INTHEUNITEDSTATESDISTRICTCOURT FORTHEEASTERNDISTRICTOFPENNSYLVANIA
COUNTYOFMONMOUTHandDIANE SCAVELLO,IndividuallyandonBehalfof AllOthersSimilarlySituated, Plaintiffs, CivilAction v. No. 20-cv-2024 RITEAIDCORPORATION,etal., Defendants.
MEMORANDUMOPINION Goldberg,J. March31,2023 The County of Monmouth, New Jersey (“Monmouth”) and Diane Scavello have brought a
putativeclassactionforfraudandrelatedclaimsallegingthatDefendantRiteAidCorporationand associatedentities(collectively“RiteAid”)madefalserepresentationswhensubmittinginsurance claimsforprescriptiondrugs. Monmouthsponsorsahealthplanthatcovereddrugpurchasesfrom Rite Aid pharmacies. Scavello is a Rite Aid customer who maintains health insurance but is not insuredbyMonmouth.1 RiteAidhasmovedtocompelScavellotoarbitrateherclaims. RiteAiddoesnotallegethat
Scavellosignedanagreementtoarbitrate. Instead,RiteAidseekstoholdScavellotoanarbitration provisioninacontractsolelybetweenRiteAidandOptumRx,Inc.(“Optum”),apharmacybenefits
1 Both Monmouth and Scavello seek to represent classes of similarly situated plan sponsors and RiteAidcustomers. manager(PBM).TheOptum–RiteAidcontract,whichdoesnotmentionScavello,establishesRite AidasamemberofOptum’spharmacynetwork. Rite Aid acknowledges that a party is usually not bound by a contract they never assented
to,butnonethelessarguesthatScavelloisboundbytheOptum–RiteAidcontractunderthedoctrine of “equitable estoppel,” which sometimes requires a non-signatory to arbitrate when they have “reaped the benefits of a contract containing an arbitration clause.” Griswold v. Coventry First LLC, 762 F.3d 264, 272 (3d Cir. 2014). According to Rite Aid, Scavello reaped such benefits because she bought prescription drugs at reduced prices, such that she must now adhere to the Optum–RiteAidcontract’sterms.
Forthereasonsexplainedbelow,IfindthatequitableestoppeldoesnotbindScavellotothe Optum–RiteAidcontractandwillthereforedenyRiteAid’smotiontocompelarbitration. I. FACTS A. Scavello’sClaims Rite Aid’s equitable estoppel argument hinges on the nature of Scavello’s claims against
Rite Aid and the relation of those claims to the Optum–Rite Aid contract. See E.I. DuPont de Nemours & Co. v. Rhone Poulenc Fiber & Resin Intermediates, S.A.S., 269 F.3d 187, 202 (3d Cir. 2001) (considering “the thrust of the [plaintiff’s] claims” in relation to the arbitration agree- ment). I therefore summarize what Scavello alleges Rite Aid did wrong and how Scavello claims shewasharmedbyit.
(1) AllegedMisrepresentations Rite Aid is a pharmacy that sells prescription drugs. When an insured customer makes a purchase, Rite Aid transmits information about the purchase to the customer’s insurer or the insurer’s agent. The insurer (or its agent) will then send a message back “indicating whether the drugandconsumerarecoveredand,ifso,theamountthepharmacymustcollectfromtheconsumer asacopayment,coinsurance,ordeductibleamount.”(AmendedComplaint¶¶6-7,11,36.)
According to Scavello, Rite Aid uses an industry standard form to transmit information to customers’ insurers. One of the fields in that standard form contains the pharmacy’s (in this case Rite Aid’s) “usual and customary” price for the drug being sold. Scavello alleges that “usual and customary” is widely understood in the industry to mean “the cash price charged to the general public, exclusive of sales tax or other amounts claimed.” Scavello cites various sources for this allegedunderstanding. (AmendedComplaint¶¶35-36,39-47.)
