State v. Abbott Labs.
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The State brought a civil action against Pharmacia Corporation, alleging that the company reported inflated drug prices to Wisconsin Medicaid. A jury found Pharmacia liable for violating the Deceptive Trade Practices Act (DTPA) and the Medicaid fraud statute. The jury awarded the State $2 million for the DTPA claim and $7 million for the Medicaid fraud claim. The jury also determined that Pharmacia committed 1,440,000 separate violations of the Medicaid fraud statute. In post-trial proceedings, the circuit court reduced the number of violations to 4,578. Both parties appealed. The court of appeals certified three issues to the Supreme Court. The Court affirmed the circuit court's judgment on the issues and remanded to the court of appeals, holding (1) the State was entitled to a jury trial on its Medicaid fraud claim; (2) the jury did not impermissibly speculate in determining the damage award; and (3) the circuit court properly reduced the number of violations found by the jury.
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2012 WI 62 SUPREME COURT CASE NO.: COMPLETE TITLE: OF WISCONSIN 2010AP232-AC State of Wisconsin, Plaintiff-Respondent-Cross-Appellant, v. Abbott Laboratories, AstraZeneca LP, AstraZeneca Pharmaceuticals LP, Aventis Behring, LLC f/k/a ZLB Behring, LLC, Aventis Pharmaceuticals, Inc., Ben Venue Laboratories, Inc., Boehringer Ingelheim Pharmaceuticals, Inc., Boehringer Ingelheim Roxane, Inc., Bristol-Myers Squibb Co., Dey, Inc., Ivax Corporation, Ivax Pharmaceuticals, Inc., Janssen LP f/k/a Janssen Pharmaceutica Products, LP, Johnson & Johnson, Inc., McNeil-PPC, Inc., Merck & Co. f/k/a Schering-Plough Corporation, Merck Sharp & Dohme Corp. f/k/a Merck & Company, Inc., Mylan Pharmaceuticals, Inc., Mylan, Inc. f/k/a Mylan Laboratories, Inc., Novartis Pharmaceuticals Corp., Ortho Biotech Products, LP, Ortho-McNeil Pharmaceutical, Inc., Pfizer Inc., Roxane Laboratories, Inc., Sandoz, Inc. f/k/a Geneva Pharmaceuticals, Inc., Sicor, Inc. f/k/a Gensia Sicor Pharmaceuticals, Inc., SmithKline Beecham Corp. d/b/a GlaxoSmithKline, Inc., TAP Pharmaceutical Products, Inc., Teva Pharmaceuticals USA, Inc., Warrick Pharmaceuticals Corporation, Watson Pharma, Inc. f/k/a Schein Pharmaceuticals, Inc. and Watson Pharmaceuticals, Inc., Defendants, Pharmacia Corporation, Defendant-Appellant-Cross-Respondent. ON CERTIFICATION FROM THE COURT OF APPEALS OPINION FILED: SUBMITTED ON BRIEFS: ORAL ARGUMENT: SOURCE OF APPEAL: COURT: COUNTY: JUDGE: JUSTICES: CONCURRED: June 22, 2012 December 6, 2011 Circuit Dane Richard G. Niess DISSENTED: NOT PARTICIPATING: BRADLEY, CROOKS, and PROSSER, J.J., did not participate. ATTORNEYS: For the defendant-appellant-cross-respondent, there were briefs filed by O. Thomas Armstrong, Beth J. Kushner, Douglas M. Raines, and von Briesen & Roper S.C., Milwaukee, John C. Dodds, Erica Smith-Klocek, Máire E. Donovan, and Morgan, Lewis, & Bockius, LLP, Philadelphia, and John Clayton Everett, Jr. and Morgan, Lewis, & Bockius, LLP, Washington D.C., and oral there were argument by John C. Dodds. For the plaintiff-respondent-cross-appellant, briefs filed by Frank D. Remington, assistant attorney general, with whom on the brief was J.B. Van Hollen, attorney general, and George F. Galland, Jr., Charles Barnhill, Jr., Betty Eberle, Barry J. Blonien, and Miner, Barnhill & Galland, P.C., Madison, and oral argument by George F. Galland. An amicus brief was filed by Donald K. Schott, Elyce Wos, Matthew J. Splitek, and Quarles & Brady, LLP, Madison; William F. Cavanaugh, Adeel A. Mangi, and Patterson, Belknap, Webb & Tyler, LLP, of counsel, New York; and Andrew D. Schau and Covington & Burling, LLP, of counsel, New York, for the NonPharmacia Brand Defendants. An amicus brief was filed by Robert H. Friebert, Shannon A. Allen, and Friebert, Finerty, & St. John, S.C., Milwaukee; and Joseph Angland, Michael J. Gallagher, Heather K. McDevitt, and White & Case, Defendants. LLP, New York, for the Non-Pharmacia Generic 2012 WI 62 NOTICE This opinion is subject to further editing and modification. The final version will appear in the bound volume of the official reports. No. 2010AP232-AC (L.C. No. 2004CV1709) STATE OF WISCONSIN : IN SUPREME COURT State of Wisconsin, Plaintiff-Respondent-Cross-Appellant, v. Abbott Laboratories, AstraZeneca LP, AstraZeneca Pharmaceuticals LP, Aventis Behring, LLC f/k/a ZLB Behring, LLC, Aventis Pharmaceuticals, Inc., Ben Venue Laboratories, Inc., Boehringer Ingelheim Pharmaceuticals, Inc., Boehringer Ingelheim Roxane, Inc., Bristol-Myers Squibb Co., Dey, Inc., Ivax Corporation, Ivax Pharmaceuticals, Inc., Janssen LP f/k/a Janssen Pharmaceutica Products, LP, Johnson & Johnson, Inc., McNeil-PPC, Inc., Merck & Co. f/k/a ScheringPlough Corporation, Merck Sharp & Dohme Corp. f/k/a Merck & Company, Inc., Mylan Pharmaceuticals, Inc., Mylan, Inc. f/k/a Mylan Laboratories, Inc., Novartis Pharmaceuticals Corp., Ortho Biotech Products, LP, Ortho-McNeil Pharmaceutical, Inc., Pfizer Inc., Roxane Laboratories, Inc., Sandoz, Inc. f/k/a Geneva Pharmaceuticals, Inc., Sicor, Inc. f/k/a Gensia Sicor Pharmaceuticals, Inc., SmithKline Beecham Corp. d/b/a GlaxoSmithKline, Inc., TAP Pharmaceutical Products, Inc., Teva Pharmaceuticals USA, Inc., Warrick Pharmaceuticals Corporation, Watson Pharma, Inc. f/k/a Schein Pharmaceuticals, Inc. and Watson Pharmaceuticals, Inc., Defendants, Pharmacia Corporation, FILED JUN 22, 2012 Diane M. Fremgen Clerk of Supreme Court Defendant-Appellant-Cross-Respondent. APPEAL from orders of the Circuit Court for Dane County, Richard G. Niess, Judge. ¶1 Affirmed and remanded. MICHAEL J. GABLEMAN, J. This case comes before us on certification from the court of appeals. civil action alleging against that the Pharmacia company The State brought a Corporation reported inflated ("Pharmacia"), drug prices to Wisconsin Medicaid. A jury found Pharmacia liable for violating Wisconsin sections Trade Statutes Practices fraud statute"). Act 100.18(1) ("DTPA") and (1992)1 the 49.49(4m)(a)2. Deceptive ("Medicaid The jury awarded the State $2 million for the DTPA claim and $7 million for the Medicaid fraud claim, totaling $9 million in damages. the jury also Answering a special verdict question, determined that Pharmacia committed separate violations of the Medicaid fraud statute. 1,440,000 In post- trial proceedings, the circuit court vacated that answer and reduced the number of violations to 4,578. See Reyes v. Greatway Ins. Co., 220 Wis. 2d 285, 301, 582 N.W.2d 480 (Ct. App. 1998) (holding that a circuit court may change answer where it is not supported by credible evidence). 1 a jury Both The complaint alleged violations dating back to 1992. All subsequent references to any statutes or regulations, state or federal, are to the versions in effect in 1992 unless otherwise indicated. No. parties appealed, raising numerous issues.2 2010AP232-AC The court of appeals certified three to this court: 1) whether the State was entitled to a jury trial; impermissible circuit each whether speculation court Because 2) properly of these by the the reduced issues damages jury; the was and number correctly were 3) of based whether on the violations. resolved in the circuit court, we affirm and remand to the court of appeals. I. ¶2 FACTUAL BACKGROUND As with most aspects of this case, many of the facts are sharply disputed by the parties. undisputed facts. Here we present only the In the procedural history below we present in greater detail the parties' differing characterizations of the facts at trial. Because of the volume of facts relevant to the certified issues, we also present additional facts during the course of our analysis. ¶3 Medicaid is a program jointly funded and managed by the states and the federal government. U.S. 297, 301 (1980). Its purpose Harris v. McRae, 448 is to facilitate the provision of health care services to those without the means to pay for them. 42 U.S.C. § 1396. 2 At the federal level, Medicaid The issues raised by Pharmacia on appeal but not certified to this court include, inter alia, a separation of powers issue, an issue regarding the duty to mitigate damages, various evidentiary issues, and an issue regarding attorney fees and costs. The issues raised by the State on appeal but not certified to this court include, inter alia, the correctness of the circuit court's determination of the forfeiture amount imposed per violation and the breadth of the injunction. In our order accepting the certification from the court of appeals we limited our review to the certified issues. 3 No. is administered Services by ("CMS"), Department the an Centers agency of Health and for within Human Medicare the and aegis Services. 2010AP232-AC Medicaid of Douglas the v. U.S. Indep. Living Ctr. of S. Cal., Inc., 565 U.S. __, 132 S. Ct. 1204, 1208 (2012). In Wisconsin, the program is run by the Department of Health Services ("DHS"). ¶4 See generally Wis. Stat. ch. 46. Pursuant to federal law, states participating in the Medicaid program must submit "state plans" to CMS to receive federal funding. 42 U.S.C. §§ 1396a and 1396b(a). Such plans are required to "assure that payments are . . . sufficient to enlist enough providers so that care and services are available under the services geographic § 447.204. plan are at least available area." 42 to to the the U.S.C. extent general that such care and in the population § 1396a(a)(30)(A); 42 C.F.R. Federal regulations compel state Medicaid agencies to devise procedures for reimbursing pharmacists who dispense drugs to Medicaid recipients. 42 C.F.R. § 447.518. Under the federal guidelines, the reimbursements may not exceed the lesser of 1) the estimated acquisition cost ("EAC") of the drug, plus a reasonable dispensing fee, or 2) the "usual and customary" price the pharmacy charges to consumers paying for the drug without government assistance. 42 C.F.R. § 447.512(b). The regulations define EAC as the "best estimate of the price generally and currently paid by providers for a drug." 42 C.F.R. § 447.502. Whenever states change their reimbursement policies, they must seek CMS approval to institute the new plan. S. Ct. at 1208. 4 See Douglas, 132 No. ¶5 the In Wisconsin, reimbursement formulae are drawn up by legislature signed 2010AP232-AC into as law part by the of the biennial governor. budget process and that process, the During legislature and governor receive extensive input from various lobbying interests, officials. The as well litigation as from leading to DHS and other the case at state bar was principally over one part of the reimbursement formula, a figure known in the industry as an "average wholesale price" ("AWP").3 ¶6 AWP During the period of time implicated by the complaint, played a reimbursement different process generic or a brand.5 AWP minus Governmental a depending in on Wisconsin whether the Medicaid's4 drug was a For brand drugs, Medicaid paid pharmacies specific Entities role percentage. AWP Litig., Cf. 767 In re McKesson F. Supp. 2d 263, 267 3 There is considerable disagreement here and in other jurisdictions, see generally, e.g., Phuong D. Nguyen, A Review of Average Wholesale Price Litigation and Comments on the Medicare Modernization Act, 9 Quinnipiac Health L.J. 249 (2006) (surveying AWP litigation), as to the precise meaning of AWP, and that subject will be discussed below at length. There is also disagreement concerning the formulation and transmittal of AWPs, and that too will be elaborated on in the following section. 4 Henceforth we will refer to Wisconsin Medicaid simply as "Medicaid." 5 A brand name drug is a product under patent protection and thus marketed by a single company. A generic drug, by contrast, is a product that has been released from patent protection and is thus available from multiple pharmaceutical manufacturers in the same form. See generally Caraco Pharmaceutical Laboratories, Ltd. v. Novo Nordisk, 566 U.S. __, 132 S. Ct. 1670 (2012). 5 No. (D. Mass. 2011) ("Public payors generally 2010AP232-AC reimburse retail pharmacies for brand name drugs based on a percentage off of AWP."). until The percentage remained constant for all brand drugs the next process. legislative revision in the biennial budget Thus, for example, if the formula had been set at AWP minus 10% for a given period, and a pharmacy dispensed to a Medicaid recipient a brand drug with an AWP of $10, Medicaid would pay the pharmacy $9 ($10 AWP minus 10%). covered by the lawsuit, the percentage Over the years deducted from AWP in Wisconsin increased incrementally during various biennial budget sessions. ¶7 generic The reimbursement process is different with respect to drugs. allowable cost, For a such number drugs, Medicaid determined by sets state a maximum officials consultants through independent research in the market. or We will elaborate further on that process below where it is relevant to our analysis. II. ¶8 In 2004, the PROCEDURAL HISTORY State filed a civil action against several dozen large pharmaceutical manufacturers, alleging that each reported inflated AWPs, thereby causing Medicaid to overpay for 6 drugs and violating DTPA6 the and the Medicaid fraud The relevant provision of the DTPA provides: No . . . corporation . . . or agent or employee thereof, with intent to sell, distribute, increase the consumption of or in any wise dispose of any . . . merchandise . . ., directly or indirectly, to the public for sale . . ., shall make, publish, 6 No. statute.7 After several years of extensive 2010AP232-AC discovery, Pharmacia,8 which manufactures both brand and generic drugs, was the first defendant to go to trial.9 ¶9 The State sought a jury trial at circuit court, and Pharmacia a bench trial. Applying our case law on the subject, the circuit court concluded that the State was entitled to a jury trial on both statutory claims. disseminate, circulate, or place before the public, or cause, directly or indirectly, to be made, published, disseminated, circulated or placed before the public, in this state, in a newspaper, magazine or other publication, or in the form of a . . . notice, . . . bill, circular, pamphlet, letter, . . . or over any radio or television station, or in any other way similar or dissimilar to the foregoing, an advertisement, announcement, statement or representation of any kind to the public relating to such purchase [or] sale, . . . which advertisement, announcement, statement or representation contains any assertion, representation or statement of fact which is untrue, deceptive or misleading. Wisconsin Statutes section 100.18(1). 