The Sheet Metal Workers fund case was consolidated with a similar one filed by the Plumbers Welfare Fund, Local 130, U.A. in 2017. In May 2021, Judge Smith granted certification to multiple classes of health plans, rejecting the companies’ arguments that the classes were too obscure and would require an unmanageable amount of work to identify class members.
In the same order, Judge Smith granted Caremark’s motion to dismiss the Sheet Metal Workers fund’s claims because of the arbitration clause in their contract.
On Thursday, Judge Smith also ruled that certain benefit funds whose contracts don’t delegate issues of arbitrability to the arbitrator must arbitrate their claims against CVS. These benefit funds, governed by Delaware, Hawaii, and Texas law, must be excluded from the class because CVS can invoke its alternative dispute resolution provisions through equitable estoppel under state law, the order said.
The benefit funds argued that federal law should apply, Judge Smith added.
Several contracts involve mediation clauses rather than arbitration ones. Those funds, governed by California, Delaware, Florida, Georgia, Iowa, Massachusetts, New York, Ohio, Tennessee, Texas, or Virginia law, must also be excluded from the class, Judge Smith held. However, the benefit funds with mediation clauses governed by Alabama, Colorado, Idaho, Illinois, Indiana, or New Jersey law may proceed, Judge Smith ruled.
