PER CURIAM.
Wyeth, Inc., and Wyeth Pharmaceuticals, Inc. (hereinafter referred to collectively as "Wyeth"), appeal from a class-certification order of the Jefferson Circuit Court concluding that Blue Cross and Blue Shield of Alabama ("BCBSAL") met the prerequisites for class certification under Rule 23(a) and 23(b)(3), Ala. R. Civ. P. We vacate the order and remand.
On or about July 15, 1997, Wyeth began distributing Duract, a nonsteroidal, anti-inflammatory drug prescribed for the short-term management of acute pain. The labeling for Duract included an insert provided to physicians, pharmacists, and patients, directing that patients take at most 1 to 2 capsules every 6 to 8 hours and that Duract should be used only for a period of 10 days or less. The Food and Drug Administration ("FDA") had approved Duract and its labeling before the drug was released into the marketplace.
In December 1997, Wyeth received reports of liver problems, some life-threatening, in patients who had taken Duract for an extended period. In February 1998, Wyeth sought and received FDA approval for a revised package insert for Duract, which described the reports of liver problems resulting from the overuse of the drug and which reemphasized that Duract was intended "only for the short term (10 days or less)."
Following the release of the new package insert, Wyeth continued to receive reports of adverse liver effects for long-term users of Duract. These reports caused Wyeth to conclude that no change in the package insert could guarantee that physicians would stop prescribing Duract for long-term use. Therefore, Wyeth voluntarily withdrew Duract from the market on June 22, 1998, notifying the public of its decision to do so through a press release.
As part of the process of withdrawing Duract from the market, Wyeth voluntarily instituted a customer-refund program for retail customers who still had Duract capsules in their possession. The program provided that Wyeth would reimburse retail customers at the rate of $1.15 per capsule for every Duract capsule returned to Wyeth, with a minimum of a $5.00 refund regardless of the number of pills returned.
BCBSAL sued Wyeth on September 23, 2003, alleging breach of implied contract and unjust enrichment. BCBSAL is a health-insurance company that pays, in whole or in part, the health-care costs of its insureds in exchange for premiums; BCBSAL is what is known as a third-party payer ("TPP") of health-care services. BCBSAL also acts as an administrator for health plans of self-funded insurance groups, performing administration functions in exchange for a fee.
BCBSAL filed its first amended complaint on June 22, 2004, asserting that class treatment for all TPPs nationwide was appropriate and seeking certification of a class of all TPPs.
BCBSAL filed a second amended complaint on December 29, 2004, in which it sought recovery against Wyeth solely on a theory of unjust enrichment. BCBSAL alleged that it and other TPPs "conferred on [Wyeth] a benefit in the form of the consideration of the purchase price paid by [the putative class members] for unused Duract." The payment for these unused capsules, BCBSAL claimed, "was erroneously made, and would not have been made if [the putative class members] had been aware that substantial portions of the Duract for which it conferred a benefit would be unused due to the withdrawal of Duract." The complaint concluded that the "[r]etention of the benefit conferred upon [Wyeth] by [the putative class members] is inequitable and has resulted in the unjust enrichment of [Wyeth]."
After a hearing on the class-certification motion, the trial court entered an order certifying a nationwide class of TPPs "who paid for the prescription drug Duract that was not used as of the date of its withdrawal from the market on June 22, 1998, because the prescribed course of Duract for which payment was made did not expire until after its withdrawal from the market." Any TPPs that purchased Duract directly from Wyeth were explicitly excluded from class membership.
Pursuant to § 6-5-642, Ala.Code 1975,
Smart Prof'l Photocopy Corp. v. Childers-Sims, 850 So.2d 1245, 1248-49 (Ala.2002) (citing Compass Bank v. Snow, 823 So.2d 667 (Ala.2001)).
At the outset, Wyeth contends that BCBSAL lacks standing to serve as class representative because, Wyeth argues, BCBSAL did not sustain an injury of a nature required for standing. It argues that BCBSAL did not allege any loss, financial or otherwise, resulting from the withdrawal of Duract from the market, and that BCBSAL did not allege that it made payments to insureds or to pharmacies that were more than it would have made had the withdrawal not occurred. Wyeth also notes that, despite the withdrawal, BCBSAL received the same premiums from its insureds that it normally would receive in exchange for paying their health-care expenses.
BCBSAL contends that Wyeth's argument that the payments made by BCBSAL do not give BCBSAL standing actually goes to the merits of BCBSAL's unjust-enrichment claim despite being "dressed up as if ... subject matter jurisdiction were implicated." BCBSAL also contends that Wyeth's argument as to standing was not presented to the trial court.
