Desrys v. Medco, et. al

8/7/2019 Desrys v. Medco, et. al

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MICHAEL A. HACKARD, ESQ. (SBN 71067)hackard(^h ackardlaw . comMICHAE L D. LANE, ESQ. (SBN 239517)mlane(^h ackardlaw . comMICHAEL A. HACKARD, a Professional Law Corporation10630 Mather B oulevardMather, CA 95655Tel: (916)313-3030Fax:(916)226-5177ARCHIE C. LAMB, JR., ESQ. (To Apply as Pro Hac Vice)alamb 1 (^vzw .blackberry.netP. O. Box 2088Birmmgham, AL 35201Tel: (205)324-4425Fax: (205) 324-4649Attomeys for Plamtiff Michael Desrys

SUPERIOR COURT OF THE STATE OF CALIFORNIACOUNTY OF SACRAMENTO

FfLEDSu ps rior C ou rt Of CaSifon0 3 / 1 7 / 2 0 1 1^ " i J DepCase Numbtiir;34-2011-0OOS361.1

MICHAEL DESRYS, as an Individual and onBehalf of All Others Similarly Situated,Plaintiff,

vs.MEDC O HEALTH SOLUTIONS, INC., aDelaware corporation, FEDERICOBUEN ROSTR O, Individually, KURATOSHIMADA, Individually, CHARLES VAL DES,Individually, and DOES 1-100, Inclusive,

Defendants.

Case No.CLASS ACTIONC O MP L A I N T F O R E Q U I T A B L EA ND MO N E T A R Y R E L I E F

Jury T r ia l Demanded

P A R T I E S1. Plaintiff MIC HAE L DESR YS ("Pla intiff) resides in Sacramento County,

Califomia.2. Plaintiff is informed and believes and thereon alleges that, at all relevant times.

Defendant MEDCO HEALTH SOLUTIONS, INC. ("Medco") was and is a Delaware corporationlicensed to do business in the State of California. Plaintiff is informed and believes and thereon

COMPLAINT FOR EQUITABLE AND MONETARY RELIEF
http://blackberry.net/http://blackberry.net/


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1 alleges that Medco transacts business, has agents and is doing business in Sacramento County and2 other counties in Califomia.3 3. Plain tiffis informed and believes and thereon alleges that Defendant FEDE RICO4 BU ENR OSTR O is an individual residing in Caiifomia.5 4. Plaintiff is informed and believes and thereon alleges that Defendant KUR ATO6 SHIMA DA is an individual residing m Califomia.7 5. Plaintiff is informed and believes and thereon alleges that Defendant CHA RLES8 VAL DES is an individual residing in Califomia.9 6. Plaintiff is ignorant of the tm e names and capacities of the Defendants sued herein

10 as Does 1 through 100, inclusive, and therefore sue those Defendants, and each oft he m , by such11 fictitious nam es. Plaintiff will amend this com plaint to allege their tm e capacities when12 ascertained. Plain tiffis informed and believes and thereon alleges that all such fictitiously nam ed13 Defendants, and each ofth em , are responsible in some mann er for the occurrences herein alleged14 and that Pla intiffs damages herein alleged were proximately caused by Defenda nts' acts.15 7. Pla inti ffis informed and believes and thereon alleges, that at all relevant times16 Defendants, and each of them, were acting on behalf of and as the agent, servant, employee,17 and/or representative of each other with the consent, knowledg e, and permission of each of the18 remaining Defendants, and were acting within the scope and purpose of said agency,19 employment, authority, and/or representation.20 JURISDICT ION AND VENUE21 8. The Court has proper jurisdiction over this action under 410.10 of th e Califomia22 Code of Civil Procedure and Business & Professions Code 17200, et seq.23 9. Jurisdiction over Medco is proper because it has purposely availed itself of the24 privilege of conducting business activities in Califomia and because it currently maintains25 systematic and continuous business contacts with this State, and has man y thousands of customers26 who are residents of the State of Califomia and who do business with Defendant Medco from27 locations across this State.28

2COMPLAINT FOR EQUITABLE AND MONETARY RELIEF


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1 10. Venue is proper in this Court because man y Class Mem bers did business with2 Medco and engaged in transactions in this County, Medco engaged in transactions in this County,3 and because Medco has received substantial profits fi-om customers who engaged in transactions4 here.5 STATEM ENT OF FACTS6 11. Plaintiff is a mem ber of the Califomia Public Em ploy ees' Retirement System7 ("CalPERS") health plan that provides medical benefits for Plaintiff, including pharmacy8 prescription benefits.9 12. Plaintiff is informed and believe s and thereon alleges that in or abou t May 2004

