Express Scripts 2009 Annual Report Download - page 42

Express Scripts 2009 Annual Report 40
annual survey of r
e
t
ail drug prices. On July 12, 2004, the case was dismissed with prejudice on the grounds that
t
he plaintiffs lacked standing to bring the action. On June 2, 2006, the U.S. Court of Appeals for the Ninth Circuit
r
eversed the district court's opinion on standing and remanded the case to the district court. The district court’s
denial of defendants’ motion to dismiss on constitutionality grounds is currently on appeal to the Ninth Circuit.
Plaintiff
s
ha
ve
fil
ed
a m
o
ti
o
n f
o
r
c
la
ss
ce
rtifi
c
ati
on
,
but that mo
t
ion has not been briefed pending the outcome of
t
he appeal
.
North Jackson Pharmacy, Inc., et al. v. Express Scripts
(
Civil Action No. C
V
-
03
-
B
-
269
6
-
NE
,
United States
District Court for the Northern District of Alabama
)
(
filed October 1, 2003
)
. This case purports to be a class
action against us on behalf of independent pharmacies within the United States. The complaint alleges that
c
ertain of our business practices violate the Sherman Antitrust Act, 15 U.S.C §1, et. seq. The suit seeks
u
nspecified moneta
r
y damages (including treble damages) and injunctive relief. Plaintiffs’ motion for class
c
ertification was granted on March 3, 2006. A motion filed by the plaintiffs in an antitrust matter against Medco
and Merck in the Eastern District of Pennsylvania before the
J
udicial Panel on Multi
-
District Litigation requesting
t
ransfer of this case and others to the Eastern District of Pennsylvania for MDL treatment was granted on August
24, 2006. We filed a motion to decertify the class on January 16, 2007, and
i
t has been fully briefed and argued
.
W
e are awaiting the Court’s decision on such motion
.
In re Express Scripts Securities Litigation
(
Case No.4:0
4
-
CV
-
1009
,
United States District Court for the Easter
n
District of Missouri ). On September 13, 2005, plaintiffs filed an amended complaint. The complaint alleges that
Express Scripts and certain of our officers violated federal securities law. The complaint alleges that we failed to
disclose certain alleged improper business practices and issued false a
n
d misleading financial statements and that
c
ertain officers violated insider trading laws. The complaint is brought on behalf of purchasers of our stock
during the period October 29, 2003 to August 3, 2004. The complaint requests unspecified compensato
r
y
damages, equitable relief and attorney's fees. Defendants filed a motion to dismiss on October 28, 200
5
an
d
s
upplemental briefing was completed in January 200
9
.
W
e are awaiting the Court’s decision on such motion
.
Gary Miller Derivatively on behalf of
nominal Defendant, Express Scripts, Inc. v. Stuart Bascomb, et al
(
Case
N
o.
04
2
-
08632, Missouri Circuit Court, City of St. Louis) (filed October 22, 2004).
Judith Deserio, Derivatively
on behalf of Nominal Defendant, Express Scripts, Inc. v. Stuart L. Bas
comb, et al
(
filed December 22, 2004
)
was
co
n
so
li
d
at
ed
w
ith Mill
er
.
Plaintiffs have filed shareholder derivative lawsuits against certain of our current and
former directors and officers. The cases make various allegations including that the defendants ca
used
us
t
o
i
ssue
false and misleading statements, insider selling, breach of fiduciary duty, abuse of control, gross mismanagement,
waste of corporate assets and unjust enrichment. Plaintiffs demand unspecified compensatory damages, equitable
re
li
e
f an
d
attorney's
f
ees.
C
ases are stayed pending the ruling on the motion to dismiss i
n
In re Express Scripts
Securities Litigation
.
Pearson’s Pharmacy, Inc. and Cam Enterprises, Inc. d/b/a Altadena Pharmacy v. Express Scripts, Inc.
(
Case No.
3
:
0
6
-
CV
-
00073
-
W
KW
,
U
nited States District Court for the Middle District of Alabama) (filed January 26, 2006).
On February 15, 2006, an amended complaint alleging a class action on behalf of all pharmacies reimbursed based
u
po
n
average wholesale price (“AWP”
)
w
a
s
fil
ed.
The complaint alleges that we fail to properly reimburse
pharmacies for filling prescriptions. Plaintiffs seek unspecified monetary damages and injunctive relief. O
n
March 31, 2006 we filed a motion to dismiss the complaint. On June 7, 2007, the court dis
m
i
ssed
th
e
c
laim
s
f
or
fraudulent misrepresentation, fraudulent suppression and unjust enrichment, leaving only a breach of contract
c
laim
.
On June 19, 2009, Express Scripts filed a motion for summary judgment on the remaining claims. O
n
October 29
,
2009
,
t
he court granted summary judgment in Express Scripts’ favor, disposing of all claims.
Plaintiffs filed a notice of appeal on November 17, 2009.
Inola Drug, Inc. v. Express Scripts, Inc.
(
Case No. 0
6
-
CV
-
11
7
-
T
C
K
-
SAJ
,
United States District Court for t
he
Northern District of Oklahoma). On February 22, 2006, a class action lawsuit was filed alleging that ou
r
r
eimbursement to pharmacies violates the Oklahoma Third Party Prescriptions Act. The complaint also alleges
t
hat we failed to properly reimburse pha
r
macies for filling prescriptions based on AWP. The proposed class
i
ncludes all pharmacies in the United States who contract with us and the proposed subclass includes all
pharmacies in Oklahoma who contract with us. On March 25, 2009, the court granted ou
r
motion for partial
s
ummary judgment and dismissed the breach of contract claim and any claim for injunctive relief based upon the
c
ontract claim. Additionally, the court denied plaintiff’s motion for class certification. On April 8, 2009, plaintiff
fil
ed
a motion to alter or amend the order on summary judgment and class certification, which was denied.
Plaintiff voluntarily dismissed the remaining claims and on May 21, 2009, the court entered a final judgment. O
n
J
une 19
,
2009
,
Plaintiff filed a notice of appeal.