The gist of Scavello’s fraud and other misrepresentation claims is that Rite Aid submitted “usualandcustomary”pricestoinsurersthatwerenotactuallythepricesRiteAidwouldchargethe generalpublicforthesamedrugs. AccordingtoScavello’sallegations,RiteAidoffereduninsured customers discounts on prescription drugs. Thus, Scavello asserts, those discounted prices—not the listed retail prices—were Rite Aid’s “usual and customary” prices for the drugs it sold. But when submitting information to a customer’s insurer, Rite Aid allegedly reported a price that was much higher than the discounted price a cash-paying customer would pay. Scavello alleges that
this report, submitted to the insurer, was false. And, because Rite Aid was aware that the prices it reportedwerenotaccurate,Scavelloassertsthatthesemisrepresentationsweremadefraudulently. (AmendedComplaint¶¶48-51,54-55,60,123-26.) (2) AllegedHarmtoScavello
Scavello maintains health insurance but does not allege that Rite Aid offered false “usual andcustomary”pricestoherpersonally. Instead,sheallegesthatRiteAid’sfalsereportstoinsurers harmed her because they caused her to pay higher copayments than she would have otherwise. According to Scavello, her copayment was “calculated based on the [usual and customary] price reported by Rite Aid.” Thus, she alleges that “Rite Aid knowingly based ... [her] payment on a
purported [usual and customary] price that was fraudulently inflated above Rite Aid’s true [usual and customary] price,” causing her to be charged a copayment that was “also artificially inflated.” (AmendedComplaint¶¶2,20,38,60,308.) Scavello further alleges that she was unaware that “the copayment demanded and charged wasnotaccurate.”Thus,sheclaimsthat“RiteAid...madepricerepresentationsto[her]...atthe pointofsale”andthatthesewere“false.”AndScavelloassertsthatout-of-pocketcharges(suchas
copayments) “cannot” exceed the usual and customary price for a drug but that she was charged copaymentsthatdidexceedRiteAid’strueusualandcustomarypricesforthedrugsshepurchased. (AmendedComplaint¶¶20,38,67,310.) Based on these allegations, Scavello brings claims for fraud, negligent misrepresentation, violation of Pennsylvania’s Unfair Competition and Consumer Protection Law, and unjust enrich- ment.
B. TheOptum–RiteAidContract Rite Aid introduces the following additional facts that are not contained in the complaint. Forpurposesofthismotion,Scavellodoesnotdisputethesefacts2: Scavello was insured under a Blue Cross Medicare Part D health plan when she made
2 AlthoughthefactspertainingtotheOptum–RiteAidcontractareoutsidethepleadings,Scavello does not object to their consideration. See Guidotti v. Legal Helpers Debt Resol., LLC, 716 F.3d 774-76(3dCir.2013)(motiontocompelarbitrationmayconsiderfactsoutsidethepleadingsunder asummaryjudgmentstandard);Fed.R.Civ.P.56(a)(summaryjudgmentisproperwhen“thereis nogenuinedisputeastoanymaterialfact”). the purchases at issue in this case. (Rite Aid’s Memorandum at 6-7.) Blue Cross does not transact withRiteAiddirectlybutoperatesthroughanintermediaryknownasapharmacybenefitsmanager (PBM), in this case Optum. Rite Aid attaches a substantially redacted copy of a contract between OptumandRiteAidtoitsmotiontocompelarbitration(the“Optum–RiteAidcontract”).3
The Optum–Rite Aid contract incorporates a document that required Optum and Rite Aid to arbitrate their disputes. Specifically, the contract incorporates the terms of Optum’s “provider manuals,” and a document that Rite Aid represents to be Optum’s 2017 Provider Manual includes aprovisionstating,inrelevantpart: Other than with respect to issues giving rise to immediate termination hereof or non-renewal hereof, the parties will work in good faith as set forth below to resolve any and all issues and/or disputes between them (hereinafter referred to as a “Dispute”) including, but not limited to all questions of arbitrarily [sic], the existence, validity, scope, interpretation or termination of the Agreement, PM [presumably Provider Manual] or any term thereof prior to the inception of any litigationorarbitration. ... If the party asserting the Dispute has satisfied the requirements of this section thereof,itshallthereafterbesubmittedtobindingarbitration.... (FarrellDec.Ex.Eat123.) Rite Aid contends that Scavello is bound by this provision and must accordingly arbitrate herclaimsinthiscase.
