Opinion ID: 204019
Heading Depth: 2
Heading Rank: 3

Heading: Aggregate Damages

Text: AstraZeneca's third challenge to the entry of a class-wide judgment is that the district court awarded aggregate damages without any individualized determination of damages as to a single class member (including the named plaintiffs), thereby violating AstraZeneca's fundamental right to defend against each class member's claim of injury and damages. In support of its argument that a rough estimate of damages is insufficient, AstraZeneca cites In re New Motor Vehicles Canadian Export Antitrust Litigation, 522 F.3d 6, 28 (1st Cir.2008), and McLaughlin, 522 F.3d 215, for the proposition that the plaintiffs should have been required to prove that each class member was harmed by AstraZeneca's pricing practices. Requiring such proof, the company argues, ensures that AstraZeneca will pay damages reflective of its actual liability. As to whether the plaintiffs adequately proved the class members' claims of injury, AstraZeneca once again takes aim at Dr. Hartman's methodology, arguing that the approach he used to set the 30% liability speed limit failed to take into account the individualized circumstances of the class members. Little more need be said about Dr. Hartman's liability analysis or the district court's decision to adopt it. Suffice it to say that the methodology used to develop the 30% speed limit that triggered potential liability, which included an examination of TPPs' (including class representative BCBS-MA's) testimony, data, and contracts, sufficiently incorporated individualized information about the class members to support the district court's decision to adopt it for the entire class. [33] AstraZeneca's criticisms of Dr. Hartman's damages calculation, however, merit further discussion. AstraZeneca alleges that Dr. Hartman's calculation fails to account for five factors: i) that fourteen Massachusetts TPPs and 23,000 consumers opted out of the class; ii) that those persons with flat co-payments were defined out of the class; iii) that some TPPs did not always reimburse based on AWP during the class period; iv) that some physicians did not bill patients for the co-payments; and v) that some physicians did not collect the co-payments that were billed. AstraZeneca asks us to review the district court's damages methodology for a violation of the company's due process rights, and of Federal Rule of Civil Procedure 23. The use of aggregate damages calculations is well established in federal court and implied by the very existence of the class action mechanism itself. See, e.g., 3 Herbert B. Newberg & Alba Conte, Newberg on Class Actions § 10.5, at 483-86 (4th ed. 2002) (Aggregate computation of class monetary relief is lawful and proper. Courts have not required absolute precision as to damages.... Challenges that such aggregate proof affects substantive law and otherwise violates the defendant's due process or jury trial rights to contest each member's claim individually, will not withstand analysis.... Just as an adverse decision against the class in the defendant's favor will be binding against the entire class in the aggregate without any rights of individual class members to litigate the common issues individually, so, too, an aggregate monetary liability award for the class will be binding on the defendant without offending due process. (footnotes omitted)). There is nothing about this case to suggest a contrary conclusion. Thus, to the extent that AstraZeneca argues that the district court's decision to use an aggregate damages methodology violated Rule 23 or the company's due process rights, AstraZeneca's challenge fails in the starting gate. To the extent that AstraZeneca's arguments instead go to the question of whether Dr. Hartman's methodology was sufficiently reliable, see Daubert, 509 U.S. at 597, 113 S.Ct. 2786, we review the district court's ruling for an abuse of discretion, see Gen. Elec. Co. v. Joiner, 522 U.S. 136, 141-43, 118 S.Ct. 512, 139 L.Ed.2d 508 (1997), but we find none here. To begin, we note that none of AstraZeneca's first three purported errors in Dr. Hartman's damages calculations is severe enough to suggest that the district court abused its discretion in relying on it. As to the various parties who opted out of the class action, the number of opt-outs was a small fraction of the number of notices mailed: according to a signed declaration from the Notice and Administration Manager of Complete Claim Solutions, LLC, which was appointed as the Litigation Administrator below, nearly 45,000 notices were mailed to TPPs, and nearly 950,000 notices were mailed to consumers. In the scope of a gargantuan mailing effort such as this, the number of opt-outs, while large, clearly represents a very small percentage of the class. Even assuming arguendo that Dr. Hartman's analysis did indeed fail to account for parties who opted out, any imprecision that resulted was likely to be small. And if there is a more specific reason that the particular parties who opted out might have had a disproportionate effect on the damages calculation, AstraZeneca has waived that argument by failing to advance it. Zannino, 895 F.2d at 17. Similarly, we are unable to ascertain from AstraZeneca's brief (or from the record) how Dr. Hartman's alleged failure to take into account persons who paid a flat co-payment could have affected the reliability of his damages calculation. If AstraZeneca intends to suggest that Dr. Hartman erroneously calculated damages for these persons, who were defined out of both Class 2 and Class 3, its brief is far too opaque on the nature of the alleged error or its impact on the ultimate damages calculation for us to credit it. That argument, too, is waived. Id. As to AstraZeneca's claim that some TPPs did not always reimburse based on AWP, the district court found to the contrary when it stated, Throughout this period (and until today), [AWP] has also been the pricing benchmark used by most TPPS in Massachusetts and the nation. The evidence on this point may have been mixed, as AstraZeneca has argued, but not so mixed as to render either the district court's fact finding or its reliance upon Dr. Hartman's damages calculation legally infirm. Finally, AstraZeneca's two remaining challengesthat some physicians did not bill patients for co-payments, and that some physicians did not collect the co-payments that were billedare also insufficient to prove an abuse of the district court's discretion. AstraZeneca provides no argument explaining how many co-payments went unbilled or uncollected, or what impact the resulting imprecision would have on the ultimate damages calculation. Nor does AstraZeneca address the fact that the definition for Class 3 injuries includes both actual outlays of cash and legally enforceable debts, which the co-payments, even if uncharged and uncollected, undoubtedly were. In fact, the only citation AstraZeneca offers in support of these last two challenges is to the district court's statements that doctors could not always collect the entire co-payment from those patients who were unable to pay and that some doctors did not charge Medicare beneficiaries who could not afford the coinsurance payment. These statements are hardly specific enough to show that the district court abused its discretion in imposing aggregate damages. If anything, they show that the district court was mindful of potential imprecision in the aggregate damages methodology when it imposed its award, yet decided that the imprecision, if any, was negligible. But that is neither here nor there; AstraZeneca simply has not offered sufficiently developed argumentation on this point to avoid waiver. See Zannino, 895 F.2d at 17. [34]