18th Annual Workplace Class Action Report - 2022 Edition

Annual Workplace Class Action Litigation Report: 2022 Edition 311 Negron, et al. v. Cigna Health & Life Insurance Co., 2021 U.S. Dist. LEXIS 95608 (D. Conn. May 20, 2021). Plaintiffs, a group of health insurance plan participants, filed a class action alleging that Defendants fraudulently schemed to overcharge millions of people for prescription drugs in violation of the terms of their health plans pursuant to the ERISA. Plaintiffs filed a motion for class certification pursuant to Rule 23. The Court denied the motion. It found that there were material differences in language among the thousands of health plans at issue, which actually governed whether Plaintiffs had suffered the same injury or any injury at all. Plaintiffs asserted that all plans uniformly stated that members "may be required to pay a portion of the Covered Expenses," which Plaintiffs claimed was expressly defined to include co-payments and deductibles. Id . at *5. Plaintiffs characterized the "claw-backs" of the difference or "spread" between the member charge and the pharmacy fee were illegal "overcharges," because their pharmacies charged them drastically more for prescription drugs than they were required to pay under their health plans, which Plaintiffs argued had capped their co-payments and deductibles at the pharmacies’ transaction fee. Id . at *6-7. Defendant argued that the design of the plans was the result of a "choice that each employer makes." Id . at *7. The Court reasoned that Plaintiffs sought to certify as a class members of potentially thousands of plans involving as many as 500 million transactions. The Court opined that the ambiguities that needed to be resolved under the various plans would become infeasible once it would be required to consider thousands of plan documents. For these reasons, the Court ruled that the specific plans identified by Defendant and the fact that they required individual-specific reference to terms in the plans outside the class definition defeated any assertion of commonality or predominance. Id . at *53. Accordingly, the Court denied Plaintiffs’ motion for class certification. (iii) Third Circuit Boley, et al. v. Universal Health Services, 337 F.R.D. 626 (E.D. Penn. 2021). Plaintiffs, a group of participants in their former employer’s defined contribution plan, filed a class action alleging that the Plan’s fiduciaries breached their fiduciary duties in violation of the ERISA. Plaintiffs filed a motion for class certification pursuant to Rule 23, and the Court granted the motion. Plaintiffs asserted that Defendants retained more expensive and under-performing funds despite the availability of lower cost funds, failed to monitor excessive recordkeeping and administrative fees and costs relative to similar plans, offered an excessively expensive menu of investment options, and failed to monitor their appointees. Id at 629. Plaintiffs asserted that they met the Rule 23(a) requirements because: (i) the Plan consisted of over 60,000 participants during the class period; (ii) Plaintiffs and the class members had the same overarching claims for which questions of law and fact applied; (iii) all Plan participants suffered the same or similar injuries; and (iv) class counsel would adequately represent the interests of all Plan participants. Id . at 629-30. Defendants argued that Plaintiffs’ claims were not common nor typical of the claims of the putative class because: (i) the claims of were subject to individualized defenses available to fiduciaries under § 404(c); (ii) individualized factual determinations would be required to determine whether the claims were untimely under the ERISA’s statute of limitations; and (iii) Plaintiffs only invested in a few of the investment options available to the Plan. Id . at 630-31. The Court agreed with Plaintiffs and found that the class met the requirements of Rule 23(a). The Court also determined that certification pursuant to Rule 23(b)(1) was appropriate because Plaintiffs’ claims focused on Defendants’ conduct in administering the Plan, as this involved facts which were identical for all class members, rather than any individual Plan participants’ circumstances. Id . at 639. For these reasons, the Court granted Plaintiffs’ motion for class certification. (iv) Fourth Circuit Peters, et al. v. Aetna Inc., 2 F.4th 199 (4th Cir. 2021). Plaintiff, a participant in Mars, Inc.’s ("Mars") self- funded healthcare plan ("the Plan"), filed a class action alleging that Defendants breached their fiduciary duties to the Plan based on Defendant Aetna’s arrangement to have the Plan and its participants pay certain administrative fees pursuant to an agreement between Aetna and benefit provider Optum. The District Court denied Plaintiffs’ motion class certification, and on appeal, the Fourth Circuit reversed and remanded. Plaintiff sought class certification of two classes, including: (i) participants or beneficiaries of self-insured ERISA health insurance plans administered by Aetna for which responsibility for a claim was assessed using an agreed rate between Optum and Aetna that exceeded the provider’s contracted rate with Optum for the treatment provided; and (ii) all participants or beneficiaries of ERISA health insurance plans insured or administered by Aetna for whom co-insurance responsibility for a claim was assessed using an agreed rate between Optum and Aetna that exceeded the provider’s contracted rate with Optum for the treatment provided. Id . at 242. The District Court