BCBSAL specifically alleges that the payments made by TPPs for the purchase of Duract were "erroneously made, and would not have been made if the TPPs had been aware that substantial portions of the Duract for which it conferred a benefit would be unused due to the withdrawal of Duract." In other words, under the particular theory of unjust enrichment urged by BCBSAL, the withdrawal of Duract from the market rendered BCBSAL's payments, to the extent allocable to those Duract capsules that eventually went unused, an unjust benefit to Wyeth. BCBSAL's claimed injury is its payment for unused Duract capsules.
We begin our analysis of this issue by observing that our courts too often have fallen into the trap of treating as an issue of "standing" that which is merely a failure to state a cognizable cause of action or legal theory, or a failure to satisfy the injury element of a cause of action. As the authors of Federal Practice and Procedure explain:
13A Federal Practice & Procedure § 3531.6 (emphasis added). Cf. 13B Federal Practice & Procedure § 3531.10 (discussing citizen and taxpayer standing and explaining that "a plaintiff cannot rest on a showing that a statute is invalid, but must show `some direct injury as a result of its enforcement, and not merely that he suffers in some indefinite way in common with people generally'").
In the present case, Wyeth appears to argue that the plaintiff, BCBSAL, lacks standing because, Wyeth says, BCBSAL's allegations, even if true, would not entitle it to a recovery. In responding to a similar argument, the court in Angleton v. Pierce, 574 F.Supp. 719, 726 (D.N.J.1983), articulated a correct understanding of the aforestated difference between the issue of a plaintiff's standing and the issue of the viability of a plaintiff's cause of action:
Thus, the focus of an inquiry into standing is not on the viability of the legal theory asserted; rather, the focus is on whether the plaintiff is the "proper part[y] to bring the action." If the legal theory itself is not a viable one under applicable law, that is a different question. The question whether the right asserted by BCBSAL is an enforceable one in the first place, i.e., whether BCBSAL has seized upon a legal theory our law accepts, is a cause-of-action issue, not a standing issue.
Thus, although questions may exist regarding the viability under Alabama law of the particular legal theory asserted by BCBSAL (see the discussion in Part III.B. of this opinion), if we assume that theory to be viable for purposes of our standing inquiry, it is easy to see that BCBSAL has "the required personal stake" to assert that theory. If BCBSAL's legal theory is viable, i.e., if BCBSAL's payment for unused Duract capsules resulted in the unjust enrichment of Wyeth at BCBSAL's expense, BCBSAL's effort to recover the funds it paid for the unused Duract reflects the "personal stake and concrete adverseness" necessary for standing.
Nor do we see that the consideration of the legal theory asserted by BCBSAL is outside the subject-matter jurisdiction of either the trial court or this Court. The courts of this State exist for the very purpose of performing such tasks as sorting out what constitutes a cognizable cause of action, what are the elements of a cause
Rule 23, Ala. R. Civ. P., states, in pertinent part:
"A Rule 23 determination is wholly procedural and has nothing to do with whether a plaintiff will ultimately prevail...." Little Caesar Enters., Inc. v. Smith, 172 F.R.D. 236, 241 (E.D.Mich.1997) (comment on Rule 23, Fed.R.Civ.P.). We also note that, in examining the several prerequisites for class certification contained in Rule 23, it should be kept in mind that "Alabama's Rule 23 and the corresponding federal rule (Rule 23, Fed.R.Civ.P.) are `virtually identical,'... and `[f]ederal authorities are persuasive when [a court is] interpreting the Alabama Rules of Civil Procedure.'" Mitchell v. H & R Block, Inc., 783 So.2d 812, 816 (Ala.2000) (quoting Marshall Durbin & Co. v. Jasper Utils. Bd., 437 So.2d 1014, 1025 (Ala.1983), and Rowan v. First Bank of Boaz, 476 So.2d 44, 46 (Ala.1985)).
"The party seeking certification bears the burden of showing that each of the four requirements of Rule 23(a) and at least one requirement of Rule 23(b) have been met." Allied Orthopedic Appliances, Inc. v. Tyco Healthcare Group L.P., 247 F.R.D. 156, 164 (C.D.Cal.2007). BCBSAL
Rule 23(b)(3) requires that "questions of law or fact common to the members of the class predominate over any questions affecting only individual members...." The trial court considered the question of predominance in response to Wyeth's contention that claims alleging unjust enrichment generally are not suitable for class treatment. Among other things, Wyeth argued to the trial court, and argues to this Court, that the predominance requirement is not met here because prosecution of an unjust-enrichment claim will require each class member to establish that it paid for unused Duract under a mistake of fact or in reliance on a fraudulent misrepresentation.