7 The relevant provision of the Medicaid fraud statute states that "[n]o person, in connection with medical assistance, may . . . knowingly make or cause to be made any false statement or representation of a material fact for use in determining rights to a benefit or payment." Wis. Stat. § 49.49(4m)(a)2. 8 Pharmacia is a wholly-owned subsidiary of Pfizer. At trial, evidence was introduced relating to various branches of Pharmacia and predecessor companies. The parties have never suggested that these distinctions are significant to the case. In the interest of clarity, we therefore use the term "Pharmacia" even where other corporate names were employed at trial. 9 Proceedings involving the other pending the resolution of this case. 7 defendants are stayed No. A. ¶10 2010AP232-AC The State's Case at Trial Over the course of a nine-day trial, the two sides presented radically different versions of the Medicaid reimbursement system, and of Pharmacia's role in that system. The State's account is summarized in this section. ¶11 Because pharmaceutical broadly of the industry, applicable complexity Medicaid formula for and dynamism required determining the consistent a of and the appropriate reimbursements for pharmacies that dispensed drugs to Medicaid patients. to The agency did not have sufficient staff or resources collect the information necessary to calculate proper reimbursement rates, so it was dependent upon assistance from companies in the industry. ¶12 As with other states throughout the country, the solution that emerged was for pharmaceutical manufacturers like Pharmacia to report certain figures relating to the sales of their products, and for calculate reimbursements. was AWP. DataBank Pharmacia ("FDB"), an Medicaid to use those figures to The most important of those figures provided AWPs independent for company its drugs that to First organized and disseminated information regarding the pharmaceutical industry 8 No. 2010AP232-AC to Medicaid,10 which then plugged them into its reimbursement formula. ¶13 Pharmacia, as with all manufacturers, reported AWPs in agreement with Medicaid that the AWPs were supposed to reflect what the name suggested: the average price for which the drug was sold by the wholesaler to the pharmacy. During the early days of Medicaid, this assumption was largely accurate. did reflect the average price paid by the AWPs pharmacies, and Medicaid was able to simply reimburse the pharmacies in those amounts. ¶14 Over time, however, the manufacturers began reporting inflated AWPs. They did so to engage in a practice known as "marketing spread." the When a manufacturer "marketed the spread," it reported an inflated AWP to Medicaid and Medicaid then paid the pharmacy more for the drug than the pharmacist paid the wholesaler for the same product. pharmacies had an incentive to buy As a consequence, products from the manufacturer (via a wholesaler) who reported the most inflated AWP, because pharmacies then made a higher profit margin than they would have on drugs made by other manufacturers. the manufacturer obtained a larger 10 and larger share In turn, of the There was actually yet another intermediary involved in the process, Electronic Data Systems, but it served for all intents and purposes as an arm of the state and neither party suggests its role is relevant to the issues before us. For the sake of simplicity, we therefore discuss the transfers of information from Pharmacia as though they were conveyed directly to FDB. 9 No. 2010AP232-AC market, as pharmacies became increasingly aware of wider profitmargins on the manufacturer's product. Pharmacia "marketed the spread" along with its competitors, and it reported more and more dramatically inflated AWPs over time. ¶15 varying Medicaid degrees and and other at officials varying in times, Wisconsin that AWP knew, no to longer represented an accurate barometer of what pharmacies were paying wholesalers for drugs. inconsistent and Nevertheless, it was confronted with often contradictory information, with considerable disagreement as to how far AWPs were from actual wholesale prices. Consequently, the state was forced to guess as to just how unrealistic AWPs were. After formulating such a guess, the state would then determine a percentage to subtract from AWP in order to derive the reimbursement amounts. That percentage grew over time, as the state acquired more and better information on the magnitude of the inflations. Although the formulae by which AWPs were reduced represented the state's best guess as to the amount of the inflation, it erred on the side of generosity to ensure that no supplier was shortchanged, and its payments were therefore almost universally too high. Thus, the manufacturers, along with everyone else in the supply chain, continued to profit from the false AWPs. ¶16 Pharmacia was aware of the benefits accruing by virtue of its misrepresentations, and it took measures to perpetuate the scheme and avoid detection. One such measure was the so- called the "charge back," whereby company would provide wholesalers various secret discounts designed to compensate them 10 No. 2010AP232-AC for the difference between the amount the pharmacy paid for the products and the amount the wholesaler paid Pharmacia. In this way, the true prices of the drugs were obscured from public view. ¶17 If the state had known true AWPs, it would have simply reimbursed pharmacies at those prices. Thus, the damage suffered by the state is the difference between the amount it did pay Pharmacia and the actual wholesale prices11 for its products, i.e., the true average price at which it sold its drugs to wholesalers. Finally, the number of violations committed by Pharmacia is the number of times the state overpaid for a product as the result of an inflated AWP, for that is the truest measure of the company's wrongful conduct. 11 We use "actual wholesale prices" as a shorthand to mean prices that did in fact reflect the average prices that pharmacies were paying wholesalers for the drugs at issue. We do not thereby imply any conclusion as to whether the AWPs at issue in the present case were required by law to reflect actual wholesale prices in the sense that Pharmacia had a legal obligation to report different numbers, as that question is not before us. It has not been certified and so remains at the court of appeals. For the same reasons, we will refer to Pharmacia's reported AWPs as "inflated" to reflect the undisputed fact that they did not track actual wholesale prices without implying anything about the "truth" or "falsity" of the AWPs. We recognize that this terminology may engender confusion, but it is unavoidable given the complexity and interrelationship of the certified and uncertified issues. We caution the parties and the court of appeals not to take this opinion as bearing on the proper resolution of the uncertified issues upon remand, as those are not before us. 11 No. B. ¶18 2010AP232-AC Pharmacia's Case at Trial Unsurprisingly, Pharmacia related a very different narrative to the jury, which is summarized in this section. By its account, AWPs are and always were a "benchmark," designed to allow for consistency and stability in reimbursement rates, but never intended to reflect actual prices or their averages. state was well aware of that fact, and well The aware that pharmacists were profiting from Medicaid reimbursements. Such profits do not demonstrate the existence of any fraud; rather, they were necessary and required by federal law to ensure that pharmacies participated in Medicaid. If the profits did not exist, pharmacies would withdraw from the program and indigent patients would lose access to the subsidized medications to accessible to which they are entitled. ¶19 True wholesale prices were Pharmacia than they were to the state. no more Such prices are known only to the wholesalers and their pharmacy customers; Pharmacia is not privy to their confidential arrangements. of that information, Pharmacia reference to transactions between In the absence calculated AWPs wholesalers and not with pharmacies, but with reference to wholesale acquisition cost that is, the amount the wholesalers paid for its products. ¶20 In any event, the AWPs upon which the state relied were not Pharmacia's, they were FDB's. FDB committed itself to independently verifying the AWPs it provided to the state by conducting surveys of wholesalers. Pharmacia was not responsible for the AWPs published by FDB, nor should it be held 12 No. 2010AP232-AC accountable for any characterization of the AWPs put forth by FDB. ¶21 Had the state desired other pricing information, it could easily have acquired it. FDB offered a variety of data encompassing a wide range of transactions in the pharmaceutical industry. The state opted for AWP, knowing full well what it signified, and what it did not. Alternatively, the state could have altogether declined necessary FDB's services information itself. It and already gathered had the access to pharmaceutical pricing data through the extensive drug purchases Wisconsin makes outside of the Medicaid program, for example those obtained for use in correctional facilities. More simply, it could just have asked Pharmacia for the data it wanted, a straightforward approach it never took. ¶22 the Medicaid's reimbursement formulae were a function of political process. As each budget was being prepared, various government officials would recommend that the rates be lowered by substantial amounts to generate taxpayer savings. At the same time, a vigorous pharmacy lobby would counter that the reimbursements were more accurate than alleged, and that significant reductions would eliminate their profit margins and force them to withdraw from Medicaid, thereby depriving eligible individuals of access to necessary medication. The legislature and governor took both perspectives into consideration and came up with a reimbursement rate that balanced the interest in fiscal responsibility with the interest in ensuring access to 13 No. subsidized medicine. 2010AP232-AC Pharmacia should not be punished for a political decision made by Wisconsin. C. ¶23 Verdict and Post-Trial Proceedings The jury found Pharmacia liable for violating both the DTPA and the Medicaid fraud statute. It awarded $2 million in damages for the DTPA claim and $7 million for the Medicaid fraud claim, for special a total verdict of $9 million question, the in jury damages. concluded Answering that a Pharmacia violated the Medicaid fraud statute 1,440,000 times, the number of times the State alleged that Medicaid had overpaid for the company's products as a result of the inflated AWPs. Pharmacia then successfully moved the circuit court to vacate the number of violations found by the jury. regarding the issue, the During post-trial proceedings circuit court determined record supported a finding of 4,578 violations. that the It imposed a $1,000 forfeiture on each violation, totaling $4,578,000. ¶24 court of Both parties appealed, raising numerous issues. appeals certified three: 1) whether the State The was entitled to a jury trial; 2) whether the damages were based on impermissible speculation by the jury; and 3) whether the circuit court properly reduced the number of violations. To expedite the resolution of this important case, we accepted the certification and limited our review to the certified issues. We now affirm the circuit court on each of those issues. III. ¶25 The first STANDARD OF REVIEW issue whether the State had a constitutional right to a jury trial hinges on our reading of 14 No. the Wisconsin Constitution, independent review. and is therefore 2010AP232-AC subject to our Harvot v. Solo Cup Co., 2009 WI 85, ¶32, 320 Wis. 2d 1, 768 N.W.2d 176 (citations omitted). ¶26 On the second issue whether the jury's damage award was impermissibly speculative we will not reverse the award if it was "within the realm of reason in view of the evidence." Rupp v. Travelers Indem. Co., 17 Wis. 2d 16, 26, 115 N.W.2d 612 (1962). Under this standard, we search the record for credible evidence to support the award, and view that evidence in the light most favorable to the jury's determination. Ager Plumbing & Heating, Inc., 19 Springen v. Wis. 2d 487, 489, 120 N.W.2d 692 (1963). ¶27 whether Medicaid With the respect circuit fraud to the court third issue the properly violations the question of the number of review depends on reduced standard of whether the jury's alleged error is properly characterized as an error of law or of fact. Because the circuit court sufficiently instructed the jury on what constituted a violation, the jury's error is best understood as one of fact. We therefore apply a sufficiency review issue. of the evidence standard of to the third Morden v. Cont'l AG, 2000 WI 51, ¶38, 235 Wis. 2d 325, 611 N.W.2d 659. That standard requires us to overturn a circuit court's decision to change the jury's answer if there is "any credible evidence" inferential. to support the verdict, direct or Hanson v. Am. Family Mut. Ins. Co., 2006 WI 97, ¶18, 294 Wis. 2d 149, 716 N.W.2d 866 (internal quotation marks and citation omitted). As with the speculativeness issue, we 15 No. 2010AP232-AC answer this question while viewing the record in the light most favorable to the jury's determination. ¶41. Morden, 235 Wis. 2d 325, Because the circuit court was better situated to assess the evidence than we are, we also accord its weighing of the evidence "substantial deference." D.L. Anderson's Lakeside Leisure Co. v. Anderson, 2008 WI 126, ¶59, 314 Wis. 2d 560, 757 N.W.2d 803 (internal quotation marks and citations omitted). Therefore, we will accept the circuit court's reduction of the number of violations unless the record reveals that the number it found was Wis. 2d 665, "clearly 671-72, wrong." 