Plumbers Welfare Fund, Local 130 v. CVS Health Corporation

OCR transcription for search; preserved printed pages are authoritative

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UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF RHODE ISLAND

SHEET METAL WORKERS LOCAL NO. 20
WELFARE AND BENEFIT FUND, and
INDIANA CARPENTERS WELFARE FUND,
on behalf of themselves and all
others similarly situated,

C.A. No. 16-046 WES

Plaintiffs,
Vv.
CVS PHARMACY, INC., et al.,

Defendants.

PLUMBERS WELFARE FUND, LOCAL 130,
U.A., on behalf of itself and all
others similarly situated,

C.A. No. 16-447 WES
Plaintiffs,

Vv.
CVS PHARMACY, INC., et al.

Defendants.

~~ we we He He He we woe wo we He He wo we we wo we we wre we wre ws DS Sa aS SS WS

MEMORANDUM AND ORDER

WILLIAM E. SMITH, District Judge.

Plaintiffs Sheet Metal Workers Local No. 20 Welfare and
Benefit Fund (“Sheet Metal Workers”), Indiana Carpenters Welfare
Fund (“Indiana Carpenters”), and Plumbers Welfare Fund Local 130
(“Plumbers”) (collectively, “Plaintiffs” or “named Plaintiffs”)

move to certify four classes of third-party payors (“TPPs”) or

AUTHENTICATED
U.S. GOVERNMENT
INFORMATION

GPO

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health 	plans 	in 	two 	consolidated 	cases. 	Pls.’ 	Mem. 	in 	Supp. 	of
Pls.’ 	Mot. 	for 	Class 	Certification 	(“Pls.’ 	Mot.”) 	1-3, 	ECF 	No.
123;1 see also Reply in Supp. of Pls.’ Mot. for Class Certification
(“Pls.’ Reply”) 3-4, ECF No. 145-1 (amending the class definition
for the “Omissions Consumer Protection Class”).2 	They allege that
Defendant 	CVS 	Pharmacy, 	Inc. 	(“CVS”) 	and 	five 	pharmacy 	benefit
managers 	(“PBMs”) 	– 	Defendant 	Caremark, 	L.L.C. 	(“Caremark”,
together with CVS, “Defendants”), Express Scripts, Inc., OptumRx,
Inc., 	Medco 	Health 	Solutions, 	Inc., 3 	and 	MedImpact 	Healthcare
Systems, 	Inc. 	– 	engaged 	in 	a 	nationwide 	scheme 	and 	conspiracy 	to
overcharge 	TPPs, 	in 	violation 	of 	the 	Racketeer 	Influenced 	and
Corrupt Organizations Act (“RICO”), 18 U.S.C. § 1961, et seq., and
various state laws. 	First Am. Compl. (“FAC”) 5-9, 52-84, ECF No.
171. 	Specifically, 	Plaintiffs 	allege 	that 	CVS 	defrauded 	and
overcharged the health plans in failing to treat its Health Savings
Pass (“HSP”) membership prices as its “Usual and Customary” (“U&C”)
prices when reporting U&C prices to the PBMs. 	Moreover, Plaintiffs
1 All docket entries refer to the docket in C.A. No. 16-046.
2 Defendants 	make 	much 	of 	the 	term 	“health 	plans” 	as 	overly
vague, 	but 	Plaintiffs 	clarify 	that 	it 	is 	used 	as 	a 	synonym 	for
“third-party payor” – “namely, any entity (other than the patient
or health care provider) that reimburses the patient’s health care
expenses 	(e.g., 	pharmaceutical 	purchases).” 	Pls.’ 	Reply 	18. 	In
this opinion, “TPPs” and “health plans” are used interchangeably.
3 Express 	Scripts 	purchased 	MedCo 	in 	2012. 	FAC 	¶¶ 	12, 	111.
During 	the 	life 	of 	the 	HSP 	Program, 	Indiana 	Carpenters’ 	PBM 	was
MedCo. 	Id. ¶ 12.
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claim 	that 	CVS 	and 	the 	PBMs 	conspired 	to 	conceal 	from 	the 	TPPs
that the HSP prices were not included in its U&C prices.
In 	addition, 	Caremark 	moves 	to 	dismiss 	Sheet 	Metal 	Workers’
claims against Caremark, on the basis that the parties have agreed
to 	arbitrate 	any 	disputes 	between 	them. 	See 	generally 	Mem. 	in
Supp. 	of 	Caremark 	LLC’s 	Mot. 	under 	the 	FAA 	to 	Dismiss 	the 	Claims
of 	Sheet 	Metal 	Workers 	(“Caremark 	Mot. 	to 	Dismiss”) 	1, 	ECF 	No.
163-1.
For 	the 	reasons 	that 	follow, 	Plaintiffs’ 	Motion 	for 	Class
Certification, 	ECF 	No. 	120, 	is 	GRANTED, 	and 	Caremark’s 	Motion 	to
Dismiss, 	ECF 	No. 	163, 	is 	also 	GRANTED. 	The 	Court 	DENIES 	WITHOUT
PREJUDICE 	Plaintiffs’ 	Motions 	to 	Exclude 	the 	Expert 	Testimony 	of
Catherine 	Graeff, 	Michael 	P. 	Salve, 	Ph.D., 	and 	Brett 	E. 	Barlag,
ECF Nos. 140-42.
I. 	Background4
Retail 	pharmacy 	chains 	generally 	sell 	their 	prescription
drugs 	to 	two 	groups 	of 	consumers: 	those 	with 	prescription
insurance, 	and 	those 	without 	insurance, 	also 	referred 	to 	as 	cash
payors. 	FAC ¶ 29. 	Customers with insurance make up well over 90
percent 	of 	CVS’s 	prescription 	drug 	business, 	and 	their
prescription 	purchases 	are 	processed 	and 	paid 	for 	(in 	part 	or 	in
4 	The 	Court 	gleans 	the 	background 	from 	Plaintiffs’ 	First
Amended 	Complaint. 	See 	generally 	First 	Am. 	Compl. 	(“FAC”), 	ECF
No. 81-1.
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full) 	by 	health 	plans, 	including 	health 	insurance 	companies,
third-party 	administrators, 	health 	maintenance 	organizations,
self-funding 	health 	and 	welfare 	benefit 	plans, 	health 	plans, 	and
other health benefit providers (collectively referred to herein as
“health plans” or “TPPs”). 	Id.
Pharmacies, including CVS, report the prices they charge cash
customers, 	known 	as 	the 	“Usual 	and 	Customary” 	or 	“U&C” 	price, 	to
PBMs and TPPs to comply with the National Council for Prescription
Drug 	Program’s 	(“NCPDP”) 	requirements. 	Id. 	¶¶ 	1, 	33-35. 	This
arrangement (and the contracts between CVS and the PBMs), in part,
guarantees 	that 	TPPs 	and 	insured 	consumers 	do 	not 	pay 	more 	for 	a
prescription 	drug 	than 	an 	uninsured 	consumer 	would 	pay 	for 	the
same drug. 	Id. ¶ 1.
Pharmacy 	benefit 	managers, 	or 	PBMs, 	facilitate 	transactions
between 	TPPs 	and 	pharmacies. 	Id. 	¶ 	28. 	TPPs 	contract 	with 	PBMs
to perform services “including the negotiation of drug prices with
drug 	companies, 	creation 	of 	formularies, 	management 	of
prescription billing, construction of retail pharmacy networks for
insurers, and provision of mail-order services.” 	Id. 	PBMs set up
how 	pharmacy 	claims 	are 	adjudicated 	consistent 	with 	instructions
from their TPP clients. 	Id. ¶ 36. 	Pursuant to PBM/TPP contracts,
TPPs 	pay 	their 	PBMs 	for 	generic 	drugs 	purchased 	by 	their 	members
based on the “lower of” three benchmark prices: 	average wholesale
price 	(“AWP”) 	less 	a 	defined 	percentage 	(i.e., 	AWP 	- 	%); 	U&C; 	or
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Maximum 	Allowable 	Cost 	(“MAC”). 	Id. 	¶¶ 	39-41. 	A 	drug’s 	AWP 	is
set 	and 	published 	by 	third 	parties. 	Id. 	¶ 	40. 	PBMs 	set 	the 	MAC
for 	each 	generic 	drug 	on 	their 	proprietary 	MAC 	lists. 	Id. 	¶ 	41.
The U&C is set by the pharmacy and is typically the highest of the
three prices. 	Id. ¶ 42.
PBMs also contract with pharmacies to dispense drugs to their
TPP 	clients. 	Id. 	¶ 	43. 	In 	those 	contracts, 	PBMs 	also 	typically
agree 	to 	pay 	pharmacies 	based 	on 	benchmark 	prices, 	such 	as 	AWP,
U&C, and MAC. 	Id. 	As the middlemen, PBMs make their profit from
charging 	their 	TPP 	clients 	more 	for 	drugs 	than 	they 	pay 	the
pharmacy 	for 	the 	transactions. 	Id. 	Thus, 	PBMs 	do 	not 	disclose
the 	prices 	they 	charge 	their 	TPP 	clients, 	nor 	what 	they 	pay
pharmacies. 	Id.
It was against this backdrop that, in September 2006, “Walmart
turned 	the 	world 	of 	generic 	prescription 	drugs 	upside-down” 	by
announcing 	that 	it 	would 	charge 	$4 	for 	a 	30-day 	supply, 	and 	$10
for 	a 	90-day 	supply, 	of 	hundreds 	of 	generic 	prescription 	drugs.
Id. 	¶¶ 	2, 	52. 	Target, 	Walgreens, 	Rite 	Aid, 	and 	other 	retailers
with 	pharmacies 	followed 	suit. 	Id. 	¶ 	52. 	Walmart 	and 	Target
(until CVS acquired Target pharmacies in 2015) reported $4 as their
U&C prices. 	Id. 	Tweaking the model a bit, Walgreens and Rite Aid
required 	customers 	to 	“join” 	their 	generic 	prescription 	drug
programs to reap the benefits. 	Id. ¶ 57.
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Plaintiffs 	allege 	that 	CVS 	joined 	with 	Caremark 	(and 	later
ScriptSave), 	a 	fellow 	subsidiary 	of 	CVS 	Health 	Corporation, 	to
sketch out a discount generic drug program that shielded CVS from
reporting 	the 	discount 	price 	as 	its 	U&C 	to 	PBMs. 	Id. 	¶¶ 	56-57,
71-83. 	In March 2008, prior to launching the HSP program, CVS and
Caremark 	analyzed 	how 	adopting 	a 	generic 	discount 	program 	would
impact 	CVS’s 	revenue 	from 	TPPs. 	Id. 	¶ 	59. 	An 	analyst 	at 	CVS
determined 	that 	the 	impact 	to 	TPP 	revenue 	would 	be 	$866 	million
annually 	if 	CVS 	included 	all 	the 	drugs 	on 	the 	Walmart 	list, 	and,
if 	CVS 	included 	all 	the 	drugs 	on 	the 	Walgreens 	list, 	the 	impact
would 	be 	an 	additional 	$329 	million. 	Id. 	As 	a 	result, 	CVS
structured its HSP differently, citing concerns that “[m]aking the
program 	‘too 	attractive’ 	creates 	higher 	risk 	for 	our 	3rd 	party
plan pricing and profitability.” 	Id. ¶ 61 (quoting CVSSM-0002427,
at 2430 (May 8, 2008 presentation given to Larry Merlo, as edited
by 	Bari 	A. 	Harlam 	at 	Caremark)). 	Unlike 	Walmart 	and 	Walgreens,
CVS 	decided 	to 	charge 	consumers 	a 	$10 	annual 	fee 	to 	join 	the
program. 	Id. 	¶ 	65. 	Plaintiffs 	allege 	that, 	in 	addition 	to
collaborating with Caremark, CVS also “enlisted the participation
of” 	three 	of 	the 	largest 	PBMs 	in 	the 	country, 	Express 	Scripts,
OptumRx, 	and 	MedImpact, 	to 	embark 	on 	a 	scheme 	to 	conceal 	from
health 	plans 	its 	HSP 	drug 	prices 	when 	reporting 	U&C 	prices. 	Id.
¶ 3.
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In November 2008, the HSP program went live. 	Id. ¶ 64. 	From
November 9, 2008 through 2010, customers paid a $10 annual fee to
join the program, which gave them access to a 90-day supply of 400
commonly 	prescribed 	generic 	drugs 	for 	$9.99. 	Id. 	¶¶ 	64-65.
Starting 	in 	2011, 	the 	annual 	fee 	went 	up 	to 	$15, 	and 	CVS 	raised
the 	price 	for 	HSP-listed 	drugs 	to 	$11.99 	for 	a 	90-day 	supply 	and
$3.99 	for 	a 	30-day 	supply. 	Id. 	¶ 	65. 	From 	November 	2008 	to
February 	2016, 	CVS 	did 	not 	report 	the 	HSP 	price 	as 	the 	U&C 	price
for HSP-eligible drugs. 	Id. ¶ 66. 	Caremark administered the HSP
program 	from 	its 	inception 	until 	July 	2013, 	when 	ScriptSave 	took
over 	its 	administration; 	the 	program 	was 	discontinued 	on 	January
31, 2016. 	Id. ¶¶ 23, 70, 83. 	Caremark played a dual rule in this
saga: 	in 	addition 	to 	administering 	the 	HSP 	program, 	many 	TPPs
used Caremark as a PBM. 	Id. ¶ 3.
Importantly, 	PBMs 	have 	incentive 	to 	encourage 	or 	conceal
inflated 	U&C 	prices 	– 	PBMs 	make 	more 	money 	when 	U&C 	prices 	are
higher. 	Id. 	¶ 	47. 	When 	a 	PBM 	pays 	a 	pharmacy 	the 	U&C 	price 	for
a generic drug transaction, the TPP also pays the U&C price to the
PBM. 	Under 	those 	circumstances, 	the 	PBM 	makes 	no 	profit 	or
“spread” 	between 	what 	it 	pays 	the 	pharmacy 	and 	what 	the 	TPP 	pays
the PBM. 	Id. ¶ 49. 	During the HSP program, CVS’s HSP prices were
often 	lower 	than 	the 	price 	a 	TPP 	would 	have 	paid 	under 	a 	formula
using AWP or MAC as the benchmark price. 	Id. ¶ 50. 	Therefore, if
CVS 	had 	reported 	its 	HSP 	prices 	as 	U&C 	prices, 	the 	U&C 	price
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generally would have been the lowest benchmark price. 	Id. 	Thus,
PBMs 	stood 	to 	lose 	“hundreds 	of 	millions 	of 	dollars 	in 	‘spread’
opportunities” were HSP prices to be reported as U&C prices. 	Id.
Plaintiffs 	allege 	that, 	for 	this 	reason, 	Caremark, 	Express
Scripts, 	OptumRx, 	and 	MedImpact 	not 	only 	failed 	to 	intervene 	and
prevent 	CVS’s 	alleged 	fraudulent 	scheme, 	but 	concealed 	it 	“by
adopting 	‘policies’ 	that 	contradicted 	the 	language 	of 	their 	own
contracts and provider manuals . . . .” 	Id. ¶ 51. 	Specifically,
in 	its 	role 	as 	a 	PBM, 	Caremark 	instituted 	a 	policy 	that
differentiated 	between 	Walmart’s 	$4 	generic 	program 	and 	“Club
Plans” 	– 	like 	the 	HSP 	program 	– 	that 	required 	consumers 	to 	join
and 	pay 	a 	membership 	fee. 	Id. 	¶ 	4. 	Under 	this 	policy, 	generic
programs 	without 	membership 	fees 	were 	required 	to 	report 	their
plan prices as U&C prices, and “Club Plans” were not. 	Id. 	Caremark
did not disclose this policy to its TPP clients, other than those
members 	of 	its 	Client 	Advisory 	Board. 	As 	a 	result, 	Plaintiffs
allege, 	CVS 	and 	Caremark 	– 	both 	as 	HSP 	administrator 	and 	PBM 	–
concealed 	from 	TPPs 	that 	CVS 	was 	not 	reporting 	HSP 	prices 	as 	U&C
prices for HSP-eligible drugs. 	Id. ¶¶ 3-5.
II. 	Discussion
A. 	Defendant 	Caremark’s 	Motion 	to 	Dismiss 	Sheet 	Metal
Workers’ Claims under the Federal Arbitration Act
Caremark 	moves 	to 	dismiss 	Sheet 	Metal 	Workers’ 	claims 	under
the 	Federal 	Arbitration 	Act 	(“FAA”), 	arguing 	that 	the 	operative
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agreements 	between 	Caremark 	and 	Sheet 	Metal 	Workers 	include
arbitration 	clauses. 	See 	generally 	Caremark 	Mot. 	to 	Dismiss 	1.
Caremark 	argues 	that 	Sheet 	Metal 	Workers 	violated 	the 	parties’5
agreements by initiating this suit against Caremark and by refusing
to 	engage 	in 	dispute-resolution 	negotiations. 	See 	id. 	Caremark
highlights that, under the parties’ dispute-resolution provisions,
Sheet 	Metal 	Workers 	agreed 	to 	do 	the 	following 	in 	advance 	of
litigation: 	(1) 	give 	notice 	of 	any 	dispute; 	(2) 	designate 	a
dispute-resolution representative; (3) negotiate in good faith to
resolve the dispute; and (4) submit to binding arbitration in Cook
County, Illinois if negotiations did not resolve the dispute in 90
days. 	Id.
On 	a 	motion 	to 	dismiss 	in 	favor 	of 	arbitration, 	a 	court
considers “whether a valid arbitration clause exists, whether the
movant 	is 	entitled 	to 	invoke 	the 	clause, 	whether 	the 	non-moving
party 	is 	bound 	by 	it, 	and 	whether 	the 	clause 	covers 	the 	claims
asserted.” 	FPE 	Found. 	v. 	Cohen, 	801 	F.3d 	25, 	29 	(1st 	Cir. 	2015)
(citing Soto–Fonalledas 	v. 	Ritz–Carlton 	San 	Juan 	Hotel 	Spa 	&
Casino, 640 	F.3d 	471, 	474 	(1st 	Cir. 	2011)). 	A 	court 	may 	then
consider 	whether 	a 	party 	has 	waived 	the 	right 	to 	arbitrate. 	Id.
Here, Sheet Metal Workers argues only that Caremark has forfeited
its 	arbitration 	rights 	by 	sitting 	on 	its 	hands, 	and 	that 	not 	all
5 In 	this 	section, 	“parties” 	refers 	only 	to 	Plaintiff 	Sheet
Metal Workers and Defendant Caremark.
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claims 	asserted 	fall 	within 	the 	relevant 	arbitration 	provisions.
See Resp. in Opp’n to Def. Caremark’s Mot. for Leave to File Mot.
under the FAA to Dismiss the Claims of Sheet Metal Workers (“Pls.’
Opp’n 	to 	Mot. 	to 	Dismiss”) 	5, 	ECF 	No. 	132; 	Sheet 	Metal 	Workers
Sur-Reply in Opp’n to Def. Caremark’s Mot. For Leave to File Mot.
Under 	FAA 	to 	Dismiss 	(“Sheet 	Metal 	Workers 	Sur-Reply”) 	8-9, 	ECF
No. 164.
But before the Court can pass on whether Caremark waived its