The trial court acknowledged that this Court's decisions provide ample support for Wyeth's contention that unjust-enrichment claims generally are not appropriate for class certification. This Court explained in Heilman as follows:
876 So.2d at 1123.
The trial court distinguished all of these cases on the basis that they involved a mistake of fact or fraud and agreed with BCBSAL's argument that "[a]n unjust enrichment claim need not depend on proof of mistake or fraud." For support, the trial court cited this Court's explanation of unjust enrichment in Heilman: "To prevail on a claim of unjust enrichment, the plaintiff must show that the "`defendant holds money which, in equity and good conscience, belongs to the plaintiff or holds money which was improperly paid to defendant because of mistake or fraud."'" Heilman, 876 So.2d at 1122-23 (quoting Dickinson v. Cosmos Broad. Co., 782 So.2d 260, 266 (Ala.2000), quoting, in turn, Hancock-Hazlett Gen. Constr. Co. v. Trane Co., 499 So.2d 1385, 1387 (Ala.1986) (some emphasis added)). From this statement in Heilman, the trial court deduced that there are two types of unjust-enrichment claims: (1) those based on the theory that "equity and good conscience" require the defendant to disgorge money that belongs to the plaintiff; and (2) those based on the theory that a "mistake [of fact] or fraud"
The trial court concluded that BCBSAL based its theory of the case on the first type of unjust-enrichment claims, claims based on "equity and good conscience," and that such claims are appropriate for class certification. We conclude that the trial court's analysis asks too much of what it considers to be a separate type of unjust-enrichment claim, particularly insofar as providing a basis for the certification of a nationwide class action.
Citing Mantiply v. Mantiply, 951 So.2d 638 (Ala.2006), Wyeth argues that an unjust-enrichment claim based on an allegation that the "defendant holds money which, in equity and good conscience, belongs to the plaintiff," requires proof of mistake on the part of the plaintiff or wrongful conduct on the part of the defendant. Wyeth quotes from Mantiply as follows:
Among other things, BCBSAL responds by asserting that Scrushy v. Tucker, 955 So.2d 988 (Ala.2006), holds that in Alabama an unjust-enrichment claim requires no proof of mistake on the part of the plaintiff or of wrongful conduct by a defendant. BCBSAL relies on the fact the parties stipulated in Scrushy that the defendant "did not participate in and is not responsible for any of the criminal activities that resulted in the falsification of the financial statements." 955 So.2d at 1012. We are not persuaded, however, that Scrushy stands for the proposition that the prosecution of an unjust-enrichment claim does not require proof of "mistake, misreliance, fraud, or wrongful conduct." As Wyeth points out, although the parties stipulated in Scrushy that the defendant "did not participate in the criminal fraud that resulted in the falsification of the financial statements," the evidence showed that it was the defendant's managerial responsibility and fiduciary duty to ensure that the financial statements were accurate and that he failed to do so. Wyeth's reply brief, at 20. In point of fact, as Wyeth notes, the financial statements the defendant in Scrushy signed and approved were, in fact, inaccurate and unreliable, and it was in reliance on those financial statements that the bonuses at issue in Scrushy were paid.
Both the trial court and BCBSAL also rely upon Cheminova America Corp. v. Corker, 779 So.2d 1175, 1179 (Ala.2000), contending that it is an example of an Alabama unjust-enrichment case in which the court did not require proof of mistake or fraud. Wyeth correctly notes, however, that the term "unjust enrichment" appears nowhere in the Cheminova opinion; moreover, the elements of unjust enrichment are nowhere discussed in that case. Wyeth further argues that, even assuming that Cheminova could be read as involving an unjust-enrichment claim, mistaken reliance and/or wrongful conduct in that case existed in connection with the mislabeling of a consumer product that was the basis for the plaintiff's claim of entitlement to restitution. Wyeth's reply brief, at 20 n. 8 (citing Cheminova, 779 So.2d at 1179).
Wyeth appears to have the better argument as to the requirements of Alabama law regarding unjust enrichment. Ultimately, however, we need not definitively address this question in order to determine the appropriateness of class certification of a statewide class of Alabama plaintiffs.
