Mayo Clinic adds its weight to class action lawsuit of CSL

THE Mayo Clinic, one of the most prestigious and well-funded hospitals in the US, has joined a multi-million-dollar class action lawsuit against the Australian blood plasma group CSL, claiming it was part of a damaging international cartel that fixed plasma prices.

By InvestSMART · 15 Feb 2010

By InvestSMART ·
15 Feb 2010

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It is the 19th plaintiff and most high profile to date to sign up to the civil action against CSL, its chief US rival Baxter International and the Plasma Protein Therapeutics Association, a peak body and advocate for the world's leading plasma collectors and producers.

Documents filed with the Illinois Northern District Court show the Mayo Clinic citing anti-trust litigation as the reason for its case.

The Mayo Clinic, based in Rochester, Minnesota, is the largest integrated, not-for-profit group practice in the world with more than 3300 doctors, scientists and researchers and 46,000 allied health staff across three locations.

The hospital, often a refuge for sickly Hollywood stars and world leaders, is unlikely to have joined the lawsuit against CSL and its competitor in a desperate grab for cash - its latest financial report shows revenue of $US7.22 billion ($8.1 billion) and assets of $US8.33 billion.

The lawsuit has gathered pace and size since it was launched in July by Pemiscot Memorial Hospital, a small, publicly owned hospital in Missouri, as hospitals across the US have signed up as plaintiffs.

The lawsuit has also pulled in the University of Utah and other medical organisations such as California's Comprehensive Blood & Cancer Centre, MAK Medical and Barnes Drug Stores.

The US plaintiffs are seeking more than $US100 million in damages and demanding a trial by jury. The action stems from last year's failed attempt by CSL to buy one of its US competitors, Talecris Biotherapeutics.

Specialty class action law firms seized on comments by the US Federal Trade Commission when it blocked the deal that CSL and players in the global plasma industry had operated a "tight oligopoly" engaging in market rigging and limiting the supply of life-saving therapies to push up prices.

The FTC's anti-trust allegations have never been tested in court.

CSL has consistently argued the claims are without merit and unsupported by fact. It would vigorously defend the civil action.

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Frequently Asked Questions about this Article…

What is the class action lawsuit against CSL about and who is alleging wrongdoing?

The civil action alleges CSL was part of an international cartel that fixed plasma prices and limited supply of plasma therapies. US hospitals and medical organisations — now including the Mayo Clinic — have joined the suit claiming anti‑trust violations tied to the global plasma industry.

Which organisations have joined the lawsuit as plaintiffs and how significant is the Mayo Clinic's involvement?

The case began with Pemiscot Memorial Hospital and has attracted a growing list of US plaintiffs such as the University of Utah, California’s Comprehensive Blood & Cancer Centre, MAK Medical, Barnes Drug Stores and others. The Mayo Clinic is the 19th and most high‑profile plaintiff to sign up, citing anti‑trust litigation as its reason for joining.

Who are the defendants named in the class action against CSL?

The lawsuit names CSL, its chief US rival Baxter International, and the Plasma Protein Therapeutics Association (a peak body representing leading plasma collectors and producers) as parties in the civil action.

How much are the US plaintiffs seeking in damages and what legal relief are they asking for?

US plaintiffs are seeking more than US$100 million in damages and have demanded a trial by jury, according to court documents filed in the Illinois Northern District Court.

What role did the US Federal Trade Commission (FTC) play in this dispute?

The FTC blocked CSL’s proposed acquisition of US competitor Talecris and said industry players operated a "tight oligopoly" that engaged in market rigging and limited supply to push up prices. The article notes those FTC anti‑trust allegations have not been tested in court.

Why might the Mayo Clinic join the class action if it is financially strong?

The Mayo Clinic formally cited anti‑trust litigation as the reason for joining. The article highlights Mayo’s large scale and resources — reporting roughly US$7.22 billion in revenue and US$8.33 billion in assets — suggesting its participation is driven by the legal and competition issues rather than financial desperation.

How has CSL responded to the class action and the allegations of price‑fixing?

CSL has consistently argued the claims are without merit and unsupported by fact, and the company says it will vigorously defend the civil action.

What should everyday investors watch for next regarding the CSL class action?

Investors may want to monitor court filings in the Illinois Northern District Court, any increase in plaintiff numbers (the suit has been growing), announcements from the FTC about further action, and CSL’s public statements. The article also flags the connection to the failed Talecris takeover as the catalyst for the litigation and notes plaintiffs are pursuing more than US$100 million in damages.