right 	to 	arbitration, 	the 	Court 	must 	first 	address 	a 	threshold
issue: 	whether 	the 	Court 	or 	an 	arbitrator 	should 	decide 	whether
Caremark 	forfeited 	its 	right 	to 	arbitrate 	through 	litigation-
conduct waiver.6
1. 	Who Decides Litigation-Conduct Waiver?
Caremark argues that whether it waived its right to arbitrate
under 	the 	relevant 	contracts 	is 	an 	issue 	of 	arbitrability 	for 	an
arbitrator, not the Court, to decide. 	Reply in Supp. of Caremark’s
6 Caremark argues that Illinois law, not federal law, applies
to 	this 	dispute. 	Caremark 	Reply 	8-9. 	While 	the 	Court 	need 	not
reach 	the 	issue, 	the 	First 	Circuit 	has 	signaled 	that 	litigation-
conduct waiver is an issue of federal law. 	See Rankin v. Allstate
Ins. 	Co., 	336 	F.3d 	8, 	12 	n.3 	(1st 	Cir. 	2003) 	(noting 	that, 	while
not argued, “arbitration-related issues in this case are probably
governed by the” FAA and, if so, “federal law would automatically
govern 	waiver 	issues” 	(citation 	omitted)). 	Under 	either 	body 	of
law, the result here is the same. 	See LRN Holding, Inc. v. Windlake
Capital Advisors, LLC, 949 N.E.2d 264, 270–72 (Ill. App. 3d Dist.
2011) (noting that, under Illinois law, where a contract contains
a 	choice-of-law 	provision 	and 	incorporates 	the 	American
Arbitration Association rules of arbitration, federal law applies
to questions regarding arbitration).
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Mot. for Leave to File Mot. under the FAA to Dismiss the Claims of
Sheet 	Metal 	Workers 	(“Caremark 	Reply”) 	1, 	ECF 	No. 	135. 	This 	is
because, 	Caremark 	says, 	the 	contracts 	at 	issue 	here 	incorporate
the 	commercial 	rules 	of 	the 	American 	Arbitration 	Association
(“AAA”), 	which 	delegate 	the 	issue 	of 	arbitrability 	to 	an
arbitrator. 	Id. 	at 	4-5 	(citing 	Prescription 	Benefit 	Services
Agreement ¶ 13.16 (Jan. 1, 2015) (“PBSA”), ECF No. 131-32).
In Marie v. Allied Home Mortg. Corp., 402 F.3d 1, 14-15 (1st
Cir. 	2005), 	the 	First 	Circuit 	held 	that, 	even 	where 	a 	contract
provides that an arbitrator shall decide issues of arbitrability,
“waiver 	by 	conduct, 	at 	least 	where 	due 	to 	litigation-related
activity, is presumptively an issue for the court.” 	Applying this
rule, 	courts 	in 	this 	Circuit 	have 	decided 	issues 	of 	litigation-
conduct waiver, distinct from issues of arbitrability. 	See, e.g.,
In 	re 	Intuniv 	Antitrust 	Litig., 	No. 	1:16-CV-12653-ADB, 	2021 	WL
517386, 	at 	*8 	(D. 	Mass. 	Feb. 	11, 	2021) 	(citing 	Christensen 	v.
Barclays 	Bank 	Del., 	No. 	18-cv-12280, 	2019 	WL 	1921710, 	at 	*5 	(D.
Mass. 	Apr. 	30, 	2019); Binienda 	v. 	Atwells 	Realty 	Corp., 	No. 	15-
cv-00253, 	2018 	WL 	1271443, 	at 	*2-3 	(D.R.I. 	Mar. 	9, 	2018); Cutler
Assocs., 	Inc. 	v. 	Palace 	Constr., 	LLC, 	132 	F. 	Supp. 	3d 	191, 	199–
200 (D. Mass. 2015)).
Caremark contends that after the Supreme Court’s decisions in
BG 	Group, 	PLC 	v. 	Republic 	of 	Argentina, 	572 	U.S. 	25 	(2014), 	and
Henry 	Schein, 	Inc. 	v. 	Archer 	& 	White 	Sales, 	Inc., 	139 	S. 	Ct. 	524
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(2019), 	Marie 	is 	no 	longer 	good 	law, 	and 	issues 	of 	litigation-
conduct waiver are now consigned to an arbitrator. 	Caremark Reply
3. 	This argument gets no traction.
In BG Group, the Supreme Court recognized that “courts presume
that the parties intend arbitrators, not courts, to decide disputes
about 	the 	meaning 	and 	application 	of 	particular 	procedural
preconditions 	for 	the 	use 	of 	arbitration.” 	572 	U.S. 	at 	34
(citation 	omitted). 	“These 	procedural 	matters 	include 	claims 	of
‘waiver, 	delay, 	or 	a 	like 	defense 	to 	arbitrability.’” 	Id. 	at 	35
(quoting 	Moses 	H. 	Cone 	Mem’l 	Hosp. 	v. 	Mercury 	Constr. 	Corp., 460
U.S. 1, 25 (1983)). 	This Court previously considered, in Binienda,
2018 WL 1271443, at *2-3, whether BG Group displaced the reasoning
in Marie, and concluded that it did not.
In 	BG 	Group, 	the 	Supreme 	Court 	emphasized 	that 	parties
typically 	expect 	a 	forum-based 	decisionmaker 	to 	decide 	forum-
specific 	procedural 	gateway 	matters, 	including 	“the 	satisfaction
of 	‘prerequisites 	such 	as 	time 	limits, 	notice, 	laches, 	estoppel,
and 	other 	conditions 	precedent 	to 	an 	obligation 	to 	arbitrate.’”
572 	U.S. 	at 	34-35 	(quoting 	Howsam 	v. 	Dean 	Witter 	Reynolds, 	Inc.,
537 	U.S. 	79, 	84 	(2002)). 	Thus, 	“waiver”, 	as 	contemplated 	in 	BG
Group, 	does 	not 	include 	“litigation-conduct 	waiver”. 	See
Binienda, 2018 WL 1271443, *2. 	As it did in Binienda, this Court
concludes 	that 	“[n]othing 	in 	BG 	Group 	undercuts 	the 	holding 	in
Marie, 	that 	the 	Supreme 	Court 	did 	not 	intend 	to 	alter 	[the]
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traditional 	rule 	that 	courts 	presumptively 	decide 	issues 	of
litigation-conduct 	waiver.” 	Id. 	(citation 	omitted); 	see 	also
Rankin v. Allstate Ins. Co., 336 F.3d 8, 12 (1st Cir. 2003) (pre-
dating 	BG 	Group, 	but 	emphasizing 	that 	“an 	arbitration 	provision
has 	to 	be 	invoked 	in 	a 	timely 	manner 	or 	the 	option 	is 	lost” 	and,
“[u]nder federal law, such a forfeiture is an issue for the judge”
(citations omitted)).
Nor 	does 	Henry 	Schein 	come 	to 	Caremark’s 	aid. 	In 	Henry
Schein, 	the 	Supreme 	Court 	held 	that 	when 	a 	contract 	delegates
arbitrability 	to 	an 	arbitrator, 	courts 	must 	give 	full 	meaning 	to
that 	delegation 	and 	refrain 	from 	passing 	on 	any 	issues 	of
arbitrability. 	139 	S. 	Ct. 	at 	529. 	Here, 	in 	contrast, 	whether
Caremark waived its right to arbitrate through litigation conduct
in 	this 	judicial 	forum 	is 	a 	distinct 	issue 	from 	the 	underlying
arbitrability of the dispute. 	See In re Intuniv Antitrust Litig.,
2021 WL 517386, at *8 (concluding that the Supreme Court’s decision
in Henry Schein did not upset Marie’s holding); see also Sabatelli
v. 	Baylor 	Scott 	& 	White 	Health, 	832 	F. 	App’x 	843, 	848 	n.3 	(5th
Cir. 2020) (noting that litigation-conduct waiver “is an issue for
the court, rather than the arbitrator, to decide . . . because it
‘implicates courts’ authority to control judicial procedures or to
resolve issues . . . arising from judicial conduct’” (quoting Vine
v. PLS Fin. Srvs., Inc., 689 F. App’x 800, 802–03 (5th Cir. 2017));
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Ehleiter 	v. 	Grapetree 	Shores, 	Inc., 	482 	F.3d 	207, 	219 	(3d 	Cir.
2007).7
The Court therefore concludes that litigation-conduct waiver
is 	presumptively 	an 	issue 	for 	the 	Court, 	not 	an 	arbitrator, 	to
decide.
2. 	Litigation-Conduct Waiver
Next, 	Caremark 	argues 	that 	it 	has 	not 	waived 	its 	right 	to
arbitrate Sheet Metal Workers’ claims through its participation in
this 	litigation. 	Caremark 	Reply 	8-15. 	Generally, 	a 	party 	may
waive its right to arbitration explicitly or through its conduct.
FPE 	Found., 	801 	F.3d 	at 	29. 	Under 	federal 	law, 	when 	deciding
whether 	a 	litigant 	has 	waived 	its 	right 	to 	compel 	arbitration
through litigation conduct, a court must consider several factors:
(1) 	whether 	the 	parties 	participated 	in 	a 	lawsuit 	or
took 	other 	action 	inconsistent 	with 	arbitration; 	(2)
whether the litigation machinery has been substantially
invoked 	and 	the 	parties 	[are] 	well 	into 	preparation 	of
a 	lawsuit 	by 	the 	time 	an 	intention 	to 	arbitrate 	[is]
communicated; 	(3) 	whether 	there 	has 	been 	a 	long 	delay
7 Caremark further highlights that the current version of the
AAA’s Commercial Rules states that “[n]o judicial proceeding by a
party 	relating 	to 	the 	subject 	matter 	of 	the 	arbitration 	shall 	be
deemed a waiver of the party’s right to arbitrate.” 	Caremark Reply
5 	(quoting 	American 	Arbitration 	Association, 	Commercial
Arbitration 	Rules 	and 	Mediation 	Procedures, 	Rule 	52(a) 	(2013)).
However, 	the 	AAA’s 	Commercial 	Rules 	contained 	this 	same 	language
when 	the 	First 	Circuit 	decided 	Marie, 	and 	thus, 	this 	argument 	is
not 	persuasive. 	See 	In 	re 	Intuniv 	Antitrust 	Litig., 	2021 	WL
517386, 	at 	*8. 	Moreover, 	one 	could 	interpret 	the 	text 	“judicial
proceeding by a party” as denoting that a plaintiff does not waive
its right to arbitrate by filing suit. 	But in any event, the Rules
only 	govern 	arbitration, 	they 	have 	no 	bearing 	on 	the 	Court’s
determinations.
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and trial is near at hand; (4) whether the party seeking
to 	compel 	arbitration 	has 	invoked 	the 	jurisdiction 	of
the 	court 	by 	filing 	a 	counterclaim; 	(5) 	whether
discovery 	not 	available 	in 	arbitration 	has 	occurred;
and, (6) whether the party asserting waiver has suffered
prejudice.
Id. 	(citation 	and 	quotation 	omitted) 	(alterations 	in 	original).
In weighing the factors, no one factor carries the day, but rather,
“each 	case 	is 	to 	be 	judged 	on 	its 	particular 	facts.” 	Tyco 	Int’l
Ltd. 	v. 	Swartz 	(In 	re 	Tyco 	Int’l 	Ltd. 	Sec. 	Litig.), 	422 	F.3d 	41,
46 	(1st 	Cir. 	2005) 	(citation 	omitted). 	“‘[W]aiver 	is 	not 	to 	be
lightly 	inferred,’ 	thus 	reasonable 	doubts 	as 	to 	whether 	a 	party
has 	waived 	the 	right 	to 	arbitrate 	should 	be 	resolved 	in 	favor 	of
arbitration.” 	Id. at 44 (quoting Restoration Pres. Masonry, Inc.
v. 	Grove 	Eur. 	Ltd., 325 	F.3d 	54, 	61 	(1st 	Cir. 	2003)). 	Here, 	the
question 	is 	whether 	Caremark 	invoked 	its 	arbitration 	right 	in 	a
timely manner consistent with its desire to arbitrate. 	See id.
While 	Plaintiffs 	initiated 	this 	suit 	against 	CVS 	in 	2016,
they 	did 	not 	seek 	leave 	to 	amend 	their 	Complaint 	to 	add 	Caremark
as 	a 	defendant 	until 	June 	5, 	2017. 	See 	Pls.’ 	Mot. 	for 	Leave 	to
File First Am. Compl., ECF No. 56. 	After being granted that leave,
on 	May 	4, 	2018, 	Plaintiffs 	filed 	the 	First 	Amended 	Complaint,
naming 	Caremark 	as 	a 	defendant. 	FAC, 	ECF 	No. 	81-1. 	Caremark
answered 	on 	July 	3, 	2018, 	asserting 	that 	“putative 	class 	members
and 	at 	least 	one 	Plaintiff 	have 	agreed 	to, 	and 	failed 	to 	comply
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with, 	dispute 	resolution 	procedures 	for 	their 	claims . . . .”
Caremark L.L.C.’s Answer to FAC ¶ 29, ECF No. 90.
On 	October 	31, 	2018, 	Caremark 	began 	the 	dispute-resolution
process 	and 	sent 	Sheet 	Metal 	Workers 	a 	Dispute 	Notice 	requesting
a 	response 	within 	ninety 	days 	in 	accordance 	with 	the 	arbitration
clause. 	See 	Caremark 	Dispute 	Resolution 	Ltr 	1, 	ECF 	No. 	129-79.
In that letter, Caremark designated a representative and requested
that 	Sheet 	Metal 	Workers 	do 	the 	same. 	Id. 	at 	1-2. 	Sheet 	Metal
Workers responded on January 22, 2019, declining to participate in
the 	dispute 	resolution 	process 	and 	asserting 	that 	Caremark 	had
forfeited 	its 	right 	to 	compel 	that 	process. 	Sheet 	Metal 	Worker
Dispute 	Resolution 	Ltr 	1-2, 	ECF 	No. 	129-80. 	Caremark 	responded,
denying 	Sheet 	Metal 	Workers’ 	forfeiture 	argument, 	on 	January 	26,
2019. 	Caremark 	Dispute 	Resolution 	Ltr, 	ECF 	No. 	129-81. 	The 	90-
day 	period 	expired 	on 	January 	29, 	2019, 	and 	Sheet 	Metal 	Workers
did not respond to Caremark’s final letter. 	See Caremark Mot. to
Dismiss 3. 	Plaintiffs filed their Motion for Class Certification
on April 29, 2019, and on July 17, 2019, Caremark filed its Motion
for 	Leave 	to 	File 	Motion 	under 	the 	FAA 	to 	Dismiss 	the 	Claims 	of
Sheet Metal Workers, ECF No. 127.
The 	upshot 	is 	that 	Caremark 	was 	added 	as 	a 	defendant 	on 	May
4, 	2018, 	engaged 	in 	the 	dispute-resolution 	process 	from 	October
31, 	2018 	to 	January 	29, 	2019, 	and 	sought 	dismissal 	based 	on
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arbitration 	on 	July 	17, 	2019.8 	While 	the 	down 	time 	before 	and
after 	the 	dispute 	resolution 	process 	(May 	to 	October 	2018, 	and
January 	to 	July 	2019) 	remains 	somewhat 	unexplained, 	it 	was 	not
particularly long. 	Importantly, prior to its filing this Motion,
Caremark’s 	litigation-related 	activity 	vis-à-vis 	Sheet 	Metal
Workers was limited to responding to discovery requests. 	Caremark
Reply 	12. 	Caremark 	further 	filed 	its 	Motion 	to 	Dismiss 	prior 	to
any 	summary 	judgment 	deadline 	and 	well 	in 	advance 	of 	(a 	yet-to-
be-scheduled) trial. 	Id. at 13.
Thus, turning to the six factors the Court must consider, the
first five factors lean in Caremark’s favor. 	During the period of
delay, 	Caremark 	and 	Sheet 	Metal 	Workers 	participated 	very 	little
in 	the 	lawsuit, 	no 	substantive 	motions 	were 	litigated, 	trial 	was
still far off, Caremark filed no counterclaims against Sheet Metal
Workers, 	and 	Sheet 	Metal 	Workers 	does 	not 	claim 	that 	Caremark
secured 	discovery 	that 	is 	unavailable 	in 	arbitration.9 	See 	FPE
8 While Caremark makes much of putting Sheet Metal Workers on
notice of its intent to arbitrate by asserting it as an affirmative
defense, this Motion is the first time Caremark properly asserted
its 	right. 	See 	In 	re 	Citigroup, 	Inc., 	376 	F.3d 	23, 	27 	(1st 	Cir.
2004) (noting that it is not sufficient to assert in an answer the
right to arbitrate as an affirmative defense).
9 The Court does understand Sheet Metal Workers to argue that
CVS 	conducted 	discovery 	that 	would 	not 	have 	been 	available 	at
arbitration 	and 	that 	CVS 	and 	Caremark 	have 	the 	same 	attorneys.
See 	Feb. 	27, 	2020 	Hr’g 	Tr. 	123-24, 	ECF 	No. 	170. 	While 	the 	Court
is 	sympathetic 	to 	the 	realities 	of 	this 	situation, 	it 	is 	not
confident that Sheet Metal Workers would have found itself in any
different of a position had Caremark asserted its arbitration right
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Found., 801 F.3d at 29. 	Notably, Caremark did not, for instance,
file 	counterclaims 	against 	Sheet 	Metal 	Workers, 	serve 	discovery
requests on Sheet Metal Workers, file motions against Sheet Metal
Workers, 	or 	seek 	adjudication 	of 	any 	arbitrable 	issue 	involving
Sheet 	Metal 	Workers. 	Caremark 	Reply 	12. 	Caremark 	further 	filed
its Motion to Dismiss well in advance of any trial date, and before
any 	other 	substantive 	deadlines, 	aside 	from 	class 	certification.
See FPE Found., 801 F.3d at 29; see also Creative Sols. Grp., Inc.
v. Pentzer Corp., 252 F.3d 28, 33-34 (1st Cir. 2001) (holding that
the 	right 	to 	arbitrate 	had 	not 	been 	waived 	where 	party 	moving 	to
compel arbitration had not invoked formal discovery).
On the last of the six factors, Sheet Metal Workers contends
that it has been prejudiced by Caremark’s dilatory effort to move
for 	arbitration. 	In 	particular, 	it 	argues 	that 	if 	it 	is 	sent 	to
arbitration 	now, 	Sheet 	Metal 	Workers 	will 	be 	prejudiced 	by 	the
need 	to 	litigate 	potential 	defenses 	related 	to 	statutes 	of
