Eufaula Drugs, Inc., et al. v. TDI Managed Care Services, Inc. et al
MEMORANDUM OPINION AND ORDER that the parties' Settlement Agreement, the terms of the Settlement as described in the Settlement Agreement and the Notice, and the plan for allocating the Settlement proceeds are APPROVED; that Class Counsel's 192 Petition for Award of Attorneys' Fees and Expenses Related to Class Settlement is GRANTED; that Plaintiffs' 66 Amended Complaint is DISMISSED with prejudice and without costs, except as provided in the Settlement Agreement, as agai nst EHS; that jurisdiction is retained by this Court for the purpose of protecting and implementing the Settlement and the terms of this Order; that the parties' 189 Joint Motion for Preliminary Approval of Class Action Settlement is DENIED as moot; that EHS's 176 Motion for Decertification of Plaintiff Class is DENIED as moot. Signed by Hon. Chief Judge Mark E. Fuller on 11/23/2009. (cc, )
IN THE UNITED STATES DISTRICT COURT FOR T H E MIDDLE DISTRICT OF ALABAMA N O R T H E R N DIVISION E U F A U L A DRUGS, INC., et al., P la in tif f s , v. T D I MANAGED CARE SERVICES, IN C ., et al., ) ) ) ) ) ) ) ) ) )
C A S E NO. 2:05-cv-293-MEF (W O - DO NOT PUBLISH)
M E M O R A N D U M OPINION AND ORDER I . Introduction T h e parties are involved in a class action lawsuit and have reached a Settlement A g re e m e n t. The Court took briefings from the parties and held a Settlement Fairness H e a rin g to determine whether the settlement proposed was fair, reasonable, and adequate. Upon consideration of all matters submitted during the hearing and otherwise, the Court has d e te rm in e d that the proposed Settlement Agreement is due to be approved. II . Jurisdiction and Venue T h is Court has subject matter jurisdiction over this action pursuant to the Class Action F a irn e s s Act of 2005, 28 U.S.C. § 1332(d). The parties do not contest venue, and the Court f in d s an adequate factual basis for venue in this Court. See Eufaula Drugs, Inc. v. TDI M a n a g e d Care Servs., Inc., No. 05-cv-293 (M.D. Ala. Mar. 12, 2009) (concluding that this C o u rt has subject matter jurisdiction and venue is proper).
III. Facts and Procedural History A . Facts P la in tif f s , retail pharmacies, entered into agreements with Defendants ("EHS"), p h a rm a c y benefit management companies, whereby Plaintiffs agreed to dispense prescription m e d ic a tio n to EHS's clients, customers, insureds, and/or members. EHS agreed to reimburse P la in tif f s for filling name-brand medications. The reimbursement amounts were to be d e te rm in e d by using the Average Whole Price ("AWP"), a benchmark price in the industry, a v a ila b le through publication in First Databank, Medispan, and Thomson. Plaintiffs alleged th a t EHS paid them outdated AWPs, thus failing to fully reimburse Plaintiffs. Plaintiffs re m a in in g claims are for breach of contract and injunctive relief. B . Procedural History T h is Court has previously certified a class in this case (Doc. #155), defined as: A ll pharmacies and/or other similar entities, who entered into a contract w h ic h provided for reimbursement of prescriptions according to a formula w h ic h included the [AWP] with EHS and/or its predecessors in interest, th e ir successors in interest, and/or their subsidiaries and/or their related e n titie s from February 14, 1999 to October 23, 2003, inclusive. E x c l u d e d from the class are any pharmacies that previously requested exclusion from the c la s s . T h e parties submitted a proposed Settlement Agreement, setting forth the essential te rm s of the agreement, to the court for preliminary approval and asked the court for an order d ire c tin g notice to the Class Members (Doc. #189). The Court issued an order approving the
"form, substance and requirements of the Notice" submitted by the parties, requiring a m a ilin g of the Notice, and requiring proof by affidavit of such mailings at or before a s c h e d u le d Settlement Fairness Hearing (Doc. #191). Plaintiffs have submitted the required a f f id a v it (Doc. #195-2). The Court also approved the appointment of Administar Services G ro u p s LLC as the Settlement Administrator for the Settlement (Doc. #191). Pursuant to the C o u rt's order, Class Counsel petitioned for attorneys' fees and expenses (Doc. #192). T h e Court held a Settlement Fairness Hearing on Friday, November 6 for the purposes o f determining: 1 . Whether the proposed Settlement of the Action on the terms and conditions p ro v id e d for in the Settlement Agreement is fair, reasonable, and adequate and should b e approved by the Court; 2 . Whether the proposed allocation of the proceeds of the Settlement is fair and re a s o n a b le , and should be approved by the Court; 3 . Whether the application of Class Counsel for Class Counsel Fees and Expenses s h o u ld be granted; 4 . Whether the application of Class Counsel for Class Representative Awards to P la in tif f s should be granted; and 5 . Whether judgment should be entered dismissing the Settled Claims with prejudice in favor of EHS as against all persons or entities who are Class Members herein who h a v e not requested exclusion therefrom.