548 Richards N.W.2d 85 (Ct. v. App. Mendivil, 1996) 200 (internal quotation marks and citation omitted). IV. ¶28 We first DISCUSSION consider whether the State had a constitutional right to a jury trial and conclude that it did. We then consider impermissibly whether speculative the and jury's determine damage that award it was was not. Finally, we consider whether the circuit court properly reduced the number of violations and hold that it did. A. The State Had a Constitutional Right to a Jury Trial ¶29 The Wisconsin Constitution provides that "[t]he right of trial by jury shall remain inviolate, and shall extend to all cases at law." that Wis. Const. art. I, § 5. It is well-settled the provision guarantees the right to a civil jury trial as the right existed at the time our state's constitution was adopted in 1848. Town of Burke v. Wis. 2d 623, 635, 117 N.W.2d 580 (1962). 16 City of Madison, 17 When the right to a No. 2010AP232-AC civil jury trial for a particular cause of action is in dispute, we pose a two-pronged test to resolve the dispute. Liquor Mart v. H&S Petroleum, Inc., 2002 Vill. Food & WI 92, ¶11, Wis. 2d 478, 647 N.W.2d 177 ("the Village Food test"). 254 First, we ask whether the "cause of action created by statute existed, was known, or was recognized at common law at the time of the adoption of the Wisconsin Constitution in 1848." Id. Next we consider whether the cause of action was viewed as "at law" in 1848. Id. ¶30 The question of whether the State had a constitutional right to a jury trial reduces to two separate inquiries: 1) whether the State was entitled to a jury trial on the DTPA claim and 2) whether it was entitled to one on the Medicaid fraud claim. The affirmative. circuit court answered both questions in the Because both prongs of the test are satisfied by both causes of action, we agree with the circuit court that the State was entitled to a jury trial and therefore affirm its ruling. 1. The State Had a Constitutional Right to a Jury Trial on its DTPA Claim ¶31 The State's DTPA claim meets both prongs of the test: it was recognized at common law in 1848 and it was regarded as "at law" at that time. Accordingly, we conclude that the State had a constitutional right to a jury trial on its DTPA claim. ¶32 known, or We first analyze whether the DTPA claim "existed, was was recognized at common law at the adoption of the Wisconsin Constitution in 1848." 17 time Id. of the The State No. 2010AP232-AC submits that the DTPA claim is an essential counterpart to the common law claim of "cheating." The circuit court agreed, and so too do we. ¶33 A common law claim can be regarded as the essential counterpart to a statutory cause of action in a civil jury trial analysis where the two share a similar purpose. Wis. 2d 1, ¶72. Harvot, 320 The DTPA and common law cheating share such a purpose: combatting deceptive commercial conduct. ¶34 When ascertaining whether a statutory cause of action had an essential common law counterpart in 1848, we often resort to Sir William Blackstone's Commentaries on the Laws of England (1778) (hereinafter "Blackstone"). See Harvot, 320 Wis. 2d 1, ¶84; State v. Schweda, 2007 WI 100, ¶23, 303 Wis. 2d 353, 736 N.W.2d 49; Dane Cnty. v. McGrew, 2005 WI 130, ¶23 n.18, 285 Wis. 2d 519, 699 N.W.2d 890 (collecting cases). Blackstone categorizes cheating as an "offence . . . against public trade." 4 Blackstone at *157. The DTPA announces, by its very name, that it targets a similar category of wrongful conduct, namely, deceptive trade practices. ¶35 the Similarly, Blackstone's description of cheating tracks DTPA's characterization of deceptive trade practices. Blackstone notes that the object of the common law rule is to "prevent deceits in particular trades." Id. such other deceits, Blackstone cites, amongst As examples of conduct, "the offence of selling by false weights and measures," the offense of "playing with false dice," and the offense of defrauding "another of any valuable chattels by colour of any false token, 18 No. counterfeit letter, or (formatting altered). false pretence." Although the 2010AP232-AC Id. DTPA at speaks *157-58 in less antiquated terms, it displays a similar emphasis on attempts to profit through deception. Tietsworth v. Harley-Davidson, Inc., 2003 WI App 75, ¶24, 261 Wis. 2d 755, 661 N.W.2d 450 ("[T]he DTPA is a broad remedial statute designed to protect the public from all untrue, deceptive or misleading representations made in sales promotions.") omitted), reversed (internal on other Wis. 2d 94, 735 N.W.2d 418. quotation grounds marks by and 2007 WI citation 97, 303 We conclude, therefore, that both the common law cause of action of cheating and the DTPA combat analogous practices. ¶36 In Pharmacia's view, the Wisconsin courts have already settled that there is no right to a jury trial for an action brought pursuant to the DTPA. For that proposition, it relies upon State v. Ameritech Corp., 185 Wis. 2d 686, 517 N.W.2d 705 (Ct. App. 1994). Ameritech did indeed hold as much, but the holding is no longer good law. The court of appeals there employed the "codification" test, whereby a statutory cause of action carries with it a right to a jury trial if "the statute codifies an action known to the common law in 1848." 690. Id. at In Village Food we expressly renounced that test because it construed our precedent "too narrowly." 254 Wis. 2d 478, ¶11. Instead, we reaffirmed the two-prong test set forth above. Id. Consequently, holding, Pharmacia may as its holding resulted 19 not from rely the upon Ameritech's application of an No. 2010AP232-AC erroneous and defunct test.12 Our ascertainment of a jury trial right be under the DTPA must performed according to the appropriate test, i.e., the one enumerated in Village Food. ¶37 Pharmacia also seeks to apply that test, but it does so unconvincingly. cheating and identically. It submits that the elements of common law those of the DTPA do not match each other A party accusing another of cheating at common law was required to prove that the individual: 1) performed an act calculated to deceive; 2) the act was aimed at, or affected, the public or the individual; and 3) "ordinary prudence" would not have protected the victim against the fraud. See, e.g., People v. Cummings, 46 P. 284, 284 (Cal. 1896); Hammer v. State, 89 N.E. 850, 852 (Ind. 1909). In comparison, a plaintiff alleging violations of the DTPA must prove: 1) that the defendant made a representation to the public with the intent to induce an obligation; 2) that the representation was untrue, deceptive or misleading; and 3) that the representation caused the plaintiff a pecuniary loss. K&S Tool & Die Corp. v. Perfection Mach. Sales, Inc., 2007 WI 70, ¶19, 301 Wis. 2d 109, 732 N.W.2d 792 (internal quotation marks and citations 12 omitted). Pharmacia Ameritech is no longer good law only with respect to its discussion and application of the test for determining whether there is a right to a civil jury trial, not with respect to any of its other holdings, which we explicitly and specifically preserve for their precedential value. See Blum v. 1st Auto & Ca. Ins. Co., 2010 WI 78, ¶42, 326 Wis. 2d 729, 786 N.W.2d 78 (holding "that when the supreme court overrules a court of appeals decision, the court of appeals decision no longer possesses any precedential value, unless this court expressly states otherwise"). 20 No. focuses on the "ordinary prudence" element of 2010AP232-AC common law cheating, arguing that it has no essential counterpart in the elements of the DTPA and that no right to a jury trial therefore exists. ¶38 As insinuation a preliminary that a matter, statutory we Pharmacia's of cause reject action carries no constitutional right to a jury trial merely because the elements of that cause of action and those of the purported common law claim are not identical. Such an approach would restore by another name the "codification" test articulated in Ameritech and unequivocally abandoned in Village Food. ¶39 The real question is whether the divergence between the elements of the DTPA and those of common law cheating is sufficiently significant to demonstrate that the State had no right to a jury trial. We conclude that it is not, and therefore affirm the circuit court's decision to grant the jury trial. ¶40 To support its view that the elements of common law cheating are too distinct from those of the DTPA to give rise to a jury trial right, Pharmacia relies principally upon Schweda. There, we determined that no jury trial right various environmental statutory causes of action. Wis. 2d 353, ¶14. attached to Schweda, 303 We rejected the proffered analogy between those statutes and common law nuisance because the latter was a "sprawling concept" that "could encompass a vast array of causes of action," whereas the former applied to a much narrower realm of conduct. Id., ¶32. In 21 drawing that distinction, we No. 2010AP232-AC emphasized that "[t]he breadth of nuisance is so great that we must narrowly construe the actions that we analogize to" it. Id., ¶40. ¶41 Common law cheating does not capture nearly so wide a swath of activity as does nuisance. On the contrary, it is cabined to a similar field as that covered by the DTPA itself. Compare DTPA) Tietsworth, with 261 Cummings, cheating). Wis. 2d 755, 46 P. at ¶24 284 (characterizing (describing common the law As a result, Schweda's analysis did not compel a bench trial in the instant case. ¶42 We acknowledge that Schweda called attention to the elements of nuisance and those of the environmental statutes in play in that case. claim sounding in In particular, the opinion observed that a common law nuisance was required to prove "substantial and unreasonable harm to interests in the use and enjoyment contrasted of land." that Schweda, requirement with 303 Wis. 2d 353, modern ¶35. environmental It laws, which "regulate more subtle and attenuated harms than the common law of nuisance does." Id. (quoting Solid Waste Agency of N. Cook Cnty. v. U.S. Army Corps Of Eng'rs, 101 F.3d 503, 505 (7th Cir. 1996)). It is clear from this quote that the problem with the analogy between the elements of common law nuisance and those of the environmental laws was not simply that they were not identical. Rather, the problem was that all of the similarities between the two flowed from the fact that nuisance was so broad as to encompass all environmental laws. 22 No. ¶43 2010AP232-AC Given the context of these comments in Schweda, one cannot escape the conclusion that no such deficiency plagues the analogy between common law cheating and the DTPA. Unlike nuisance, the reasonable reliance requirement does not highlight any substantial difference in the breadth of the two laws being compared. Common law cheating covers the same substantive area of conduct as does the DTPA, and the difference in elements between the two is insufficient to outweigh the similarities. Accordingly, we conclude that the cause of action created by the DTPA "was recognized at common law at the time of the adoption of the Wisconsin Constitution in 1848" and the first prong of the Village Food test is therefore satisfied with respect to that cause of action. ¶44 Vill. Food, 254 Wis. 2d 478, ¶11. Pharmacia does not deny that common law cheating was regarded as "at law" in 1848, and there is no reason to believe it was not. See 3 Blackstone at *165 (noting that a plaintiff can seek damages in a common law cheating action); see also Josma v. W. Steel Car & Foundry Co., 94 N.E. 945, 946 (Ill. 1911) (same); Vill. Food, 254 Wis. 2d 478, seeking money damages is one at law."). ¶33 ("An action Consequently, common law cheating was considered "at law" in 1848, both prongs of the Village Food test are satisfied with respect to the DTPA claim, and the State was entitled to a jury trial on that claim. 