limitations and laches (even assuming that the defenses eventually
fail). 	Moreover, 	it 	contends 	that 	Caremark 	may 	argue 	that 	its
claims are barred for failure to comply with the dispute-resolution
procedures. 	Pls.’ 	Opp’n 	to 	Mot. 	to 	Dismiss 	6-7. 	However, 	the
only relevant prejudice is that which is a product of a defendant’s
failure to timely invoke the arbitration procedure, not a product
earlier. 	Presumably CVS and Sheet Metal Workers would have engaged
in that same discovery.
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of arbitration itself. 	See In re Citigroup, Inc., 376 F.3d 23, 26
(1st 	Cir. 	2004)). 	For 	that 	reason, 	Sheet 	Metal 	Workers’ 	claims
that 	it 	may 	face 	new 	defenses 	in 	arbitration 	(statute 	of
limitations, laches, and failure to comply with dispute-resolution
procedures) 	fail 	because 	Caremark 	already 	has 	alleged 	those
affirmative defenses in its Answer. 	Caremark Reply 14.
Sheet 	Metal 	Workers 	further 	argues 	that 	it 	is 	prejudiced
because it did not have the opportunity to add a substitute named
plaintiff without an arbitration clause in its relevant agreement;
this argument, however, also fails as it is not the product of any
alleged delay. 	Moreover, named Plaintiffs and the putative class
suffer no prejudice because, as discussed below, the Court is not
persuaded 	that 	the 	absence 	of 	a 	named 	plaintiff 	that 	contracted
with 	a 	specific 	PBM 	advances 	Defendants’ 	typicality 	argument.
Having 	considered 	all 	the 	relevant 	factors, 	the 	Court
concludes 	that 	Caremark 	has 	not 	waived 	its 	right 	to 	arbitration
through its litigation conduct. 	See FPE Found., 801 F.3d at 29.
3. 	Claims Subject to Arbitration
Sheet 	Metal 	Workers 	further 	argues 	that, 	even 	if 	the 	Court
finds no litigation-conduct waiver, Caremark is still not entitled
to 	arbitrate 	all 	of 	Sheet 	Metal 	Workers’ 	claims. 	Sheet 	Metal
Workers 	highlights 	that 	the 	contracts 	containing 	the 	arbitration
clause 	do 	not 	cover 	the 	entire 	class 	period 	– 	they 	are 	dated
January 	1, 	2011 	and 	January 	1, 	2015. 	Sheet 	Metal 	Workers 	Sur-
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Reply 	9. 	Sheet 	Metal 	Workers 	thus 	argues 	that 	Caremark 	has 	no
right 	to 	arbitrate 	claims 	arising 	prior 	to 	January 	1, 	2011.
Further, 	Sheet 	Metal 	contends 	that 	it 	is 	unclear 	whether 	the
parties entered into the January 11, 2011 agreement. 	Id.
In 	pertinent 	part, 	the 	dispute 	resolution 	provision 	in 	the
January 1, 2015 contract provides:
Dispute 	Resolution. 	In 	the 	event 	of 	a 	dispute 	between
the 	parties 	and 	prior 	to 	commencing 	any 	litigation 	or
other 	legal 	proceeding, 	each 	party 	shall, 	by 	giving
written 	notice 	to 	the 	other 	party 	(“Dispute 	Notice”),
request 	a 	meeting 	of 	authorized 	representatives 	of 	the
parties for the purpose of resolving the dispute.
PBSA 	¶ 	13.16; 	see 	also 	id. 	¶ 	13.12 	(providing 	that 	the 	dispute
resolution clause survives termination of the agreement). 	Whether
this 	dispute-resolution 	provision 	requires 	the 	parties 	to
arbitrate 	disputes 	arising 	out 	of 	contracts 	entered 	prior 	to 	or
after 	the 	January 	1, 	2015 	contract 	is 	an 	issue 	of 	arbitrability.
The parties have delegated the issues relating to arbitrability to
an arbitrator, see PBSA ¶ 13.16 (incorporating the AAA rules), and
therefore, 	these 	arbitrability 	questions 	must 	be 	decided 	by 	an
arbitrator. 	See 	Henry 	Schein, 	Inc. 	v. 	Archer 	and 	White 	Sales,
Inc., 139 S. Ct. 524, 529 (2019) (holding that, where “the parties’
contract delegates the arbitrability question to an arbitrator, a
court 	may 	not 	override 	the 	contract”, 	even 	where 	“the 	argument
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that the arbitration agreement applies to a particular dispute is
wholly groundless”).
In 	conclusion, 	because 	Caremark 	has 	not 	waived 	its 	right 	to
arbitrate 	Sheet 	Metal 	Workers’ 	claims 	against 	it 	through 	its
conduct in this litigation, the Court GRANTS Caremark’s Motion to
Dismiss.10
B. 	Plaintiffs’ Motion for Class Certification
Plaintiffs 	Sheet 	Metal 	Workers, 	Indiana 	Carpenters, 	and
Plumbers now move to certify the following classes under Rule 23(a)
and (b)(3) of the Federal Rules of Civil Procedure:
Nationwide 	Class. 	All 	health 	plans 	that, 	at 	any 	time
between 	November 	2008 	and 	February 	1, 	2016, 	(1) 	had
Caremark, 	L.L.C., 	Express 	Scripts, 	Medco, 	OptumRx, 	or
MedImpact 	(or 	any 	of 	their 	predecessors) 	as 	their
pharmacy 	benefit 	managers, 	(2) 	paid 	for 	generic
prescription drugs purchased from CVS that were included
in 	CVS’s 	Health 	Savings 	Pass 	program, 	and 	(3) 	paid 	for
those 	drugs 	based 	on 	a 	formula 	containing 	Usual 	and
Customary price.
Unjust 	Enrichment 	Class. 	All 	health 	plans 	that, 	at 	any
time between November 2008 and February 1, 2016, (1) had
Caremark, 	L.L.C., 	Express 	Scripts, 	Medco, 	OptumRx, 	or
MedImpact 	(or 	any 	of 	their 	predecessors) 	as 	their
pharmacy 	benefit 	managers, 	(2) 	paid 	for 	generic
prescription drugs purchased from CVS that were included
in 	CVS’s 	Health 	Savings 	Pass 	program 	in 	Arkansas,
Colorado, 	Connecticut, 	District 	of 	Columbia, 	Hawaii,
Illinois, Indiana, Iowa, Missouri, New Mexico, New York,
10 Neither 	party 	argues 	that 	a 	stay, 	rather 	than 	dismissal,
is the more appropriate remedy. 	See Dialysis Access Ctr., LLC v.
RMS Lifeline, Inc., 638 F.3d 367, 372 (1st Cir. 2011) (noting that
a 	district 	court 	has 	the 	discretion 	to 	dismiss 	claims 	where 	one
party 	has 	a 	right 	to 	arbitrate 	all 	claims 	(citing 	Next 	Step 	Med.
Co. v. Johnson & Johnson Int’l, 619 F.3d 67, 71 (1st Cir. 2010))).
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Oklahoma, and West Virginia, and (3) paid for those drugs
based on a formula containing Usual and Customary price.
Unfair and Deceptive Conduct Consumer Protection Class.
All health plans that, at any time between November 2008
and February 1, 2016, (1) had Caremark, L.L.C., Express
Scripts, 	Medco, 	OptumRx, 	or 	MedImpact 	(or 	any 	of 	their
predecessors) 	as 	their 	pharmacy 	benefit 	managers, 	(2)
paid 	for 	generic 	prescription 	drugs 	purchased 	from 	CVS
that were included in CVS’s Health Savings Pass program
in 	California, 	Florida, 	Illinois, 	Iowa, 	Massachusetts,
New Jersey, New York, Ohio, and Washington, and (3) paid
for those drugs based on a formula containing Usual and
Customary price.
Omissions 	Consumer 	Protection 	Class. 	All 	health 	plans
that, at any time between November 2008 and February 1,
2016, (1) had Caremark, L.L.C., Express Scripts, Medco,
OptumRx, or MedImpact (or any of their predecessors) as
their 	pharmacy 	benefit 	managers, 	(2) 	paid 	for 	generic
prescription drugs purchased from CVS that were included
in 	CVS’s 	Health 	Savings 	Pass 	program 	in 	Illinois,
Michigan, Nevada, and New Jersey, and (3) paid for those
drugs based on a formula containing Usual and Customary
price.
Pls.’ Reply 3-4.
Plaintiffs 	have 	excluded 	the 	following 	payors 	from 	the
proposed classes: 	(1) any governmental payors, including Medicare
and Medicaid; (2) any health plans that served on Caremark’s Client
Advisory 	Committee 	since 	January 	1, 	2008; 	(3) 	any 	health 	plans
that have had parent, subsidiary, or affiliate relationships with
any 	pharmacy 	benefit 	manager 	at 	any 	time 	since 	January 	1, 	2008;
and 	(4) 	health 	plans 	making 	payments 	processed 	by 	OptumRx 	after
January 	29, 	2015. 	They 	further 	exclude: 	(1) 	CVS, 	and 	its
management, 	employees, 	subsidiaries, 	and 	affiliates; 	and 	(2) 	CVS
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Caremark 	and 	its 	officers 	and 	directors. 	See 	id. 	(amending 	the
class definition).
1. 	Legal Standard
In ruling on a motion for class certification, the Court must
“undertake 	a 	‘rigorous 	analysis’” 	to 	determine 	whether 	the
putative class satisfies each of the four prerequisites set forth
in Rule 23(a) of the Federal Rules of Civil Procedure: 	numerosity,
commonality, 	typicality, 	and 	adequacy 	of 	representation. 	In 	re
Nexium Antitrust Litig., 777 F.3d 9, 17-18 (1st Cir. 2015) (quoting
Comcast Corp. v. Behrend, 569 U.S. 27, 33 (2013)). 	In addition to
the 	Rule 	23(a) 	prerequisites, 	to 	be 	certified, 	a 	putative 	class
must 	demonstrate 	that 	it 	satisfies 	one 	of 	the 	requirements 	set
forth 	in 	Rule 	23(b). 	Here, 	Plaintiffs 	contend 	that 	they 	have
satisfied 	Rule 	23(b)(3), 	that 	is, 	that 	“the 	questions 	of 	law 	or
fact 	common 	to 	class 	members 	predominate 	over 	any 	questions
affecting 	only 	individual 	members, 	and 	that 	a 	class 	action 	is
superior 	to 	other 	available 	methods 	for 	fairly 	and 	efficiently
adjudicating the controversy.” 	Fed. R. Civ. P. 23(b)(3).
The 	Supreme 	Court 	has 	cautioned 	that 	Rule 	23 	“does 	not 	set
forth 	a 	mere 	pleading 	standard” 	but 	rather, 	a 	plaintiff 	“must
affirmatively 	demonstrate 	[its] 	compliance 	with” 	the 	Rule.
Comcast, 	569 	U.S. 	at 	33 	(quoting 	Wal–Mart 	Stores, 	Inc. 	v. 	Dukes,
564 	U.S. 	338, 	350 	(2011)). 	This 	inquiry 	“frequently 	. 	. 	.
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‘overlap[s] with the merits of the plaintiff’s underlying claim.’”
Id. at 33-34 (quoting Dukes, 564 U.S. at 351).
Here, Plaintiffs argue that each of the prerequisites of Rule
23 	has 	been 	met 	and 	that 	the 	Court 	should 	certify 	the 	proposed
classes accordingly. 	Defendants disagree, of course, arguing that
Plaintiffs fail to satisfy the requirements of Rule 23, and thus,
class certification is not appropriate. 	Specifically, Defendants
argue 	that 	the 	named 	class 	representatives 	do 	not 	satisfy 	the
typicality and adequacy requirements, the proposed classes are not
ascertainable, 	and 	Plaintiffs 	have 	failed 	to 	demonstrate 	that
issues 	common 	to 	the 	classes 	predominate 	over 	individual 	issues,
as required by Rule 23(b)(3).
2. 	Numerosity and Commonality
To be certified under Rule 23, the members of a class must be
“so numerous that joinder of all members is impracticable.” 	Fed.
R. 	Civ. 	P. 	23(a)(1). 	As 	a 	general 	rule, 	if 	the 	named 	plaintiffs
demonstrate 	“that 	the 	potential 	number 	of 	plaintiffs 	exceeds 	40,
the 	first 	prong 	of 	Rule 	23(a) 	has 	been 	met.” 	García-Rubiera 	v.
Calderón, 	570 	F.3d 	443, 	460 	(1st 	Cir. 	2009) 	(quoting 	Stewart 	v.
Abraham, 275 F.3d 220, 226-27 (3d Cir. 2001)). 	The Court concludes
that the proposed class – comprising hundreds if not thousands of
TPPs 	– 	is 	too 	numerous 	to 	render 	joinder 	practical, 	and 	thus
numerosity is established.
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Rule 	23(a)(2) 	requires 	“questions 	of 	law 	or 	fact 	common 	to
the class.” 	A common question is one that is “capable of classwide
resolution – which means that determination of its truth or falsity
will resolve an issue that is central to the validity of each one
of the claims in one stroke.” 	Dukes, 564 U.S. at 350. 	“[E]ven a
single 	[common] 	question 	will 	do[.]” 	Id. 	at 	359 	(quotations
omitted). 	The 	Court 	is 	satisfied 	that 	a 	common 	question 	exists
regarding 	whether 	Defendants 	engaged 	in 	a 	scheme 	to 	defraud 	TPPs
by 	failing 	to 	report 	HSP 	prices 	as 	U&C 	prices, 	and 	accordingly,
the commonality prerequisite is also met.
3. 	Typicality and Adequacy of Representation
For a class to be certified under Rule 23, the proposed class
representatives 	must 	demonstrate 	that 	they 	“will 	fairly 	and
adequately protect the interests of the class[,]” Fed. R. Civ. P.
23(a)(4), and the “claims or defenses of the representative parties
are 	typical 	of 	the 	claims 	or 	defenses 	of 	the 	class[.]” 	Fed. 	R.
Civ. P. 23(a)(3).
Named Plaintiffs assert that their claims are typical of the
claims of class members because they allege a singular fraudulent
scheme: 	that 	CVS 	overcharged 	class 	members 	for 	drugs 	by 	not
reporting 	HSP 	prices 	as 	the 	drugs’ 	U&C 	prices. 	Pls.’ 	Reply 	9.
Moreover, 	named 	Plaintiffs 	assert 	they 	are 	adequate
representatives 	with 	knowledge 	of 	the 	claims 	and 	no 	conflicts.
Id. at 11-14.
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Defendants counter that named Plaintiffs are neither typical
of 	the 	putative 	class 	members 	nor 	adequate 	to 	represent 	the
proposed 	classes. 	Specifically, 	Defendants 	argue 	that 	named
Plaintiffs 	cannot 	adequately 	represent 	health 	plans 	that
contracted 	with 	PBMs 	with 	whom 	named 	Plaintiffs 	had 	no
relationship; 	named 	Plaintiffs 	are 	subject 	to 	additional 	unique
defenses; 	they 	lack 	familiarity 	with 	the 	basic 	elements 	of 	their
claims; and they had actual knowledge of the alleged scheme. 	Mem.
in 	Supp. 	of 	Defs.’ 	Obj. 	to 	Pls.’ 	Mot. 	for 	Class 	Certification
(“Defs.’ Opp’n”) 58-64, ECF No. 133.
OptumRx and MedImpact. 	Defendants contend that because none
of 	the 	named 	Plaintiffs 	contracted 	with 	the 	PBMs 	OptumRx 	or
MedImpact, 	they 	are 	not 	suitable 	to 	represent 	putative 	class
members 	who 	did. 	Defs.’ 	Opp’n 	6; 	see 	also 	Defs.’ 	Sur-Reply 	in
Opp’n 	to 	Pls.’ 	Mot. 	for 	Class 	Certification 	(“Defs.’ 	Sur-Reply”)
22, ECF No. 166-1.11 	Defendants insist that named Plaintiffs have
no 	incentive 	to 	develop 	or 	present 	evidence 	that 	the 	specific
language about U&C pricing in OptumRx’s and MedImpact’s contracts
support 	the 	absent 	class 	members’ 	claims. 	Defs.’ 	Opp’n 	60-61.
These 	arguments 	ring 	hollow. 	Named 	Plaintiffs, 	represented 	by 	a
reputable, national plaintiffs-side firm, have every incentive to
11 	Defendants 	also 	advance 	this 	argument 	as 	to 	Caremark 	in
pressing its Motion to Dismiss. 	See Feb. 27, 2020 Hr’g Tr. 110:20-
111:2, 	ECF 	No. 	170. 	The 	argument 	fails 	for 	the 	same 	reasons 	it
fails as to OptumRx and MedImpact.
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develop 	the 	claims 	of 	those 	health 	plans 	that 	did 	contract 	with
OptumRx 	and 	MedImpact 	in 	order 	to 	establish 	the 	strongest 	trial
and/or settlement position as a class. 	See, e.g., In re Loestrin
24 Fe Antitrust Litig., No. 1:13-MD-2472, 2019 WL 3214257, at *12
(D.R.I. July 2, 2019) (noting that the plaintiffs, represented by
the 	same 	law 	firm 	as 	the 	TPPs 	here, 	were 	“in 	blunt, 	strategic
terms” motivated to pursue the full extent of absent class members’
claims “[b]ecause the bigger the claim, the bigger the leverage on
[the defendants] and hopefully the bigger the settlement”).
Moreover, 	Defendants’ 	theory 	of 	the 	case 	on 	the 	merits 	is
that 	“all 	of 	the 	U&C 	definitions 	should 	be 	interpreted, 	in 	light
of 	the 	uniform 	industry 	understanding, 	to 	mean 	that 	membership
