Sherman v. CVS Health Corporation et al
Filing
9
MEMORANDUM AND ORDER granting (6) Motion to Consolidate Cases in case 1:17-cv-00378-WES-LDA; granting (6) Motion to Consolidate Cases in case 1:17-cv-00399-WES-PAS; granting (6) Motion to Consolidate Cases in case 1:17-cv-00425-WES-PAS. So Ordered by Chief Judge William E. Smith on 12/6/2017. (Jackson, Ryan)
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF RHODE ISLAND
ALISON SHERMAN, Derivatively on
behalf of CVS HEALTH CORPORATION,
)
)
)
Plaintiff,
)
)
v.
)
)
LARRY J. MERLO, DAVID M. DENTON,
)
DAVID W. DORMAN, RICHARD J.
)
SWIFT, C. DAVID BROWN II, JEAN)
PIERRE MILLON, ANNE M. FINUCANE,
)
TONY L. WHITE, WILLIAM C. WELDON, )
NANCY-ANN M. DEPARLE, RICHARD M.
)
BRACKEN, and ALECIA A. DECOUDREAUX,)
)
Defendants,
)
)
and
)
)
CVS HEALTH CORPORATION, a
)
Delaware corporation,
)
)
Nominal Defendant.
)
)
___________________________________)
)
)
ELIE FEGHALI, Derivatively on
)
behalf of CVS HEALTH CORPORATION, )
)
Plaintiff,
)
)
v.
)
)
LARRY J. MERLO, DAVID M. DENTON,
)
DAVID W. DORMAN, RICHARD J.
)
SWIFT, C. DAVID BROWN II, JEAN)
PIERRE MILLON, ANNE M. FINUCANE,
)
TONY L. WHITE, WILLIAM C. WELDON, )
NANCY-ANN M. DEPARLE, RICHARD M.
)
BRACKEN, and ALECIA A. DECOUDREAUX,)
)
Defendants,
)
)
C.A. No. 17-378 WES
C.A. No. 17-399 WES
and
)
)
CVS HEALTH CORPORATION, a
)
Delaware corporation,
)
)
Nominal Defendant.
)
)
___________________________________)
)
ALAN BANCHALTER, Derivatively on
)
behalf of CVS HEALTH CORPORATION, )
)
Plaintiff,
)
)
v.
)
)
LARRY J. MERLO, DAVID M. DENTON,
)
DAVID W. DORMAN, RICHARD J.
)
SWIFT, C. DAVID BROWN II, JEAN)
PIERRE MILLON, ANNE M. FINUCANE,
)
TONY L. WHITE, WILLIAM C. WELDON, )
NANCY-ANN M. DEPARLE, RICHARD M.
)
BRACKEN, and ALECIA A. DECOUDREAUX,)
)
Defendants,
)
)
and
)
)
CVS HEALTH CORPORATION, a
)
Delaware corporation,
)
)
Nominal Defendant.
)
___________________________________)
C.A. No. 17-425 WES
MEMORANDUM AND ORDER
WILLIAM E. SMITH, Chief Judge.
This matter is before the Court on a joint motion (ECF No. 6)
filed
by
Plaintiffs
Alison
Sherman,
Elie
Feghali,
and
Alan
Banchalter (collectively, "Plaintiffs"); and Defendants Larry J.
Merlo, David M. Denton, David W. Dorman, Richard J. Swift, C. David
Brown II, Jean-Pierre Millon, Anne M. Finucane, Tony L. White,
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William C. Weldon, Nancy-Ann M. DeParle, Richard M. Bracken, Alecia
A. DeCoudreaux (collectively, “Defendants"); and nominal defendant
CVS Health Corporation ("CVS Health" or the "Company"). The joint
motion asks the Court to consolidate, appoint lead counsel and
liaison counsel, and stay the above-captioned actions pending the
resolution of related actions. For the reasons cited therein, the
Court
hereby
GRANTS
the
parties’
joint
motion
and
ORDERS
as
follows:
1.
The following actions shall be consolidated before this
Court for all purposes, including pre-trial proceedings and trial
(the "Consolidated Derivative Action"):
•
Sherman v. Merlo, C.A. No. 17-378 WES
•
Feghali v. Merlo, C.A. No. 17-399 WES
•
Banchalter v. Merlo, C.A. No. 17-425 WES
2.
Every
pleading
filed
in
the
Consolidated
Derivative
Action, or any separate action included herein, must bear the
following caption:
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF RHODE ISLAND
IN RE CVS HEALTH CORPORATION
DERIVATIVE LITIGATION
)
)
)
______________________________)
)
This Document Relates To:
)
)
ALL ACTIONS.
)
______________________________)
Lead C.A. No. 17-378 WES
(Consolidated with C.A. Nos.
