Missouri Federal Court: AHF Express Scripts Antitrust Claim Preclusion Blocks Lawsuit

• A federal judge dismissed an antitrust lawsuit filed by the AIDS Healthcare Foundation (AHF) against Express Scripts and its subsidiary, Accredo Health Group Inc.
• The court ruled that AHF's claims were barred by claim preclusion, as they should have been raised in a previous lawsuit against Express Scripts.
• Judge Maria A. Lanahan found that both the current and prior lawsuits stemmed from the same facts and circumstances, specifically concerning the 2017 Pharmacy Provider Agreement and alleged anticompetitive practices.
• AHF's arguments that the current case involved new facts or parties were rejected, as the central allegation regarding arbitrary contract terms and low reimbursement rates remained consistent.
• This ruling emphasizes the legal principle against claim splitting, requiring litigants to assert all related claims from a single transaction in one action to avoid dismissal.

This outcome highlights the strategic necessity for plaintiffs to thoroughly assess and present the full scope of their claims at the outset of litigation to avoid the pitfalls of claim preclusion.

A federal judge in Missouri recently dismissed an antitrust lawsuit brought by the AIDS Healthcare Foundation (AHF) against pharmacy benefit manager (PBM) Express Scripts and its subsidiary, Accredo Health Group Inc. The ruling, issued on Tuesday, found that AHF's claims were barred by claim preclusion, meaning they should have been raised in an earlier legal action. The AIDS Healthcare Foundation, which operates a nonprofit pharmacy specializing in care for HIV/AIDS and hepatitis C patients in Louisiana, initiated the current lawsuit in 2024.

In its 2024 complaint, AHF alleged that Express Scripts was engaging in anticompetitive practices designed to stifle competition among specialty pharmacies in Louisiana. Specifically, the foundation claimed that Express Scripts leveraged its significant market power as a PBM to establish a monopoly for its subsidiary, Accredo Health Group Inc., thereby undermining the competitive landscape. The lawsuit sought an injunction to prevent Express Scripts from enforcing certain terms of a 2017 Pharmacy Provider Agreement, in addition to monetary damages.

U.S. District Judge Maria A. Lanahan, a Donald Trump appointee, determined that the AHF Express Scripts antitrust claim preclusion was warranted because the issues presented in the 2024 case stemmed from the same core facts and circumstances as a previous lawsuit filed by AHF against Express Scripts. That prior action, also heard in Missouri federal court, was dismissed in February 2023 for failing to state a plausible claim for relief. Judge Lanahan clarified that Missouri law governs the claim-preclusive effect of the prior judgment, given it was a federal diversity judgment rendered by the same court.

Missouri law strictly prohibits claim splitting, a legal doctrine that prevents a party from pursuing claims in a new lawsuit that arise from the same act, contract, or transaction as claims previously litigated. The court found that the central allegations in both lawsuits were fundamentally similar: that Express Scripts utilized its bargaining power to impose one-sided, arbitrary, and opaque contractual terms, such as performance incentives, which resulted in AHF receiving lower reimbursement rates. Both the initial and subsequent AIDS Healthcare Foundation Express Scripts lawsuit also sought identical remedies, specifically an injunction against the 2017 Pharmacy Provider Agreement terms and damages.

AHF contended that its 2024 claims were not subject to preclusion, arguing that they involved entirely different operative facts, were based on newly discovered information, and included Accredo Health Group Inc. as a party, which had not been named in the previous litigation. However, Judge Lanahan remained unconvinced by these arguments. She emphasized that the core allegation in the current case—that Express Scripts engaged in an anticompetitive scheme to exploit its market power as a PBM by unilaterally imposing arbitrary and capricious contract terms, leading to low reimbursement rates under the 2017 Pharmacy Provider Agreement—was precisely the same central allegation asserted in AHF's prior case.

The court also dismissed AHF's justification for not bringing these claims earlier, which was that it was unaware of the basis for its contract claims until 2024. Judge Lanahan pointed to AHF's own allegations, which stated that Express Scripts drastically cut its reimbursement payments around January 2021, thereby negating the claim of recent discovery. This underscores the principle that parties are expected to bring all related claims arising from a single transaction in one action, even if new facts are later alleged.

This decision by Judge Maria Lanahan on claim splitting serves as a significant reminder for litigators regarding the critical importance of avoiding claim splitting and ensuring all related claims stemming from a single transaction are asserted in a single legal action. The application of res judicata in this antitrust PBM context demonstrates that even if a plaintiff alleges new facts or adds a new defendant like Accredo Health Group Inc., the underlying similarity of the claims, particularly when tied to the same foundational agreement like the 2017 Pharmacy Provider Agreement, can lead to dismissal.

Failure to consolidate all relevant claims can have severe consequences, effectively barring a party from pursuing remedies even if they believe they have a legitimate grievance. The ruling reinforces the judicial system's interest in finality and efficiency, preventing parties from relitigating issues that could have been, or were, addressed in prior proceedings. This outcome highlights the strategic necessity for plaintiffs to thoroughly assess and present the full scope of their claims at the outset of litigation to avoid the pitfalls of claim preclusion.

This ruling underscores the critical importance for litigators to avoid claim splitting and to assert all related claims arising from the same transaction in a single action. Failure to do so, even if new facts are alleged, can lead to dismissal based on claim preclusion (res judicata), significantly impacting a client's ability to pursue remedies.

Source: Original reporting via Courthouse News