program 	prices 	like 	HSP 	are 	not 	U&C 	prices.” 	Defs.’ 	Opp’n 	30.
This focus on industry understanding provides ample motivation for
named 	Plaintiffs 	to 	pursue 	evidence 	regarding 	OptumRx 	and
MedImpact, as well as all PBMs more generally. 	Thus, the Court is
confident that the named Plaintiffs have the incentive to address
contract 	language 	or 	other 	evidence 	unique 	to 	health 	plans 	that
contracted 	with 	these 	two 	PBMs. 	Any 	purported 	conflict 	arising
from 	different 	U&C 	contract 	terms 	is 	merely 	speculative. 	See
Matamoros 	v. 	Starbucks 	Corp., 	699 	F.3d 	129, 	138 	(1st 	Cir. 	2012)
(holding that only fundamental conflicts that “go to the heart of
the litigation prevent a plaintiff from meeting the Rule 23(a)(4)
adequacy requirement” (citation and quotation omitted)).
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Additional 	Unique 	Defenses. 	Defendants 	argue 	that 	named
Plaintiffs 	are 	subject 	to 	additional 	defenses 	– 	rendering 	them
atypical 	– 	because 	they 	have 	sued 	in 	the 	name 	of 	trusts, 	rather
than 	in 	the 	name 	of 	their 	trustees. 	Defs.’ 	Opp’n 	6. 	Whether
named-Plaintiff 	trusts 	have 	the 	capacity 	to 	sue 	under 	state 	law
presents 	an 	interesting 	legal 	question 	– 	but 	not 	one 	that
undermines 	their 	ability 	to 	serve 	as 	adequate 	and 	typical 	class
representatives.
The 	First 	Amended 	Complaint 	alleges 	that 	named-Plaintiff
trusts 	are 	“employee 	welfare 	benefit 	plan[s]” 	and 	“employee
benefit 	plan[s]” 	as 	defined 	in 	the 	Employee 	Retirement 	Income
Security Act (“ERISA”). 	FAC ¶¶ 9, 11, 13. 	Named Plaintiffs have
staked out the position that they are not traditional trusts, but
rather 	Voluntary 	Employees 	Beneficiary 	Association 	Plans
(“VEBAs”), which are welfare benefit plans under Section 501(c)(9)
of the Internal Revenue Code. 	See Ltr from E. Fagen to K. Hoover
1 	(May 	4, 	2018), 	ECF 	No. 	144-12. 	“A 	VEBA 	is 	subject 	to 	some
aspects 	of 	ERISA, 	but 	is 	not 	considered 	to 	be 	a 	qualified
retirement plan.” 	Id.
It 	is 	not 	clear 	at 	this 	juncture 	whether 	ERISA 	conveys 	to
named Plaintiffs, as VEBAs, the capacity to sue as discussed below.
That 	said, 	were 	Defendants 	to 	convince 	the 	Court 	on 	summary
judgment that named Plaintiffs do not have the capacity to sue as
trusts, it would not undermine named Plaintiffs’ ability to serve
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as 	adequate 	and 	typical 	class 	representatives. 	As 	a 	remedy 	in
those 	circumstances, 	First 	Circuit 	authority 	favors 	directing
plaintiff-trusts 	to 	substitute 	their 	trustees 	as 	plaintiffs, 	not
dismissal 	of 	the 	claims. 	See 	Yan 	v. 	Rewalk 	Robotics 	Ltd., 	973
F.3d 	22, 	37 	(1st 	Cir. 	2020) 	(stating 	that 	Rule 	17 	“expressly
anticipates 	the 	possibility 	that 	a 	complaint 	might 	be 	brought 	by
someone 	who 	turns 	out 	not 	to 	be 	the 	party 	in 	interest” 	and
“expressly admonishes that ‘[t]he court may not dismiss an action
for failure to prosecute in the name of the real party in interest
until, after an objection, a reasonable time has been allowed for
the real party in interest to ratify, join, or be substituted into
the action’” (quoting Fed. R. Civ. P. 17(a)(3))).
To 	the 	extent 	an 	employee 	benefit 	plan 	is 	subject 	to 	ERISA,
courts have concluded that ERISA provides it with the capacity to
sue 	under 	state 	law. 	See 	Int’l 	Union 	of 	Bricklayers 	& 	Allied
Craftsmen, 	Local 	No. 	1 	of 	Rhode 	Island 	v. 	Menard 	& 	Co. 	Masonry
Bldg. 	Contractors, 	619 	F. 	Supp. 	1457, 	1462 	(D.R.I. 	1985) 	(Selya,
J.) 	(construing 	29 	U.S.C. 	§ 	1132(d)(1) 	as 	providing 	employee
benefit 	plans 	with 	the 	“right 	. 	. 	. 	to 	sue 	and 	be 	sued 	like
corporations 	and 	other 	legal 	entities, 	thereby 	eliminating
artificial 	state 	law 	capacity-to-sue 	barriers 	and 	authorizing
suits brought by funds in situations where there would properly be
jurisdiction” (citing Pressroom Unions-Printers League Income Sec.
Fund v. Cont’l Assurance Co., 700 F.2d 889, 893 (2d Cir. 1983)));
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see also Local 159, 342, 343 & 444 v. Nor-Cal Plumbing, Inc., 185
F.3d 	978, 	984 	(9th 	Cir. 	1999) 	(holding 	that 	§ 	1132(d)(1) 	gives
ERISA 	plans 	the 	capacity 	to 	sue 	where 	the 	court 	otherwise 	has
jurisdiction); 	Labul 	v. 	XPO 	Logistics, 	Inc., 	No. 	3:18-CV-2062
(VLB), 	2019 	WL 	1450271, 	at 	*6 	(D. 	Conn. 	Apr. 	2, 	2019) 	(rejecting
a similar challenge to pension funds’ appointment as lead plaintiff
in a class action, holding that the funds had capacity to sue under
§ 	1132(d)(1)); 	29 	U.S.C. 	§ 	1132(d)(1) 	(“An 	employee 	benefit 	plan
may sue or be sued under this subchapter as an entity.”).
The Second Circuit in Pressroom and then-District Judge Selya
in 	Menard 	specifically 	spoke 	to 	the 	capacity 	of 	ERISA 	trusts 	to
bring state law claims in federal court, noting that
“if 	a 	fund 	became 	involved 	in 	a 	contract 	dispute, 	and
wished to pursue a state law contract claim, § 1132(d)(1)
would allow the fund to bring such an action in its own
name.”
. . .
And, 	insofar 	as 	§ 	1132(d)(1) 	does 	cede 	to 	trust 	funds
capacity 	to 	sue 	as 	entities 	in 	their 	own 	behalf, 	it
satisfies 	an 	obvious 	need. 	Conferral 	of 	entity 	status
on 	an 	[employee 	benefit 	plan] 	eliminates 	an 	artificial
impediment to the prosecution of actions by such a fund
. . . and thereby enhances an important purpose of ERISA:
furtherance of the stability and integrity of [employee
benefit plans].
Menard, 619 F. Supp. at 1462 (quoting Pressroom, 700 F.2d at 893).
Thus, 	to 	the 	extent 	named 	Plaintiffs 	are 	subject 	to 	ERISA, 	they
would 	have 	capacity 	to 	sue. 	Moreover, 	Rule 	17(b)(3)(A) 	of 	the
Federal 	Rules 	of 	Civil 	Procedure 	provides 	that 	an 	unincorporated
association 	“may 	sue 	or 	be 	sued 	in 	its 	common 	name 	to 	enforce 	a
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substantive right existing under the United States Constitution or
laws”, 	and 	therefore, 	named 	Plaintiffs 	have 	capacity 	to 	pursue
their federal RICO claims. 	Fed. R. Civ. P. 17(b)(3)(A)).
For 	these 	reasons, 	Defendants’ 	capacity-based 	argument 	does
not undermine Plaintiffs’ ability to serve as adequate and typical
class representatives.
Class 	Representatives’ 	Lack 	of 	Familiarity 	with 	Basic
Elements 	of 	their 	Claims. 	Defendants 	next 	argue 	that 	the 	named
Plaintiffs 	are 	inadequate 	class 	representatives 	because 	they 	are
unfamiliar with the basic elements of their claims. 	Defs.’ Opp’n
6. 	Defendants 	say 	that, 	during 	depositions, 	the 	funds’
representatives did not know basic facts about the suit and could
not speak to the veracity of the allegations. 	Id. at 64-65. 	The
record 	belies 	this 	argument. 	Plaintiffs’ 	proposed 	class
representatives 	have 	“the 	minimal 	degree 	of 	knowledge” 	necessary
to 	satisfy 	the 	Rule 	23 	adequacy 	requirement. 	See 	In 	re 	Pharm.
Indus. Average Wholesale Price Litig., 277 F.R.D. 52, 60 (D. Mass.
2011) 	(“[I]n 	a 	complex 	[pharmaceutical] 	case 	such 	as 	this, 	a
plaintiff 	need 	not 	have 	expert 	knowledge 	of 	all 	aspects 	of 	the
case 	to 	qualify 	as 	a 	class 	representative, 	and 	a 	great 	deal 	of
reliance 	upon 	the 	expertise 	of 	counsel 	is 	to 	be 	expected.”
(citation and quotation omitted)); In re Advance Auto Parts, Inc.,
Sec. 	Litig., 	No. 	CV 	18-212-RGA, 	2020 	WL 	6544637, 	at 	*6 	(D. 	Del.
Nov. 	6, 	2020) 	(“It 	is 	well-settled 	that 	a 	class 	representative
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need only possess a minimal degree of knowledge necessary to meet
the 	adequacy 	standard.” 	(quoting 	Roofer’s 	Pension 	Fund 	v. 	Papa,
333 F.R.D. 66, 77 (D.N.J. 2019)). 	Each named Plaintiffs’ 30(b)(6)
representative 	provided 	a 	brief 	and 	broad 	overview 	of 	his
understanding 	of 	the 	case 	and 	testified 	that 	he 	relied 	on 	the
advice 	of 	counsel. 	See, 	e.g., 	Sheet 	Metal 	Workers 	Trustee 	Scott
Parks 	Dep. 	40:16-19, 	ECF 	No. 	144-5 	(“My 	understanding 	is 	CVS
Caremark 	inflated 	their 	pricing 	by 	not 	incorporating 	their 	drug
program, 	and 	it 	was 	not 	factored 	into 	the 	usual 	and 	customary
pricing.”); 	Indiana 	Carpenters 	Trustee 	Michael 	Joseph 	Lauer 	Dep.
141:8-11, 	ECF 	No. 	144-13 	(confirming 	that 	the 	representative
understood 	from 	the 	Complaint 	that 	Carpenters 	was 	“suing 	CVS 	in
this 	case 	for 	not 	reporting 	its 	HSP 	prices 	as 	its 	U&C 	prices”);
Plumbers 	Trustee 	Joseph 	Ohm 	Dep. 	14:21-25, 	ECF 	No. 	144-14
(describing 	the 	pending 	claims 	as 	addressing 	“various 	retail
generic 	drug 	programs 	offered 	at 	the 	retail 	level 	by 	various
pharmacies”).
Actual 	Knowledge. 	As 	explained 	in 	more 	detail 	below, 	the
Court 	disagrees 	that 	any 	purported 	actual 	knowledge 	of 	the 	HSP
pricing 	scheme 	on 	the 	part 	of 	the 	named 	Plaintiffs 	renders 	them
inadequate 	or 	atypical 	class 	representatives. 	The 	Court 	is
prepared to manage any such knowledge issues with subclasses.
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For these reasons, the Court concludes that named Plaintiffs
are 	adequate 	and 	typical 	class 	representatives 	for 	the 	proposed
classes. 	See Fed. R. Civ. P. 23(a)(3) & (a)(4).
4. 	Ascertainability
To 	meet 	their 	burden 	on 	a 	motion 	for 	class 	certification,
named 	Plaintiffs 	must 	demonstrate, 	“by 	a 	preponderance 	of 	the
evidence, 	that 	the 	class 	is 	currently 	and 	readily 	ascertainable
based 	on 	objective 	criteria.” 	Nexium, 	777 	F.3d 	at 	19 	(quoting
Carrera 	v. 	Bayer 	Corp., 	727 	F.3d 	300, 	306 	(3d 	Cir. 	2013)).
Defendants argue that the proposed classes in the instant case are
not ascertainable.
a. 	Whether 	Plaintiffs’ 	Class 	Definition 	is 	Too
Vague
Defendants argue that Plaintiffs have used overly vague terms
to 	define 	the 	proposed 	classes 	of 	“health 	plans” 	and 	the 	class
exclusions 	(namely, 	“governmental 	payor” 	and 	“affiliates”) 	and
that 	Plaintiffs 	have 	not 	provided 	a 	reliable 	methodology 	for
identifying 	the 	universe 	of 	health 	plans 	from 	electronic 	claims
data. 	Defs.’ 	Sur-Reply 	4; 	see 	also 	Defs.’ 	Opp’n 	3, 	26-27. 	The
Court disagrees.
The 	Court 	is 	satisfied 	that 	the 	universe 	of 	TPPs 	is
identifiable 	in 	an 	administratively 	feasible 	manner 	through
requests 	for 	production 	to 	Caremark 	and 	subpoenas 	to 	third-party
PBMs. 	See Pls.’ Reply 16 n.75. 	At this juncture, the Court need
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only be satisfied that Plaintiffs can execute their plan; they do
not 	need 	to 	have 	the 	information 	in 	hand. 	See 	In 	re 	Asacol
Antitrust 	Litig., 	907 	F.3d 	42, 	58 	(1st 	Cir. 	2018) 	(“And 	to
determine 	whether 	a 	class 	certified 	for 	litigation 	will 	be
manageable, 	the 	district 	court 	must 	at 	the 	time 	of 	certification
offer a reasonable and workable plan . . . .”).
Plaintiffs’ expert, Dr. Rena Conti,12 has detailed her method
for 	excluding 	pharmacy 	claims 	paid 	by 	government 	payors, 	and, 	in
response 	to 	input 	from 	Mr. 	Brett 	Barlag, 	Defendants’ 	expert, 	she
updated 	her 	CVS 	Condor 	Codes 	(i.e., 	the 	CVS 	data 	field 	used 	to
identify 	the 	PBM 	associated 	with 	each 	claim) 	for 	identifying 	and
excluding 	government 	payors 	to 	be 	more 	inclusive. 	See 	Expert
Report 	of 	Rena 	Conti, 	(“Conti 	Report”) 	¶ 	71, 	ECF 	No. 	123-6; 	see
also 	Reply 	Report 	of 	Rena 	Conti, 	(“Conti 	Reply”) 	¶ 	47, 	ECF 	No.
145-2; In re Loestrin 24 FE Antitrust Litigation, 410 F. Supp. 3d
352, 386, 394, 401 (D.R.I. 2019) (approving a similar methodology
for removing governmental payors from the proposed class).
12 Dr. Conti is an Associate Research Director of Biopharma &
Public Policy for the Boston University Institute for Health System
Innovation 	& 	Policy, 	an 	Associate 	Professor 	at 	the 	Boston
University 	Questrom 	School 	of 	Business, 	Department 	of 	Markets,
Public 	Policy 	and 	Law, 	and 	an 	Academic 	Affiliate 	of 	Greylock
McKinnon 	Associates. 	Expert 	Report 	of 	Rena 	Conti, 	¶ 	1, 	ECF 	No.
123-6. 	She 	received 	a 	B.A. 	from 	Kenyon 	College 	and 	a 	Ph.D. 	in
Health Policy (Economics Track) from Harvard University. 	Id. ¶ 5.
Defendants 	do 	not 	dispute 	her 	qualifications 	to 	offer 	expert
opinion. 	They do, however, offer counter expert opinion.
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Moreover, 	Dr. 	Conti 	has 	set 	forth 	a 	method 	for 	excluding
Caremark’s 	Client 	Advisory 	Committee 	and 	those 	health 	plans 	with
affiliate 	relationships 	with 	PBMs 	once 	discovery 	is 	completed.
See Conti Report 5 n.11; see also Conti Reply ¶ 39 (detailing plans
to exclude Caremark’s Client Advisory Committee once CVS provides
the 	pertinent 	data). 	It 	strains 	credulity 	for 	Defendants 	to
suggest 	they 	do 	not 	have 	access 	to 	data 	on 	their 	own 	Client
Advisory 	Committee 	and 	affiliates, 	and 	indeed, 	they 	have 	every
incentive to come forward with data on Plaintiffs’ exclusions, as
Mr. Barlag’s expert report plainly demonstrates. 	Thus, the Court
is 	satisfied 	by 	a 	preponderance 	of 	the 	evidence 	that 	Plaintiffs
have 	the 	tools 	– 	and 	Defendants 	the 	motivation 	to 	sharpen 	those
tools 	– 	to 	precisely 	identify 	class 	members 	and 	apply 	class
exclusions.
Plaintiffs 	have 	thus 	established 	by 	a 	preponderance 	of 	the
evidence 	that 	they 	can 	identify 	the 	universe 	of 	TPPs, 	as 	well 	as
apply 	the 	class 	definition 	and 	class 	exclusions 	in 	an
administratively feasible way on a class-wide basis.
b. 	Identifying 	TPPs 	that 	Contracted 	for 	U&C
Pricing Terms13
13 	To 	the 	extent 	Plaintiffs 	assert 	that 	(challenged)
testimonial affidavits and declarations from class members may be
used 	to 	establish 	class 	membership, 	Pls.’ 	Reply 	15 	(citing 	In 	re
Dial Complete Mktg. and Sales Practices Litig., 312 F.R.D. 36, 50
(D.N.H. 	2015)), 	they 	are 	incorrect. 	See 	In 	re 	Asacol 	Antitrust
Litig., 	907 	F.3d 	42, 	52-53 	(1st 	Cir. 	2018) 	(rejecting 	rebutted,
testimonial affidavits as proof of injury at class certification).
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At the crux of this suit is the allegation that CVS failed to
report its HSP prices as its U&C prices for eligible generic drugs,
and as a result, putative class members paid more than they should
have. Thus, to fall within the putative class, a TPP or health
plan must have been entitled to “lower-of U&C _ pricing”
(hereinafter, “lower-of pricing”) during the class period. lLower-
of pricing provides that, for specified prescription drugs, a TPP
will pay the lowest of several pricing metrics, often including
the U&C.14 Pls.’ Mot. 4-5.