10 ("May 2004 M eeting"), Ca lPER S' then-CEO , Federico Buenrostro ("Buenrostro"), convened11 with Alfred ViUalobos ("ViUalobos"), a former member of Ca lPE RS ' Board of Adm inistration,12 and David Snow ("Snow "), the Chairman and CEO of Med co, at ViUalobos' Lake Tahoe home in13 Nevada ("ViUalobos Hom e") to discuss changing Ca lPER S' pharmacy benefit managem ent14 company to Medco.15 13. Pla intiffis informed and believes and thereon alleges that in or about September16 2004 ("September 2004 Meeting" ), Buenrostro, Snow, and ViUalobos retumed to the ViUalobos17 Hom e and were joined by three other mem bers of CalP ER S' Board of Adm inistration, Charles18 Valdes ("Valdes"), Kurato Shimada ("Shimada"), and Robert Carlson ("Carlson"), to fiirther19 discuss changing CalP ER S' pharmacy benefit managem ent company to M edco.20 14. Plain tiffis informed and believes and thereon alleges that soon after the May 200421 M eeting, Medco agreed to pay ViUalobos $4 million to secure a pharmacy benefit m anagement22 contract with CalPE RS.23 15. Plain tiffis informed and believes and thereon alleges that in or about Novem ber24 2004, ViUalobos paid for Bue nrostro's wedding at the ViUalobos Hom e, including lodging for25 Bu enrostro 's wedding guests and other related expenses ("ViUalobos Gifts").26 16. Plain tiffis informed and believes and thereon alleges that over the following year,27 Snow continued to pnv ately meet with one or more of ViUalobos, Buen rostro, Valdes, Shimada,28



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1 and/or Carlson to continue their discussions regarding changing CalPE RS ' pharmacy benefit2 management company to Medco ("Post-September 2004 Medco Meetings").3 17. In or about October 18, 200 5, Ca lPER S' Health Benefits Com mittee convened at a4 regularly scheduled meeting to recommend to the fiill CalPERS Board which entity to award the5 pharmacy benefit managem ent contract ("October 2005 Officiai CalPERS M eeting"). Plaintiff is6 informed and believes and thereon alleges that Buenrostro, Valdes, Shimada, and Carlson7 attended the October 2005 Official CalPERS Meeting.8 18. Plaintiff is informed and believe s and thereon alleges that at the Octob er 20059 Official CalPER S Meeting, Valdes moved to recomm end that the pharmacy benefit management

10 contract be awarded to Medc o, and that Valdes and Carlson voted in favor of said11 recommendation.12 19. Plaintiff is informed and believ es and thereon alleges after the October 200513 Official CalPERS M eeting, Medco paid ViUalobos $1 million, the final instaUment ofth eir initial14 $4 million agreement. Plaintiffis informed and believes and thereon alleges Med co agreed to pay15 ViUalobos an additional $20,000 a mon th as an ongoing retainer.16 20. Plain tiffis informed and believes and thereon alleges neither Buenrostro, Valdes,17 Shimada, nor Carlson informed the Comm ittee at or prior to the October 2005 Official CalPERS18 Meeting about the May 2004 Meeting, September 2004 Mee ting, Post-September 2004 Medco19 Meetings (collectively, the "Clandestine Medco Meetings") and/or the ViUalobos Gifts.20 21 . Plaintiff is informed and believes and thereon alleges by or around July 1, 2006 ,21 Medco entered into a 3-year, $26 million pharmacy benefit management contract with CalPERS22 ("Medco PBM Contract"). Plaintiff is informed and believes and thereon alleges that the Medco23 PBM Contract was extended twice and was increased to $48 million.24 22 . Plaintiff is informed and believe s and thereon alleges that after the Medco PBM25 Contract, Plaintiff incurred increased charges for medications provided through Medco.26 CLASS ACTION ALLEG ATIONS27 23 . Plaintiff brings this action against Defendan ts on beha lf of him self and all others28 similarly situated in Caiifomia to recover damages against Defendants for causes of action an sing



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1 from Defe nda nts' unlawful, unfair, or wrongful business acts and/or practic es. Plaintiff and the2 Califom ia Class assert causes of action against Defendants for unfair frade practices under Bus. &3 Prof. Code 17200, et seq.4 24. The Class is defined as:5 All individuals who are mem bers of Ca lPE RS ' organization health plan that were provided6 prescription benefits from Medco du nn g or after 2006 .7 25 . The following persons shall be excluded from the Class: (1) Defendants and their8 subsidiaries and affiliates; (2) all persons who ma ke a timely election to be excluded from the9 proposed Class; (3) govemmental en tities; or (4) the judg e(s) to whom this case is assigned and

10 any immed iate family mem bers thereof.11 26. Plaintiff reserves the ng ht to modify or amend the Class definition before the Court12 determ ines whether certification is appro priate.13 27. The Class for whose benefit this action is brought is so numerous that joinder of all14 Class mem bers is impracticable. Plain tiffis informed and believes and thereon alleges there are15 hundreds of thousands^ of individ uals in the Cla ss.16 28. The claims of Plaintiff are typical of the claims of the Class in that the17 representative Plaintiff, like all Class members, was a member of CalPERS' organization health18 plan, purchased medications through Medco during or after 2006, and incurred increased charges19 for said medications provided through Me dco.20 29. The representative Plaintiff, like all Class members, has been injured in fact by21 Defendan ts' miscondu ct.22 30. Furthermore, the factual basis of Defend ants' misconduct as described above are23 common to all Class mem bers and represent a comm on thread of illegal, unfair and/or deceptive24 misconduct resulting in injury to all mem bers oft he Class.25 31 . There is a well-defined commim ity of interest in the questions of law and fact26 affecting the mem bers of the Class as a who le. These questions of law and fact common to the27 Class predominate over any questions affecting solely individual mem bers, and include whether28 Defendan ts' activities related to M edc o's pursuit and acquisition of the Medco PBM Contract