2. The State was Entitled to a Jury Trial on its Medicaid Fraud Claim ¶45 Applying the Village Food test to the State's Medicaid fraud claim, we conclude that Medicaid fraud is an essential 23 No. 2010AP232-AC counterpart to common law fraud and that common law fraud was considered "at law" in 1848. Thus, we affirm the circuit court's decision to grant the State a jury trial on its Medicaid fraud claim. a. Common Law Fraud is an Essential Counterpart to Medicaid Fraud ¶46 The State offers common law fraud as the "essential counterpart" to Medicaid fraud for purposes of the first prong of the Village Food test. ¶47 The Medicaid fraud statute and common law fraud target similar conduct. See Schweda, 303 Wis. 2d 353, ¶35 (examining the conduct targeted by causes of action as part of the jury trial right inquiry). concerned with The Medicaid fraud statute is centrally "false of . . . material fact benefit or payment." for statement[s] use in or representation[s] determining rights Wis. Stat. § 49.49(4m)(a)2. to a Setting to one side for the moment the fact that the statute is limited to a narrow species of fraud (that which takes place in medical assistance programs), it is apparent what sort of practices it seeks to prohibit: deceptive conduct party at the expense of another. targeted a similar behavior in a range variety of of designed to enrich one Common law fraud historically conduct, business combatting relationships protecting the integrity of the market. deceptive and thereby See Pasley v. Freeman, (1789) 100 Eng. Rep. 450 (K.B.) 457, 3 T.R. 51, 64 (holding that an action for "deceit lies when a man does any deceit to the damage of another"). 24 No. ¶48 carries Pharmacia no programs it jury submits trial governs that right did the Medicaid because not exist the in 2010AP232-AC fraud medical 1848. statute assistance We decline to address Pharmacia's historical premise because we disagree with its method of analysis. A statute that creates a cause of action with an essential counterpart at common law becomes no less an essential counterpart narrower range of practices. simply because it addresses a In other words, if the legislature focuses and directs the principles of common law fraud to a specific realm Medicaid it does not strip a litigant of his right to a jury trial where it would otherwise exist. Were we to adopt Pharmacia's reasoning, a legislative enactment clearly modeled on a common law cause of action but applied specific context would carry no right to a jury trial. to a See, e.g., Dura Pharmaceuticals, Inc. v. Broudo, 544 U.S. 336, 344 (2005) (emphasizing fraud action[s]"). the "common-law roots of . . . securities In such circumstances, to deprive plaintiffs of a jury right based not on the substance of the law at issue, but upon historical happenstance, would be an absurd result, and we therefore reject Pharmacia's argument. ¶49 To relatively substantiate recent advent Pharmacia cites Harvot. its of contention medical regarding assistance the programs, It finds in that decision a holding that where "modern social legislation" was "unheard of" in 1848, there can be no essential common law counterpart legislation for purposes of a jury trial right. differently. to the We read Harvot In that decision, we upheld a circuit court ruling 25 No. 2010AP232-AC denying a jury demand in an action brought under the Wisconsin Family and Medical Leave Act (WFMLA). It is true, as Pharmacia says, that we noted in Harvot that the WFMLA represents "modern social legislation" of a type that "was quite unheard of in 1848." 320 Wis. 2d 1, ¶80. however, that sentence Contrary to Pharmacia's intimation, represents only one component of the decision's reasoning, not its overall holding. ¶50 In Harvot, we ultimately rejected the plaintiff's claim to a jury trial right because "the most analogous common law cause of action" that the plaintiff offered to the court was essentially a claim for the breach of an employment contract. 320 Wis. 2d 1, ¶85. The purpose of such a claim, we reasoned, was "to ensure that the . . . employee . . . was cared for and compensated as he was promised." Id., ¶86. It was not, like the WFMLA, motivated by an intent to help employees "balance work and family demands." ¶51 Id. Seen in its context, the "modern social legislation" language from Harvot does not avail Pharmacia. Medicaid fraud, unlike the WFMLA, is in fact motivated by a purpose closely similar to the purpose of its suggested common law forebear: protecting the integrity of business relationships and market transactions. See generally Jason Chimon, George C. Chipev, & Timothy Feulner, Health Care Fraud, 48 Am. Crim. L. Rev. 783 (2011) (conducting general review of health care fraud law). The fact concerns that on a the more Medicaid fraud contemporary statute screen does fundamental purpose substantively different. 26 projected not those render the Indeed, the common No. law as a whole adjusts to historical 2010AP232-AC circumstance, see O. Holmes, 1 The Common Law (1881) ("The law embodies the story of a nation's this is development particularly through true of many common centuries . . . ."), law fraud. See, and e.g., Samuel W. Buell, What is Securities Fraud?, 61 Duke L.J. 511, 522 (2011) ("[F]raud is a legal concept designed to adapt alongside the evolving behaviors that it targets.") (citing, in part, Stonemets v. Head, 154 S.W. 108, 114 (Mo. 1913) ("Fraud is kaleidoscopic, infinite. protean form at will, Fraud being infinite and taking on were courts to cramp themselves by defining it with a hard and fast definition, their jurisdiction would be cunningly circumvented at once by new schemes beyond the definition.")). It would therefore be especially illogical for a us to confine jury trial right to only those fraud statutes which mimic the common law as it was in 1848, when the common law in 1848 could not imagine many of the contexts in which fraud operates today. We decline to rest an important constitutional right on historical vicissitude. ¶52 Pharmacia also compares the elements of Medicaid fraud with those of common law fraud, insisting that they differ in crucial respects. While we agree that this line of inquiry is relevant, see Schweda, 303 Wis. 2d 353, ¶35 (comparing elements of causes of action as part of a jury trial right analysis), we disagree with Pharmacia's plaintiff alleging fraud conclusion. must prove: 1) At a common law, a representation of material fact; 2) the representation's falsity; 3) the intent to deceive (or reckless disregard for truth or falsity); 4) intent 27 No. 2010AP232-AC to defraud or to induce action; 5) justifiable reliance by the deceived party. See Krause v. Busacker, 105 Wis. 350, 350, 81 N.W. 406 (1900); Kaloti Enters., Inc. v. Kellogg Sales Co., 2005 WI 111, ¶12, 283 Wis. 2d 555, 699 N.W.2d 205. Although no published decision from the Wisconsin courts has set forth the elements of the Medicaid fraud statute, they are easily deduced from the statute: 1) knowingly making or causing to be made; 2) a false statement or representation of material fact; 3) for use in determining rights to a benefit or payment in connection with medical assistance. United States 1994) (discussing statute). addressed v. Aside above, Wis. Laughlin, the 26 the only § 49.49(4m)(a)2.; F.3d 1523, elements from the Stat. of federal also (10th 1526-29 see Cir. Medicaid medical assistance divergence between fraud requirement the elements advanced by Pharmacia is the presence of reasonable reliance in common law fraud and its absence from Medicaid fraud. ¶53 We do not believe that this discrepancy, such as it is, outweighs the closely similar purposes of the two laws. First, although the Medicaid fraud statute does not include the term "reasonable reliance," it does require a showing that the deceptive statement was made "for use in determining rights to a benefit or payment in connection with medical assistance." Stat. § 49.49(4m)(a)2. By inserting such language into Wis. the statute, the legislature indicated that Medicaid fraud could be substantiated only by proof that the false statement played some role in the state's calculation of payments. Though that requirement is not identical to reasonable reliance, it is also 28 No. not wholly dissimilar, as both require 2010AP232-AC evidence that the culpable conduct influenced the decision-making process of the relevant actor. In any event, the difference between the two is insufficient override to the substantial overlap between Medicaid fraud and common law fraud. in purpose Accordingly, we conclude that the cause of action created by the Medicaid fraud statute "was recognized at common law at the time of the adoption of the Wisconsin Constitution in 1848" and the first prong of the Village Food test respect to that cause of action. is therefore satisfied with Vill. Food, 254 Wis. 2d 478, ¶11. b. Common Law Fraud was "At Law" in 1848 for Purposes of the State's Right to a Jury Trial ¶54 In their discussions regarding the State's right to a jury trial on its Medicaid fraud claim, the parties quarrel over the nature of the forfeitures and damages sought by the State. Pharmacia contends that the State pursued in personam forfeitures, which were unrecognized at common law in 1848, and that its damage claim was in actuality an equitable one, and thus properly resolved in a bench trial. opposite position on both points. The State takes the Although they do not frame this debate in terms of whether common law fraud was "at law" for purposes of the State's claims, that is the only conceivable relevance it has for the certified questions.13 13 Otherwise, the argument reduces to a dispute over which particular matters should have been submitted to the jury, and which to the trial judge, and that question lies outside the scope of our present review. 29 No. ¶55 at law 2010AP232-AC At common law, an action for fraud could sound either or in equity. Strom v. Goldman, Sachs & Co., 202 F.3d 138, 143-44 (2d Cir. 1999), abrogated on other grounds by Great-West Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204 (2002). When heard in a court of equity, fraud was defined in a looser, more flexible fashion than it was in a legal proceeding. See Aaron v. SEC, 446 U.S. 680, 693 (1980) ("[F]raud has a broader meaning in equity than at law.") (internal brackets, quotation marks, and citations omitted). We need not delve deeper into the distinction, however, because common law fraud, as it was at law in 1848, is sufficiently analogous to Medicaid fraud to satisfy the second prong of the test. Compare Pasley v. Freeman, (1789) 100 Eng. Rep. 450 (K.B.) 457, 3 T.R. 51, 64 (describing common law fraud at law) with Wis. Stat. § 49.49(4m)(a)2. (setting forth the elements of Medicaid fraud). Pharmacia's focus on the equitable remedies purportedly sought by the State is misplaced. Regardless of whether or not the State pursued some equitable relief, the question before us now is whether the cause of action as a whole is an essential counterpart to a cause of action considered "at law" in 1848. We have answered that question in the affirmative. Consequently, the second prong of the Village Food test is met, and the State was entitled to a jury trial on its Medicaid fraud claim. 30 No. B. 2010AP232-AC The Jury's Damage Award of $9 Million for Pharmacia's Inflated AWPs in Connection with Brand and Generic Drugs Was not Impermissibly Speculative ¶56 The next issue before us is whether the jury engaged in impermissible speculation in determining the damage award. Because the damages were based on reasonable inferences drawn by the jury from credible evidence, we hold that it did not speculate and accordingly uphold the award. ¶57 The jury's damage award of $9 million reflected the State's request for an award in approximately that amount.14 request in turn through expert reflected testimony the and State's reiterated position, at The communicated closing argument, that approximately $9 million represented the amount of money Medicaid would have saved wholesale prices. had it received, and used, actual Specifically, Lawrence DeBrock, Professor of Economics and Dean of the College of Business at the University of Illinois ("Professor DeBrock"), explained to the jury how he calculated Wisconsin's damages for both brand name and generic drugs. Comparing Medicaid records to subpoenaed documents detailing wholesale drug transactions in the private market, he found the difference between what Medicaid reimbursed pharmacies 14 The State's damages expert suggested that the most appropriate calculation of damages was $9,527,180. At closing argument, the State requested a reduced damage award of $9,146,180 because of an issue regarding the statute of limitations. The jury awarded $9 million. Pharmacia does not argue that the discrepancy between the two amounts has any significance to our analysis. 