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Corcoran v. CVS Health

United States District Court, N.D. California

November 22, 2019

Christopher Corcoran, et al., Plaintiffs,
CVS Health, et al., Defendants.



         Plaintiffs bring this putative class action against defendants alleging that they knowingly overcharged millions of insured patients by submitting falsely inflated drug prices to pharmacy benefit managers (“PBMs”) and third-party payor insurance providers (“TPPs”), which resulted in higher copayment obligations for plaintiffs. Specifically, plaintiffs raise claims under the laws of eleven states: (i) each state's statutory laws proscribing unfair and deceptive acts and practices (“UDAP”); and common law claims for (ii) fraud, (iii) negligent misrepresentation, and (iv) unjust enrichment.

         Now before the Court are the following motions: First, plaintiffs move to substitute class representatives and for certification of New York and Arizona classes based on these two substituted class representatives.[1] Second, plaintiffs move for approval of the notice provider, Angeion Group LLC, and for approval of the class notice program.

         Having carefully reviewed the pleadings, the papers submitted on each motion, the parties' oral arguments at the hearing held on November 12, 2019, and for the reasons set forth more fully below, the Court Orders as follows: The Court Grants plaintiffs' amended motion to substitute class representatives and for certification of New York and Arizona classes. The Court Grants in part and Denies in part plaintiffs' motion for approval of the notice provide and class notice program.


         The facts of the case are well known to the parties and counsel of record. The background relevant to the instant motion is summarized as follows.

         On September 5, 2017, the Court granted in part plaintiffs' prior motion for class certification, granted in part defendants' motion to exclude certain opinions by an expert witness, and granted defendants' motion for summary judgment. Corcoran v. CVS Health, 15-cv-03504-YGR, Dkt. No. 327, 2017 WL 3873709, at *20-21 (N.D. Cal. Sept. 5, 2017) (“September 2017 Order”). The Court denied in part the motion for class certification based on the representatives of the proposed New York and Arizona classes failing to meet the requirements of Rule 23(a)- specifically, typicality and adequacy. Id. at *6, 21. The Court concluded that the proposed class representatives did not have any qualifying transactions, and thus, denied without prejudice plaintiffs' motion to certify a New York and Arizona class. Id.

         On June 12, 2019, the Ninth Circuit issued a memorandum decision reversing and remanding the September 2017 Order. Corcoran v. CVS Health Corporation, 779 F. App'x. 431 (9th Cir. 2019). Specifically, the Ninth Circuit reversed the Court's holdings that certain materials and issues failed to create a triable issue, Id. at 433-34, with respect to narrowing the classes on typicality grounds, Id. at 434, and in striking plaintiffs' expert witness' testimony. Id. at 434-35.

         On August 23, 2019, the Court issued an order complying with the Ninth Circuit's mandate by denying the motion to strike plaintiffs' expert witness, and denying defendants' motion for summary judgment, and by certifying the following class without limitation:

All CVS customers in California, Florida, Illinois, and Massachusetts, who, between November 2008 and July 31, 2015 (the “Class Period”), (1) purchased one or more generic prescription drugs that were offered through CVS's Health Savings Pass (“HSP”) program at the time of the purchase; (2) were insured for the purchase(s) through a third-party payor plan administered by one of the following pharmacy benefit managers: Caremark/PCS, Express Scripts, Medco, MedImpact, or Optum/Prescription Solutions (prior to January 29, 2015); and (3) paid CVS an out-of-pocket payment for the purchase greater than the HSP price for the prescription.

Corcoran v. CVS Health, 15-cv-03504-YGR, Dkt. No. 371, 2019 WL 3987671, at *1 (N.D. Cal. Aug. 23, 2019) (“August 2019 Order”).

         Recognizing that the September 2017 Order had denied plaintiffs' motion to certify a New York and Arizona class without prejudice, the Court permitted plaintiffs a limited period to identify an appropriate representative for each class and permitted the parties to engage in appropriate discovery and motion practice on the proposed class representatives. Id. at *2. The Court also noted in the August 2019 Order that:

[D]uring the case management conference on August 19, 2019, defendant indicated that the Court had not addressed certain elements of class certification in the September 2017 order. In the September 2017 order, the Court explained that it did not address certain of defendant's arguments because, either it had previously rejected them and so, for the same reasons, did so again (see Dkt. No. 327 at 7 n.4, 8), or the arguments were mooted by the Court's decisions elsewhere within the September 2017 order (see Id. at 10-11).