While many TPP/PBM and CVS/PBM contracts provided for lower-
of pricing during the class period, some did not. See, e.g., Conti
Reply II] 46, 48 (updating her damages calculation to “exclude[]
claims identified by Mr. Barlag that may not have had U&C in the
lower-of pricing formula”). Complicating matters, some TPPs had
different contracts over the course of the class period, which in
turn may have contained different pricing provisions and covered
different prescriptions. Defendants highlight Sheet Metal Workers
as an example: “For part of the class period, Sheet Metal didn’t
get U&C pricing at all. For part of the class period, it did.

And for part of the class period, it got U&éC for some prescriptions

36

37
but 	not 	other[s] 	. 	. 	. 	.” 	Feb. 	27, 	2020 	Hr’g 	Tr. 	43:16-19. 	The
parties forecast that there may be upward of 40,000 TPP contracts.
Id. at 49-50.
Seizing 	on 	this, 	Defendants 	next 	argue 	that 	there 	is 	no
manageable way to identify which health plans or TPPs paid for HSP
drugs based on a formula that incorporates U&C as a pricing metric.
Defs.’ 	Sur-Reply 	1. 	Instead, 	they 	say, 	to 	determine 	class
membership, 	one 	would 	need 	to 	review 	thousands 	of 	contracts.
Defs.’ Opp’n 3. 	To do so, Defendants’ expert, Brett Barlag, states
that “one would likely need to (1) link the individual prescription
transactions 	to 	the 	individual 	TPP 	associated 	with 	that
transaction 	and 	(2) 	review 	the 	contract 	between 	the 	PBM 	and 	that
TPP 	to 	determine 	whether 	the 	contract 	entitled 	the 	TPP 	to 	U&C
pricing 	– 	and, 	if 	so, 	for 	what 	time 	periods.” 	Decl. 	of 	Brett 	E.
Barlag (“Barlag Decl.”) ¶ 119, ECF No. 131-1.
Plaintiffs 	counter 	that 	the 	process 	doesn’t 	need 	to 	be 	that
complicated. 	They 	say 	that 	class 	members 	can 	be 	identified 	from
the 	PBM/TPP 	contracts 	and 	existing 	PBM 	data. 	Pls.’ 	Reply 	15-16
(citing Defs.’ Opp’n 3; Conti Reply ¶¶ 10-17); see also Conti Reply
¶ 11 (stating that “PBMs maintain electronic claims data for each
TPP and electronically store generic price algorithms” that could
be 	used 	to 	“identify 	whether 	a 	TPP’s 	generic 	pricing 	algorithm
contained the U&C price as a term”). 	Plaintiffs would develop and
deploy 	a 	computer 	program 	to 	identify 	whether 	a 	TPP’s 	generic
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pricing 	algorithm 	contained 	the 	U&C 	price 	as 	a 	term, 	and 	if 	it
did, 	to 	determine 	whether 	that 	TPP 	had 	paid 	for 	any 	HSP 	drugs 	at
CVS 	during 	the 	class 	periods. 	Conti 	Reply 	¶ 	11. 	According 	to
Plaintiffs, any TPPs that satisfy these two conditions and do not
fall into a class exclusion are properly included in the putative
classes. 	Id. 	If 	their 	classes 	are 	certified, 	Plaintiffs 	will
seek 	the 	information 	through 	requests 	for 	production 	to 	Caremark
and 	document 	subpoenas 	to 	the 	third-party 	PBMs. 	Pls.’ 	Reply 	16
n.75; 	see 	also 	Conti 	Reply 	¶¶ 	12-13 	(confirming 	a 	data 	field 	in
the 	Caremark/Sheet 	Metal 	Workers 	data 	containing 	a 	variable 	that
can 	be 	used 	to 	identify 	price 	basis 	by 	which 	a 	claim 	is
adjudicated, such as U&C price); Expert Report of Catherine Graeff
2, 	ECF 	No. 	129-2 	(noting 	that 	the 	NCPDP 	developed 	the 	Universal
Claim 	Form 	in 	1980 	in 	an 	effort 	to 	standardize 	pharmacy 	benefit
claims and that pharmacies and TPPs contract for which data fields
on the UCF shall be filled out for claims adjudication).
As 	a 	fallback 	position, 	if 	the 	PBMs 	fail 	to 	produce 	the
requisite 	data, 	Plaintiffs 	also 	offer 	to 	review 	each 	of 	the
contracts 	– 	estimated 	to 	number 	upwards 	of 	40,000 	– 	for 	lower-of
U&C pricing provisions. 	See Conti Reply ¶ 14; Feb. 27, 2020 Hr’g
Tr. 	19-20. 	Under 	this 	method, 	Plaintiffs 	would 	identify 	PBM/TPP
contracts 	with 	the 	U&C 	price 	included 	in 	the 	generic 	pricing
formula. 	Once identified, Plaintiffs would review the PBM claims
data to confirm that the TPP paid for an HSP drug purchased at CVS
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during 	the 	class 	period. 	Conti 	Reply 	¶ 	15. 	Dr. 	Conti’s 	team
reviewed the 450 contracts in its possession from Caremark, Express
Scripts, MedImpact, and OptumRx to test this method, and confirmed
they could determine whether each contract indicated “presumptive
class membership.” 	Id. ¶ 16.
After carefully reviewing the expert reports and considering
Plaintiffs’ 	proposed 	methodology, 	the 	Court 	is 	satisfied 	that
Plaintiffs 	have 	demonstrated 	an 	administratively 	feasible 	method
by 	which 	to 	determine 	which 	TPPs 	were 	entitled 	to 	lower-of 	U&C
pricing during the class period. 	At bottom, whether a health plan
or 	TPP 	is 	a 	member 	of 	the 	proposed 	class 	is 	objectively
ascertainable from either documents (i.e., contracts) or datasets.
This 	case 	is 	clearly 	distinguishable 	from, 	for 	example, 	the
landmark case of In re Asacol, 907 F.3d at 51-53. 	In Asacol, class
membership 	depended 	on 	brand 	loyalty, 	which 	was 	only 	knowable 	by
questioning a putative class member. 	Id. 	Here, in contrast, class
membership can be determined either from “identify[ing] whether a
TPP’s generic pricing algorithm contained the U&C price as a term,”
Conti 	Reply 	¶ 	11, 	or 	an 	objective 	contract 	review. 15 	Thus,
15 The 	Court 	is 	not 	convinced 	that 	any 	differences 	in 	the
contracts’ 	U&C 	pricing 	provisions 	render 	this 	exercise
unmanageable. 	To the extent the parties need to litigate whether
certain 	TPPs’ 	contract 	language 	entitled 	them 	to 	U&C 	pricing,
Defs.’ 	Opp’n 	23 	& 	n.6, 	this 	can 	be 	done 	in 	subclasses. 	If
Defendants 	have 	actual 	proof 	that 	some 	contracts 	are 	ambiguous
(which the Court understands to not be Defendants’ primary merits
position) the Court will proceed to develop subclasses to litigate
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Plaintiffs’ 	proffered 	methodology 	presents 	a 	workable 	plan 	to
ascertain class membership from objective criteria. 	See Matamoros
v. Starbucks Corp., 699 F.3d 129, 139 (1st Cir. 2012) (“For a class
to be sufficiently defined, the court must be able to resolve the
question 	of 	whether 	class 	members 	are 	included 	or 	excluded 	from
the 	class 	by 	reference 	to 	objective 	criteria.” 	(quoting 	5 	James
Wm. 	Moore 	et 	al., 	Moore’s 	Federal 	Practice 	§ 	23.21[3][a] 	(3d 	ed.
2012))); 	see 	also 	Asacol, 	907 	F.3d 	at 	52; 	Byrd 	v. 	Aaron’s 	Inc.,
784 	F.3d 	154, 	171 	(3d 	Cir. 	2015), 	as 	amended 	(Apr. 	28, 	2015)
(stating 	that 	“‘the 	size 	of 	a 	potential 	class 	and 	the 	need 	to
review individual files to identify its members are not reasons to
deny 	class 	certification’” 	because 	“[t]o 	hold 	otherwise 	would
seriously 	undermine 	the 	purpose 	of 	a 	Rule 	23(b)(3) 	class 	to
aggregate 	and 	vindicate 	meritorious 	individual 	claims 	in 	an
efficient manner” (quoting Young v. Nationwide Mut. Ins. Co., 693
F.3d 532, 539–40 (6th Cir. 2012))).
The 	cases 	cited 	by 	Defendants 	do 	not 	convince 	this 	Court
otherwise. 	In 	Skelaxin, 	the 	district 	court 	concluded 	that 	the
class 	was 	not 	ascertainable 	where 	class 	member 	identification
required 	“individual 	inquiry 	into 	contracts 	covering 	millions 	of
[prescription] 	purchases” 	and 	the 	putative 	class 	had 	“not
individual issues. 	The Court always has the option of decertifying
a 	class 	where 	such 	an 	inquiry 	proves 	overwhelming; 	that 	said, 	at
this point, Plaintiffs have met their burden in establishing that
the classes are ascertainable.
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identified what in each transaction would be required to determine”
class 	membership. 	In 	re 	Skelaxin 	(Metaxalone) 	Antitrust 	Litig.,
299 F.R.D. 555, 570, 572 (E.D. Tenn. 2014). 	That is not the case
here. 	As 	recited 	in 	detail 	above, 	Plaintiffs 	have 	demonstrated
that 	they 	can 	employ 	either 	an 	algorithm 	or 	contract 	review 	to
determine 	whether 	a 	TPP 	paid 	for 	drugs 	during 	the 	class 	period
using U&C pricing.
In 	Manson, 	the 	second 	case 	Defendants 	rely 	upon, 	the 	court
held 	that 	the 	putative 	class 	was 	not 	ascertainable 	because 	the
public 	records 	proposed 	by 	the 	plaintiffs 	established 	only 	“the
possibility that 	a 	particular 	homeowner 	might 	fall 	within 	the
class.” 	Manson 	v. 	GMAC 	Mortg., 	LLC, 	283 	F.R.D. 	30, 	38 	n.26 	(D.
Mass. 2012). 	Here, Plaintiffs’ proposed methodology will be able
to identify class members with a far greater degree of certainty.
Thus, 	the 	Court 	concludes 	that 	Plaintiffs 	have 	set 	forth 	an
administratively 	feasible 	plan 	for 	ascertaining 	the 	contours 	of
their proposed class.
5. 	Predominance
Under 	Rule 	23(b)(3), 	a 	putative 	class 	must 	demonstrate 	that
common 	issues 	predominate 	over 	individual 	issues. 	Asacol, 	907
F.3d 	at 	51 	(citing 	Amgen, 	Inc. 	v. 	Connecticut 	Ret. 	Plans 	& 	Tr.
Funds, 	568 	U.S. 	455, 	469 	(2013)). 	Class 	members’ 	“claims 	must
depend upon a common contention.” 	Dukes, 564 U.S. at 350. 	“That
common 	contention, 	moreover, 	must 	be 	of 	such 	a 	nature 	that 	it 	is
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capable 	of 	classwide 	resolution 	— 	which 	means 	that 	determination
of 	its 	truth 	or 	falsity 	will 	resolve 	an 	issue 	that 	is 	central 	to
the 	validity 	of 	each 	one 	of 	the 	claims 	in 	one 	stroke.” 	Id. 	The
Supreme 	Court 	emphasized 	that 	“[w]hat 	matters 	to 	class
certification 	. 	. 	. 	is 	not 	the 	raising 	of 	common 	‘questions’ 	—
even 	in 	droves 	— 	but 	rather, 	the 	capacity 	of 	a 	class-wide
proceeding to generate common answers apt to drive the resolution
of 	the 	litigation.” 	Id. 	(quoting 	Richard 	A. 	Nagareda, 	Class
Certification in the Age of Aggregate Proof, 84 N.Y.U. L. Rev. 97,
132 	(2009)). 	Pervasive 	“[d]issimilarities 	within 	the 	proposed
class” 	may 	serve 	to 	prevent 	“the 	generation 	of 	common 	answers.”
Id. 	(quoting 	Nagareda, 	84 	N.Y.U. 	L. 	Rev. 	at 	132). 	To 	find
predominance, the district court must determine that it can dispose
of 	any 	differences 	among 	class 	members’ 	claims 	“in 	a 	manner 	that
is not ‘inefficient or unfair.’” 	Asacol, 907 F.3d at 51 (quoting
Amgen, 568 U.S. at 469).
In 	Asacol, 	the 	First 	Circuit 	described 	inefficiency 	“as 	a
line 	of 	thousands 	of 	class 	members 	waiting 	their 	turn 	to 	offer
testimony and evidence on individual issues.” 	Id. 	The flip side
of this inefficiency is unfairness, illustrated well as “an attempt
to eliminate inefficiency by presuming to do away with the rights
a 	party 	would 	customarily 	have 	to 	raise 	plausible 	individual
challenges on those issues.” 	Id. at 51-52. 	Thus, where a putative
class 	action 	raises 	individual 	issues 	for 	adjudication, 	a 	class
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may 	be 	certified 	only 	if 	“the 	proposed 	adjudication 	will 	be 	both
‘administratively feasible’ and ‘protective of defendants’ Seventh
Amendment 	and 	due 	process 	rights.’” 	Id. 	at 	52 	(quoting 	Nexium,
777 F.3d at 19).
To this end, and before certifying a class, a district court
must “offer a reasonable and workable plan for how that opportunity
will be provided in a manner that is protective of the defendant’s
constitutional 	rights 	and 	does 	not 	cause 	individual 	inquiries 	to
overwhelm 	common 	issues.” 	Id. 	at 	58; 	see 	also 	In 	re 	New 	Motor
Vehicles 	Canadian 	Export 	Antitrust 	Litig., 	522 	F.3d 	6, 	20 	(1st
Cir. 	2008) 	(“Under 	the 	predominance 	inquiry, 	‘a 	district 	court
must formulate some prediction as to how specific issues will play
out 	in 	order 	to 	determine 	whether 	common 	or 	individual 	issues
predominate in a given case.’” (quoting Waste Mgmt. Holdings, Inc.
v. Mowbray, 208 F.3d 288, 298 (1st Cir. 2000))).
Defendants 	argue 	that 	common 	issues 	do 	not 	predominate
because the differences between class members – in their contracts,
their purported knowledge of the alleged fraud, and their payment
structures 	– 	would 	render 	a 	class 	action 	“inefficient” 	and/or
“unfair.” 	Defs.’ Opp’n 27-28 (quoting Asacol, 907 F.3d at 51).
Here, 	the 	Court 	is 	satisfied 	that 	the 	common 	issues 	to 	be
tested by the proposed classes – namely, whether CVS fraudulently
failed to include its HSP prices in its U&C pricing – will provide
common 	answers. 	See 	Dukes, 	564 	U.S. 	at 	350 	(emphasizing 	that 	a
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Rule 	23(b)(3) 	action 	must 	have 	the 	capacity 	to 	produce 	common
answers); see also Corcoran v. CVS Health Corp., 779 F. App’x 431,
433 	(9th 	Cir. 	2019) 	(holding, 	in 	consumer 	suit 	with 	similar
allegations against CVS, that there existed triable issue of fact
as 	to 	whether 	contract 	language 	supported 	finding 	that 	PBM
contracts 	required 	CVS 	to 	include 	HSP 	prices 	as 	U&C 	prices 	in
consumer 	class 	action). 	Thus, 	after 	careful 	consideration, 	the
Court 	concludes 	that 	common 	issues 	predominate, 	and 	as 	discussed
further 	below, 	any 	issues 	relating 	to 	subsets 	of 	classes 	– 	in
particular, those relating to contract interpretation, knowledge,
statute of limitations, and arbitration issues – can be adjudicated
in 	an 	administratively 	feasible 	manner 	with 	the 	use 	of
subclasses.16
a. 	Injury
With 	respect 	to 	injury, 	Defendants 	contend 	that 	several
issues must be litigated individually, and thus individual issues
predominate over common ones. 	The Court takes them up seriatim.
i. 	Contract Interpretation
Defendants 	contend 	that 	common 	issues 	do 	not 	predominate
because 	there 	are 	too 	many 	issues 	requiring 	individual 	contract
16 Indeed, 	Defendants 	themselves 	compiled 	a 	chart 	purporting
to reflect the individual issues at play in 39 MedImpact contracts
proposed 	in 	this 	case. 	See 	Defs.’ 	App’x 	B, 	ECF 	No. 	133-1. 	In
doing 	so, 	they 	also 	demonstrate 	that 	each 	of 	these 	issues 	is
capable of resolution before trial.
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interpretation. 	For 	a 	TPP 	to 	have 	sustained 	injury 	under 	the
alleged scheme at issue, it must have paid an overcharge when CVS
failed 	to 	include 	HSP 	prices 	in 	its 	U&C 	prices. 	In 	Defendants’
view, that determination is dependent on the drug-pricing formula
dictated by individual contracts, including generic effective rate
discounts 	(“GERs”). 	To 	sort 	this 	out, 	they 	contend, 	one 	must
review thousands of individual contracts between CVS and PBMs, as
well 	as 	between 	the 	five 	PBMs 	at 	issue 	and 	the 	putative 	class
members. 	What 	is 	more, 	some 	putative 	class 	members 	had 	multiple
PBMs and/or multiple contracts with a single PBM during the class
period. 	Defs.’ Opp’n 36.
Assuming 	that 	the 	parties 	do 	not 	convince 	this 	Court 	on
summary judgment that either all TPPs or no TPPs were entitled to
receive HSP prices as U&C prices, the contract language will make
a 	difference. 	See 	Corcoran, 	779 	F. 	App’x 	at 	433 	(holding 	that
there 	existed 	a 	triable 	issue 	of 	fact 	as 	to 	whether 	the 	contract
language 	supported 	a 	finding 	that 	the 	PBM 	contracts 	required 	CVS
to 	include 	HSP 	prices 	as 	their 	U&C 	prices 	in 	a 	consumer 	class
action). 	The 	parties 	have 	forecasted 	that 	each 	will 	argue 	at
summary judgment that industry standard dictates the result here:
Defendants 	will 	argue 	that 	“when 	the 	varying 	U&C 	price
definitions . . . are 	interpreted 	in 	light 	of 	industry
understanding, the only conclusion is that the U&C definitions do
not 	include 	membership 	program 	prices”, 	Defs.’ 	Sur-Reply 	9
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(emphasis omitted), and Plaintiffs will argue that HSP prices were
– without exception – U&C prices per industry standard, see Pls.’
Reply 1.
While 	this 	merits 	question 	is 	not 	before 	the 	Court 	now,
contract 	review 	– 	by 	human 	or 	computer 	– 	appears 	inescapable.
First, 	some 	TPPs 	have 	no 	colorable 	claim 	to 	being 	entitled 	to
lower-of 	U&C 	pricing, 	and 	thus 	must 	be 	removed 	from 	any 	putative
classes, as discussed above. 	Second, those TPPs entitled to lower-
of U&C pricing for some or all of the class period may or may not
have been entitled to receive the HSP price as its U&C price. 	Some
contracts 	expressly 	exclude 	membership 	programs 	from 	U&C 	prices,
some are silent, and still others may expressly include or exclude
discounts. 	If Defendants do not prevail on summary judgment, some
or 	all 	of 	these 	differences 	in 	contract 	language 	will 	likely
present fact issues for trial. 	See Corcoran, 779 F. App’x at 433.
There 	may 	be 	upwards 	of 	40,000 	contracts, 	and 	while 	the
relevant language in each contract must be isolated to ensure that
Defendants are afforded the opportunity to litigate the merits as
it pertains to the various TPPs, see Asacol, 907 F.3d at 53, there
will be a small universe of answers to the common question posed.
In 	the 	Court’s 	view 	the 	contract 	language 	can 	be 	sorted 	into
various buckets and litigated group by group. 	See Byrd v. Aaron’s
Inc., 784 F.3d 154, 171 (3d Cir. 2015), as amended (Apr. 28, 2015)
(“[T]he size of a potential class and the need to review individual
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files 	to 	identify 	its 	members 	are 	not 	reasons 	to 	deny 	class