3 Technically, only Defendant Rite Aid Hdqtrs. Corp. is a party to the Optum–Rite Aid contract, but Scavello does not dispute that all Rite Aid Defendants may cite it. See Richards v. Am. Aca- demic Health Sys., LLC, No. 20-cv-59, 2020 WL 2615688, at *4 (E.D. Pa. May 22, 2020) (per- mittingnon-signatorydefendanttoinvokearbitrationagreement). II. LEGALSTANDARD “Because arbitration is a matter of contract between the parties, a judicial mandate to ar- bitrate must be predicated upon the parties’ consent.” Guidotti, 716 F.3d at 771 (alterations and
quotation marks omitted). Before compelling arbitration, a court must be “satisfied that the mak- ingoftheagreementforarbitration...isnotinissue.”9U.S.C.§4. Apartymovingtocompelarbitrationmayrelyonfactsoutsidethepleadings. SeeGuidotti, 716F.3dat774-76. Insuchacase,thecourtmustapplyasummaryjudgmentstandardtodetermine whethertheundisputedfactsestablishtheexistenceofavalidagreementtoarbitrate. Seeid.Ifthe outcome turns on disputed facts, the parties have a right to present that issue to a jury. 9 U.S.C.
§4. In this case, the parties do not dispute any facts relevant to the existence of an agreement to arbitrate. In particular, Scavello does not dispute the existence of the Optum–Rite Aid contract or its incorporation of the Optum Provider Manual’s arbitration provision, nor does she challenge Rite Aid’s assertion that her fraud claims involve price submissions that Rite Aid made to Optum pursuanttothatcontract. Ithereforeconsiderwhethertheseundisputedfactsrequirearbitrationof Scavello’sclaims.
III. DISCUSSION “The Federal Arbitration Act, 9 U.S.C. § 1 et seq. (‘FAA’), creates a body of federal sub- stantivelawestablishingandgoverningthedutytohonoragreementstoarbitratedisputes.”Invista S.A.R.L. v. Rhodia, S.A., 625 F.3d 75, 83 (3d Cir. 2010). “In particular, the FAA provides that as
a matter of federal law ‘[a] written provision’ in a maritime or commercial contract showing an agreement to settle disputes by arbitration ‘shall be valid, irrevocable, and enforceable, save upon such grounds as exist in law or equity for the revocation of any contract.’” Id. (quoting 9 U.S.C. §2). “Arbitration is strictly a matter of contract. If a party has not agreed to arbitrate, the
courts have no authority to mandate that he do so.” Bel-Ray Co. v. Chemrite (Pty) Ltd., 181 F.3d 435, 444 (3d Cir. 1999); see also Morgan v. Sundance, Inc., 142 S. Ct. 1708, 1713 (2022) (“[A]rbitration agreements [are] as enforceable as other contracts, but not more so.”). Neverthe- less, “non-signatories may be bound to arbitration agreements under certain very limited circum- stances.” Invista, 625 F.3d at 84. “In determining if parties have agreed to arbitrate, [courts] apply ordinarystate-lawprinciplesthatgoverntheformationofcontracts.”Id.(quotationmarksomitted).