5COMPLAINT FOR EQUITABLE AND MONETA RY RELIEF


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1 violated Cal. Bus. & Prof. C. 72000, et seq, for which Plaintiff and the other members of the2 Class are entitled to recover.3 32. Plaintlffs claims raise predominant common issues for all Class members as they4 anse out ofthe same acts andpractices of Defendants.5 33. Plaintiffhas suffered the harm alleged, and Plaintiffhas no irteconcilable interests6 antagonistic to the interests of any other Class member.7 34. Plaintiff is committed to the vigorous prosecution of this action and has retained8 competent counsel experienced in the prosecution of class actions. Acc ording ly, Plaintiff is an9 adequate representative of the Class and will fairly and adequately protect the interests of the

10 Class.11 35. To the extent it is an element for class certification, a class action is superior to12 other available metho ds for the fair and efficient group-wide adjudication ofthis confroversy and13 provides substantial benefits. Since the amount ofeach individual Class member's claim is small14 relative to the complexity ofthe litigation, and due to the financiai resources of Defendants, no15 Class mem ber could afford to seek legal redress for some if not all ofthe claims alleged herein.16 36. Therefore, absent a class action, the Class members will continue to suffer losses17 and Defendants' violations ofthe law will proceed without remedy.18 CAUSES OF ACTION19 FIRST CLA IM FOR R E L I E F :20 Violations of Bus . & Prof. Code 17200, et seq.21 (Against all Defendants)22 37. Plaintiffs hereby incorporate by reference all of the foregoing paragraphs as if set23 forth in full herein.24 38. Defendants' conduct described herein violates Business and Professions Code25 17200 (The Unfair Com petition Law or "UCL") in the following respects:26 (a) Defendants' engagement in the Clandestine Medco Meetings and ViUalobos27 Gifts, and/or M edc o's paying ViUalobos $4 million to engage in the28 Clandestine Medco Meetings and ViUalobos Gifts, as alleged above,

6COMPLAINT FOREQUITABLE AND MONETARY RELIEF


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constitutes unlawful activity prohibited by Business and Professions Codesection 17200, et seq. The actions of Defendants in M edc o's pursuit of th eMedco PBM Contract constitute false, unfair, fraudulent and deceptivebusiness practices, within the meaning of Business and Professions Codesection 17200, et seq.

(b) As a result of Defend ants' violations of the UC L, Plaintiffs have paidexcessive amounts of money for their medications purchased throughMedco and suffered and will continue to suffer injury in fact and a loss ofmoney or property.

39. Pursuant to Califomia Business and Professions Code 17203, Plaintiff andmem bers oft he Class seek, and are therefore entitled to:

(a) an Order requiring that Medco cease performance of the Med co PBMConfract;

(b) restitution of all amounts paid to Medco or its agents;(c) equitable relief pursuant to Cal. Code of Civil Procedure 384;(d) pre-judgment interest at the highest rate allowable by law; and(e) paymen t ofth eir attom eys' fees and costs pursuant to, inter alia, Cal. Code

ClV. Proc. 1021.5, the common fund and private Attomey Generaldoctnnes.

P R A Y E R F O R R E L I E FWHEREFORE, Plaintiff, on behalf of himself and the members of the Class he seeks to

represent, prays forjudgm ent as follows as appropriate for the particular C ause of Action:1. Preliminary and permanent injunctive relief enjoining Medco from performing the

Medco PBM Contract;2. Restitution o fall excessive amounts paid to Medco or its agents by Plaintiffand the

Class, including restitution equal to disgorgement ofthe lU-gotten gains derived from Defendants'misconduct;

3. Actual damages in an amount according to proof;COMPLAINT FOR EQUITABLE AND MONETARY RELIEF


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4. Punitive and exemplary damages in an amount according to proof;5. Pre-judgment interest at the legal rate permitted by law;6. The costs and disbursements incu ned by Plaintiff in connection with this action,

including reasonable attomeys' fees pursuant to, inter alia, California Code of Civil Procedure1021.5; and7. Such other and further relief as the Court deems just and proper.

J U R Y D E MA N DPlaintiffand the Class demand a trial by jury on all claims so tnable.

Dated: March 17, 2011 MICHA EL A. HAC KAR D, a PLC

Arch^J[gr;gamb, ^Attomeys for Plaintiff, Michael Desrys


Desrys v. Medco, et. al

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