At the hearing, any member of the class could present arguments and evidence in support of o r in opposition to the settlement. A t the hearing, the parties presented the details of the settlement, as follows: The p a rtie s agreed to settle the case for $2.8 million.1 Plaintiffs' attorneys request a fee of oneth ird of that amount, plus not more than $100,000 in litigation expenses. They also request th a t a $15,000 Class Representative Award be paid to each named plaintiff class re p re se n ta tiv e as compensation for their extensive participation in the litigation. N o tic e was sent to all Class Members, numbering 21,314, through first class mail. The parties also created a website where Class Members could get information on the p ro p o s e d settlement. Nobody objected to the settlement. I V . Findings T h e Court having considered all matters submitted to it at the hearing and otherwise; a n d it appearing that notice of the hearing substantially in the form approved by the Court w a s mailed to all Class Members at the respective addresses set forth in the records of EHS; a n d the Court having considered and determined the fairness and reasonableness of the award o f attorneys' fees and expenses requested; the Court finds as follows: In full compliance with the requirements of 28 U.S.C. § 1715(b), EHS provided notice o f the Settlement to (a) the Attorney General of the United States of America and (b) the a p p ro p ria te State official (as that term is defined in 28 U.S.C. § 1715(a)(2)) of every state in
EHS's expert valued the case at $4.3 million, had plaintiffs prevailed at trial. 4
which a Class Member resides. As further required under 28 U.S.C. § 1715(d), more than n in e ty (90) days have elapsed since the service of such notices on the appropriate State o f f ic ia ls and the Attorney General of the United States. Neither the Attorney General of the U n ite d States nor any appropriate State official has served a written objection to the S e ttle m e n t or appeared at the Settlement Fairness Hearing to interpose an objection to the S e ttle m e n t. A ll parties and their counsel have complied with each requirement of Rule 11 of the F e d e ra l Rules of Civil Procedure as to all proceedings herein. In full compliance with Federal Rule of Civil Procedure 23 and the requirements of d u e process, on July 16, 2009, the Settlement Administrator mailed notices of the proposed s e ttle m e n t by first-class mail to the Class Members as shown on the records maintained by E H S . This notice constituted the best notice practicable under the circumstances, and c o n s titu te d due and sufficient notice to all persons and entities entitled thereto. T h e settlement has been arrived at by arm's-length bargaining. Sufficient discovery h a s been taken or investigation completed to enable counsel and the court to act intelligently. The action involves complex factual and legal issues and was actively prosecuted over four ye a rs and, in the absence of a settlement, would involve further proceedings, including p o s s ib le appeals, with uncertain resolution of the complex factual and legal issues. The p ro p o n e n ts of the settlement are counsel experienced in similar litigation. Class Counsel h a v e conducted the litigation and achieved the Settlement with skill, perseverance, and
diligent advocacy. The number of objectors, of which there are none, is not large when c o m p a re d to the class as a whole. T h e proposed allocation of proceeds is fair and reasonable. The application of Class C o u n s e l for fees and expenses is appropriate and is consistent with awards in similar cases. Therefore, the Settlement Agreement, the terms of the Settlement as described in the S e ttle m e n t Agreement and the Notice, and the plan for allocating the Settlement proceeds are f a ir, reasonable, and adequate. V . Conclusion A c c o rd in g ly, it is hereby O R D E R E D that: (1 ) The parties' Settlement Agreement, the terms of the Settlement as described in the S e ttle m e n t Agreement and the Notice, and the plan for allocating the Settlement proceeds are A P P R O V E D . The Class Members and parties to the Settlement Agreement are DIRECTED h e re b y to consummate the Settlement in accordance with the terms and conditions set forth in the Settlement Agreement. Class Counsel, counsel for EHS, and the Settlement
A d m in is tra to r are DIRECTED to administer the Settlement in accordance with its terms and p r o v is io n s . Without further order of the Court, the parties may agree to reasonable