Thus,“iftraditionalprinciplesofstatelawallowacontracttobeenforced...againstnonpartiesto the contract,” the non-signatory may be compelled to arbitrate. Griswold, 762 F.3d at 271 (quota- tionmarksomitted). RiteAidseekstobindScavellototheOptum–RiteAidcontractunderthedoctrineof“equi- table estoppel,” which “prevent[s] a non-signatory from embracing a contract, and then turning its backontheportionsofthecontract,suchasanarbitrationclause,thatitfindsdistasteful.”DuPont, 269 F.3d at 199-200. “A nonsignatory can ‘embrace’ a contract in two ways: (1) by knowingly
seeking and obtaining direct benefits from that contract; or (2) by seeking to enforce terms of that contract or asserting claims based on the contract’s other provisions.” Griswold, 762 F.3d at 272 (alterations omitted). Rite Aid argues that Scavello “embraced” the Optum–Rite Aid contract in bothoftheseways,whichIconsiderbelow. A. SeekingtoEnforce According to Rite Aid, Scavello is bound by the Optum–Rite Aid contract because the claimsinhercomplaint,althoughstyledastortclaims,actuallyseektoenforceRiteAid’scontrac-
tualobligationtoreport“usualandcustomary”pricestoOptum. WhileRiteAidacknowledgesthatScavellodoesnotliterallyallegebreachofacontractual dutytoreportusualandcustomaryprices,RiteAidpositsthattheonlyreasonScavellowasentitled to have Rite Aid submit any prices at all was that Scavello was insured under a health plan that utilized Optum’s pharmacy network. Rite Aid points to the Optum–Rite Aid contract’s definition of “usual and customary” prices and argues that it controls Rite Aid’s price-reporting obligations
irrespectiveofhowthattermmighthavebeendefinedbyothersintheindustry. (FarrellDec.¶26; Farrell Dec. Ex. E at 108, Farrell Dec. Ex. B at 17.) Thus, in Rite Aid’s view, Scavello’s claim that Rite Aid submitted the wrong prices is tantamount to alleging that Rite Aid failed to perform undertheOptum–RiteAidcontract. Rite Aid also contends that even though Scavello has pled tort claims, there were no ac- tual tort duties governing Rite Aid’s conduct. In particular, Rite Aid notes that PBM–pharmacy contracts frequently vary the precise definition of “usual and customary” prices, such that the “in-
dustry standard” definition Scavello alleges in inapplicable. Thus, Rite Aid argues that I should treatScavello’scomplaintasallegingadutycreatedbycontractbecausenootherdutyexisted. In addressing Rite Aid’s arguments, I begin by examining the precise duties Scavello al- leges Rite Aid breached and how Scavello claims to have been harmed. See DuPont, 269 F.3d at 202. Scavello alleges that Rite Aid harmed her in two ways: First, Rite Aid allegedly lied to Scavello’sinsureroritsagent—who,forpurposesofthismotion,isunderstoodtobeOptum—and
therebycausedOptumtochargeScavellotoohighacopayment. Second,ScavelloallegesthatRite Aidliedtoherpersonallyaboutthenatureofthecopaymentitcollected,leadinghertobelievethe copaymentwasbasedonthedrug’scashpricewheninfactitwasnot. Neither alleged harm depends on Rite Aid having a contractual duty to report usual and
customary prices to Optum. Regardless of why Rite Aid reported prices, Scavello alleges Rite Aid breached a tort duty to not knowingly misrepresent facts to induce others to rely on them. (Amended Complaint ¶¶ 121-130.) As the Ninth Circuit explained in rejecting a nearly identical argumentbyRiteAid: It is irrelevant whether the contracts between Rite Aid and the pharmacy ben- efits managers required Rite Aid to report the usual and customary price of a prescription drug. Even if the contracts contained no provision requiring Rite Aid to report the usual and customary price, the fact remains that Rite Aid did reportthatinformationandallegedlypurposelyinflatedit. RiteAid’sdutynotto commit fraud is independent from any contractual requirements with the phar- macybenefitmanagers. Staffordv.RiteAidCorp.,998F.3d862,866(9thCir.2021). To make the point more concrete, suppose that Rite Aid transmitted a message to Optum thatsaid,ineffect,“ScavelloisseekingtopurchaseXYZ.Asagreedinourcontract,wearereport- ing the $20.00 price of the drug. Incidentally, $20.00 is also what a