certification . . . .” (quoting Young v. Nationwide Mut. Ins. Co.,
693 	F.3d 	532, 	539–540 	(6th 	Cir. 	2012))); 	cf. 	Asacol, 	907 	F.3d 	at
53 (denying class certification to a putative class that included
brand loyal consumers, in part because the plaintiffs had not been
“provided any basis from which [the court] could conclude that the
number of affidavits to which the defendants will be able to mount
a 	genuine 	challenge 	is 	so 	small 	that 	it 	will 	be 	administratively
feasible”).
In 	sum, 	Plaintiffs 	have 	demonstrated 	through 	their 	expert
that they are capable of using algorithms, or undertaking contract-
by-contract 	review, 	to 	identify 	the 	universe 	of 	lower-of 	U&C
pricing. 	Plaintiffs 	have 	further 	demonstrated 	that 	they 	can
organize 	the 	relevant 	contract 	language 	into 	various 	buckets 	or
subclasses 	for 	the 	jury 	to 	consider. 	It 	is 	not 	fathomable 	(or
supported 	by 	evidence) 	that 	the 	putative 	class 	TPPs 	and 	the 	at-
issue 	PBMs 	drafted 	40,000 	contracts 	with 	40,000 	distinct 	lower-
of-U&C 	pricing 	provisions. 	Cf. 	Corcoran, 	779 	F. 	App’x 	at 	434
(noting, 	in 	addressing 	typicality, 	that 	there 	was 	no 	“meaningful
differences 	in 	the 	PBM 	agreements 	that 	would 	result 	in 	the
interests of the class representatives being misaligned with those
of 	the 	absent 	class 	members”). 	Instead, 	the 	record 	evidence
suggests that some of the U&C language expressly included discount
programs, and other language was silent on discount programs.
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Assuming 	the 	case 	proceeds 	to 	trial, 	a 	jury 	may 	find 	that
some, 	none, 	or 	all 	of 	the 	class 	TPPs’ 	contracts 	entitled 	them 	to
HSP pricing, but this factual determination is not as overwhelming
as Defendants have suggested. 	See Asacol, 907 F.3d at 61 (Barron,
J., 	concurring) 	(stating 	that 	Rule 	23(b)(3) 	“‘does 	not 	require 	a
plaintiff 	seeking 	class 	certification 	to 	prove 	that 	each 	element
of 	her 	claim 	is 	susceptible 	to 	classwide 	proof’ 	but 	only 	to 	show
that there is no ‘reason to think that [individualized] questions
will 	overwhelm 	common 	ones 	and 	render 	class 	certification
inappropriate’” (quoting Nexium, 777 F.3d at 21)).
ii. 	Actual Knowledge
Defendants next argue that individualized issues of knowledge
defeat 	class 	certification 	because 	Plaintiffs’ 	claims 	are
undermined where class members were aware that U&C pricing did not
include HSP prices. 	Defs.’ Opp’n 41. 	They argue that some health
plans knew they were not receiving HSP prices, pointing to evidence
purporting 	to 	demonstrate 	this 	for 	two 	of 	the 	three 	named
plaintiffs. 	Defs.’ 	Opp’n 	4. 	Defendants 	argue 	that 	actual
knowledge 	both 	undermines 	injury 	for 	each 	claim 	in 	the 	Complaint
and 	provides 	an 	affirmative 	defense. 	To 	mount 	this 	defense,
Defendants say, requires an individualized review of class-member
communications 	and 	other 	class-member-specific 	evidence. 	Defs.’
Opp’n 	39; 	Defs.’ 	Sur-Reply 	11. 	Alongside 	most 	of 	Defendants’
arguments, the road leads back to Asacol: 	if some members of the
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putative class were uninjured because they had actual knowledge of
the 	underlying 	fraud, 	Defendants 	must 	have 	the 	opportunity 	to
challenge 	and 	remove 	those 	uninjured 	class 	members 	in 	an
administratively feasible and efficient fashion. 	Defs.’ Sur-Reply
12-13 (citing Asacol, 907 F.3d at 53-54).
While this argument is compelling at first blush, upon closer
review, Defendants have not put forth evidence of actual knowledge
as 	to 	the 	named 	Plaintiffs, 	nor 	the 	broader 	putative 	class,
sufficient to block Plaintiffs’ bid for class certification.
First, 	the 	evidence 	presented 	as 	to 	the 	named 	Plaintiffs 	is
notably 	thin. 	With 	respect 	to 	Sheet 	Metal 	Workers, 	Defendants
offer a June 2009 email chain between Dan Tibus, a Caremark account
executive, 	and 	Sheet 	Metal 	Workers’ 	prescription 	benefits
consultants 	“regarding 	prescription 	benefits, 	including 	drug
prices.” 	Decl. 	of 	Daniel 	Tibus 	¶ 	4, 	ECF 	No. 	131-9; 	Email 	from
Daniel 	Tibus 	to 	Rick 	Gerasta 	(June 	23, 	2009) 	(“Tibus 	Email”), 	at
CAREMARKSM_0006154, 	ECF 	No. 	131-43. 	In 	this 	email, 	the 	account
manager 	explained 	to 	the 	outside 	consultants 	that 	the 	HSP 	“does
not 	integrate 	with 	the 	RX 	benefit. 	. 	. 	. 	This 	retail 	program 	was
initially 	launched 	as 	a 	benefit 	for 	uninsured 	customers.
Naturally, consumers with insurance use it as a substitute if the
Health Savings Pass provides a richer benefit than their employer
plan.” 	Tibus Email at CAREMARKSM_0006154. 	In addition, Defendants
point 	to 	evidence 	that 	one 	of 	the 	Sheet 	Metal 	Workers 	trustees
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signed 	up 	for 	HSP 	for 	himself. 	That 	trustee’s 	deposition 	makes
plain that he did not recall signing up for the HSP, did not recall
whether 	it 	required 	a 	membership 	fee, 	and 	did 	not 	recall 	the
pricing 	under 	the 	program. 	See 	Michael 	Jones 	Dep. 	83:3-12, 	ECF
No. 129-21 (“I couldn’t even tell you if I signed up, but I think
I did.”).
It 	is 	not 	clear 	at 	all 	to 	the 	Court 	that 	this 	is 	sufficient
to 	conjure 	an 	issue 	of 	material 	fact 	on 	the 	issue 	of 	knowledge.
Defendants 	offer 	nothing 	to 	suggest 	that 	the 	knowledge 	of 	Sheet
Metal Workers’ outside consultants is imputable to the health plan,
nor is there any mention in the email chain of U&C price or CVS’s
failure 	to 	report 	its 	HSP 	price 	as 	its 	U&C 	price. 	What 	is 	more,
there is nothing in this record suggesting that a reasonable juror
could 	conclude 	from 	this 	sole 	HSP-enrolled 	trustee’s 	deposition
that 	he 	had 	knowledge 	of 	the 	alleged 	fraudulent 	scheme 	simply
because 	he 	signed 	up 	for 	the 	HSP 	program. 	See 	Corcoran 	v. 	CVS
Healthcare Corp., Case No. 15-cv-03504-YGR, 2017 WL 3873709, at *7
(N.D. Cal. Sept. 5, 2017), rev’d on other grounds Corcoran v. CVS
Health 	Corp, 	779 	Fed. 	App’x 	431 	(9th 	Cir. 	2019) 	(“[T]he 	evidence
proffered 	by 	defendants 	does 	not 	sufficiently 	demonstrate 	that
potential [consumer] class members, even those who were members of
HSP, 	knew 	of 	the 	allegedly 	deceptive 	practices. 	. 	. 	. 	Putative
class 	members 	likely 	did 	not 	understand 	the 	relationship 	between
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the 	pharmacy’s 	U&C 	and 	what 	the 	pharmacy 	charges 	them, 	which 	may
be at times less than or more than the HSP program prices.”).
The 	same 	is 	true 	of 	Indiana 	Carpenters. 	In 	support 	of 	its
contention 	that 	Indiana 	Carpenters 	had 	actual 	knowledge 	of 	the
alleged 	fraud, 	Defendants 	offer 	a 	single 	email 	from 	Indiana
Carpenters’ MedCo account executive to Indiana Carpenters’ client
services 	manager. 	The 	email 	contains 	broad 	talking 	points 	about
generic 	prescription 	drug 	programs 	(“such 	as 	Walmart 	& 	Kmart”),
and a notice providing more detail. 	See Email from Bart Gerber to
Irene Newman (Apr. 2, 2010), ECF No. 129-64. 	In that notice, MedCo
account executive, Bart Gerber, never once mentions CVS or the HSP
program specifically; instead, the notice states:
Medco has found that the low cost generic programs vary
from 	retailer 	to 	retailer; 	some 	programs 	are 	offered
free of charge to patients whereby the low cost generic
price can be submitted via the U&C field through Medco’s
TelePAID 	system 	(for 	example, 	the 	$4 	Wal*Mart 	generic
program), other programs include membership fees to gain
access 	to 	a 	member-only 	price 	that 	differs 	from 	the
pharmacy’s U&C price (for example the program offered by
Walgreens)[.]
Id. 	The client services manager did not understand from the email
that 	CVS 	was 	not 	reporting 	the 	HSP 	price 	as 	the 	U&C 	price, 	and
more 	generally, 	she 	had 	no 	understanding 	of 	the 	role 	U&C 	prices
played in the claims adjudication process or how drug prices were
set. 	See, e.g., R. Irene Newman Dep. 35:15-36:18, 52:10-53:7, ECF
No. 	144-8; 	see 	also 	Lauer 	Dep. 	89:3-21; 	90:22-24, 	ECF 	145-8
(indicating 	that 	person 	copied 	on 	email 	did 	not 	understand 	the
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meaning 	of 	“a 	member-only 	price 	that 	differs 	from 	the 	pharmacy’s
U&C 	price” 	and 	that 	he 	did 	not 	know 	what 	the 	email 	sender 	and
recipient “were talking about”); David Tharp Dep. 60:12–61:12, ECF
No. 	144-10; 	William 	Nix 	Dep. 	at 	101:11–24, 	102:25–103:5, 	ECF 	No.
144-11. 	Simply 	put, 	there 	is 	no 	evidence 	that 	anyone 	at 	Indiana
Carpenters had actual knowledge of the alleged scheme here.
Second, even with all the incentive to do so, Defendants offer
very little to suggest that a significant number of putative class
members 	other 	than 	the 	named 	Plaintiffs 	had 	actual 	knowledge 	of
the alleged scheme. 	Defendants offer evidence suggesting that no
more 	than 	a 	dozen 	TPPs 	were 	informed 	they 	had 	not 	received 	HSP
prices 	as 	their 	U&C 	pricing. 	See 	Defs.’ 	Opp’n 	15-17, 	42-43
(setting forth summary of eleven TPPs’ knowledge); Pls.’ Reply 32,
34-35 	(noting 	that, 	of 	the 	TPPs 	Defendants 	have 	identified, 	five
are not class members for other reasons).
As 	in 	any 	action 	in 	which 	“determining 	whether 	any 	given
[class member] was injured (and therefore has a claim) turns on an
assessment 	of 	the 	individual 	facts[,]” 	Defendants 	here 	must 	be
afforded 	“the 	opportunity 	to 	challenge 	each 	class 	member’s 	proof
that 	the 	defendant 	is 	liable 	to 	that 	class 	member.” 	Asacol, 	907
F.3d 	at 	55 	(citing 	Dukes, 	564 	U.S. 	at 	366-67). 	But 	the 	need 	to
assess individual circumstances – here, with respect to individual
TPPs’ 	knowledge 	of 	the 	facts 	underlying 	the 	alleged 	fraud 	– 	does
not 	alone 	foreclose 	class 	certification. 	Instead, 	class
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certification 	is 	precluded 	only 	where 	“such 	challenges 	are
reasonably 	plausible 	in 	a 	given 	case” 	and 	“the 	plaintiff 	cannot
demonstrate 	that 	allowing 	for 	such 	challenges 	in 	a 	manner 	that
protects the defendant’s rights will be manageable and superior to
the alternatives.” 	Id. (citing Fed. R. Civ. P. 23(b)(3)). 	In the
instant 	case, 	Plaintiffs 	have 	demonstrated 	that 	successful
challenges 	to 	individual 	TPPs 	based 	on 	actual 	knowledge 	will 	be
few 	and 	far 	between. 	To 	the 	extent 	these 	challenges 	present
genuine 	issues 	of 	material 	fact, 	the 	Court 	will 	manage 	them 	in
subclasses and afford Defendants the opportunity to challenge the
class member(s)’ proof. 	See Manning v. Bos. Med. Ctr. Corp., 725
F.3d 	34, 	60 	(1st 	Cir. 	2013) 	(“Moreover, 	the 	district 	court 	has
many 	tools 	at 	its 	disposal 	to 	address 	concerns 	regarding 	the
appropriate 	contours 	of 	the 	putative 	class, 	including 	redefining
the 	class 	during 	the 	certification 	process 	or 	creating
subclasses.” (citing Fengler v. Crouse Health Found., Inc., 595 F.
Supp. 2d 189, 197 (N.D.N.Y. 2009))).
That 	said, 	the 	Court 	does 	not 	anticipate 	being 	bogged 	down
with 	requests 	to 	perform 	thousands 	upon 	thousands 	of 	depositions
to explore issues of knowledge with each class member. 	There can
be no question that there is room for large classes under Rule 23.
See Asacol, 907 F.3d at 59 (Barron, J., concurring) (“Rule 23 was
clearly 	written 	to 	facilitate 	large 	consumer 	class 	actions.”
(citations omitted)). 	Defendants have access to their own emails
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and documents. 	If they present colorable claims of knowledge, the
Court 	will 	entertain 	those 	concerns, 	thus 	protecting 	Defendants’
Seventh 	Amendment 	rights. 	However, 	the 	Court 	will 	not 	allow
“arguments 	woven 	entirely 	out 	of 	gossamer 	strands 	of 	speculation
and surmise to tip the decisional scales in a class certification
ruling.” 	See Waste Mgmt. Holdings, Inc. v. Mowbray, 208 F.3d 288,
298 (1st Cir. 2000) (citing Zeigler v. Gibralter Life Ins. Co., 43
F.R.D. 	169, 	173 	(D.S.D. 	1967)); 	see 	also 	id. 	(“[W]hen 	the 	court
supportably 	finds 	that 	an 	issue 	which, 	in 	theory, 	requires
individualized factfinding is, in fact, highly unlikely to survive
typical pretrial screening . . . , a concomitant finding that the
issue 	neither 	renders 	the 	case 	unmanageable 	nor 	undermines 	the
predominance of common issues generally will be in order.”).17
Defendants 	also 	argue 	that 	individual 	knowledge 	issues 	will
predominate 	insofar 	as 	they 	dictate 	when 	class 	TPPs’ 	statute-of-
limitations periods began to run. 	The First Circuit has made clear
that 	affirmative 	defenses, 	such 	as 	statute-of-limitations
17 	To 	the 	extent 	Defendants 	argue 	that 	CVS’s 	alleged
fraudulent 	pricing 	scheme 	cannot 	be 	the 	proximate 	cause 	of
overpayment 	under 	the 	civil 	RICO 	statute 	because 	it 	did 	not
“directly” 	lead 	to 	the 	violation, 	Defs.’ 	Opp’n 	39, 	the 	Court
rejects the argument. 	As pleaded, and given the record before the
court on class certification, Plaintiffs have plainly established
that 	the 	putative 	class 	members 	were 	“the 	primary 	and 	intended
victim[s] 	of 	the 	scheme 	to 	defraud, 	and 	that 	the 	injury 	suffered
was 	a 	foreseeable 	and 	natural 	consequence 	of 	the 	fraudulent
scheme.” 	In re Neurontin Mktg. & Sales Practices Litig., 712 F.3d
51, 58 (1st Cir. 2013) (internal quotations and citations omitted).
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defenses, 	“are 	appropriate 	for 	consideration 	in 	the 	class
certification 	calculus.” 	Mowbray, 	208 	F.3d 	at 	295. 	That 	said,
the First Circuit has explained:
Although 	a 	necessity 	for 	individualized 	statute-of-
limitations 	determinations 	invariably 	weighs 	against
class 	certification 	under 	Rule 	23(b)(3), 	we 	reject 	any
per 	se 	rule 	that 	treats 	the 	presence 	of 	such 	issues 	as
an 	automatic 	disqualifier. 	In 	other 	words, 	the 	mere
fact 	that 	such 	concerns 	may 	arise 	and 	may 	affect
different 	class 	members 	differently 	does 	not 	compel 	a
finding 	that 	individual 	issues 	predominate 	over 	common
ones.
Id. 	at 	296 	(citing 	5 	James 	Wm. 	Moore 	et 	al., 	Moore’s 	Federal
Practice 	§ 	23.46[3], 	at 	23–210 	to 	–211 	(3d 	ed. 	1999)); 	Smilow 	v.
Sw. 	Bell 	Mobile 	Sys., 	Inc., 	323 	F.3d 	32, 	39 	(1st 	Cir. 	2003)
(“[W]here 	common 	issues 	otherwise 	predominated, 	courts 	have
usually 	certified 	Rule 	23(b)(3) 	classes 	even 	though 	individual
issues were present in one or more affirmative defenses.” (citation
omitted)). 	In 	Mowbray, 	the 	First 	Circuit 	affirmed 	the 	district
court’s 	certification 	of 	the 	class 	despite 	“possible 	differences
in the application of a statute of limitations to individual class
members” 	because 	the 	district 	court 	properly 	engaged 	in 	a 	“case-
specific 	analysis”. 	208 	F.3d 	at 	296-97 	(quotation 	and 	citation
omitted). 	As in Mowbray, the Court is confident that, here, “most
class 	members’ 	claims 	[are] 	unaffected 	by 	possible 	limitations
defenses”, 	Mowbray, 	208 	F.3d 	at 	297 	(citation 	omitted), 	and
accordingly, 	that 	the 	application 	of 	individual 	statute-of-
limitation defenses do not bar certification. 	The Court will take
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full 	advantage 	of 	its 	authority 	to 	“place 	class 	members 	with
potentially 	barred 	claims 	in 	a 	separate 	subclass 	or 	exclude 	them
from 	the 	class 	altogether” 	where 	“evidence 	later 	shows 	that 	an
affirmative defense is likely to bar claims against at least some
class 	members”. 	Smilow, 	323 	F.3d 	at 	39-40 	(internal 	citations
omitted).
iii. 	Arbitration Clauses
Defendants aver that many absent class members may be subject
to arbitration clauses in their PBM/TPP contracts. 	If a class is
certified, Defendants state they will move to dismiss or to compel
arbitration, 	causing 	individual 	issues 	to 	predominate. 	Defs.’
Opp’n 53-54 & n.29. 	Importantly, these contracts are between TPPs
and PBMs – CVS is a party to none of these contracts, and Caremark
is 	only 	a 	party 	where 	the 	contracting 	PBM 	was 	Caremark. 	See 	id.
at 5; Pls.’ Reply 37-38.
First, 	in 	arguing 	that 	CVS 	will 	move 	to 	compel 	arbitration
under 	any 	PBM/TPP 	contracts 	containing 	an 	arbitration 	clause,
Defendants overstate the number of absent class members subject to
mandatory arbitration. 	Under First Circuit precedent, CVS – as a
nonparty and nonsignatory to these contracts – would only succeed
at compelling a TPP to arbitrate as a third-party beneficiary where
it 	could 	“demonstrate 	with 	‘special 	clarity 	that 	the 	contracting
parties intended to confer a benefit on’” CVS. 	Hogan v. SPAR Grp.,
Inc., 914 F.3d 34, 39 (1st Cir. 2019) (quoting McCarthy v. Azure,
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22 	F.3d 	351, 	362 	(1st 	Cir. 	1994)). 	It 	is 	not 	enough 	for 	a
nonsignatory 	to 	have 	some 	resulting 	benefit 	from 	“a 	signatory’s
exercise 	of 	its 	contractual 	rights”. 	Id. 	at 	40 	(quoting 	Ouadani
v. TF Final Mile LLC, 876 F.3d 31, 39 (1st Cir. 2017)). 	Instead,
the 	PBM/TPP 	contract 	must 	“mention 	[or] 	manifest 	an 	intent 	to
