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Aetna Inc. v. Express Scripts

September 16, 2009


The opinion of the court was delivered by: Goldberg, J.


I. Introduction

This case involves allegations that Defendants, Express Scripts, Inc., and their subsidiary, CuraScripts, Inc., tortiously interfered with an agreement termed the "Drug Supply Agreement" ("DSA"), which was entered into between Plaintiffs, Aetna, Inc., et al. ("Aetna")*fn1 and Priority Healthcare Corporation ("Priority"). The purpose of the DSA was to allow Aetna to purchase prescription drugs through Priority, which, due to its favorable position in the pharmaceutical market, was able to obtain "best prices" for specialty pharmaceutical products.

Presently before the Court are two motions filed by Defendants seeking to exclude all, or significant portions of the anticipated trial testimony of Plaintiffs' damages expert, Robert J. DeLuca. In the first motion, Defendants move to preclude opinions set forth in DeLuca's errata sheet, submitted after his second deposition, which Defendants argue was improperly prepared. Defendants have also raised a Daubert challenge, claiming that DeLuca's opinions do not satisfy the reliability prong of Daubert and Fed. R. Civ. P. 702. Additionally, Defendants asserted during oral argument that DeLuca's errata sheet contains unreliable expert opinions and, thus, should also be excluded under Daubert.

For the reasons set forth below, the Court is not persuaded that DeLuca's testimony should be excluded and, thus, Defendants' motions will be denied.

II. Procedural History

In August 2004, Aetna and Priority contracted to create Aetna Specialty Pharmacy ("ASP") for the purpose of "establishing, building, owning and operating a stand alone integrated specialty pharmacy business." (Pl.'s Compl., ¶ 18.) Plaintiffs anticipated that partnering with Priority would be advantageous because Priority operated as a pharmacy and distributor of specialty pharmaceutical products and had "increased purchasing power," which would allow Aetna to obtain "best" or preferential pricing for those products. (Pl.'s Compl., ¶¶ 20, 29-30.) On October 14, 2005, less than two years after the consummation of the DSA, Defendants acquired Priority and 100% of Priority stock.

Plaintiffs commenced this action for tortious interference of contract on December 31, 2007, primarily alleging that Defendants, a direct competitor of ASP, caused Priority to breach the DSA. According to Plaintiffs, Defendants' interference and Priority's violation of the DSA caused excessive monetary losses in that they paid higher prices for various drugs. Plaintiffs retained DeLuca, a C.P.A. with extensive experience in the health care industry, to opine on the approximate amount of these damages. DeLuca essentially reached his conclusions by comparing the price Priority paid, or could have paid, with the price ASP actually paid and then multiplied that price difference by the quantity of drugs ASP purchased. (See generally, November 7, 2008 DeLuca Rept.)

Pursuant to the Honorable Timothy J. Savage's April 7, 2008 Scheduling Order, all fact discovery was to be completed by October 3, 2008; expert reports and discovery were due on November 7, 2008; rebuttal expert reports were due on November 21, 2008; and expert depositions were to be completed by December 19, 2008. The deadlines for submission of expert reports and depositions as it relates to DeLuca were extended by agreement.

Plaintiffs noticed the deposition of Defendants' 30(b)(6) witness on June 18, 2008, and Defendants designated Travis Krajco, Manager of Procurement for CurasScript, Inc., as their 30(b)(6) witness. Krajco's deposition occurred on September 25, 2008, wherein Plaintiffs' counsel asked Krajco questions in order to understand how to interpret certain sales data produced by Defendants. On November 7, 2008, DeLuca submitted his first expert report and he was subsequently deposed on December 18, 2008. DeLuca submitted a second report ("rebuttal") on January 30, 2009.

On February 20, 2009, defense counsel sent Plaintiffs' counsel a nine-page, single-spaced letter, with numerous exhibits, challenging DeLuca's opinions. Specifically, this correspondence asserted that DeLuca had incorrectly interpreted data previously produced by Defendants, thus rendering his ultimate calculations and opinions incorrect.