e x te n s io n s of time to carry out any of the provisions of the Settlement; (2 ) Class Counsel's Petition for Award of Attorneys' Fees and Expenses Related to C la s s Settlement (Doc. #192) is GRANTED. The effectiveness of the provisions of this
Order and the obligations of the Plaintiffs and EHS under the Settlement shall not be c o n d itio n e d upon or subject to the resolution of any appeal from this Order that relates solely to the issue of Class Counsel's Petition for Award of Attorneys' Fees and Expenses Related to Class Settlement; (3 ) Plaintiffs' Amended Complaint (Doc. #66) is DISMISSED with prejudice and w ith o u t costs, except as provided in the Settlement Agreement, as against EHS; (4 ) Due and adequate notice of the proceedings having been provided to the Class M e m b e rs , and a full opportunity having been offered to them to participate in the Settlement F a irn e s s Hearing, all Class Members are bound by this Order; (5 ) Plaintiffs and Class Members, on behalf of themselves and their respective o f f ic e rs , directors, owners, shareholders, principals, affiliates, subsidiaries, parent c o rp o ra tio n s , members, partners, employees, agents, attorneys, and all persons acting for th e m , past or present, are hereby permanently barred and enjoined from instituting, c o m m e n c in g or prosecuting any and all claims in law or in equity and any and all claims, d e m a n d s , actions, causes of action, obligations, damages, liabilities, loss, costs, penalties, or e x p e n s e s , including attorneys' fees of any kind or nature whatsoever, past or present, a s c e rta in e d or unascertained, whether or not known, suspected, or claimed from the b e g in n in g of time through and including the Effective Date including, without limitation th o s e arising out of or in any way related to the Action, that have been or could have been a s s e rte d in the Action by the Class Members or any of them against any of the Released
Parties arising out of or in any way relating to reimbursement of brand name prescription d ru g claims under Class Members' contracts with EHS. "Released Parties" means EHS and its past and present shareholders, principals, parent corporations, affiliates, subsidiaries, p re d e c e s s o rs and successors, and each of their past and present officers, directors, owners, s h a re h o ld e rs , principals, members, partners, employees, agents, attorneys, insurers, and a s s ig n s of any of the foregoing, and all persons acting for them, past or present; (6 ) Plaintiffs and all Class Members are hereby permanently barred and enjoined from f ilin g , commencing, prosecuting, intervening in, participating in as Class Members or o th e rw is e , or receiving any benefits or other relief from any other lawsuit in any state, te rrito ria l or federal court, or any arbitration or administrative or regulatory or other p r o c e e d in g in any jurisdiction, which asserts claims based on or in any way related to the S e ttle d Claims. This Court shall retain exclusive continuing jurisdiction to enforce the in ju n c tio n provided for in this paragraph; (7 ) Jurisdiction is retained by this Court for the purpose of protecting and im p le m e n tin g the Settlement and the terms of this Order, including the resolution of any d is p u te s that may arise with respect to the effectuation of any of the provisions of the S e ttle m e n t, and for the entry of such further orders as may be necessary or appropriate in a d m in is te rin g and implementing the terms and provisions of the Settlement and this Order; (8) Given that the proposed settlement has been approved by this Court, the parties' J o in t Motion for Preliminary Approval of Class Action Settlement (Doc. #189) is DENIED
as moot. For the same reason, EHS's Motion for Decertification of Plaintiff Class (Doc. # 1 7 6 ) is DENIED as moot; (9 ) Neither this Order, the Settlement, nor any of its terms and provisions, nor any of th e negotiations or proceedings connected with it, nor any of the documents or statements re f e rre d to therein shall constitute any evidence or admission by or against any Plaintiffs, C la s s Members, or EHS on any matter, except as necessary to enforce this Order or the S e ttle m e n t. Similarly, no part of the amounts to be paid by EHS pursuant to the Settlement A g re e m e n t constitutes a fine or penalty under any law or a payment to settle any actual or p o te n tia l liability for a fine or penalty under any law; and (1 0 ) A separate final judgment will be entered consistent with this Memorandum O p in io n and Order. D O N E this the 23rd day of November, 2009.
/s/ Mark E. Fuller CHIEF UNITED STATES DISTRICT JUDGE
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?