cash-paying customer would pay.” Scavello’s fraud claim is not that Rite Aid was contractually obligated to report a different price but that Rite Aid should not have falsely represented whatever price it reported, required or not, to be the cash price. (See Amended Complaint ¶¶ 60, 123.) Thus, Scavello does not seek to holdRiteAidtoitsobligationstoOptum,andsheisnot“seekingtoenforcetermsofthatcontract orassertingclaimsbasedonthecontract’sotherprovisions.”Griswold,762F.3dat272(alterations omitted). The Third Circuit’s decision in DuPont supports the above reasoning. There, the plaintiff brought a claim for alleged breach of an oral promise to continue performing under a written contract,whichcontainedanarbitrationprovision. 269F.3dat201. Althoughperformingunderthe oralpromisewouldhavemeantperformingunderthewrittencontractandtherefore“implicate[d]” thewrittencontract,thedutyallegedlybreachedwasonlytheoralpromise. Id.Forthatreason,the
plaintiff was not required to arbitrate. Id. The same is true here: Scavello alleges only a breach of thedutynottocommitfraudandthereforedoesnotseektoenforcetheOptum–RiteAidcontract. Rite Aid’s primary response is that there was no actual tort duty requiring it to report accurate usual and customary prices to Optum (or, if there was such a duty, the contract displaced it). Thus, Rite Aid reasons, Scavello’s claims must rest on contractual duties even if that is not how Scavello pled them. In effect, Rite Aid argues that because Scavello’s claims are meritless, I
shouldanalyzenotScavello’sactualclaimsbutthecontractclaimsScavelloshouldhavebrought. Rite Aid’s position is inconsistent with the rule that “the plaintiff, not the defendant, con- trols the complaint,” a principle the Third Circuit has repeatedly applied to the arbitration context. Abdurahman v. Prospect CCMC LLC, 42 F.4th 156, 162 (3d Cir. 2022). For example, the DuPont court recognized that it was “bound to accept as true” the plaintiff’s alleged breach of duty “for purposes of reviewing and resolving the arbitration issue.” Dupont, 269 F.3d at 204-05. The con- clusion of Abdurahman is similar: There, the defendant sought to compel arbitration based on an
agreement between the plaintiff and a non-party that the plaintiff “could have,” but did not, sue. TheThirdCircuitdeclinedto“piercethepleadingsanddetermine,somehow,whetherotherparties andgroundsmighthavebeenaddedandwhethertheirabsenceistied,insomeway,toanintentto avoidarbitration.”42F.4that162. This rule that the plaintiff’s actual, not hypothetical, claims control the estoppel analysis is illustrated again in O’Hanlon v. Uber Techs., Inc., 990 F.3d 757 (3d Cir. 2021). In that case,
users of motorized wheelchairs sued Uber for not offering accessible transportation. Uber moved to compel arbitration, “contending that even though Plaintiffs had never registered for an Uber account or accepted its Terms of Use, they were nevertheless bound by the mandatory arbitration clause of that agreement” because “Plaintiffs could not establish standing to sue in federal court
unless they ‘step into the shoes’ of ‘actual Uber Rider App users who all are bound by Uber’s TermsofUse.’”Id.at761. TheThirdCircuitdeclinedtheinvitationtorecharacterizetheplaintiffs’ claims: theplaintiffs’complaintdidnotmentionUber’sTermsofUse,andtheirclaimsaccordingly “ar[ose] entirely under the [Americans with Disabilities Act].” Id. at 767. Whether the plaintiffs had standing to bring that claim was a separate issue the Third Circuit determined it did not have toreach. Id.at765-66.
The consistent reasoning of these cases is clear: When a plaintiff chooses not to bring claimsthatwouldimplicateanarbitrationagreement,acourtmaynotsubstitutedifferentclaimsin an effort to “pull[] the entire dispute into ... arbitration ... .” Abdurahman, 42 F.4th at 161. Here, as in Abdurahman, O’Hanlon, and DuPont, Scavello bases her claims on alleged obligations that are independent of the contract containing an arbitration agreement. If there are deficiencies in Scavello’stortclaims(anissueIdonotreach),thatisforthemerits;itdoesnotmeanthatScavello isreallybringingacontractclaim.
