Established 1963
Updated:
February 17, 2016
| Practice Area:
Securities Litigation
Memorandum Order
Final Order and Judgment
Memorandum of Law In Support of Co-Lead Plaintiffs' Motion for Final Approval of Settlement and Plan of Allocation
Memorandum of Law In Support of Lead Counsel's Application for An Award of Attorneys' Fees and Expenses
Joint Declaration of Robert Rothman and Jonathan Gardner
Declaration of Norfolk County Retirement System
Declaration of Plymouth County Retirement System and City of Brockton Retirement System
Declaration of Adam D. Walter
Declaration of Robert M. Rothman
Declaration of Jonathan Gardner
Declaration of Barry Kusinitz
Declaration of William L. Chapman
Declaration of Bernard Gross
Notice
Proof of Claim
Stipulation of Settlement
Order Granting Preliminary Approval
Decision and Order Denying Motion to Dismiss
Consolidated Class Action Complaint
On February 17, 2016, the court granted final approval to a $48 million settlement with CVS Caremark and the individual defendants. Labaton Keller Sucharow is co-lead counsel and the Plymouth County Retirement System, the Norfolk County Retirement System, and City of Brockton Retirement System are lead plaintiffs.
The case involved a historic merger, announced March 2007, of CVS Corp. and Caremark Rx Inc., the nation’s second largest prescription benefits manager (PBM), which hinged almost exclusively on CVS's ability to integrate Caremark's PBM business into the new entity, CVS Caremark. By November 2007, the company misrepresented the status of the integration of CVS and Caremark, and falsely touted that CVS Caremark was now "operating as one company."
However, the lead plaintiffs allege the PBM business was never properly integrated, and this failure led directly to pervasive customer service problems, resulting in the departure of many large PBM clients. For instance, Coventry Health Care terminated contracts worth over $4 billion annually and Horizon Blue Cross Blue Shield of New Jersey terminated its contract worth as much as $1.3 billion annually. When investors learned of the cause of these terminated relationships with CVS Caremark, the company’s share price fell 20 percent. Additionally, right before CVS Caremark disclosed the loss of many major clients, the company’s CEO, CFO, and the head of PBM business cashed out more than $40 million in CVS Caremark stock for personal gain.
On December 31, 2013, the court denied the defendants' motion to dismiss in total.
The case is Richard Medoff v. CVS Caremark Corp. et al., No.09-cv-00554 (D.R.I.). The lead plaintiffs are Plymouth County Retirement System, the Norfolk County Retirement System, and City of Brockton Retirement System. Labaton Keller Sucharow represents Plymouth County Retirement System and the Norfolk County Retirement System. The defendants are CVS Caremark; Thomas Ryan, current CEO; David Rickard, former CFO; and Howard McLure, former head of the PBM business.
Settlement Hearing
A settlement hearing was held on January 19, 2016 at 10:00 am at the United States District Court for the District of New Hampshire, 55 Pleasant Street, Courtroom 2, Concord, NH 03301-3941.
If you have questions about the settlement, please contact Labaton Keller Sucharow at settlementquestions@labaton.com or 1-888-219-6877.