One week later, DeLuca was deposed a second time and was presented with the February 20, 2009 correspondence, which he had not previously reviewed. Despite strenuous objections from Plaintiffs' counsel, Defendants proceeded to question DeLuca about the contents of the letter. For instance, defense counsel represented to DeLuca that they had identified "fundamental errors in [his] unit of measure adjustments for two particular drugs" and asked DeLuca whether he would look into potential mistakes in his analysis. (DeLuca Dep., p. 695.) Defense counsel then continued to ask DeLuca substantive and detailed questions regarding his analysis, continually referring to information contained in the February 20, 2009 correspondence. (Id., pp. 695-721.) DeLuca repeatedly responded that his goal was to be as accurate as possible and offered to adjust his analysis to "be as accurate as possible" if the information contained in the February 20, 2009 correspondence was more accurate than the initial information provided to him. (See Id., p. 718.)

Thereafter, on April 10, 2009, DeLuca submitted the four-page errata sheet (with voluminous addenda) which Defendants object to and is central to the issues before the Court. On July 7, 2009, oral argument was held on the propriety of the errata sheet and on several Daubert motions, including the motion pertaining to DeLuca.*fn2

III. DeLuca's Errata Sheet Is Admissible Under Fed. R. Civ. P. 30(e)

Citing primarily to Tenth Circuit cases, Defendants first argue that DeLuca's errata sheeet is inadmissible because it makes impermissible substantive changes to his deposition testimony. (Def.'s Mot. for Sanctions, pp. 13-14.) These cases frown upon any effort to change answers made by a deponent under oath, likening a deposition transcript to answers to an in-class exam that the student tries to change after receiving a failing grade. See Summerhouse v. HCA Health Servs. of Kansas, 216 F.R.D. 502, 510-11 (D. Kan. 2003); Foraker v. Schauer, 2005 WL 6000493 (D. Colo. Sept. 8, 2005).

Both parties acknowledge that other courts are split over whether deponents may use their errata sheets to make substantive changes to testimony. However, the majority rule, as laid out in Wright and Miller, Federal Practice and Procedure, § 2118, and followed by District Courts in this Circuit, is that a deponent may "make changes that contradict the original answers given, even if those changes are not supported by convincing explanations, as long as the deponent complies with the instructions provided within the rule itself for making such changes." Consulnet Computing, Inc. v. Moore, 2008 WL 5146539, *9 (E.D. Pa., Dec. 5, 2008). See also, Agrizap, Inc. V. Woodstream Corp., 232 F.R.D. 491, 493, n.2 (E.D. Pa., Jan. 19, 2006) (noting the majority of federal courts interpret Rule 30(e) to permit deponent to make "any kind of changes."). Under this broader interpretation of the rule, all of the deponent's answers, including old and new, remain a part of the record, and Defendants are free to cross-examine the witness at trial on his contradictory answers. Id. Thus, we hold that DeLuca's errata sheet is admissible under Fed. R. Civ. P. 30(e).*fn3

IV. DeLuca's Errata Sheet Is Not a Third Expert Report

Defendants also complain that Plaintiffs used DeLuca's errata sheet as a guise to submit a third report beyond the expert report deadlines. Defendants particularly take issue with the errata sheet's addenda, which they allege contains changes to DeLuca's initial calculations and sets forth new opinions. Plaintiffs respond that the submission of the errata sheet and addenda was necessary because Defendants presented DeLuca with new information during his February 27, 2009 deposition. Plaintiffs particularly cite to defense counsels' February 20, 2009 correspondence, and the fact that defense counsel explicitly invited DeLuca to review his calculations. Defendants counter that the information contained in the February 20, 2009 correspondence was not new, had previously been available to Plaintiffs' counsel and DeLuca and, thus, the errata sheet and addenda with new calculations should be excluded.

In determining whether the opinions contained in the disputed errata sheet and addenda are admissible, we first attempt to decipher whether Defendants' February 20, 2009 correspondence contained information that was not previously known to Plaintiffs and DeLuca. Several issues the Court has been asked to resolve turn on this question and, thus, careful scrutiny of this correspondence follows.

As a starting point, we note that DeLuca's original opinions generally focus upon calculating the price differences between what Plaintiff paid for certain drugs and what they believe they would have paid had Priority not breached the DSA. DeLuca undertook these calculations by "comparing the prices paid by ASP versus the prices paid by Defendant(s) for the same products in the same time periods."*fn4 (Nov. 7, 2008 DeLuca Rept., p. 10.)

