Mabe v. Optumrx

• Docket Number: Civil Action 3:17-CV-01102
• Decision Date: 22 July 2024
• Parties: ROBERT D. MABE et al., Plaintiffs, v. OPTUMRX, Defendant.
• Court: U.S. District Court — Middle District of Pennsylvania

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ROBERT D. MABE et al., Plaintiffs, v. OPTUMRX, Defendant.

Civil Action No. 3:17-CV-01102

United States District Court, M.D. Pennsylvania

July 22, 2024

MEMORANDUM

KAROLINE MEHALCHICK, United States District Judge

Before the Court is a mass action initially filed on June 22, 2017 by over 400 Plaintiff-pharmacies (“Plaintiffs”) against pharmacy benefits manager, OptumRx. (Doc. 1; Doc 36). The operative second amended complaint was filed on February 13, 2018. (Doc. 36). Therein, Plaintiffs allege claims of breach of contract and breach of the duties of good faith and dealing, as well as violations of various state statutes. (Doc. 1). Presently before the Court is OptumRx's renewed motion to compel arbitration under the standard set forth in Federal Rule of Civil Procedure 56 filed after limited discovery on the issue of arbitrability and in consideration of the Third Circuit's ruling on OptumRx's previous motion to compel arbitration asserted under Rule 12. (Doc. 42; Doc. 336); see Robert D. Mabe, Inc. v. OptumRX, 43 F.4th 307 (3d Cir. 2022). Also before the Court is Plaintiffs' motion for summary judgment on the issue of arbitration.^[1] (Doc. 335). As detailed below, Plaintiffs' motion for summary judgment (Doc. 335) will be DENIED and OptumRx's motion to compel arbitration (Doc. 336) will be GRANTED.

I. Factual and Procedural Background

Unless otherwise indicated, the following factual summary is taken from the parties' filings related to the instant motions. (Doc. 335; Doc. 336). OptumRx is a pharmacy benefits manager that administers prescription drug programs on behalf of health-insurance plans. (Doc. 337-3, ¶ 2; Doc. 338, ¶ 1; Doc. 368, ¶ 1). The plaintiffs in this action are over 400 pharmacies that contract to fill prescription drugs for members of health plans in OptumRx's network (“Plaintiffs”). (Doc. 36, ¶ 449; Doc. 338, ¶ 3). Here, OptumRx moves to compel arbitration of 415 of the 431 Plaintiffs originally included in the Second Amended Complaint, and 415 out of 423 Plaintiffs remaining in this case. (Doc. 338, ¶ 4).

Plaintiffs aver that becoming a part of OptumRx's network is necessary for pharmacies that wish to serve customers insured under OptumRx's pharmacy benefit plans. (Doc. 368, ¶ 19). Accordingly, Plaintiffs each have entered into various contracts to become a part of OptumRx's network, either directly or through third parties known as pharmacy services administrative organizations (“PSAOs”). (Doc. 36, ¶ 441; Doc. 337-3, ¶¶ 4-5; Doc. 338, ¶¶ 5, 19). Regardless of whether the pharmacy contracted directly with OptumRx or through a PSAO, the contractual relationship between every Plaintiff and OptumRx is governed first by a Provider Manual. (Doc. 337-3, at 3-4; Doc. 338, ¶ 5). The Provider Manual governs all pharmacies participating in OptumRx's network and accordingly, all the Plaintiffs remaining in this action. (Doc. 337-3, ¶ 8-10; Doc. 338, ¶ 6; Doc. 381, at 3-4). The Provider Manual sets out the parties' relationships and provides policies and procedures with which the pharmacies must comply. (Doc. 337-1, ¶¶ 12-13, at 19-194, 195-346, 348-470; Doc. 338, ¶ 7). The Provider Manual is updated annually, with new versions superseding old ones. (Doc. 338, ¶ 8, Doc. 337-3, ¶¶ 8, 9, 16; Doc. 368, ¶ 8). Since July 2015, the Provider Manual has contained an arbitration provision requiring mandatory arbitration of all disputes. (Doc. 338, ¶ 8, Doc. 3373, ¶¶ 8, 9, 16; Doc. 368, ¶ 8). At the time this action was filed, the arbitration provision required arbitration pursuant to California law; however, the current arbitration agreement does not specify choice of law. (Doc. 337-3, at 144-45, 368; Doc. 338, ¶ 9; Doc. 368, ¶ 9). According to OptumRx, the Provider Manual has been publicly available online since 2015 on a website specifically designed for pharmacies.^[2] (Doc. 338, ¶ 13; Doc. 337-3, ¶ 9). The parties agree generally that OptumRx notifies pharmacies with updates to its Provider Manual.^[3] (Doc. 337-4, ¶ 4; Doc. 338, ¶ 14; Doc. 368, ¶ 14; Doc. 381, at 10).