Rite Aid cites to precedent which it posits shows that courts have relied on deficiencies in alleged tort duties to bind a plaintiff to arbitration. But the cases Rite Aid cites do not sup- port its position. Rite Aid first cites a district court’s decision that a plaintiff could not maintain a parallel, non-arbitrable claim for breach of an oral promise because the written arbitration agree- ment contained an integration clause, thus triggering the parol evidence rule. Hutt v. Xpressbet, LLC, No. 20-cv-494, 2020 WL 2793920, at *6 (E.D. Pa. May 29, 2020). But the court in that
case did not invent an arbitrable claim the plaintiff did not bring, as the plaintiff himself sought to enforce a confidentiality provision of the written contract. Id. The other case Rite Aid relies on, Esis, Inc. v. Coventry Health Care Workers Comp., Inc., No. 13-cv-2957, 2016 WL 928667 (E.D. Pa. Mar. 9, 2016), held that the plaintiff’s tort claims were insufficiently pled in part because the
plaintiff “identifie[d] no independent duty of care” aside from the contract. Id. at *6. But Esis did not issue an order compelling arbitration nor, as Rite Aid urges here, did it craft an arbitrable claim the plaintiff did not bring. Rather, the outcome in Esis was that the claims either had to be dismissedbecausetheplaintiffwasapartytothearbitrationagreementandthusagreedtoarbitrate all claims “concerning” it, or, alternatively, that the claims were insufficiently pled and had to be dismissedunderRule12(b)(6). Id.at*5-*6.
Rite Aid’s other cases are even farther afield. In Scottsdale Ins. Co. v. Kinsale Ins. Co., 253 F. Supp. 3d 796 (E.D. Pa. 2017), an insurer asserted the rights of its insured as a subrogee, so it stepped into the shoes of the insured and was accordingly bound by the insured’s agreement to arbitrate. Id. at 803. In Just B Method, LLC v. BSCPR, LP, No. 14-cv-1516, 2014 WL 5285634 (E.D. Pa. Oct. 14, 2014), the non-signatory plaintiff was suing for breach of an obligation to pro- vide commissions to the signatory LLC of which the plaintiff was the sole member. Id. at *8-9. AndinCrawfordPro.Drugs,Inc.v.CVSCaremarkCorp.,748F.3d249(5thCir.2014),theplain-
tiffwasasignatory,sothatcasehasnoapplicationtothesefacts. Id.at*225. Inshort,asfarasthe parties’briefingreveals,acourthasneverconcludedthatclaimsanalogoustoScavello’s“s[ought] toenforce”anunpledcontracttowhichtheplaintiffwasnotaparty. Alternatively, Rite Aid seeks to reason by analogy to Pennsylvania’s “gist of the action doctrine,” which “prevents a purely contractual duty from serving as the basis for a tort claim.” SodexoMAGIC,LLCv.DrexelUniv.,24F.4th183,216(3dCir.2022). Totheextentthisanalogy
is informative, I conclude that it points against arbitration of Scavello’s claims. Whether a tort claim is barred under the gist of the action doctrine turns on “the nature of the duty alleged to have been breached.” Id. at 217. “Tort actions arise from the breach of a duty owed to another as a matter of social policy, while breach-of-contract actions arise from the breach of a duty created
by contract.” Id. at 216. Here, Scavello alleges breach of a societal duty not to defraud, and “a precontractual duty not to deceive through misrepresentation or concealment exists independently of a later-created contract.” Id. at 217. In addition, a contract that “merely serve[s] as the vehicle which established the relationship between” two parties does not trigger the gist of the action doctrine with respect to any torts that are committed during the course of that relationship. Bruno v. Erie Ins. Co., 106 A.3d 48, 70 (Pa. 2014). Similarly, in the arbitration context, an arbitration
agreement that merely brings non-signatories together does not obligate those non-signatories to arbitratetheirdisputes. Abdurahman,42F.4that162. Accordingly, Scavello is not bound by the arbitration provision in the Optum–Rite Aid contract as a non-signatory “seeking to enforce terms of that contract or asserting claims based on thecontract’sotherprovisions.”Griswold,762F.3dat272(alterationsomitted).