31 No. and the prices wholesalers. the State actually paid by the 2010AP232-AC pharmacies to their His estimate of that difference was advanced by at closing argument and presumably adopted by the jury. ¶58 Pharmacia attacks reimbursement was set the through damage the award because Medicaid political process and, in Pharmacia's view, there was no way the jury could sufficiently predict what the legislature and governor would have done with different AWPs.15 ¶59 The damage award was calculated with reference to the AWPs reported by Pharmacia. Because brand drugs are reimbursed by a different process than are generic drugs, we discuss them in turn. 15 Pharmacia further contends that the evidence at trial indicated that Wisconsin political officials knowingly used higher AWPs to pay pharmacies more than their acquisition costs in order to ensure that they participated in Medicaid. As Pharmacia sees it, such evidence disproved the assumption upon which the jury grounded its damage award: that the legislature desired actual wholesale prices and would have reimbursed pharmacies in accordance with such prices. This argument essentially goes to liability, not damages. That is, if there was insufficient evidence to sustain the State's claim that it would have paid lower AWPs if they had been published, then the damage award would not be lower, it would be zero. For in that event, there would have been no injury and thus no fraud. It is well-settled that "the uncertainty which prevents recovery is uncertainty as to the fact of the damage and not to its amount." Eden Stone Co. v. Oakfield Stone Co., 166 Wis. 2d 105, 125, 479 N.W.2d 557 (Ct. App. 1991)(emphasis altered)(citing Cutler Cranberry Co. v. Oakdale Elec. Co-op., 78 Wis. 2d 222, 233, 254 N.W.2d 234 (1977)). The court of appeals did not certify the question of Pharmacia's liability, so we do not address this argument. 32 No. 1. 2010AP232-AC The Jury Did Not Impermissibly Speculate as to the Damage Award with Respect to Brand Name Drugs ¶60 The jury did not impermissibly speculate as to the damage award with respect to brand name drugs because the jury received credible evidence supporting a reasonable inference that, had actual wholesale prices been provided, the legislature would have used them to reimburse pharmacies for brand name drugs. ¶61 Many of the facts regarding the reimbursement process are sharply disputed by the parties. Since we are bound to uphold a damage award where it is based on credible evidence viewed in the light most favorable to the jury's determination, Springen, 19 Wis. 2d at 489, we focus on the reimbursement process as it was characterized to the jury at trial. ¶62 The evidence at trial unequivocally revealed that, at all times relevant to the case, Medicaid paid pharmacies AWP minus a specific percentage for brand name drugs. The parties and their witnesses likewise agreed that Pharmacia reported AWPs that did not track the wholesalers for drugs.16 actual prices pharmacies were paying The dispute is over how reimbursement rates would have changed, if at all, had accurate prices been conveyed to Medicaid. As the following discussion demonstrates, 16 At trial, Pharmacia presented evidence and argument to convince the jury that the company was not in fact responsible for the published AWPs because FDB alone determined some of them and confirmed and vouched for all of them. That issue, again, relates to liability and not to whether the damage award was speculative, and we consequently do not address it. 33 No. the jury was presented with sufficient 2010AP232-AC credible evidence to support a reasonable inference that reimbursement rates would have been reduced to reflect actual wholesale prices, had they been provided. impermissibly Accordingly, we conclude that the jury did not speculate in reaching its damage award with respect to brand name drugs. ¶63 Office First, the jury considered evidence that the federal of Inspector General for CMS ("OIG") provided to Wisconsin Medicaid officials the results of a national audit of pharmacy acquisition costs for drugs reimbursed under Medicaid. The report indicated that Wisconsin pharmacies were purchasing brand name drugs at an average of 20.25% below the published AWPs, during a period when the Wisconsin Medicaid reimbursement rate was AWP minus 11.25%. The OIG advised DHS to consider the report in making changes to pharmacy reimbursement policy. important, the ultimately reduced recommended. State submitted the Such evidence reimbursement evidence that rates strongly the just legislature as supports Most the the OIG jury's determination that Wisconsin would have paid Pharmacia prices in line with actual faithfully wholesale reported, and prices it if therefore such prices strongly had been supports the damage award. ¶64 a former Second, the jury heard from Amie Goldman ("Goldman"), analyst with the Legislative Fiscal Bureau, a nonpartisan agency tasked with providing fiscal analyses to the Wisconsin legislature biennial budget. for use in formulating the state's While on the stand, Goldman recounted several 34 No. meetings she had with agents representing 2010AP232-AC various lobbying interests, as well as DHS and other officials, as part of her effort to compile on legislature Medicaid a ramifications the reimbursement agency, as well closely AWPs as tracked comprehensive formulae. legislators actual report of advising adopting alternative Goldman explained themselves, were wholesale prices conflicting input from different actors. the that her unsure how in light of Ultimately, she and her colleagues both "wanted" and "needed accurate information" regarding AWPs. Had such information been provided, Goldman testified, there would have been no need for her to prepare the report, as the legislature would according to actual wholesale prices. have simply reimbursed Thus, Goldman's testimony substantially bolstered the State's position that inflated AWPs caused Wisconsin to overpay for Medicaid drugs, and provided a credible foundation for the jury to calculate damages. ¶65 Other witnesses called by the State confirmed the picture drawn by the OIG report and Goldman's testimony, and provided yet further evidence that Pharmacia damaged the state by providing inflated AWPs when actual wholesale prices would have resulted in lower reimbursements. Moody, a former director of Medicaid For instance, Mark W. who served on the governor's commission on pharmacy reimbursement, testified that it would have assisted the commission in reaching a consensus on adjusting Medicaid reimbursement rates if they had been provided information that reflected actual wholesale prices. Additionally, Dr. Gerard Anderson, the Director of the Center 35 No. for Hospital Finance and Management at the 2010AP232-AC Johns Hopkins Bloomberg School of Public Health, opined that his survey of Pharmacia and government documents revealed that "all of Pharmacia's AWPs . . . were false, and because they were false, the Wisconsin Medicaid program overpaid providers, resulting in excess payments by the Wisconsin Medicaid programs." ¶66 Lastly, Professor DeBrock provided a well-informed, detailed basis for the jury to calculate Wisconsin's damages. He compared Medicaid records with subpoenaed documents detailing wholesale drug transactions in the private market and found the difference between what Medicaid reimbursed pharmacies and the prices actually paid by the pharmacies to their wholesalers. His estimate of that difference $9,527,180 was advanced by the State at closing argument (reduced to $9,146,180 as a result of statute of limitations considerations) and presumably formed the basis for the jury's damage award. ¶67 In summary, there was plentiful evidence from a wide range of credible witnesses with extensive experience in the field to substantiate the State's argument that the legislature would have reduced brand drug reimbursements to reflect actual wholesale prices had Pharmacia offered them. ¶68 Challenging the credibility of the evidence summarized above, Pharmacia emphasizes the testimony it proffered to rebut the State's sounder account. evidence In supported particular, a Pharmacia conclusion that asserts the that legislature knew that the reported AWPs did not track accurate wholesale prices. Indeed, Pharmacia argues, the greater weight of the 36 No. 2010AP232-AC evidence demonstrated that the state did in fact have access to actual pricing information and made the deliberate choice not to rely upon presented it. In evidence support of suggesting that that contention, various state Pharmacia officials received actual pricing information, as well as reports that the reimbursement rates were substantially higher than pharmacies' actual acquisition substantiate costs. Pharmacia's Other evidence argument was that advanced the to legislature repeatedly declined to follow various recommendations to lower reimbursement rates in order to prices.17 informed branches prison Several of and the witnesses Wisconsin hospital bring government, systems, paid them the closer jury most to that actual various prominently wholesalers directly the for medication and thus knew the prices such drugs commanded on the open market. ¶69 It is true, as Pharmacia submits, that the jury heard accounts that clashed with the State's characterization of the legislature's knowledge and intentions. But there are factual disputes in every jury trial; indeed, there would be no need for 17 For example, James Vavra ("Vavra"), Director of the Benefits Management Bureau in the Division of Health Care Access and Accountability for Wisconsin Medicaid, testified that his office provided information to DHS in formulating budget issue papers, which were used by the governor and legislature to make changes to DHS's budget. Vavra further testified that his office recommended lower reimbursement rates in accordance with the OIG report, in order to bring Wisconsin in line with actual acquisition costs for pharmacies. Finally, he testified that the legislature repeatedly rejected such proposals. Pharmacia admitted several exhibits to support Vavra's testimony. 37 No. a jury trial at all if there were not. 2010AP232-AC See, e.g., Tri City Nat. Bank v. Fed. Ins. Co., 2004 WI App 12, ¶34, 268 Wis. 2d 785, 674 N.W.2d 617 ("Juries resolve factual disputes."). It would be especially surprising if the evidence had been consistent and clear in the trial here, given that it involved an enormously complex process with numerous moving parts. Nevertheless, our inquiry asks only whether the record contains credible evidence, viewed in the light most favorable to the jury's determination, to support the damages awarded. ¶70 Springen, 19 Wis. 2d at 489. Applying that standard, it cannot be said that the damages here were speculative simply because some officials in state government received some information indicating that some AWPs were inflated above actual prices by some amount. The State has never alleged, in any court, at any stage of the proceedings, that no one in the Wisconsin government knew that AWPs did not reflect actual wholesale prices. What it alleged at trial, and what it continues to allege, is that no one in Wisconsin state government knew the exact degree of inflation, and that that drugs. The uncertainty, uncertainty jury as it was caused given heard a it to overpay compelling testimony for account describing a Medicaid of that chaotic, confusing process in which decision-makers received dramatically different reports from different sources. Indeed, Pharmacia's evidence only strengthened that account, because it described even more disagreements among the actors feeding information to the state. Cf. Commonwealth v. TAP Pharm. Prods., 36 A.3d 1112, 1152 (Pa. Commw. Ct. 2011) ("[G]iven the trial judge's findings 38 No. 2010AP232-AC regarding the significant confusion over AWP, we reject [the] argument that asserted in it is clear earlier that litigation the Commonwealth that it knowingly intended its reimbursement rates to be more generous than other entities in order to provide pharmacists a reasonable profit on ingredient costs.") (emphasis altered); but see AstraZeneca LP v. State, 41 So. 3d 15, litigation 29-30 (Ala. against misrepresentation 2009)(reversing pharmaceutical because the company state judgment for "had in AWP fraudulent actual knowledge . . . that published AWPs were not net prices" in the form of information known to certain Alabama Medicaid officials). ¶71 In light of these conflicts, we have concluded that the jury's damage award as to brand name drugs was based on a reasonable inference flowing from credible evidence. When, as here, "facts are in dispute or the evidence is such that fairminded [jurors] may draw different inferences," it is for the jurors, not for us, to determine "what seems to them to be the most reasonable inference." Weber v. Chicago & Nw. Transp. Co., 191 Wis. 2d 626, 636, 530 N.W.2d 25 (Ct. App. 1995) (quoting Lavender v. Kurn, 327 U.S. 645, 653 (1946)). The jury had ample evidence to credit suggesting that Wisconsin officials did not know with certainty actual wholesale prices, that Pharmacia's published prices provided the basis for its reimbursement rates, and that Medicaid paid more than it intended to and rightfully owed as a consequence. That evidence was offered by several witnesses with extensive experience in different areas of the 39 No. Wisconsin official Medicaid bodies process, and others and by numerous involved payment of the reimbursements. in the 2010AP232-AC documents from formulation and The jury chose who among the witnesses to believe and we are not at liberty to disturb its damage award merely believed others. because Pharmacia would rather they had See Fischer v. Cleveland Punch & Shear Works Co., 91 Wis. 2d 85, 92, 280 N.W.2d 280 (1979) ("The credibility of witnesses and the weight given to their testimony are matters left to the jury's judgment, and where more than one inference can be drawn from the evidence, this court must accept the inference drawn by the jury.") (citations omitted). ¶72 In essence, Pharmacia asks us to search the record for evidence to sustain an award that the jury could have, but did not reach, and this we cannot do. Wis. 2d 109, ¶38. K&S Tool & Die Corp., 301 The jury was free to rely on the evidence it found most credible and equally free to discount evidence it did not. Both parties presented supporting material, and the jury made its decision. For the reasons set forth above, we conclude that the jury did not impermissibly speculate in arriving at its damage award with respect to brand name drugs.18 18 The parties debate the significance and relevance of various federal regulations, particularly requirements regarding the relationship between estimated and actual acquisition costs. Because it is not necessary to resolve this dispute in order to answer the speculativeness question, we do not address them. 40 No. 2. 