In addition to the Provider Manual, pharmacies become a part of OptumRx's network through Provider Agreements. (Doc. 337-3, ¶¶ 4, 5, 15; Doc. 338, ¶ 18; Doc. 368, ¶ 18). Because pharmacies have the option to join OptumRx directly or through PSAOs, the Provider Agreement may be signed by either the directly contracting pharmacy or the PSAO. (Doc. 337-3, ¶¶ 4, 5, 14, 15; Doc. 338, ¶ 19; Doc. 368, ¶ 19). About forty Plaintiffs have directly contracted with OptumRx through a Provider Agreement during at least part of the relevant time period. (Doc. 337-3, at 480-516; Doc. 338, ¶ 21; Doc. 368, ¶ 4). All direct Provider Agreements contain arbitration provisions requiring mandatory arbitration of all disputes. (Doc. 36, ¶ 450; Doc. 338, ¶ 22; Doc. 356-1-12; Doc. 368, ¶ 22). Pharmacies that join OptumRx's network through a PSAO are bound by the Provider Agreement because it is signed on their behalf by their PSAO.^[4] (Doc. 337-3, at 480-516; Doc. 338, ¶¶ 25-31; Doc. 368, ¶ 25-26). “At least” 374 Plaintiffs “are or were” members of PSAOs that entered into Provider Agreements with OptumRx. (Doc. 337-3, at 480-516; Doc. 338, ¶ 25; Doc. 368, ¶ 25).

When a pharmacy joins a PSAO, they also enter into a Participation Agreement with the PSAO. (Doc. 338, ¶¶ 32, 33). This contract is signed by the PSAO and the pharmacy. (Doc. 338, ¶¶ 32, 33). According to OptumRx, by signing the Participation Agreement, a Plaintiff-pharmacy indicates “that they want to access the PSAO's existing Provider Agreements, and authoriz[es] the PSAO to negotiate and enter into Provider Agreements on the pharmacy's behalf.” (Doc. 337-3, ¶¶ 5, 15, 16; Doc. 338, ¶ 32). Plaintiffs deny this statement without citing to the record, providing only that “[n]othing in any participation agreement allows any plaintiff to ‘access the PSAO's existing Provider Agreements.' The delegation clauses in each specific Participation Agreement speaks for itself.” (Doc. 368, ¶ 5). Defendants also assert that “[a]ll PSAO Provider Agreements at issue in this motion contained arbitration provisions requiring mandatory arbitration of all disputes.” (Doc. 338, ¶ 37). Plaintiffs deny this statement, providing specifically that the Provider Agreements between OptumRx and the PSAOs Amerisource and Trinet do not contain arbitration agreements. (Doc. 368, ¶ 37).

On February 13, 2018, Plaintiffs filed the operative amended complaint. (Doc. 36). On March 13, 2018, OptumRx filed a motion to compel arbitration under Rule 12(b)(6). (Doc. 42).

On May 28, 2021, this Court denied OptumRx's motion to compel arbitration. See Robert D. Mabe, Inc. v. Optum RX, No. CV 3:17-1102, 2021 WL 2184764 (M.D. Pa. May 28, 2021), vacated in part sub nom. Robert D. Mabe, Inc. v. OptumRX, 43 F.4th 307 (3d Cir. 2022). On August 2, 2022, the Third Circuit vacated and remanded, directing the parties to conduct limited discovery on issues of arbitrability. See Robert D. Mabe, Inc. v. OptumRX, 43 F.4th 307, 330 (3d Cir. 2022). The Third Circuit also directed OptumRx to file a new motion to compel arbitration under the Rule 56 standard to determine whether Plaintiffs' “arguments can be supported by a developed record.” Mabe, 43 F.4th at 330. This renewed motion to compel arbitration, filed by OptumRx with the benefit of discovery, is now before the Court. (Doc. 336).

OptumRx filed the instant motion to compel arbitration on April 24, 2023, along with a statement of facts, accompanying exhibits, and a brief in support. (Doc. 336; Doc. 337; Doc. 338). Also on April 24, 2023, Plaintiffs incorrectly filed a motion for summary judgment on the issue of arbitrability as a Statement of Facts, as well as a declaration in support of their motion, a brief in support, and accompanying exhibits. (Doc. 335; Doc. 335-1; Doc. 335-2; Doc. 335-3; Doc. 335-4; Doc. 335-5; Doc. 335-6).

On May 15, 2023, OptumRx filed a brief in opposition to Plaintiffs' motion for summary judgment. (Doc. 361). On May 30, 2023, Plaintiffs filed a reply brief. (Doc. 366). On June 5, 2023, Plaintiffs filed a brief in opposition to OptumRx's motion, Answer to OptumRx's State of Facts, and accompanying exhibits. (Doc. 368). On July 3, 2023, OptumRx filed a reply brief in support of their motion. (Doc. 377). The Court held oral argument on the outstanding motions on June 10, 2024. Accordingly, the motions are ripe for discussion.

II. Legal Standards

A. Motion to Compel Arbitration

“It is well established that the Federal Arbitration Act (FAA) reflects a ‘strong federal policy in favor of the resolution of disputes through arbitration.'” Kirleis v. Dickie, McCamey & Chilcote, P.C., 560 F.3d 156, 160 (3d Cir. 2009) (quoting Alexander v. Anthony Int'l, L.P., 341 F.3d 256, 263 (3d Cir. 2003)). However, “the cardinal principle of the law of arbitration is that ‘under the [FAA, arbitration] is a matter of consent, not coercion, and parties are generally free to structure their arbitration agreements as they see fit.'” Gay v. CreditInform, 511 F.3d 369, 388 (3d Cir. 2007) (quoting Volt Info. Sciences, Inc. v. Bd. of Trustees of the Leland Stanford Junior Univ., 489 U.S. 468, 479 (1989). The Federal Arbitration Act provides that “[a] written provision in any. . .contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract. . .shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity. . .” 9 U.S.C. § 2. The Supreme Court has interpreted the FAA to require courts to “rigorously enforce arbitration agreements according to their terms, including terms that ‘specify with whom the parties choose to arbitrate their disputes,' and ‘the rules under which that arbitration will be...