17-399 WES and 17-425 WES)
(Derivative Action)
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3.
The files of the Consolidated Derivative Action will be
maintained in one file under Lead C.A. No. 17-378 WES. This order
granting consolidation applies to each case arising out of the
same, or substantially the same, transactions or events as the
Consolidated Derivative Action, which is subsequently filed in,
removed to, or transferred to this Court.
4.
Defendants are not required to respond to the complaints
in these actions or to the complaint in any action consolidated
into this action, other than a final consolidated complaint or a
complaint designated as the operative complaint, in which case
Defendants shall have 30 days from the filing of such final or
operative complaint to move against or answer that complaint. In
the event that this stay terminates before the filing of a final
consolidated complaint or a complaint designated as the operative
complaint, and unless otherwise ordered by the Court or agreed
among the Parties, Defendants shall move against or answer the
complaints in these actions within 30 days of the termination of
the stay.
5.
Pursuant to Rule 5(b)(2)(E)-(F) of the Federal Rules of
Civil Procedure, service by e-mail transmission shall be permitted
in
addition
participants,
to
service
service
via
shall
ECF
be
transmission.
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notification.
deemed
For
effective
non-CM/ECF
upon
e-mail
6.
serve
as
Robbins Arroyo LLP and Gainey McKenna & Egleston shall
co-lead
counsel
for
Plaintiffs
in
the
Consolidated
Derivative Action. Co-lead counsel shall have authority to speak
for Plaintiffs in matters regarding pre-trial and trial procedure
and settlement negotiations, and shall make all work assignments
in such a manner as to facilitate the orderly and efficient
prosecution of the Consolidated Derivative Action, and to avoid
duplicative or unproductive efforts. Moore, Virgadamo & Lynch,
Ltd., and Motley Rice, LLC, shall serve as co-liaison counsel in
the Consolidated Derivative Action.
7.
The
Consolidated
Derivative
Action
and
any
and
all
deadlines in that Action shall be stayed pending the resolution of
Texas ex rel. Winkelman v. CVS Health Corp., No. D-1-GV-14000388
(Tex. Dist. Ct. - Travis Cty., filed April 7, 2014; unsealed Jan.
5, 2017) and Corcoran v. CVS Health Corp., No. 15-cv-03504 (N.D.
Cal., filed July 30, 2015) – including the exhaustion of any and
all appeals in those actions – and consistent with the paragraphs
below.
8.
With regard to the Sherman, Feghali, and Banchalter
complaints, and with regard to any amendment or supplement to the
complaints (including any consolidated complaint) that elaborates
upon facts or claims relating to acts or transactions alleged in
the original complaints, or that asserts new legal theories of
recovery based upon the acts or transactions that formed the
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substance
of
the
original
Sherman,
Feghali,
and
Banchalter
complaints, any challenge to Plaintiffs' standing to maintain the
derivative actions (or Consolidated Derivative Action) on the
ground that Plaintiffs have failed to plead facts sufficient to
raise a reasonable doubt that a pre-litigation demand on the
Company's Board of Directors ("Board") would have been futile shall
be determined based on the membership of the Company’s Board on
the date Plaintiffs filed their original complaints (August 16,
2017, August 28, 2017, and September 12, 2017, respectively).
9.
In
the
event
that
Plaintiffs
amend
their
complaint
(including in a consolidated complaint) to include materially
different facts and/or claims, any such challenge to those new or
materially
amended
membership
of
the
claims
Board
shall
as
of
be
the
determined
date
of
based
the
on
the
amended
(or
consolidated) complaint.
10.
Defendants agree to provide Plaintiffs with reasonable
notice of the filing during the pendency of the stay of any lawsuit
asserting derivative claims on behalf of CVS Health that are
similar to the claims asserted in the complaints.
11.
Should a lawsuit asserting similar derivative claims on
behalf of CVS Health be filed during the pendency of the stay, and
should the plaintiff in any such action refuse to stay that laterfiled lawsuit, any Party may lift the stay in this Consolidated
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Derivative Action by providing 10 days' written notice to all
Parties and to the Court.
12.
The fact that the Parties have entered into this stay
shall not be used in any way to prejudice any of the Parties in
this Consolidated Derivative Action.
13.
Within 14 days of the date that any lifting of the stay
takes effect, the Parties shall meet and confer to reach an
agreement regarding a schedule for filing and responding to any
amended or consolidated complaint. In no event shall Defendants'
response to any complaint be due sooner than the later of 30 days
after the Motion is decided or 30 days after the stay is lifted.
14.
Unless the Court instructs otherwise, the Parties will
file with the Court a status update regarding this case every 120
days.
IT IS SO ORDERED:
William E. Smith
Chief Judge
Date: December 6, 2017
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