2010AP232-AC The Jury did not Impermissibly Speculate as to the Damage Award with Respect to Generic Drugs ¶73 As with brand drugs, the jury's award of damages with respect to supporting generic the drugs was that inference based the on credible publication evidence of actual wholesale prices would have resulted in corresponding reductions to reimbursements. Specifically, Ted Collins ("Collins"), the consultant to DHS who established the reimbursement rates for generic drugs, testified that he was forced to rely on his own research in the market because he knew AWPs were substantially inflated. He further testified that he would have used actual wholesale prices to set reimbursement rates for generic drugs had he been given them. solid foundation from Thus, Collins' testimony provided a which the jury could have reasonably inferred that Medicaid would have used actual wholesale prices to reimburse generic drugs had Pharmacia supplied them. same foundation therefore supported the reasonable The inference that Medicaid was damaged by the inflated AWPs in the generic context in the same manner as it was damaged in the brand context: namely, that the difference between the inflated AWPs and actual average wholesale prices constituted the amount of the damage.19 Accordingly, we conclude that the jury did not impermissibly speculate and therefore uphold the damage award. 19 For this reason, Professor DeBrock's method of calculating damages, summarized above, was reasonably applied by the jury to both brand and generic drugs. 41 No. ¶74 2010AP232-AC Unlike brand name drugs, generic drugs are generally not reimbursed by Medicaid based on AWP.20 Instead, they are reimbursed based on maximum allowable cost ("MAC"), an amount calculated to provide a uniform ceiling for generic drugs, given that they are often made available on the market at a wide range of prices. The purpose of a MAC is to reflect the price paid by a pharmacy to a wholesaler for a given drug. ¶75 with One witness in particular spoke to the damages issue respect to generic drugs, and his unique insight and credible testimony provided a solid foundation for the jury's damage award. ¶76 Collins, a consultant to DHS, was responsible for setting the MACs for Wisconsin during the time relevant to this case. At trial, Collins recounted at length how he had struggled to obtain accurate pricing information for calculating 20 According to Collins' testimony, generic drugs were occasionally reimbursed on the basis of AWP. For instance, there was sometimes a "lag" period for a generic drug while it was on the market but before Collins was able to set a MAC. During such a period, Collins would set the reimbursement at the same rate as applied to brand drugs, e.g., the AWP of the drug minus 10%. However, because Collins' uncontroverted testimony established (and because the parties agree) that MACs were more central to the reimbursement process for generics than were AWPs, we focus our analysis in this section on the role MACs played in providing the basis for generic reimbursements, and the role AWPs would have played in that process had they reflected actual wholesale prices. To the extent that some generic drugs were at some times reimbursed on the basis of AWPs, damages assessed for those drugs at those times were not speculative for the same reasons set forth in the section discussing the damages imposed for Pharmacia's brand drugs, which were also reimbursed on the basis of AWP. 42 No. MACs to set on generic drugs because he could 2010AP232-AC not use the reported AWPs, which he knew to be substantially inflated and thus unreliable. In order to determine the MACs, Collins conducted independent research,21 which often resulted in spotty and conflicting information. He compensated by adding money to the reimbursement rates to avoid erring on the side of excessive conservatism. As a result, he testified, "[t]he poorer I was at guessing what the price should be, the more money" the state paid. He further stated under oath that if he had known the actual prices pharmacies paid wholesalers for generics, and if those prices had been lower than his MACs, he would have set the MACs consistent with such prices. claim that companies his like job would Pharmacia have Collins went so far as to been reported rendered actual superfluous wholesale if prices, remarking, "[i]f it was accurate information, [the state would] just apply it." ¶77 As with brand name drugs, Pharmacia sought to undermine the State's damages claim concerning generic drugs by offering evidence that various governmental officials had access to true pricing information and elected not to rely on it.22 21 For example, Collins testified that he researched the prices charged to veterinary hospitals for generic drugs purchased from wholesalers. He also consulted online information made available by a co-operative of pharmacists and records relating to drug purchases made by Wisconsin's prison system. 22 For example, the jury received evidence that wholesalers themselves provided accurate pricing information and that the state had access to such information through FDB and other sources. 43 No. 2010AP232-AC Their continuing reliance on that evidence fails for the same reason as it does with respect to brand name drugs. the jury reasonably rejected it. In a word, Indeed, its rejection is even more difficult to question in this context given the force of Collins' testimony. Regardless of what various other officials said to the jury, and regardless of what various governmental and industry documents contained, the jury heard a first-hand account of how the reporting of actual wholesale prices would have influenced Whatever other Medicaid's reasonable reimbursement inferences the of generic evidence drugs. might have occasioned, it surely must be said, at the very least, that "fair-minded" jurors could have drawn the "reasonable inference" that actual wholesale prices reported by Pharmacia would have reduced the amount paid by Medicaid for generic drugs. 191 Wis. 2d at 636. to be the most Weber, The jury selected "what seem[ed] to them reasonable inference," id., and we may not disturb that decision. ¶78 Finally, Pharmacia submits, as it has throughout these proceedings, that because generics were not reimbursed on the basis of AWPs, any damage award based on the inflation of AWPs with respect to generics must be speculative. Such an argument mischaracterizes the State's theory and the jury's verdict. The State did not argue at trial that Medicaid paid too much for generic drugs because it was incorporating inflated AWPs into its reimbursement process; rather, it argued that it paid too much for generic drugs because it did not have actual wholesale prices to use. Indeed, the State's theory regarding damages in 44 No. the generic context was not substantively 2010AP232-AC different respect than its theory in the brand name context. drugs as well as generics, the State never in this With brand contended that Medicaid paid Pharmacia the amounts Pharmacia supplied in its AWPs; it contended that Medicaid estimated what pharmacies paid to wholesalers because it knew the AWPs were inflated, but did not know by how much. inflated AWPs Thus, in both contexts, the reporting of harmed Medicaid, and in both the accurate AWPs would have saved Medicaid money. reporting of See In re Pharm. Indus. AWP Litig., 582 F.3d 156, 190 (1st Cir. 2009) (affirming damages in AWP litigation as non-speculative where expert testimony established "that had the AWPs not been inflated, the plaintiffs would not have paid as much as they did"), petition for cert. dismissed, 561 U.S. __, 131 S. Ct. 60 (2010).23 ¶79 Simply put, the proper calculation of damages focuses primarily on what would have happened absent the liable conduct, not what did happen with the liable conduct. See, e.g., Schulz v. St. Mary's Hosp., 81 Wis. 2d 638, 657, 260 N.W.2d 783 (1978) (holding that a damage calculation is sound where the jury can "estimate with reasonable probability what would have happened had the injury not occurred"). Here, absent the liable conduct, Pharmacia would have reported actual wholesale prices, and the jury had credible evidence to 23 support the inference that In re Pharmaceutical Industry AWP Litigation dealt with a single brand name drug, but the simple proposition for which it is cited here that damages are not speculative if accurate wholesale prices would have resulted in lower reimbursements applies to generics as well. 45 No. Medicaid would have reimbursed Pharmacia's 2010AP232-AC generic drugs consistently with such accurate prices. ¶80 Lastly, and most importantly, the State supported its damage theory regarding generic drugs with credible evidence, most powerfully in the form of Collins' testimony that Medicaid would have used actual wholesale prices as the basis for its generic reimbursements if it had them. Far from constituting impermissible speculation, the jury's decision to rely on such testimony represented an exercise of the jury's traditional role in calculating damages. See, e.g., Weber, 191 Wis. 2d at 634-37 (collecting cases concerning the role of expert witnesses in helping to guide the jury in the calculation of damages based on likely future events). The jury chose to credit Collins' credible testimony, and we are not at liberty to unsettle that determination. See Fischer, 91 Wis. 2d at 92 ("The credibility of witnesses and the weight given to their testimony are matters left to the jury's judgment, and where more than one inference can be drawn from the evidence, this court must accept the inference drawn by the jury."); Mgmt. Computer Services, Inc. v. Hawkins, Ash, Baptie & Co., 206 Wis. 2d 158, 189, 557 N.W.2d 67 (1996) (reiterating that a plaintiff need not "prove damages with mathematical precision; rather, evidence of damages is sufficient if it enables the jury to make a fair and reasonable approximation.") (citations omitted). ¶81 In sum, with respect to both generic and brand name drugs, Pharmacia sought to convince the jury that Medicaid knew it was paying pharmacies more 46 than the pharmacies were No. themselves paying. It ably made that case at trial, placing its evidence in the most convincing light possible. it lost the 2010AP232-AC battle and the jury credited Nevertheless, contrary evidence suggesting that the inflated AWPs injured the state by causing it to overpay for the drugs. That evidence also supported the reasonable inference that Wisconsin, if it had been equipped with actual wholesale prices for both brand name and generic drugs, would have paid Pharmacia in those amounts.24 In such circumstances, we are not permitted to substitute our judgment for that of the jury, and we therefore uphold its damage award. C. The Circuit Court Properly Reduced the Number of Violations Found by the Jury ¶82 whether The final question presented for our consideration is the circuit court properly reduced the number Medicaid fraud statute violations found by the jury. of We hold that it did, and therefore affirm. 1. ¶83 it Factual Background At closing argument, the State argued to the jury that should calculate the number 24 of Medicaid fraud statute As it did at trial, Pharmacia stresses the political nature of the reimbursement process. Some of its language appears to suggest that it believes the politicization of the process, in and of itself, renders the damage award speculative. Pharmacia's claim that the proceedings below constituted an inappropriate invasion by the judicial branch into the exclusive province of the legislative and executive branches is pending in the court of appeals. It has not been certified, so we do not address it here. We answer only the certified question, which is whether or not the damages were impermissibly speculative. That inquiry does not require us to delve into the politicization of the process as a free-standing issue. 47 No. violations with reference to the number of 2010AP232-AC times Medicaid overpaid as the result of an inflated AWP for a discrete drug product (brand or generic) purchased by a consumer. It submitted that 1,440,000 was the best estimate of that number. Pharmacia argued, consistent with its theory of the case, that Pharmacia never acted unlawfully, and sought to convince the jury that there were no violations and that the jury should answer this question "zero." ¶84 Question Four of the special verdict form completed by the jurors asked them whether Pharmacia "knowingly [made], or knowingly cause[d] to be made, any false statement or representation of material fact for use in determining rights to a Wisconsin Medicaid payment." Question Five asked, "[h]ow many such false statements or representations of material fact for use in determining rights to a Wisconsin Medicaid payment did Pharmacia Corporation knowingly make or cause to be made?" The jury instructions the recited the elements of an offense of Medicaid fraud statute,25 but gave no further guidance on how to determine the precise number of violations. After deliberating, the jury adopted the State's position and in a verdict rendered on February 16, 2009 found 1,440,000 violations. 