B. AcceptedBenefitsFrom Rite Aid’s next theory is that Scavello is bound by the Optum–Rite Aid contract because she “knowingly s[ought] and obtain[ed] direct benefits from that contract.” Griswold, 762 F.3d at 272. AccordingtoRiteAid,ScavelloobtainedorseekstoobtaintwobenefitsfromtheOptum–Rite Aidcontract: First,ScavelloallegedlybenefitedwhensheshoppedatRiteAidstoresandobtained reducedpricesbasedonRiteAid’sparticipationinOptum’spharmacynetwork.4 Second,RiteAid
4 This point is arguably disputed because Scavello alleges that Rite Aid’s insured customers pay morethanuninsuredcustomersforthesamedrugs. (AmendedComplaint¶3.) Nevertheless,Ifind it unnecessary to resolve this factual dispute because, even assuming Scavello benefited from Rite asserts that Scavello seeks to benefit again from that contract by claiming damages based on Rite Aid’sallegedfailuretosendtheproperpricinginformationtoOptum. I begin with Rite Aid’s argument that Scavello is bound by the Optum–Rite Aid contract
because she received benefits from that contract in the past—by shopping at Rite Aid pharmacies. Cases in which courts have compelled arbitration under a “direct benefits” theory all involved a significantly closer nexus among the contract, the benefits, and the claims than is present here. A representative example is American Bureau of Shipping v. Tencara Shipyard S.P.A., 170 F.3d 349 (2d Cir. 1999). There, owners of a vessel hired an intermediary to obtain a “classification” (a type of certificate) for the vessel that the owners could present to an insurance carrier. Id. at 351.
When the certificate was obtained and presented to the owners, it “incorporated by reference” an arbitration agreement between the intermediary and the issuer of the certificate. Id. The owners then used the certificate to insure the vessel, and, based on that conduct, the Second Circuit held that the owners were bound to arbitrate whatever claims they had against the issuer. Id. at 351-53. Thus, the bound non-signatory in American Bureau of Shipping knowingly presented a document incorporating an arbitration agreement to an insurer and obtained “direct benefits” in the form of theinsurancepolicy. Id.at353.
Scavello’s situation is quite different. Scavello is not alleged to have seen the Optum–Rite Aid contract nor to have presented it to anyone. Nor is Scavello alleged to have received or used a document that incorporated the Optum–Rite Aid contract by reference. Whatever incidental benefitScavellomayhavereceivedfromtheOptum–RiteAidcontract,itwasnotabenefitthatshe “s[ought] and obtain[ed].” Griswold, 762 F.3d at 272. Given that “arbitration agreements [are] as
Aid’smembershipinOptum’spharmacynetwork,sheisnotrequiredtoarbitrateherclaims. enforceable as other contracts, but not more so,” Morgan, 142 S. Ct. at 1713, the consequence of RiteAid’spositionwouldseemtobethatScavelloisboundtotheentireOptum–RiteAidcontract, even though she never saw it and did not know it existed, just because she shopped at Rite Aid
stores—anextraordinaryresult. ThepresentcaseismoreanalogoustoBouriezv.CarnegieMellonUniversity,359F.3d292 (3d Cir. 2004), where the plaintiff sued a university for fraudulently inducing him to invest in a corporation that was sponsoring the university’s research. Id. 293-94. The corporation had signed anarbitrationagreementwiththeuniversity,andtheuniversityarguedthattheplaintiffwasbound byitbecausehebenefitedfromtheiragreement. Id.294. ButtheThirdCircuitfoundthatwhatever
benefit the plaintiff might have received as a shareholder of a contracting party was insufficient to bind him to the arbitration agreement. Id. at 295. Here, as in Bouriez, Scavello received at most downstream benefits from the Optum–Rite Aid contract as an insured of one of Optum’s clients. Thissortof“indirect”benefitdoesnottriggerequitableestoppel. DuPont,269F.3dat200. Rite Aid’s other cited cases are even less on point. In HealthplanCRM, LLC v. AvMed, Inc., 458 F. Supp. 3d 308 (E.D. Pa. 2020), the bound non-signatory used the signatory’s software and accepted a “browserwrap” agreement incorporating the software’s license, which contained
the arbitration agreement—an express endorsement of the arbitration agreement not alleged here. Id.at331-34. Next,inAmkorTech.,Inc.v.AlcatelBus.Sys.,278F.Supp.2d519(E.D.Pa.2003), theplaintiffwasadownstreampurchasersuingfordefectsinchipsprovidedpursuanttoacontract with the upstream purchaser. Id. at 532. The downstream purchaser had to abide by the arbitra- tion agreement in the upstream contract. Id. Thus, in Amkor, the claim in effect challenged the upstreamvendor’sperformanceunderthecontract,againunlikeScavello’sclaimsinthiscase.