Id. at *1 n.1.[2] Plaintiffs so moved to certify New York and Arizona classes, identifying Joseph Luzier and Aaron Allen as class representatives for the New York class, and Darlene McAfee as the class representative for the Arizona class. Plaintiffs further moved for approval of the notice provider, class notice program, and forms of notice. For the good cause shown in plaintiffs' administrative motion, the Court permitted plaintiffs to substitute Allen and Luzier, the initially proposed New York class substitutes, with Stephen Sullivan.

         Having identified McAfee for the Arizona class and Sullivan for the New York class, plaintiffs now seek to certify two additional state classes composed of individuals from New York and Arizona who “have filled prescriptions for generic drugs at CVS pharmacies using coverage provided by their [TPP] plans.” (Dkt. No. 101, Third Amended Complaint (“TAC”) ¶ 10.)


         A. Motion for Class Certification

         Under Federal Rule of Civil Procedure 23(a), a court may certify a class only where “(1) the class is so numerous that joinder of all members is impracticable; (2) there are questions of law or fact common to the class; (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class; and (4) the representative parties will fairly and adequately protect the interests of the class.” Fed.R.Civ.P. 23(a). Courts refer to these four requirements as “numerosity, commonality, typicality[, ] and adequacy of representation.” Mazza v. Am. Honda Motor Co., Inc., 666 F.3d 581, 588 (9th Cir. 2012).

         Once the threshold requirements of Rule 23(a) are met, plaintiffs must then show “through evidentiary proof” that a class is appropriate for certification under one of the provisions in Rule 23(b). Comcast Corp. v. Behrend, 569 U.S. 27, 33 (2013).

         “[A] court's class-certification analysis must be ‘rigorous' and may ‘entail some overlap with the merits of the plaintiff's underlying claim.'” Amgen, Inc. v. Conn. Ret. Plans & Trust Funds, 568 U.S. 455, 456-66 (2013) (quoting Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 351 (2011)); see also Mazza, 666 F.3d at 588. The Court considers the merits to the extent they overlap with the Rule 23 requirements. Ellis v. Costco Wholesale Corp., 657 F.3d 970, 983 (9th Cir. 2011). The Court must resolve factual disputes as “necessary to determine whether there was a common pattern and practice that could affect the class as a whole.” Id. (emphasis in original). “When resolving such factual disputes in the context of a motion for class certification, district courts must consider ‘the persuasiveness of the evidence presented.'” Aburto v. Verizon Cal., Inc., No. 11-CV-03683, 2012 WL 10381, at *2 (C.D. Cal. Jan. 3, 2012) (quoting Ellis, 657 F.3d at 982), abrogated on other grounds as recognized by Shiferaw v. Sunrise Sen. Living Mgmt., Inc., No. 13-CV-2171, 2014 WL 12585796, at *24 n.16 (C.D. Cal. June 11, 2014). “A party seeking class certification must affirmatively demonstrate [its] compliance with the Rule.” Dukes, 564 U.S. at 350. Ultimately, the Court exercises its discretion to determine whether a class should be certified. Califano v. Yamasaki, 442 U.S. 682, 703 (1979).

         B. Motion for Approval of Class Notice Provider and Class Notice Program

         “For any class certified under Rule 23(b)(3) . . . the court must direct to class members the best notice that is practicable under the circumstances, including individual notice to all members who can be identified through reasonable effort.” Fed.R.Civ.P. 23(c)(2)(B). “The notice may be by one or more of the following: United States mail, electronic means, or other appropriate means.” Id. The notice “must clearly and concisely state in plain, easily understood language”:

(i) the nature of the action; (ii) the definition of the class certified; (iii) the class claims, issues, or defenses; (iv) that a class member may enter an appearance through an attorney if the member so desires; (v) that the court will exclude from the class any member who requests exclusion; (vi) the time and manner for requesting exclusion; ...

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