25 The instructions informed the jury that a violation occurs where: 1) the defendant makes or causes to be made a representation of material fact for use in determining the rights to a payment requested by a Medicaid provider, i.e., a fact affecting the amount of payment; 2) the representation was false when made; 3) the defendant made the representation knowingly; and 4) the false statement was used in determining a provider's right to the payment requested by a Medicaid provider. 48 No. ¶85 In a post-trial brief, Pharmacia moved 2010AP232-AC the circuit court to vacate the jury's calculation of violations and reduce the number to zero. The circuit court agreed with Pharmacia that the jury's finding was erroneous, because, as it stated in its order, it was based on a misleading argument by the State that shifted defendant" the to "focus" the court "the "consequences (emphasis in original). circuit from culpable of the conduct culpable of the conduct." In a decision dated May 15, 2009, the determined that "Pharmacia [was] subject to forfeiture for each false material statement or representation it made or caused to be made, not each time someone looked at [the statement or representation], or even relied on it." Finding that the jury's determination was based on an erroneous legal premise, the circuit court vacated its answer. the circuit court rejected Pharmacia's contention However, that the proper number of violations was zero, finding instead that there was "clearly evidence in [the] record that would support the imposition of forfeitures." Accordingly, the circuit court ordered further briefing and argument on the issue. ¶86 After that briefing and argument took place, circuit court issued an order on September 30, 2009. the In that order, the circuit court concluded that the jury had "completely missed the boat" as a result of the plaintiff's decision to "adopt[] an unsustainable theory of recovery" and go "all in" by "equating claims paid with misrepresentations made." then reduced the number of violations to 4,578. The court It derived that number by searching the record for the number of times that FDB 49 No. 2010AP232-AC conveyed to Medicaid (in its quarterly reports) a false AWP for a Pharmacia product that Medicaid then used, at least once, in the reimbursement of a pharmacy. In other words, the circuit court found a violation "each time . . . updates were purchased by Wisconsin for each drug" and then used at least once by Medicaid in the reimbursement process. Weighing various factors related to the appropriate forfeiture amount per violation,26 the circuit court imposed $1,000 for each violation, leading to a total forfeiture amount of $4,578,000. 2. The Circuit Court Resolved the Post-verdict Motion within 90 Days, as Required by Wis. Stat. § 805.16(3) ¶87 circuit As a court threshold had no matter, authority Pharmacia to argues that the the number of reduce violations because it did so more than 90 days after the jury rendered the verdict. In Pharmacia's opinion, the circuit court's order vacating the jury's determination concerning the number of violations was timely, but the ruling reducing the number of violations from 1,440,000 to 4,578 was in violation of Wis. Stat. § 805.16(3) and thus void. Because that ruling was void, Pharmacia reasons, the timely order vacating the jury's calculation violations of is violations therefore remains frozen 26 at valid, zero. and We the number disagree, of and For example, the circuit court mentioned as aggravating factors that Pharmacia knowingly defrauded the state and that virtually all of the inflated AWPs resulted in multiple overpayments. It categorized as a mitigating factor the absence of evidence to suggest that the overpayments went "directly into Pharmacia's pockets." 50 No. 2010AP232-AC conclude that the circuit court acted within the timeline set by the statute. ¶88 Wisconsin Stat. § 805.16(3) states: "If within 90 days after the verdict is rendered the court does not decide a motion after verdict on the record or the judge . . . does not sign an order deciding the motion, the motion is considered denied and judgment shall be entered on the verdict." Pharmacia would have us apply that provision to the facts at hand to mean that "the trial court correctly vacated the answer to Question No. 5 within 90 days of verdict [but] then lost competence to provide a new answer." However, § 805.16(3) cannot sustain such a construction. ¶89 The circuit court did resolve the motion implicated by Wis. Stat. § 805.16(3) within 90 days; it did so by vacating the jury's calculation of violations. The further proceedings were not held to dispose of the motion; rather, those proceedings were required to answer the question left unresolved after the motion's disposition: how many violations of the Medicaid fraud statute did Pharmacia commit? That fact is sufficient to distinguish this case from Brandner v. Allstate Ins. Co., 181 Wis. 2d 1058, 512 N.W.2d 753 (1994), one of the principal authorities relied upon by Pharmacia in the trial court. we deemed a "supplemental decision" a "nullity" There, because the circuit court issued it more than 90 days after the verdict. Id. at 1071. Crucially, however, there were no disputed issues in Brandner left unresolved by the earlier proceedings. Thus it presented a very different circumstance from this case, where 51 No. 2010AP232-AC the circuit court's original post-trial order itself indicated that further proceedings were necessary unresolved matter of great importance.27 to determine an Consequently, a plain language reading of the statute leads us to conclude that it was not violated by the circuit court as have reducing the number of violations. ¶90 Furthermore, we previously observed, the purpose of the timeline established by Wis. Stat. § 805.16(3) is "to prevent unnecessary protraction of litigation." Jos. P. Jansen Co. v. Milwaukee Area Dist. Bd. of Vocational, Technical & Adult Ed., 105 Wis. 2d 1, 9, 312 N.W.2d 813 (1981) (emphasis added) (internal quotation marks and citation omitted). thorough consideration unnecessary. On the of the contrary, issue the can hardly question of Here, a be how called many violations Pharmacia committed for forfeiture purposes was an enormously consequential one for both parties, as well as for the citizens of the state, the remaining defendants, and the pharmaceutical industry as a whole. Indeed, the difference between the jury's tally of violations and the circuit court's was well over one million, an amount that would be amplified considerably by the circuit court's award of a monetary amount for each violation. The circuit court acted properly and within 27 It is also worth noting that even though we regarded the supplemental decision in Brandner as void, we nevertheless upheld it under our discretionary powers because, among other things, the earlier ruling "reflect[ed] [an] incorrect legal analysis." Brandner v. Allstate Ins. Co., 181 Wis. 2d 1058, 1072, 512 N.W.2d 753 (1994). 52 No. 2010AP232-AC the permitted timeframe in ensuring that such an important issue received the extensive briefing, argument, and deliberation that it deserved. ¶91 Finally, it would be absurd to leave the violation calculation at zero, where it would be if Pharmacia were right that the order vacating the jury's answer concerning the number of violations was timely but the subsequent order setting the number of vacated violations the jury's at 4,578 verdict was with not. the The express circuit court intention of reducing the number of violations to an amount supported by the record.28 It preserving the would make number of no sense forfeitures to at read zero the statute when the as only reason they were vacated at all was to supply a reduced number. State ex rel. Kalal v. Circuit Court for Dane Cnty., 2004 WI 58, ¶46, 271 Wis. 2d 633, 681 N.W.2d 110 ("[S]tatutory language is interpreted . . . to avoid absurd or unreasonable results."). As a result, we conclude that the court's ruling was not in violation of Wis. Stat. § 805.16(3). 28 The circuit court noted that "[b]y striking the jury's answer . . . the court is not holding that the answer should be changed to '0.'" It added, "there is clearly evidence in this record that would support the imposition of forfeitures . . . . However, their number cannot be determined without . . . further argument from counsel." 53 No. 3. 2010AP232-AC There was Insufficient Evidence to Support the Number of Violations Found by the Jury and the Circuit Court Was Therefore Required to Vacate that Number ¶92 We now turn to the question of whether the circuit court properly vacated the number of violations found by the jury. To evaluate that decision, we must determine whether there was any credible evidence to support the jury's finding. Hanson, 294 Wis. 2d 149, ¶18. Because the number of violations found by the jury was unsupported by any evidence, we conclude that the circuit court acted properly. ¶93 State's The jury s calculation of violations was based on the theory that Pharmacia violated the Medicaid fraud statute every time the state overpaid for a drug on the basis of an inflated AWP. However, there is no authority to support that theory, which flies in the face of the statute's plain language, as well as every judicial decision on the issue. See, e.g., State v. Menard, Inc., 121 Wis. 2d 199, 358 N.W.2d 813 (Ct. App. 1984); United States v. Bornstein, 423 U.S. 303 (1976); United States v. Ehrlich, 643 F.2d 634 (9th Cir. 1981). Furthermore, there has never been any dispute that the jury's finding of 1,440,000 violations was based solely on the State's legal theory, which the jury adopted despite the fact that the court's instructions contradicted that theory. Because the jury's finding was based on an improper legal definition, there is no evidence to support it and the circuit court was required to vacate the number of violations. 54 No. ¶94 As an initial matter, it is 2010AP232-AC important to clarify whether the jury's error was one of law or fact. The circuit court was itself understandably confused on the issue, expressing uncertainty as to the proper source of authority for vacating the jury's answer.29 The line here is a blurry one, for the jury's error falls near the gray area between law and fact. That is, the jury's finding of 1,440,000 violations flowed from a legal evidence. error but, as a result, it was unsupported by the Stated differently, the jury's finding can only be fairly understood as supported by the evidence if one adopts an erroneous legal theory. ¶95 Such complications might pose a more difficult question in another case, but they are resolved by a simple fact here: the jury was sufficiently instructed by the circuit court to have rejected the State's flawed legal theory. 29 Ultimately, The circuit court was unsure whether the proceedings were properly governed by Wis. Stat. § 805.14(1)(error of fact) or by § 805.15(1)(error of law). Although it is somewhat ambiguous, the circuit court's June 18, 2009 ruling appears to fall more on the side of § 805.14(1). For instance, the circuit court stated that "the court here must enter judgment only based upon the number of statutory violations that the credible evidence, viewed in the light most favorable to the plaintiff within the context of the applicable law, can support." Such language suggests a § 805.14(1) inquiry into whether the jury committed an error of fact. Morden v. Cont'l AG, 2000 WI 51, ¶38, 235 Wis. 2d 325, 611 N.W.2d 659. For the reasons set forth below, we agree that the mistake is best characterized as one of fact, not law, and we therefore bring to bear the § 805.14(1) standard of review. Under that standard we will reverse the circuit court's ruling if there is any credible evidence, direct or inferential, to support the jury's finding. Hanson v. Am. Family Mut. Ins. Co., 2006 WI 97, ¶18, 294 Wis. 2d 149, 716 N.W.2d 866. 55 No. that fact resolves the standard of review. 