that `[c]ircuit judges have broad powers under the Alabama Rules of Civil Procedure ... to order actions consolidated.' Ex parte Flexible Prods. Co., 915 So.2d at 39 (quoting State v. Reynolds, 887 So.2d 848, 854 (Ala.2004)). [Rule 42(a) ] specifically recognizes the propriety of consolidation, as well as the trial court's discretion to order consolidation as necessary to reduce costs or delay. Owens-Corning Fiberglass Corp. v. James, 646 So.2d 669, 674 (Ala.1994). As noted, the trial court's consolidation order states: A review of the pleadings filed in these actions reveals that the State's allegations against each Consolidated Defendant present identical claims and legal theories of recovery. Specifically, the State's second amended complaint asserts the same claims of fraudulent misrepresentation, fraudulent suppression, wantonness, and unjust enrichment against each defendant. In addition, based upon the expert disclosures filed by the State and attached as an exhibit to its motion to consolidate, it appears that the expert testimony which the State anticipates to present at trial will be the same for all defendants, as will the State's model and methodology for proving its alleged damages. State's brief at Exhibit C. The pharmaceutical manufacturers argue that [t]he trial court's reliance on allegations in the pleadings was misplaced.... Any `common' issues are common only inasmuch as they can be described using the same words. [7] Novartis's petition at 11. As the trial court notes, the State has alleged the same claims of fraudulent misrepresentation, fraudulent suppression, wantonness, and unjust enrichment against each defendant. [T]he mere fact that two cases assert similar [or the same] theories of recovery does not constitute a common question of law so as to warrant consolidation, Flintkote Co. v. Allis-Chalmers Corp. 73 F.R.D. 463, 466 (D.C.N.Y. 1977) (footnote omitted). However, our review of the pleadings reveals that certain elements of the State's first two claims present common questions of law and fact.
To establish the elements of fraudulent misrepresentation [the State] ha[s] to show: `(1) that the [pharmaceutical manufacturers'] representation was false, (2) that it concerned a material fact, (3) that [the State] relied on the false representation, and (4) that actual injury resulted from that reliance.' Consolidated Constr. Co. of Alabama v. Metal Bldg. Components, L.P., 961 So.2d 820, 825 (Ala. 2007) (Bolin, J., concurring specially) (quoting Boswell v. Liberty Nat'l Life Ins. Co., 643 So.2d 580, 581 (Ala.1994)). The factual basis of the State's fraudulent-misrepresentation claim against the pharmaceutical manufacturers is that they reported or caused to be reported AWP [average wholesale price], WAC [wholesale acquisition cost], and Direct Price for their products ... for publication and dissemination to state Medicaid agencies such as Alabama Medicaid. State's second amended complaint, Appendix, Vol. 1 at Exhibit 1, at 38. The State asserts that Alabama Medicaid reasonably relied on the false pricing data in setting prescription drug reimbursement rates and making payment on such rates. State's second amended complaint, Appendix, Vol. 1 at Exhibit 1, at 38. Thus, it appears that in this case there will be a common question of fact as to whether the pricing information published in the third-party publications was material and whether the State, in fact, relied on that information. Although the other elements of the State's claim may produce proof pertaining to individual actors and actions, Novartis's petition at 11, whether the prices submitted to and published in the third-party publications were material and whether the State relied on the third-party publications in calculating the amounts to reimburse the providers appear to be questions common to both GSK and Novartis.
The elements of a fraudulent-suppression claim are `(1) a duty on the part of the defendant to disclose facts; (2) concealment or nondisclosure of material facts by the defendant; (3) inducement of the plaintiff to act; (4) action by the plaintiff to his or her injury.' McIver v. Bondy's Ford, Inc., 963 So.2d 136, 143 (Ala.Civ.App.2007) (quoting Freightliner, L.L.C. v. Whatley Contract Carriers, L.L.C., 932 So.2d 883, 891 (Ala.2005), quoting in turn Lambert v. Mail Handlers Benefit Plan, 682 So.2d 61, 63 (Ala.1996)). The State specifically alleges that the pharmaceutical manufacturers voluntarily undertook to report or cause to be reported AWP, WAC, and Direct Price for their products ... for publication and dissemination to state Medicaid agencies including Alabama Medicaid and that they had a duty under the particular circumstances to provide accurate and complete AWP, WAC, and Direct Price information. State's second amended complaint, Appendix, Vol. 1 at Exhibit 1, at 39. In its answer, GSK admits that it distributes, markets or sells certain prescription drugs that are reimbursed by Alabama Medicaid and that from time to time, GSK provided price communications to third party publications which contained `WACs' [wholesale acquisition costs] or similar list prices for wholesalers for certain of its drugs. GSK's answer, Appendix, Vol. 1 at Exhibit 4, pp. 7 and 19. Similarly, Novartis admits that it distributes, markets or sells ... prescription drugs that are reimbursed by Alabama Medicaid and that from time to time during the relevant period, Novartis provided price lists to third party publications which contained, inter alia, `AWPs' [average wholesale prices] and `WACs' [wholesale acquisition costs] for certain of its drugs.... Novartis's answer, Appendix, Vol. 1 at Exhibit 3, pp. 6 and 12. [T]he existence of a duty is a question of law to be determined by the trial judge. State Farm Fire & Cas. Co. v. Owen, 729 So.2d 834, 839 (Ala.1998). Thus, it appears that there is a common question of law as to whether the pharmaceutical manufacturers, in participating in Alabama's Medicaid program and reporting prescription drug prices to the third-party reporting services, had a duty to accurately disclose their prescription drug prices to the third-party publications. Similarly, it appears that common to both actions on this claim is the question whether the State, in fact, acted to its injury with regard to the information provided to the third-party publications. The pharmaceutical manufacturers argue that this case share[s] none of the characteristics with those in which this Court has[, in the past,] endorsed consolidation. GSK's petition at 6. They argue that this Court has endorsed consolidation in cases involving a single, identifiable product or event, such as toxic-tort cases or cases arising out of the same transaction and in cases involving conspiracies and concurrent torts or that this Court has limited consolidation of trials to common issues rather than consolidating as to all issues. GSK's petition at 6. [8] Nonetheless, Rule 42(a) permits joint trials when the cases share a common question of law or fact. Ala. R. Civ. P. 42(a). One of either  law or fact  will suffice as the basis for invoking the rule. See also 33 Fed. Proc., L.Ed. § 77:44 (1995) (Actions involving the same parties are likely candidates for consolidation, but a common question of law or fact is enough; if a common question exists, courts often consolidate actions despite differences in parties.); 9A Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 2382 (3d ed. 2008) (The existence of a common question by itself is enough to permit consolidation under Rule 42(a), [Fed.R.Civ.P.,], even if the claims arise out of independent transactions.). Further, consolidation under Rule 42 does not require that common issues predominate over other issues. See Ex parte Flexible Prods. Co., 915 So.2d at 42 (Moreover, we reject the argument presented by the defendants that the propriety of the [case-management order] rests upon a determination of whether any common issues `predominate' over the other issues in the actions to be consolidated. A weighing of the relative dominance of the particular issues presented by actions to be consolidated (an exercise that would be speculative in actions such as this where the common issues have yet to be framed) is not required by Rule 42.). Therefore, the trial court did not err when it found that the existence of a common question of law or fact in these cases forms the premise for consolidating them.