Finally, in Fencourt Reinsurance Co. v. ITT Indus., Inc., No. 06-cv-4786, 2008 WL 2502139 (E.D. Pa. June 20, 2008), arbitration was compelled only as to an issue directly based on the contract containing the agreement to arbitrate—whether the defendant had assumed its alleged predecessor’s liability—and the court did not reach whether the underlying claim for
breach of a promise outside the contract would be arbitrable. See id. at *11 (“[T]he Court will stay the case pending the resolution of the arbitration proceedings between [the plaintiff] and [the defendant]....”);id.at*4(“[Thedefendant]...take[s]thepositionthatthefirst[issue]shouldbe arbitrated, but the second litigated.”). Thus, the only issue on which Fencourt actually compelled arbitrationwaswhethertheverycontractcontainingthearbitrationclausegavetheplaintiffaright to pursue the alleged successor for its predecessor’s promise. Id. at *10. In sum, none of these
cases are analogous to a customer shopping at a pharmacy and receiving the benefit of in-network prices. Morefundamentally,RiteAidoffersnoequitablejustificationforrewritingthecontractual arrangement among Rite Aid, Optum, Blue Cross, and Scavello to be something other than what thesepartiesagreedto. Cf.Abduraham,42F.4that162(decliningto“rewrit[e]thelaw”tocompel arbitration where a party had not contracted for it). Scavello’s interaction with Rite Aid was no surprise: the Optum–Rite Aid contract contemplated the involvement of plan members like Scav-
ello, but left them out of its arbitration provision. (See Farrell Dec. Ex. B at 14 (“[Rite Aid] seeks to provide Covered Prescription Services to Members of [Optum’s] Clients using its Pharmacies in accordance with the terms and conditions of this Agreement.”).) In fact, Optum and Rite Aid crafted a process for dispute resolution involving “President[s]” and “Vice President[s],” clearly anticipating that no customer was meant to invoke it. (See Farrell Dec. Ex. E at 123.) If Optum andRiteAidwantedplanmemberslikeScavellotoarbitratedisputeswithpharmacies,they“could
havedraftedacontract[withplanmembers]directing[their]disputestoarbitration.”Abdurahman, 42F.4that162. Buttheydidnot,andtheircontractualchoiceto“distin[guish]betweensignatories andnon-signatories”mustberespected. SeeDuPont,269F.3dat202. Finally,RiteAid’scontentionthatScavelloseekstobenefitfromtheOptum–RiteAidcon-
tract in the future—by claiming damages in this case—just recasts its position that Scavello’s claims are based on the contract. For the reasons explained previously, Scavello’s claims do not seek to benefit from the Optum–Rite Aid contract because she only alleges harm from breaches of duties independent of the contract. Scavello is therefore not equitably estopped under a “direct benefits”theory.
IV. CONCLUSION Forthereasonssetoutabove,RiteAid’smotiontocompelarbitrationwillbedenied. Anappropriateorderfollows.