After more than a decade of arbitration and multi-forum litigation, UnitedHealth Group’s pharmacy benefit manager, OptumRx, defeated in full approximately $350 million in claims by drug discount card provider United Networks of America, Inc.
The result caps a seven-year arbitration, including extensive discovery and a six-day arbitration hearing, followed by proceedings in federal courts in Colorado and Florida. In the arbitration, United Networks claimed it acquired the assets of its third-party competitor, National Benefit Builders, Inc., and was therefore entitled to bill OptumRx for National Benefits Builders’ discount card claims at a more lucrative rate. OptumRx defeated the first $300 million of United Networks’ claims in arbitration. But, after what the arbitrator called “perhaps the most extensive discovery process undertaken in an arbitration,” United Networks was awarded $48 million.
OptumRx then sued National Benefit Builders in federal court in Colorado and moved in Florida federal court to vacate the arbitration award. In the Colorado action, OptumRx quickly uncovered “clear and convincing evidence” “entirely inconsistent with what [UNA] had represented” proving “that UNA withheld documents and lied in the arbitration.” Based on the compelling new evidence uncovered in the Colorado lawsuit, the United States District Court for the Middle District of Florida issued a 50-page Final Order and Judgment on September 17 vacating the $48 million arbitration award on the grounds of fraud. This is a rare occurrence, considering arbitration awards typically are considered final awards absent “exceptional circumstances.”
Husch Blackwell represented OptumRx on this matter for more than 13 years, taking the lead on the underlying arbitration and the Colorado federal lawsuit and assisting Gibson Dunn in the Florida federal court action. The two firms worked seamlessly together to meet the high burden required to vacate an arbitration award on the grounds of fraud.
The Husch Blackwell team included Jim Monafo, Tanya Maerz, Jeff Whitney, Erica Baines, Sam Thomas, and Kay Groneck, and senior paralegal Chris Herrmann.