confer 	specific 	legal 	rights 	upon” 	CVS. 	Id. 	(quoting 	InterGen
N.V. 	v. 	Grina, 	344 	F.3d 	134, 	147 	(1st 	Cir. 	2003)) 	(alteration 	in
original).
A TPP would further only be equitably estopped from avoiding
arbitration 	under 	narrow 	circumstances. 	“[F]ederal 	courts 	‘have
been 	willing 	to 	estop 	a 	signatory 	from 	avoiding 	arbitration 	with
a nonsignatory when the issues . . . to resolve in arbitration are
intertwined with the agreement that the estopped party has signed.”
Id. at 40–41 (quoting Ouadani, 876 F.3d at 38). 	The First Circuit
has 	held 	that 	arbitration 	with 	a 	nonsignatory 	can 	be 	compelled
where 	the 	parties 	to 	the 	contract 	agreed 	to 	arbitrate 	any 	action
“arising out of, or relating in any way to” the agreement. Sourcing
Unlimited, 	Inc. 	v. 	Asimco 	Int’l, 	Inc., 	526 	F.3d 	38, 	48 	(1st 	Cir.
2008. 	Where contract language explicitly limits the agreement to
disputes 	between 	the 	signatories 	and 	there 	is 	no 	evidence 	of 	the
signatory’s intent to arbitrate with the nonsignatory, arbitration
cannot be compelled. 	See Hogan, 914 F.3d at 42 (finding “no legal
basis 	for 	forcing 	[signatory] 	to 	arbitrate 	his 	claims 	against
[nonsignatory] when he demonstrated no intent to do so”).
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Plaintiffs 	point 	to 	the 	arbitration 	clauses 	of 	over 	twenty
PBM/TPP 	contracts 	that 	explicitly 	state 	that 	the 	parties 	did 	not
intend 	to 	create 	rights 	for 	third 	parties. 	See 	Pls.’ 	Reply 	37
n.179 (“This agreement . . . is intended solely for the benefit of
each 	party 	hereto 	and 	their 	respective 	successors 	or 	permitted
assigns, and it is not the intention of the parties to confer third
party 	beneficiary 	rights, 	and 	this 	Agreement 	does 	not 	confer 	any
such rights, upon any other third party . . . .” (quoting Service
Agreement, 	at 	MI-SM_00000539, 	ECF 	No. 	145-22)). 	No 	one 	suggests
that the PBM/TPP contracts created any legal rights or duties for
CVS; 	indeed, 	CVS 	had 	its 	own 	contracts 	with 	the 	PBMs. 	Thus, 	CVS
finds support in neither the third-party beneficiary doctrine nor
the equitable estoppel doctrine.
Second, 	that 	some 	putative 	class 	members 	may 	be 	subject 	to
mandatory 	arbitration 	is 	not 	a 	bar 	to 	class 	certification. 	See
Smilow, 323 F.3d at 39 (noting that, “where common issues otherwise
predominated, courts have usually certified Rule 23(b)(3) classes
even 	though 	individual 	issues 	were 	present 	in 	one 	or 	more
affirmative defenses”); see also Walsh v. Gilbert Enters., No. CV
15-472-WES, 2019 WL 1206885, at *4 (D.R.I. Mar. 14, 2019) (holding
that named plaintiff – whose contract did not have an arbitration
clause - was typical of class that included individuals subject to
arbitration clauses because common issues otherwise predominated).
Defendants 	may 	pursue 	those 	rights 	under 	motions 	to 	compel
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arbitration and/or dismiss following class certification, and the
Court will employ the procedural tools at its disposable to exclude
those TPPs from the class or place them in a subclass. 	For these
reasons, the Court is confident that the existence of arbitration
clauses 	in 	some 	PBM/TPP 	contracts 	will 	not 	result 	in 	individual
issues predominating over common issues.
b. 	Generic Effective Rate
Defendants 	argue 	that 	individual 	issues 	further 	predominate
because 	many 	PBM/TPP 	contracts 	contain 	“aggregate 	discount
guarantees” 	(also 	called 	“generic 	effective 	rate 	guarantees” 	or
“GERs”) 	that, 	in 	their 	view, 	negate 	injury 	in 	fact 	and/or 	any
damages 	from 	alleged 	overstated 	U&C 	prices. 	Defs.’ 	Opp’n 	4, 	45-
48. 	A common PBM/TPP contract provision, a GER clause guarantees
that 	a 	TPP 	will 	receive 	an 	average 	percentage 	discount 	off 	a
benchmark 	price 	(e.g., 	average 	wholesale 	price) 	for 	all 	drugs 	in
a 	category 	(e.g., 	all 	generic 	drugs) 	for 	a 	specified 	period 	of
time 	(e.g., 	one 	calendar 	year). 	Expert 	Report 	of 	Alan 	Sekula
(“Sekula 	Report”) 	¶ 10, 	ECF 	No. 	129-4. 	In 	practice, 	it 	looks
something like this: 	a PBM guarantees its contracting TPP that it
will receive an average discount of 70% off the average wholesale
price 	(“AWP”) 	for 	generic 	prescription 	drugs 	for 	calendar 	year
2021. 	For any one generic drug, the TPP’s discount may be higher
than 	70% 	and 	for 	any 	other, 	lower. 	But 	in 	the 	aggregate, 	the
health plan is entitled to a 70% (or greater) discount off AWP for
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generic 	drugs. 	Id. 	In 	this 	example, 	if 	the 	TPP 	paid 	more 	than
30% of AWP for the generic drugs purchased in 2021, the PBM would
issue 	a 	reconciliation 	payment 	to 	make 	up 	the 	difference. 	Id. 	¶
15.
Defendants offer Sheet Metal Workers as an example; once Sheet
Metal Workers’ 2014 GER reconciliation is considered, it incurred
no 	damages 	in 	2014, 	a 	stark 	contrast 	to 	the 	$21,498 	alleged.
Defs.’ 	Opp’n 	52; 	Feb. 	14, 	2020 	Hr’g 	Tr. 	69-70; 	see 	also 	Barlag
Decl. ¶¶ 137-38.18 	In such situations, Defendants contend, health
plans 	would 	be 	left 	without 	damages. 	Furthermore, 	Defendants
suggest that removing these uninjured putative class members – as
required 	by 	Asacol 	- 	would 	be 	unduly 	laborious, 	and 	individual
issues therefore predominate. 	See Defs.’ Opp’n 49-52.
Plaintiffs 	retort 	that 	GERs 	are 	not 	relevant 	to 	injury; 	at
most, 	they 	say, 	GERs 	may 	offset 	damages 	for 	some 	putative 	class
members. 	For this proposition, Plaintiffs point to antitrust law
where 	injury 	accrues 	the 	moment 	an 	overcharge 	is 	incurred,
regardless 	of 	whether 	it 	is 	later 	offset. 	See 	In 	re 	Nexium
Antitrust Litig., 777 F.3d 9, 27 (1st Cir. 2015); see also Holmes
v. Sec. Inv’r Prot. Corp., 503 U.S. 258, 267-68 (1992) (concluding
18 To 	fall 	within 	one 	of 	the 	class 	definitions, 	a 	TPP 	need
only 	have 	suffered 	an 	injury 	during 	the 	class 	period; 	a 	TPP 	may
not 	have 	incurred 	damages 	in 	any 	one 	single 	calendar 	year, 	but
still aptly be included in one of the classes for injury incurred
during another year covered by the class period.
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that 	Congress 	used 	the 	same 	words 	in 	drafting 	RICO 	as 	it 	had 	in
the already-enacted Sherman Act and Clayton Act, and thus the Court
could “only assume it intended them to have the same meaning that
courts had already given them” (citation omitted)).
The 	Court 	concludes 	that, 	on 	this 	record, 	GERs 	are 	not
relevant to putative class TPP injury in fact. 	Still, as discussed
below, 	Plaintiffs 	must 	demonstrate 	an 	administratively 	feasible
way to identify and apply GER offsets to damages in order to ensure
that the proposed classes’ damages calculations are accurate, and
Defendants’ due process rights are honored.
First, 	PBMs 	do 	not 	make 	GER 	reconciliation 	payments 	at 	the
transaction 	level; 	instead, 	GER 	reconciliation 	payments 	are
calculated 	in 	the 	aggregate, 	across 	a 	subset 	of 	drugs, 	for 	a
defined period, after claims have been adjudicated and paid. 	Conti
Reply 	¶ 	54; 	see 	also 	Sekula 	Report 	¶ 	15. 	Thus, 	this 	arrangement
is factually distinguishable from those in which an injury offset
could be traced back to a specific transaction. 	See Barlag Decl.
¶ 	136 	(recognizing 	that 	GERs 	are 	not 	applied 	at 	the 	transaction
level, but rather in the aggregate, by noting that “[e]ven if one
assumes 	submitting 	the 	HSP 	price 	as 	the 	U&C 	price 	would 	have
changed the amount paid by Sheet Metal on an individual claim, it
does 	not 	change 	the 	aggregate 	annual 	amount 	paid 	by 	Sheet 	Metal
across all claims”).
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The 	First 	Circuit 	authority 	dictates 	that 	a 	RICO 	claim 	has
not accrued where injury to a plaintiff’s property is speculative.
DeMauro 	v. 	DeMauro, 	115 	F.3d 	94, 	97-98 	(1st 	Cir. 	1997). 	In
DeMauro, 	plaintiff-wife 	sued 	defendant-husband, 	and 	others,
alleging that they had fraudulently concealed separate and marital
assets during protracted and contentious divorce proceedings. 	Id.
at 95. 	The First Circuit held that any injury to the plaintiff’s
legal claim had not accrued because it was too speculative, as no
one 	yet 	knew 	whether 	the 	alleged 	concealment 	would 	diminish 	her
award in the divorce proceeding. 	Id. at 97 (citing Lincoln House,
Inc. 	v. 	Dupre, 903 	F.2d 	845, 	847 	(1st 	Cir. 	1990)). 	The 	First
Circuit 	noted 	concern 	that 	“it 	is 	hard 	to 	see 	how 	a 	court 	would
calculate 	damages 	now, 	given 	the 	dual 	uncertainties 	of 	what 	[the
plaintiff] 	will 	be 	awarded 	and 	how 	it 	will 	be 	affected 	by
concealment.” 	Id. 	(citing 	First 	Nationwide 	Bank 	v. 	Gelt 	Funding
Corp., 	27 	F.3d 	763, 	768 	(2d 	Cir. 	1994)). 	This 	concern 	did 	not
arise, 	however, 	where 	the 	plaintiff 	alleged 	concealment 	of
property in which she held a present ownership interest; for that
property, 	the 	court 	concluded 	she 	had 	alleged 	injury 	under 	RICO.
Id. at 98 (citing Grimmett v. Brown, 75 F.3d 506, 516–17 (9th Cir.
1996)).
Here, each alleged injury stems from an overcharge paid by a
TPP as a result of an inflated U&C price. 	The injury fully accrued
when the claim was adjudicated and paid. 	At that point, the only
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loose 	end 	was 	the 	possibility 	of 	an 	aggregate 	offset 	in 	the 	form
of 	a 	GER 	reconciliation 	payment. 	“[T]he 	injury 	has 	occurred 	and
is 	known, 	but 	it 	is 	speculative 	whether 	the 	damages 	might 	be
reduced 	or 	even 	eliminated”; 	this 	is 	not 	a 	case 	in 	which 	“the
injury is speculative because it is not known whether it will occur
at 	all” 	due 	to 	some 	future 	event 	that 	may 	or 	may 	not 	occur. 	See
Grimmett, 	75 	F.3d 	at 	517; 	see 	also 	DeMauro, 	115 	F.3d 	at 	97; 	cf.
Gastronomical Workers Union Local 610 & Metro. Hotel Ass’n Pension
Fund 	v. 	Dorado 	Beach 	Hotel 	Corp., 	617 	F.3d 	54, 	61–62 	(1st 	Cir.
2010) 	(“Fairly 	viewed, 	that 	claim 	does 	not 	suggest 	that 	the
trustees have alleged a speculative injury, the existence of which
depends upon future events that may or may not occur. 	Rather, the
claim 	is 	that 	a 	future 	event 	may 	change 	the 	type 	of 	remedy
available 	to 	redress 	an 	existing 	injury. 	Consequently, 	it 	is 	the
future event, not the trustees’ injury, that is speculative.”).
Defendants’ 	cited 	cases 	do 	not 	counsel 	otherwise, 	as 	each
involves 	speculative, 	future 	events 	that 	may 	undermine 	the
purported RICO injury. 	See, e.g., Maio v. Aetna, 221 F.3d 472 (3d
Cir. 2000) (“There is no factual basis for appellants’ conclusory
allegation that they have been injured in their ‘property’ because
the 	health 	insurance 	they 	actually 	received 	was 	inferior 	and
therefore 	‘worth 	less’ 	than 	what 	they 	paid 	for 	it.”); 	In 	re
Bridgestone/Firestone, Inc. Tires Prod. Liab. Litig., 155 F. Supp.
2d 1069, 1091 (S.D. Ind.), on reconsideration in part, No. MDL NO.
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1373, 	2001 	WL 	34691976 	(S.D. 	Ind. 	Nov. 	14, 	2001), 	rev’d 	on 	other
grounds 	288 	F.3d 	1012 	(7th 	Cir. 	2002) 	(“RICO 	affords 	a 	monetary
remedy only to plaintiffs who have actually realized the diminished
value or experienced product failure, and not to those who allege
a risk (or even a probability) of such loss.”).
The 	Court 	is 	satisfied 	that, 	on 	this 	record, 	Plaintiffs’
injury from overcharge accrued at the time of payment.
Second, regardless of whether the GER reconciliation payments
go to injury or damages, Defendants will get their day in court to
meaningfully challenge the effect of GER payments on class damages.
In the wake of Asacol, the Court can be confident of a few things.
A class may be certified without each putative class member first
establishing 	standing, 	and 	Rule 	23 	does 	not 	require 	the 	district
court 	to 	establish 	injury 	in 	fact 	for 	each 	class 	member 	prior 	to
class 	certification. 	Asacol, 	907 	F.3d 	at 	58. 	But, 	Defendants
must 	be 	afforded 	a 	meaningful 	opportunity 	to 	challenge 	injury 	in
fact and pick off uninjured class members before or at trial. 	Id.
And 	there 	is 	no 	question, 	post-Asacol, 	that 	a 	district 	court 	may
not certify a class where a body of uninjured class members stand
to recover, regardless of whether the defendants are found liable
for the aggregate damages amount. 	See generally id.
The circumstances presented here are clearly distinguishable
from those in Asacol. 	In Asacol, the First Circuit was presented
with a putative class with a small percentage of members known to
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be uninjured – the so-called brand loyalists. 	Moreover, there was
no 	administratively 	feasible 	way 	to 	allow 	the 	defendants 	a
meaningful 	opportunity 	to 	challenge 	the 	uninjured 	class 	members’
inclusion. 	See 	id. 	at 	53. 	As 	a 	result, 	the 	uninjured 	class
members 	were 	all 	but 	guaranteed 	to 	collect 	damages 	from 	the
defendants. 	Here, in contrast, we don’t inhabit the theoretical
but-for 	world 	of 	antitrust 	law; 	instead, 	a 	world 	where 	alleged
injury 	and 	damages 	are 	knowable 	and 	well 	documented. 	Even 	if 	a
subset 	of 	putative 	class 	members 	incurred 	overcharges 	that 	were
later offset by GER reconciliation payments, Defendants will have
the 	opportunity 	to 	challenge 	them 	at 	(or 	before) 	trial. 	No
uninjured putative class members stand to recover.
Finally, the Court is satisfied that Plaintiffs’ expert, Dr.
Rena 	Conti, 	will 	be 	able 	to 	incorporate 	GER 	offsets 	into 	her
damages 	calculations 	on 	a 	class-wide 	basis. 	She 	offers 	two
methods. 	First, if provided with reconciliation payment data, Dr.
Conti will perform the following calculation. 	Dr. Conti will first
isolate 	a 	TPP’s 	measured 	effective 	rate 	and 	compare 	it 	to 	its
contracted 	GER 	guaranteed 	rate 	(i.e., 	the 	guaranteed 	GER 	in 	that
TPP’s contract). 	Conti Reply ¶ 55. 	A measured effective rate is
1 	minus 	(the 	sum 	of 	all 	ingredient 	costs 	paid/the 	sum 	of 	all 	AWP
amounts). 	Id. 	If 	a 	TPP 	pays 	less 	in 	the 	aggregate 	for 	the
specified drugs than it would under its GER provision (e.g., paying
an aggregate of AWP minus 76%, where its contract provides that it
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pay 	no 	more 	than 	AWP 	minus 	75%), 	the 	PBM 	would 	submit 	no
reconciliation. 	Id. 	¶ 	56. 	If 	the 	TPP 	pays 	more 	(e.g., 	its
aggregate 	payment 	was 	equal 	to 	AWP 	minus 	72%, 	where 	its 	GER 	was
AWP minus 75%), the PBM would reconcile this with a payment equal
to the 3% (75%-72%) difference. 	Id. ¶ 57. 	Dr. Conti incorporates
reconciliation-payment 	offsets 	into 	her 	damages 	calculation, 	and
where 	a 	reconciliation 	payment 	is 	greater 	than 	the 	calculated
damages, 	the 	damages 	are 	bottomed 	out 	at 	$0. 	Id. 	¶¶ 	58-61. 	Dr.
Conti’s 	formula 	appropriately 	errs 	on 	the 	side 	of 	being
conservative 	in 	response 	to 	Defendants’ 	expert’s 	critique. 	See
id. 	¶¶ 	59 	(formula 	8), 	62-64 	(noting 	additional 	exclusions 	to
provide for a conservative damages model).
In 	the 	alternative, 	if 	Dr. 	Conti 	is 	not 	provided 	with
reconciliation payments data, she sets forth a conservative method
for 	calculating 	the 	effect 	of 	GERs 	on 	a 	class-wide 	basis. 	Id. 	¶
65. 	Under 	this 	method, 	Plaintiffs 	would 	first 	review 	all 	PBM
contracts 	for 	a 	range 	of 	annual 	GER 	guarantees 	and 	identify 	each
PBM’s 	highest 	GER 	guarantee 	for 	each 	year. 	Id. 	¶¶ 	65-66. 	Next,
using claims data for the generic drugs included in each PBM’s GER
calculation and a list of the HSP-eligible drugs, Plaintiffs would
calculate the impact of adjusting the HSP price on the conservative
GER 	reconciliation 	payment. 	Id. 	¶¶ 	66, 	69. 	This 	delta 	in 	GER
reconciliation 	payment 	would 	be 	used 	to 	offset 	Plaintiffs’
overcharge calculation. 	Id. ¶ 66.
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The 	Court 	concludes 	that 	Plaintiffs 	have 	demonstrated 	by 	a
preponderance 	of 	the 	evidence 	that 	they 	have 	a 	“reasonable 	and
workable plan” for determining the effect of a GER on the putative
class 	members’ 	damages 	“that 	is 	protective 	of 	the 	defendant[s]’s
constitutional 	rights 	and 	does 	not 	cause 	individual 	inquiries 	to
overwhelm 	common 	issues.” 	Asacol, 	907 	F.3d 	at 	58. 	Though
Defendants’ 	experts 	have 	declared 	the 	process 	overly 	burdensome,
they 	acknowledge 	that 	an 	expert 	ostensibly 	could, 	for 	any 	health
plan, 	identify 	any 	applicable 	GER 	provisions, 	determine 	the
periods 	they 	cover, 	the 	drugs 	to 	which 	they 	apply, 	whether 	the
health 	plan 	received 	reconciliation 	payments, 	and 	the 	effect 	any
reconciliation 	payments 	had 	on 	offsetting 	any 	alleged 	overcharge
to the health plan. 	See Sekula Report ¶¶ 19; Defs.’ Opp’n 47-48.
In 	the 	Court’s 	view, 	the 	need 	to 	account 	for 	GER 	damages
offsets 	does 	not 	impede 	certification. 	The 	parties 	will 	confer
before trial on which putative class members fall away as incurring
no 	damages. 	Should 	there 	be 	a 	dispute 	over 	a 	subset 	of 	health
