ERISA Team Wins Twice for Caremark in Misclassification, Fiduciary Status

The Georgia Supreme Court ruled unanimously that ERISA preempted a nationwide class action alleging that our client, Caremark Rx, Inc., unjustly enriched itself by "misclassifying" the prescription drug tamoxifen as a brand name drug, rather than a generic drug, in assessing co-payments under employer-sponsored health benefit plans.  The case was before the Georgia Supreme Court on the denial of a motion to dismiss, which had been affirmed in a split 4-3 decision by the Georgia Court of Appeals.

Steptoe's other Caremark win—a case that lasted eight years—involved the issue of fiduciary status under ERISA.  A New Jersey federal district court judge granted Caremark's summary judgment motion and dismissed a class action suit filed against our client in 1998, alleging that Caremark had breached its fiduciary obligations to persons receiving those prescription drug benefits.  The Court found that Caremark was not acting as an ERISA fiduciary when engaging in the challenged conduct and dismissed the case in its entirety.  The plaintiffs did not appeal the decision.

Caremark is a pharmaceutical benefits manager (PBM) that administers prescription drug benefit programs for its customers.