Thompson v. Bayer Corp. (No. 4:07cv00017, Feb. 12, 2009) (E.D.Ark.2009) (not reported in F.Supp.2d) (emphasis added).
Based on the foregoing, we cannot conclude that BCBSAL has met its burden of demonstrating that common questions of law and fact predominate for purposes of Rule 23(b)(3).
Because we conclude that BCBSAL has failed to make the necessary showing regarding the "predominance" requirement imposed by Rule 23(b)(3), Ala. R. Civ. P., we conclude that the trial court exceeded its discretion in certifying the class of TPPs of unused Duract. Therefore, we vacate the trial court's certification order and remand the case.
ORDER VACATED AND CASE REMANDED.
COBB, C.J., and LYONS, STUART, SMITH, BOLIN, PARKER, MURDOCK, and SHAW, JJ., concur.
WOODALL, J., dissents.
WOODALL, Justice (dissenting).
Wyeth, Inc., and Wyeth Pharmaceuticals, Inc. (hereinafter referred to collectively as "Wyeth"), argue that Blue Cross and Blue Shield of Alabama ("BCBSAL") lacks standing to maintain this action because, according to Wyeth, BCBSAL "has [alleged] no legally cognizable injury." Wyeth's brief, at 27-28. I agree. Therefore, at the risk of being accused by the majority of "hav[ing] fallen into the trap of treating as an issue of `standing' that which is merely a failure to state a cognizable cause of action or legal theory, or a failure to satisfy the injury element of a cause of action," 42 So.3d at 1219, I respectfully dissent. "Because [BCBSAL] had no standing, the trial court had no subject-matter jurisdiction, and, consequently, no alternative but to dismiss the action." State v. Property at 2018 Rainbow Drive, 740 So.2d 1025, 1029 (Ala.1999).
"`Standing requires injury in fact' to the plaintiff. Kid's Care, Inc. v. Alabama Dep't of Human Res., 843 So.2d 164, 166 (Ala.2002). Further, the injury must be to a `legally protected right.' Id." Wyeth's brief, at 25-26. A plaintiff who alleges no such injury "`has no standing to sue either on [its] own behalf or on behalf of a class.'" Kid's Care, Inc. v. Alabama Dep't of Human Res., 843 So.2d 164, 167 (Ala. 2002) (quoting Ex parte Prudential Ins. Co. of America, 721 So.2d 1135, 1137 (Ala. 1998)). Neither BCBSAL nor the majority has identified any legally protected right of BCBSAL allegedly violated by Wyeth, and I am unable to discern any such right from the averments in BCBSAL'S complaint.
BCBSAL alleges that it honored its contractual obligations to its insureds by paying pharmacies for Duract at the time the medication was dispensed to its insureds. BCBSAL does not claim that, after the medication was dispensed, it had any legal interest in the medication or any right to control the manner in which the medication was, or was not, used. Although it alleges that it paid for Duract that was unused because of the later withdrawal of that drug by Wyeth, it does not explain how that withdrawal affected any of its legal rights. Instead, BCBSAL simply says that it wants its money back. In my opinion, more is required to allege an injury to a "legally protected right."
471 F.3d at 41. The IPO court's analysis appears to be a reasonable reading of the limits of Eisen.
We note, however, that Baycol is a decision rendered by a Pennsylvania trial court, one not tested by a Pennsylvania appellate court. Moreover, the Pennsylvania trial court does not include in its opinion any discussion of what is required for a retention of money to be "wrongful" or "inequitable." It therefore provides no persuasive analysis for the proposition that an "unjust enrichment" can occur other than under the circumstances explained in Mantiply.
In the present case, Duract was not "unsafe" if used in accordance with the manufacturer's instructions and limitations. One cannot discern from the trial court's opinion in Baycol whether the same could be said of the drug at issue there; all we are told is that the defendants advised the consumer "not to use the product because it may be unsafe."
In addition, Baycol was designed for long-term use in treating chronic high cholesterol and was a drug patients must take daily, regardless of the present or absence of subjective symptoms. Part of the reasoning of the court in Baycol was that the discontinuance of the drug would require TPPs to incur the expense of substitute medications for their insureds and the expense of certain medical monitoring that would be required during the process of switching to a different chronic-use medication. In contrast, Duract is intended for temporary use, no more than 10 days, for the temporary management of acute pain, and it may be discontinued as symptoms permit. There is no claim in any version of BCBSAL's complaint or in the evidence presented for damages for the cost of "replacement" drugs or the cost of any medical monitoring associated with the switch to a different drug.