OptumRx Gets New Bid To Force 430 Pharmacies To Arbitrate Over Contract Claims

The United States Court of Appeals for the Third Circuit is on display in Philadelphia, Pennsylvania, US, June 10, 2021. REUTERS/Andrew Kelly

(Reuters) – Pharmacy benefits manager OptumRx has yet to get a chance to force more than 400 pharmacies in 47 states to arbitrate their breach of contract claims against it, a federal appeals court held Thursday.

The 3rd panel of the US Circuit Court of Appeals said the lower court rightly rejected OptumRx’s 2018 motion to enforce arbitration but was wrong to rule it out entirely, based on the pharmacies’ unproven claim that Optum had hidden the arbitration clause in a document they were not allowed to see.

Rather than treat that disputed claim as fact, the judge should have ordered a limited exchange of information between the parties and allowed OptumRx to file a new motion to enforce arbitration based on what it learned. , said the 3rd Circuit.

However, nearly half of Thursday’s opinion was devoted to a question raised by the appellate court itself: whether the Class Action Fairness Act (CAFA) allows plaintiffs to file “massive claims” like this in federal court.

Under CAFA, a mass action is one in which at least 100 plaintiffs have procedurally joined their individual lawsuits, and where the total amount in dispute is at least $5 million. The law provides that defendants can “remove” mass claims in federal court, but does not say whether plaintiffs can file them there.

No federal appeals court has fully answered that question, although two have noted that the answer is unclear.

OptumRx argued that CAFA was intended as a bulwark against forum shopping by the plaintiffs’ bar, allowing only defendants to remove mass actions in federal court.

The 3rd Circuit agreed with the pharmacies, saying that CAFA is “best read” because it allows mass actions to be filed in federal court as long as they meet the statute’s other requirements.

The pharmacies’ massive action met those requirements, the 3rd Circuit said.

Their lawsuit, filed in federal court in western Pennsylvania in 2016, accused Optum of underpayment and unfair business practices.

Nearly all pharmacies had negotiated their contracts with OptumRx through intermediaries known as pharmacy services administrative organizations (PSAOs). The pharmacies said the contracts they received contained a separate document, which contained the arbitration clause, but that Optum forbade the PSAOs from sharing that document with them — a claim Optum denied.

The company and lawyers for both parties did not immediately respond to requests for comment on Thursday.

The case is Robert D. Mabe Inc et al v. OptumRx, successor by merger of Catamaran Corp., 3rd US Circuit Court of Appeals, No. 21-2192.

For OptumRx: Lucas Townsend of Gibson Dunn & Crutcher

For the pharmacies: Mark Cuker

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