plans, 	Defendants 	will 	have 	the 	opportunity 	to 	challenge 	their
inclusion 	in 	the 	classes. 	Asacol, 	907 	F.3d 	at 	53 	(suggesting 	a
class would be ripe for certification where “a very small absolute
number 	of 	class 	members 	might 	be 	picked 	off 	in 	a 	manageable,
individualized 	process 	at 	or 	before 	trial”). 	Because 	this
information 	is 	knowable 	from 	PBM/TPP 	contracts 	and 	data,
individual issues will not predominate – not now, and not at trial.
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c. 	Damages
To 	satisfy 	the 	predominance 	requirement, 	not 	only 	must
liability be established through common proof, but Plaintiffs must
also 	demonstrate 	that 	“any 	resulting 	damages 	would 	likewise 	be
established by sufficiently common proof.” 	Nexium, 777 F.3d at 18
(quoting New Motor Vehicles, 522 F.3d at 20). 	To do so, Plaintiffs
must establish that damages are both “capable of measurement on a
classwide 	basis” 	and 	tied 	to 	their 	theory 	of 	liability. 	See
Comcast, 569 U.S. at 34-36.
A model measuring class-wide damages in a class action “must
measure 	only 	those 	damages 	attributable 	to 	that 	theory.” 	Id. 	at
35. 	“If 	the 	model 	does 	not 	even 	attempt 	to 	do 	that, 	it 	cannot
possibly 	establish 	that 	damages 	are 	susceptible 	of 	measurement
across 	the 	entire 	class 	for 	purposes 	of 	Rule 	23(b)(3).” 	Id.
“Calculations 	need 	not 	be 	exact, 	but 	at 	the 	class-certification
stage 	(as 	at 	trial), 	any 	model 	supporting 	a 	plaintiff’s 	damages
case 	must 	be 	consistent 	with 	its 	liability 	case 	. 	. 	. 	.” 	Id.
(internal citations and quotations omitted).
In 	support 	of 	their 	Motion 	for 	Class 	Certification,
Plaintiffs 	offer 	the 	expert 	opinion 	of 	Dr. 	Rena 	Conti. 	See
generally 	Conti 	Report; 	Conti 	Reply. 	Using 	her 	model, 	Dr. 	Conti
measures 	damages 	for 	the 	Nationwide 	Class 	as 	the 	delta 	between
what 	a 	TPP 	paid 	for 	certain 	HSP-eligible 	drugs 	and 	the 	amount 	it
would have paid for those HSP drugs had the U&C price incorporated
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the HSP price. 	Conti Report ¶ 62. 	For this model, Dr. Conti used
CVS pharmacy claims data for HSP drugs across 14 states19, as well
as 	HSP 	price 	data. 	Id. 	¶¶ 	11, 	63. 	Under 	her 	model, 	damages 	for
these 14 states total $334.2 million, exclusive of any GER offsets.
Conti 	Reply 	¶ 	4. 	The 	model 	is 	flexible 	and 	can 	be 	adjusted 	to
account 	for 	more 	or 	higher 	quality 	data 	as 	discovery 	proceeds.
Id. ¶ 5.
After 	careful 	review 	of 	Dr. 	Conti’s 	reports, 	the 	Court
concludes 	that 	her 	model 	reflects 	a 	reliable 	and 	sound
methodology20 by which to measure Plaintiffs’ alleged damages given
19 	The 	data 	cover 	thirteen 	states 	and 	the 	District 	of
Columbia. 	For ease of reference, the Court refers to them as the
“14 states” in this decision.
20 While 	Defendants 	have 	not 	yet 	filed 	a 	Daubert 	motion 	to
exclude 	Dr. 	Conti’s 	expert 	opinion, 	it 	was 	inescapable 	for 	the
Court to consider the soundness of her methodology in determining
whether 	damages 	are 	capable 	of 	measurement 	on 	a 	class-wide 	basis
and 	tied 	to 	Plaintiffs’ 	liability 	theory. 	Moreover, 	the 	Court
considered 	the 	expert 	reports 	offered 	by 	Defendants 	criticizing
Dr. Conti’s report. 	The Court otherwise DENIES WITHOUT PREJUDICE
the 	Motions 	as 	premature 	and 	will 	consider 	them 	once 	refiled 	as
the case proceeds. 	See Pls.’ Mots. to Exclude the Expert Testimony
of Brett E. Barlag, Catherine Graeff, Michael P. Salve, Ph.D., ECF
Nos. 	140-42. 	To 	the 	extent 	those 	reports 	conclude 	Dr. 	Conti’s
methodology 	is 	unreliable 	or 	inaccurate, 	the 	Court 	disagrees 	for
the reasons set forth herein; the Court understands the experts as
largely 	offering 	competing 	views 	that 	go 	to 	the 	weight, 	and 	not
admissibility, 	of 	the 	opinion. 	See 	Ruiz-Troche 	v. 	Pepsi 	Cola 	of
Puerto Rico Bottling Co., 161 F.3d 77, 85 (1st Cir. 1998) (“Daubert
neither 	requires 	nor 	empowers 	trial 	courts 	to 	determine 	which 	of
several competing scientific theories has the best provenance. 	It
demands 	only 	that 	the 	proponent 	of 	the 	evidence 	show 	that 	the
expert’s conclusion has been arrived at in a scientifically sound
and methodologically reliable fashion.” (citation omitted)).
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that 	she 	intends 	to 	procure 	and 	incorporate 	additional 	data 	to
strengthen 	the 	model. 	A 	summary 	of 	the 	model 	is 	helpful. 	Dr.
Conti began with all the CVS pharmacy patient claims data for the
14 	states 	covering 	transactions 	occurring 	between 	November 	2008
and 	December 	2015. 	Conti 	Report 	¶ 	70. 	She 	then 	excluded 	drugs
that 	never 	appeared 	on 	the 	HSP 	formulary 	drug 	list 	during 	the
relevant 	time, 	limited 	the 	claims 	to 	the 	five 	PBMs 	implicated 	in
this case, and excluded government payors. 	Id. ¶ 71. 	She further
excluded claims that were paid based on lesser-of pricing formulas
that do not include U&C. 	Conti Reply ¶ 48.
Using 	the 	remaining 	claims, 	Dr. 	Conti 	calculated 	the 	TPP
overpayment amount as the TPP adjudicated payment amount less the
HSP price, adjusting for the amount paid by the pharmacy customer.
Conti 	Report 	¶ 	73. 	Moreover, 	Dr. 	Conti 	applied 	a 	damages 	offset
for the annual HSP membership fees paid by cash customers to access
the 	HSP 	prices, 	and 	explained 	the 	technique 	she 	could 	apply 	to
incorporate GER offsets, if the Court deemed them relevant. 	Conti
Reply ¶¶ 54-69; Conti Report ¶¶ 75-76.
Dr. Conti opined that, after discovery produces the requisite
PBM data, she will use this same method to calculate damages on a
classwide basis using the updated data. 	Conti Report ¶ 77. 	From
PBM 	data, 	she 	will 	also 	be 	able 	to 	identify 	individual 	class
members. 	Id. 	Indeed, she demonstrated this by using the PBM data
for 	named 	Plaintiffs 	to 	calculate 	their 	damages 	during 	the 	class
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period. 	Id. 	Dr. 	Conti 	further 	extrapolated 	the 	damages 	for 	the
14 	states 	to 	the 	remaining 	36 	states 	using 	state-specific 	data
(viz., 	demographic 	information, 	total 	retail 	prescription 	sales,
Medicaid claims, and CVS’s dominance in that market). 	Id. ¶ 78.
Defendants argue that Plaintiffs’ proposed damages model both
cannot 	measure 	damages 	on 	a 	class-wide 	basis 	and 	is 	not 	tied 	to
Plaintiffs’ liability theory. 	In particular, they take issue with
Plaintiffs’ failure to test certain data.
Defendants’ argument implicates a joint stipulation that had
resolved 	a 	May 	2017 	discovery 	dispute 	between 	the 	parties. 	See
Joint Stipulation Regarding Pls.’ Motion to Compel CVS to Produce
Nationwide Data (“Joint Stipulation Nationwide Data”), ECF No. 54.
In the stipulation, Plaintiffs agreed to accept the subset of data
produced 	in 	the 	Corcoran 	case 	in 	the 	Northern 	District 	of
California, 	which 	involved 	twelve 	states 	and 	the 	District 	of
Columbia. 	See id. 	In exchange for Plaintiffs’ agreeing to abandon
their 	claim 	to 	CVS’s 	nationwide 	transaction 	data, 	Defendants
agreed 	that 	Plaintiffs 	could 	rely 	upon 	this 	subset 	of 	data 	to
demonstrate that damages could be calculated on a class-wide basis.
See id. 	To this end, the stipulation states:
CVS 	will 	not 	challenge 	Plaintiffs’ 	methodology 	for
calculating classwide damages (a) on the basis that the
data 	fields 	that 	CVS 	has 	produced 	to 	date 	for 	the
Corcoran States represent different types of information
than 	is 	available 	for 	states 	other 	than 	the 	Corcoran
States 	or 	(b) 	by 	using 	data 	from 	states 	other 	than 	the
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Corcoran 	States, 	which 	has 	not 	been 	produced 	to
Plaintiffs.
Id. 	at 	2. 	Caremark 	produced 	claims 	data 	only 	for 	HSP 	drugs
purchased 	in 	Indiana 	and 	Illinois 	at 	CVS 	pharmacies 	between
November 2008 and January 2016. 	Pls.’ Reply 30.
Under 	Plaintiffs’ 	theory, 	the 	damages 	of 	any 	given 	TPP 	are
the difference between the amount it actually paid for certain HSP
drugs and the amount it would have paid for those drugs if the HSP
price had been reported as the U&C price. 	Conti Report ¶ 62. 	In
preparing 	Plaintiffs’ 	damages 	model, 	Dr. 	Conti 	did 	not 	have 	TPP
payments 	data 	– 	due 	to 	the 	Joint 	Stipulation 	– 	and 	thus 	based
Plaintiffs’ 	model 	on 	PBM 	payments 	data. 	Defendants 	now 	complain
that 	Dr. 	Conti 	did 	not 	calculate 	the 	class 	TPP 	damages 	at 	all,
instead 	she 	calculated 	the 	difference 	between 	what 	the 	PBMs 	paid
and what they would have paid had HSP prices included U&C prices.
Defs.’ Opp’n 49.
For purposes of class certification, and given that Dr. Conti
asserts 	that 	she 	intends 	to 	update 	this 	model 	once 	more 	data 	are
made available, the Court finds that PBM data are a reliable proxy
for 	TPP 	data 	for 	purposes 	of 	class 	certification. 	See 	New 	Eng.
Carpenters Health Benefits Fund v. First DataBank, Inc., 248 F.R.D
363, 	370 	(D. 	Mass. 	2008) 	(stating, 	in 	a 	RICO 	case 	involving
fraudulently 	reported 	average 	wholesale 	drug 	prices, 	that 	the
“data [were] a reasonable proxy of TPP reimbursements for drugs”).
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Plaintiffs’ 	model 	generates 	a 	conservative 	damages 	estimate, 	or,
in 	other 	words, 	“underestimates 	the 	overcharges 	attributable 	to
Defendants’ 	alleged 	fraud”, 	because 	TPPs 	compensate 	“PBMs 	for
their 	services 	at 	a 	markup 	of 	what 	PBMs 	pay 	pharmacies.” 	Conti
Reply 	¶ 	40; 	see 	also 	Pls.’ 	Reply 	27-28 	& 	n.130 	(noting 	that 	for
any 	one 	HSP 	drug, 	CVS 	would 	submit 	the 	inflated 	U&C 	price 	to 	the
adjudicating 	PBM, 	the 	PBM 	would 	pay 	CVS, 	and 	the 	inflated 	price
would “ultimately be passed to the Class member in the form of an
even 	higher 	price 	so 	that 	the 	PBM 	would 	profit 	from 	the 	‘spread’
between 	what 	it 	paid 	CVS 	and 	what 	the 	Class 	member 	paid 	the 	PBM”
(citing Conti Report ¶¶ 62, 73)).
In 	addition 	to 	modeling 	damages 	using 	PBM 	claims 	data 	as 	a
proxy 	for 	TPP 	claims 	data, 	Dr. 	Conti 	provides 	that 	once 	more 	PBM
data 	are 	produced 	for 	the 	HSP 	drugs, 	her 	“method 	is 	flexible 	to
accommodate 	their 	inclusion 	in 	estimating 	damages.” 	Conti 	Reply
¶ 	40. 	Indeed, 	the 	model’s 	flexibility 	is 	on 	display 	where 	Dr.
Conti updates her estimate of named-Plaintiff Sheet Metal Workers’
damages 	to 	reflect 	coinsurance 	payments 	and 	the 	effect 	of 	the
Maintenance Choice Program. 	Id. ¶ 53 & n.70; see also id. ¶¶ 54-
69 (describing how model can take GERs into account).
Given 	that 	this 	methodology 	produces 	a 	conservative 	damages
model using PBM claims data, and has the demonstrated flexibility
to 	be 	adjusted 	to 	accommodate 	additional 	data, 	the 	Court 	is
satisfied that, while not “exact[,]” the model is “consistent with
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[the proposed classes’] liability case.” 	Comcast, 569 U.S. at 35
(citations and quotation omitted). 	It is true that the model has
not been tested using TPP data, but the shortcomings of Plaintiffs’
data 	are 	directly 	attributable 	to 	Defendants’ 	strategic 	decision
and will be resolved at the liability stage. 	Moreover, the record
supports a finding that, in the aggregate, any overcharges incurred
by 	PBMs 	were 	passed 	on 	to 	the 	putative 	class. 	See 	Conti 	Reply 	¶
40. 	In 	sum, 	Dr. 	Conti’s 	methodology 	is 	solid 	and 	the 	data 	are
forthcoming.21
Defendants 	also 	challenge 	the 	amount 	of 	individualization
necessary to calculate damages under Plaintiffs’ model. 	See Royal
Park Invs. SA/NV v. Wells Fargo Bank, N.A., No. 14-CV-09764, 2018
WL 	739580, 	at 	*15 	(S.D.N.Y. 	Jan. 	10, 	2018) 	(noting 	that 	expert’s
method was sufficiently reliable and he was not required to present
a 	“comprehensive 	model 	at 	the 	class 	certification 	stage” 	but
concluding 	that 	the 	methodology 	required 	individualized
determinations). 	While 	there 	can 	be 	no 	question 	that 	some
individualized 	inquiry 	is 	required 	under 	the 	instant 	damages
21 Defendants’ other criticisms are sufficiently addressed in
Dr. 	Conti’s 	Reply 	Report. 	See 	Conti 	Reply 	¶ 	48 	(adjusting 	model
to 	exclude 	claims 	that 	may 	have 	been 	paid 	based 	on 	formulas 	that
do 	not 	include 	U&C 	pricing); 	id. 	¶¶ 	52-53 	(adjusting 	model 	to
account 	for 	patient 	payment 	structures). 	And 	as 	addressed 	at
length above, the Court is satisfied that Dr. Conti’s damages model
can accurately and reliably account for GERs.
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model, the Court is satisfied that damages can “be established by
sufficiently common proof.” 	Nexium, 777 F.3d at 18.
Accordingly, 	the 	Court 	concludes 	that 	Plaintiffs 	have
demonstrated that common issues predominate as to damages and that
the damages are both “capable of measurement on a classwide basis”
and 	tied 	to 	their 	theory 	of 	liability. 	See 	Comcast, 	569 	U.S. 	at
34-36.
6. 	Superiority
For the final prerequisite to class certification, Plaintiffs
bear 	the 	burden 	of 	establishing 	that 	a 	class 	action 	is 	“superior
to other available methods for fairly and efficiently adjudicating
the controversy.” 	Fed. R. Civ. P. 23(b)(3). 	In undertaking this
analysis, the Court examines four factors:
(A) 	the 	class 	members’ 	interests 	in 	individually
controlling 	the 	prosecution 	or 	defense 	of 	separate
actions; 	(B) 	the 	extent 	and 	nature 	of 	any 	litigation
concerning the controversy already begun by or against
class 	members; 	(C) 	the 	desirability 	or 	undesirability
of 	concentrating 	the 	litigation 	of 	the 	claims 	in 	the
particular 	forum; 	and 	(D) 	the 	likely 	difficulties 	in
managing a class action.
Id. 	The 	Court 	is 	mindful 	that 	“[t]he 	policy 	at 	the 	very 	core 	of
the 	class 	action 	mechanism 	is 	to 	overcome 	the 	problem 	that 	small
recoveries do not provide the incentive for any individual to bring
a solo action prosecuting his or her rights.” 	Amchem Prods. Inc.
v. Windsor, 521 U.S. 591, 617 (1997) (quoting Mace v. Van Ru Credit
Corp., 	109 	F.3d 	338, 	344 	(7th 	Cir. 	1997)). 	The 	superiority 	and
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predominance 	inquiries 	thus 	ensure 	that 	class 	action 	litigation
will “achieve economies of time, effort, and expense, and promote
. 	. 	. 	uniformity 	of 	decision 	as 	to 	persons 	similarly 	situated,
without 	sacrificing 	procedural 	fairness 	or 	bringing 	about 	other
undesirable results.” 	Id. (quoting Advisory Committee’s Notes on
Fed. R. Civ. P. 23).
Defendants 	argue 	that 	class 	adjudication 	is 	not 	superior 	to
other methods of adjudication because (1) the elements of the state
law causes of action are materially different, and (2) the putative
class members are sophisticated entities capable of bringing suit
on their own. 	Defs.’ Opp’n 6, 68-69.
The Court is satisfied that class adjudication is the superior
method of adjudication. 	Though some putative class members may be
capable 	of 	suing 	on 	their 	own, 	and 	there 	may 	be 	some 	opportunity
to 	recover 	fees 	for 	a 	successful 	suit 	under 	RICO 	and 	some 	state
statutes, judicial economy plainly favors certification. 	Managing
subclasses within this action alleging a single fraudulent scheme
is superior to managing several thousand suits.
Moreover, 	variations 	in 	the 	underlying 	state 	law 	claims 	do
not undermine Plaintiffs’ certification efforts. 	The classes are
narrowly 	tailored 	and 	are 	not 	unlike 	numerous 	other 	nationwide
class 	actions 	that 	courts 	have 	certified. 	See, 	e.g., 	In 	re
Loestrin 24 FE Antitrust Litig., 410 F. Supp. 3d 352, 375-76, 406-
07 	(D.R.I. 	2019) 	(certifying 	class 	action 	brought 	under 	numerous
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state 	laws 	and 	analyzing 	viability 	of 	pharmaceutical 	antitrust
claims under those state statutes).22 	For these reasons, the Court
concludes that, in this case, a class action is “superior to other
available 	methods 	for 	fairly 	and 	efficiently 	adjudicating 	the
controversy.” 	See Fed. R. Civ. P. 23(b)(3).
III. Conclusion
For the above reasons, Caremark’s Motion to Dismiss, ECF No.
163, 	is 	GRANTED; 	Plaintiffs’ 	Motion 	for 	Class 	Certification, 	ECF
No. 	120, 	is 	GRANTED; 	Plaintiffs’ 	Motions 	to 	Exclude 	the 	Expert
Testimony of Brett E. Barlag, Catherine Graeff, Michael P. Salve,
Ph.D., 	ECF 	Nos. 	140-42, 	are 	DENIED 	WITHOUT 	PREJUDICE. 	The 	Court
further appoints Hagens Berman Sobol Shapiro LLP as Class Counsel
and appoints named Plaintiffs as Class Representatives.
IT IS SO ORDERED.
22 The 	Court 	gives 	Plaintiffs 	fifteen 	days 	from 	the 	entry 	of
this 	order 	to 	show 	cause 	why 	the 	Unfair 	and 	Deceptive 	Conduct
Consumer 	Protection 	Class 	definition 	should 	not 	be 	amended 	to
exclude 	health 	plans 	that 	paid 	for 	generic 	prescription 	drugs 	in
New Jersey, Ohio, and Iowa, as Defendants assert these state laws
were 	never 	pleaded 	in 	the 	Amended 	Complaint 	and/or 	were 	dropped
earlier in this suit. 	See Defs.’ Sur-Reply 27.
William E. Smith
District Judge
Date: May 11, 2021
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