2010AP232-AC For there can be no error of law by the jury in the legal sense, in the context of a post-verdict motion, where a jury makes a challenged factual finding after accurate instructions from the court. Reduced to its court essence, our system of law entrusts a trial with instructing the jury on the law, and it entrusts the jury with applying the law to the facts. See, e.g., Roehl Transp., Inc. v. Liberty Mut. Ins. Co., 2010 WI 49, ¶¶121-29, 325 Wis. 2d 56, 784 N.W.2d 542. ¶96 In this case, the jury was sufficiently instructed on the relevant law to understand that the State's theory of what constituted a violation was mistaken. They were told, in an instruction of that tracked the language the statute, that Pharmacia committed a violation whenever it made or caused to be made a misrepresentation. There is no logically defensible reading of that instruction that does not clearly contradict the State's theory. This is so because whatever legal significance one chooses to place upon the number of times Medicaid overpaid for Pharmacia drugs, that number cannot represent the number of times Pharmacia "made or caused to be made" any representations. By the time of overpayment, Pharmacia had already reported its AWP, and FDB had already published it to Medicaid. Any fraudulent "statements" had already been communicated and the alleged fraud was complete. The number of times pharmacies were overpaid is merely a consequence of the alleged fraud, not the fraudulent conduct itself. Cf. People v. Pharmacia Corp., 27 Misc. 3d 368, Sup. 374 (N.Y. 56 Ct. 2010) (holding that No. 2010AP232-AC "each . . . inflated price report constitutes the accrual of a separate wrong" in AWP litigation) (emphasis added). Indeed, as a number that reflects the ramifications of the fraud to the injured party, the 1,440,000 violations goes to damages, if it goes to anything, not to forfeitures. See, e.g., White v. Benkowski, 37 Wis. 2d 285, 290, 155 N.W.2d 74 (1967)(noting that compensatory damages are awarded to make the injured party whole for the damage suffered while punitive damages, such as forfeitures, are given to punish the wrongdoer for malice and to deter others from similar conduct). ¶97 Case law confirms our plain language reading of the statute. Three decisions have shaped the debate in this case over what constitutes a violation. None of them supports the State's theory. ¶98 There, The only Wisconsin case among the three is Menard. the regulation court of appeals prohibiting held that price-comparison a violation advertising of a occurred each time an improper advertisement was published, and that each newspaper edition (as opposed to each newspaper containing the advertisement) constituted a separate publication. Wis. 2d at 814. reflected the The court defendant's reasoned culpable that this conduct, Menard, 121 approach given that best each publication of the same advertisement in a different newspaper required an independent act. ¶99 issue in Id. at 815. The United States Supreme Court dealt with a similar Bornstein, a case involving shipments of falsely branded tubes for use in Army radios in violation of the False 57 No. Claims Act. In that decision, the court 2010AP232-AC held that a subcontractor was subject to three statutory forfeitures based on three separate shipments of the falsely branded tubes to the contractor. that the false Bornstein, 423 U.S. at 313. number of forfeitures invoices the defendant Rejecting the argument should "caused reflect to be the number submitted," of the Bornstein court concluded that a forfeiture analysis should be geared to "the specific conduct of the person from whom the Government seeks to collect the forfeiture." reasoning, the deliberately court cause noted the number of false claims. false claims was that contractor and Applying this defendant submit did any not particular Id. at 322. Instead, the number of "completely third the to fortuitous defendant's] knowledge or control." ¶100 The Id. final and beyond [the Id. decision that has shaped the forfeiture debate in this case is that of the Ninth Circuit Court of Appeals in Ehrlich, another case concerning the False Claims Act. In Ehrlich, the Ninth Circuit held that a builder was subject to 76 forfeitures relating to each false monthly statement he made to the government. the reasoning pattern, the of Bornstein Ehrlich 643 F.2d at 638. while court held distinguishing that "if a Applying its person fact knowingly causes a specific number of false claims to be filed, he is liable for an equal number of forfeitures." ¶101 There is no colorable Id. argument, under either the statute or the cases, that Pharmacia committed a violation every time Medicaid overpaid for a drug. 58 As noted, that event is not No. 2010AP232-AC a statement by Pharmacia, by FDB, or by anyone else and it therefore fails to satisfy the plain language of the statute. Moreover, the payment occurs after the completion of the alleged fraud, and so it does not reflect "the specific conduct of the" defendant, Bornstein, 423 U.S. at 313, and it consequently does not form the basis for a forfeiture award. ¶102 The jury did not require this exposition of case law in order to be able to discount the legal theory presented by the State. Equipped with instructions from the circuit court that a violation occurred every time Pharmacia made or caused to be made a misrepresentation, understand that the number the of jury times was in a Medicaid position overpaid to for Pharmacia drugs was not the number of times Pharmacia violated the Medicaid fraud statute. For whatever reason, the jury failed to apply that instruction. Nonetheless, the fact that its the misunderstanding theory does not stemmed operate to from transform State's the flawed legal appropriate legal analysis performed by either the circuit court or this court from a mistake of fact inquiry to a mistake of law inquiry. As the jury was accurately informed, it is the court's role to instruct the jury on the law, not the attorneys'. Reinig, 72 Wis. 388, 392-93, 39 N.W. 861 (1888). Mullen v. The circuit court was required, and so too are we, to presume that the jury followed this instruction and all others. State v. LaCount, 2008 WI 59, ¶23, 310 Wis. 2d 85, 750 N.W.2d 780; cf. Ex parte Par Pharm., Inc., 58 So. 3d 767, 781 (Ala. 2010) (holding that there is "no reason why [a] 59 trial court through careful No. 2010AP232-AC management will not be able to avoid or minimize any prejudice or confusion that might result" from a jury's attempt to understand complex AWP litigation). ¶103 Thus, once the circuit court properly instructed the jury on the law and the jury applied that law to find 1,440,000 violations, the circuit court had no choice but to review the record for evidence supporting that finding. In so doing, it was not required to look at the evidence through the lens of a legal theory that it knew was incorrect. On the contrary, it and we are required to presume the jury obeyed the instructions as given, LaCount, 310 Wis. 2d 85, ¶23, and the circuit court therefore properly reviewed the evidence in the context of those instructions. Kovalic v. DEC Int'l, Inc., 161 Wis. 2d 863, 873 n.7, 469 N.W.2d 224 (Ct. App. 1991). Ultimately, it is of no legal consequence that the jury's erroneous factual finding was based on an erroneous legal theory, because that theory submitted by a party and thus did not bind the jury. Wis. at 392-93. was Mullen, 72 For purposes of ascertaining whether the error was factual or legal, the dispositive fact is that the jury was properly instructed. ¶104 Applying verdicts, we the have standard no for doubt that the vacated the number of violations. simply no evidence factually to directly circuit erroneous court jury correctly This is so because there was or inferentially support the proposition that the number of times Medicaid overpaid for drugs represented the number of times Pharmacia violated the Medicaid fraud statute. For the reasons 60 set forth above, there is No. 2010AP232-AC evidence to support the finding of 1,440,000 violations only if one assumes the veracity of the State's legal theory. Because that legal theory is mistaken, there is no evidence to support the jury's finding and the circuit court was empowered to vacate the finding. 4. The Circuit Court Properly Reduced the Number of Violations to 4,578 ¶105 Having determined that the circuit court was required to reduce the number of violations, the question remains as to whether it reduced the number in the correct amount. To answer that question, we must consider whether the record reveals that the number of violations found by the circuit court was "clearly wrong."30 Richards, 200 Wis. 2d at 671-72. We hold that it was not, and therefore affirm the circuit court's ruling. ¶106 Four approaches the number of violations. have been suggested for calculating We have already rejected one the 30 The "clearly wrong" language cited in this section, and the "any credible evidence" language cited in the section above regarding whether the circuit court properly vacated the jury's answer are actually different iterations of the same standard. That is, "[a] circuit court's decision to change the jury's answer is 'clearly wrong' if the jury verdict is supported by 'any credible evidence.'" Best Price Plumbing, Inc. v. Erie Ins. Exch., 2012 WI 44, ¶30, 340 Wis. 2d 307, __ N.W.2d __ (emphasis added) (citation omitted). Here, because the jury determined the original number of violations, while the circuit court determined the final number, it makes most sense in the context of this case to employ the "any credible evidence" language in our analysis of the circuit court's decision to vacate the jury's answer, and the "clearly wrong" language in our analysis of the circuit court's determination of the actual number of violations. 61 No. 2010AP232-AC State's theory that Pharmacia committed a violation every time Medicaid overpaid for a drug and declined to address another.31 The remaining alternatives are: 1) a violation occurred every time Pharmacia reported an inflated AWP (i.e., every time it transmitted an inflated AWP to FDB which was then conveyed to Medicaid), or 2) a violation occurred every time FDB transmitted an inflated AWP to Medicaid and Medicaid then relied on it at least once in the reimbursement of a pharmacy. The circuit court chose the latter approach, and we agree that it was the appropriate one. ¶107 Beginning with the plain language of the statute, Kalal, 271 Wis. 2d 633, ¶49, the circuit court's calculation of violations is legislature. "[n]o person, consistent Wisconsin in may . . . [k]nowingly statement or with Stat. or representation words chosen § 49.49(4m)(a)2. connection make the with cause of by the provides that medical to be material determining rights to a benefit or payment." assistance, made fact any for false use in By including the phrase, "cause to be made," the legislature made clear that a defendant commits a violation when a third party transgresses the statute in a manner that was caused by the defendant. is precisely what occurred in this case. That Pharmacia reported its AWPs to FDB so that FDB would in turn convey them to Medicaid. 31 The question of whether Pharmacia committed no violations is a question that goes to the question of liability; that question has not been certified and we therefore do not address it. 62 No. 2010AP232-AC It therefore knowingly caused those statements to be made, and the circuit court properly followed the language of the statute. ¶108 Case law bolsters our statutory interpretation. Viewing the cases in this area of law as a whole, we draw the following lesson. Where a defendant perpetrates a fraud, the completion of which requires a third party to act in furtherance of that fraud defendant, actions in the by Bornstein, a manner calculation the 423 third reasonably of foreseeable violations should party. U.S. 303; See Ehrlich, Menard, 121 to include the such Wis. 2d 199; 643 F.2d 634. Indeed, it would be irrational for a forfeiture award to be based on a small number of fraudulent actions by a defendant, when the defendant acts with the knowledge and purpose that a third party will complete the fraud and hugely amplify the consequences of those actions, and when the defendant then benefits greatly from the third party's conduct. ¶109 Applying these principles, we conclude that the circuit court's calculation of violations properly included the number of times FDB transmitted an inflated AWP for a Pharmacia product to Medicaid, and Medicaid then relied upon it at least once in the Pharmacia's reimbursement purpose in process. reporting AWPs ultimate use of state Medicaid agencies. This to is FDB so was because for the While Pharmacia may not have known the precise number of times Medicaid would then access the information (because that number was a function of Medicaid's arrangement with FDB), it knew that its AWPs would only reach Medicaid via FDB. Furthermore, the fraud that the 63 No. 2010AP232-AC jury found Pharmacia liable for committing could not have been realized until the inflated AWPs reached Medicaid through FDB; for until that happened, the inflated AWPs could not have played any role in the calculation of reimbursements, where the injury occurred. drugs, Unlike the number which took place of times after the Medicaid fraud overpaid occurred, for FDB's transmittal of the inflated AWPs was an integral component of the fraud. We therefore conclude that the number of times FDB transmitted to Medicaid an inflated AWP provided by Pharmacia and used at least once by the state in the Medicaid reimbursement process constituted the best measure of how many violations occurred. Accordingly, the circuit court properly reduced the jury's calculation of violations to 4,578, and we affirm its order. V. CONCLUSION ¶110 The court of appeals certified three questions to this court: 1) whether the State was entitled to a jury trial; 2) whether the damages were based on impermissible speculation by the jury; and 3) whether the circuit court properly reduced the number of violations. Because each of these issues was correctly resolved in the circuit court, we affirm. We remand the remaining cause issues. to the court of appeals to resolve the See DeChant v. Monarch Life Ins. Co., 200 Wis. 2d 559, 595 n.2, 547 N.W.2d 592 (1996) (remanding a case to the court of appeals to resolve remaining issues after limiting review to certified questions). 64 No. 2010AP232-AC By the Court. The orders of the circuit court are affirmed and the cause is remanded to the court of appeals. ¶111 ANN WALSH BRADLEY, N. PATRICK CROOKS, and DAVID T. PROSSER, J.J., did not participate. 65 No. 2010AP232-AC
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