The February 20, 2009 correspondence from defense counsel, which, in part, prompted the contested errata sheet and addenda, primarily criticizes DeLuca's methodology regarding his unit of measure ("UOM") adjustments. For instance, this correspondence states, "as we continue to review Mr. DeLuca's latest analysis, and upon closer examination of the limited data we received from you a little over one week ago, we believe we have uncovered several additional and substantial errors in Mr. DeLuca's UOM adjustments and assumptions that we feel compelled to bring to your attention." (See Pl.'s Resp. to Def.'s Mot. for Expedited Daubert Hearing, Ex. 5, p. 5.)

Because Plaintiffs and Defendants use different systems to manage their companies' purchasing data, both parties agree that when comparing each companies' purchasing and sales data, unit of measure adjustments are necessary to calculate damages. Significantly, Defendants explain in their February 20, 2009 correspondence that their pharmacy data system typically records the number of units purchased as the "smallest dispensing unit." However, according to Defendants, when that particular unit's volume is a fraction (i.e., 1.17 ml or 1.5 ml), it is adjusted at the "next highest whole number." Thus, according to Defendant, a correct unit of measure adjustment by DeLuca would have to take this "rounding-up" into account. Defendants provide an example of their "rounding-up" system and what they deem a correct unit of measure adjustment for the drug Follistism:

Since First DataBank was pricing per ml, and Medispan per cartridge [1.17 ml], there is a 0.17 ml difference between the two units. Because there is a 1.17 ml cartridge, CuraScript Pharmacy/Atlas inventories it as two dispensing units, rounding to the next highest ml. Since the unit is rounded up, the price recorded in Atlas is divided in half, to maintain accurate purchasing records and inventory for the total purchased. Accordingly, if you review CuraScript Pharmacy's Atlas purchase records for January 11, 2006, you will see that 96 CuraScript/Atlas dispensing units were purchased.[t]his means that CuraScript Pharmacy purchased 48 [cartridges].

Stated another way by Defendant: "In order to get CuraScript Pharmacy's price per milliliter, one would need to take the price per unit, multiply by two (2 units per 1.17 cartridge), and divide the price per cartridge by 1.17 (1.17 mls per cartridge.) (Def.'s Mot. to Exclude, p. 20.)

During DeLuca's first deposition, he explained the unit of measure he used for the same drug, Follistism as follows: "[w]e did adjust this drug, Follistism, for unit of measure. We reduced the CuraScript price. Since it was in a dosage of 1.17, we had reduced that to reflect just a 1.0-milliliter." (DeLuca Dep., 73:24-75:13.) Thus, Defendants complain that DeLuca did not perform any "rounding-up" and dividing, and consequently, they assert that his unit of measure adjustment and resulting damages calculations are incorrect. For purposes of the motion before the Court, Defendants urge that this and other flaws render DeLuca's opinions so unreliable that preclusion of his opinions is warranted.

As an attachment to their February 20, 2009 correspondence, Defendants also produced a 14-page spreadsheet that revealed their computer system's "rounding-up" as it affected each drug and provided the necessary information for the correct unit of measure adjustments.*fn5 Despite not producing this spreadsheet and the February 20, 2009 correspondence until one week before DeLuca's second deposition, Defendants, nonetheless, insist that DeLuca had at his disposal, all the necessary information to make the correct unit of measure adjustments well before his second deposition. In making this argument, Defendants point to the deposition of their 30(b)(6) designee, Travis Krajco, and his answers to Plaintiffs' counsel's questions on this subject, which Defendants assert clearly explain the correct conversion process.

This deposition first reflects that Plaintiffs' counsel showed Krajco a document gleaned from Defendants' recording system, Atlas, and asked Krajco to explain the meaning of the data that was maintained in each column of the database. (Krajco Dep., 27:20-24 - 28:2-4, 30:2.) For instance, referring to "column I," labeled "QTY RECV," Plaintiffs' counsel asked, "[c]ould you just tell us what that means and what that's for?" (Id. 40:9-11.) Krajco answered, "That's the quantity received. So for that drug item in line 10, we purchased 5,040 pills . . . the Atlas system and most systems breaks it down into the smallest unit of measure, which would be tablet." (Id. 40:12-22.) A few questions later, Plaintiffs' counsel asked Krajco to explain the next column, labeled "Unit Cost," to which he responded, "Unit cost is the unit we are paying per tablet . . . [a]nd that's -- just like I said, it breaks it down to its ...

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