Envolve Pharmacy Solutions, Inc. v. Rite Aid Headquarters Corp.

• Court: Superior Court of Delaware
• Decided: March 17, 2023
• Docket: N19C-12-214 PRW CCLD
• Status: Published

Opinion

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE

ENVOLVE PHARMACY SOLUTIONS, ) INC., ET AL., ) ) Plaintiffs, ) ) v. ) C.A. No. N19C-12-214 ) PRW CCLD ) RITE AID HEADQUARTERS CORP., ) and RITE AID CORP., ) ) Defendants. )

Submitted: March 15, 2023 Decided: March 17, 2023

MEMORANDUM OPINION AND ORDER

Upon Defendants Rite Aid Headquarters Corp. and Rite Aid Corp.’s Motion for Summary Judgment, DENIED,

Upon Plaintiffs Envolve Pharmacy Solutions, Inc., et al.’s Motion for Partial Summary Judgment, DENIED.

Karen Jacobs, Esquire, Alexandra M. Cumings, Esquire, MORRIS, NICHOLS, ARSHT & TUNNELL LLP, Wilmington, Delaware; Keith J. Harrison, Esquire, Christopher Flynn, Esquire, Daniel W. Wolff, Esquire, Jerome P. DeSanto, Esquire, Jed Wulfekotte, Esquire, CROWELL & MORING LLP, Washington, D.C., Attorneys for Plaintiffs Envolve Pharmacy Solutions, Inc., et al.

Corinne Elise Amato, Esquire, Eric J. Juray, Esquire, Jason W. Rigby, Esquire, PRICKETT, JONES & ELLIOT, P.A., Wilmington, Delaware; Neil K. Gilman, Esquire, Christopher J. Dufek, Esquire, Brianne Reese, Esquire, HUNTON ANDREWS KURTH LLP, Washington, D.C.; John B. Shely, Esquire, Courtney B. Glaser, Esquire, Kelsey J. Hope, Esquire, HUNTON ANDREWS KURTH LLP, Houston, Texas, Attorneys for Defendants Rite Aid Headquarters Corp. and Rite Aid Corp.

WALLACE, J. Plaintiffs are a collective of health plans and pharmacy-benefit managers who

entered into contracts with Defendant Rite Aid, a retail pharmacy. These contracts

governed payments between the parties for prescription drug sales and

reimbursements. Plaintiffs’ remaining claims allege Defendants breached certain

contracts and caused Plaintiffs to overpay Defendants.

Plaintiffs move for summary judgment on Count II (breach of contract

between one Plaintiff and Defendants) and Count IV (breach of contract between

one Plaintiff and Defendants). Defendants also move for summary judgment on

Counts II and IV. Additionally, Defendants move for summary judgment on Count

VI (unjust enrichment regarding two contracts between non-parties and Defendants).

For the reasons below, Plaintiffs’ Motion for Partial Summary Judgment is

DENIED, and Defendants’ Motion for Summary Judgment is DENIED.

I. FACTUAL AND PROCEDURAL BACKGROUND

A. THE PARTIES

Plaintiffs Centene Health Plans are subsidiaries of Centene Corporation.1

Thirty-six entities named as Plaintiffs in this action fall under this umbrella term and

are collectively referred to as Centene Health Plans.2 Centene Health Plans are

1 Amended Complaint (“Am. Compl.”) ¶ 11, Mar. 8, 2022 (D.I. 107). 2 See id. ¶ 11(a)-(jj).

-1- “payors that offer both commercial and government-sponsored health plans,

including pharmaceutical benefits products, to their customers.”3

Plaintiffs Health Net Health Plans (collectively with Centene Health Plans,

the “Health Plans”) are subsidiaries of Centene Corporation.4 Seven entities named

as Plaintiffs in this action fall under this umbrella term and are collectively referred

to as Health Net Health Plans.5 Like Centene Health Plans, Health Net Health Plans

are payors that offer health plans to their customers.6

Plaintiff Envolve Pharmacy Solutions, Inc. (“Envolve” and together with the

Health Plans, “Centene Plaintiffs”), formerly known as US Script, Inc., is a

subsidiary of Centene Corporation.7 Envolve acted as a pharmacy-benefit manager

(“PBM”) for Centene Health Plans at all relevant times, and as a PBM for Health

Net Health Plans beginning in March 2016.8 Envolve is incorporated in Delaware;

maintains corporate offices in Orlando, Florida and St. Louis, Missouri; and acted

from Fresno, California for all events related to this action.9

3 Id. ¶ 11. 4 Id. ¶ 12. 5 See id. ¶ 12(a)-(g). 6 Id. ¶ 12. 7 Id. ¶ 14. 8 See id. ¶¶ 7, 14. 9 Id. ¶ 14.

-2- On March 24, 2016, Centene Corporation acquired Health Net, Inc. and its

affiliates, including Plaintiffs Health Net Health Plans and Health Net

Pharmaceutical Services (“HNPS”).10 HNPS was a subsidiary of Centene

Corporation from March 2016 until its dissolution in February 2021.11 HNPS

operated as a PBM for the Health Plans. HNPS was incorporated in California;

maintained its corporate headquarters in San Rafael, California; and acted from San

Rafael and Rancho Cordova, California for all events related to this action.12

Defendant Rite Aid Headquarters Corp. is a Delaware corporation and

maintains its corporate headquarters in Camp Hill, Pennsylvania.13 Defendant Rite

Aid Corporation (collectively with Rite Aid Headquarters Corp., “Rite Aid”) is Rite

Aid Headquarters Corp.’s parent.14 And Rite Aid Corporation is a Delaware

corporation, too, maintaining its corporate headquarters in Camp Hill,

Pennsylvania.15 Rite Aid is one of the largest retail drugstore chains in the United

States, with 2,510 retail locations as of February 2021.16 In fiscal year 2021, Rite

10 Id. ¶ 15. 11 Id. ¶ 16. 12 Id. 13 Id. ¶ 18. 14 Id. 15 Id. 16 Id. ¶ 20.

-3- Aid dispensed over 164 million prescriptions and had operating revenues that

exceeded $24 billion.17

B. CONNECTIONS BETWEEN THE PARTIES: RITE AID, THE PBMS, AND THE HEALTH PLANS

Rite Aid is a “provider” in the pharmacy industry.18 PBMs and health plans

are “payors.”19 PBMs are intermediaries between pharmacies and other payors, such

as health plans.20 Centene Plaintiffs include the Health Plans and one of their PBMs,

Envolve.21

Rite Aid had contracts with three relevant PBMs: Envolve, Caremark L.L.C.

f/k/a PCS Health Systems (“Caremark”), and Argus Health Systems, Inc.

(“Argus”).22 These contracts set reimbursement terms and rates.23 The PBMs,

namely Envolve, in turn, had separate contracts with the Health Plans that contained

their own contracted terms and conditions.24

17 Id. 18 Defendants’ (corrected) Motion for Summary Judgment (“Defs.’ Mot. for Summ. J.”) at 3, Dec. 22, 2022 (D.I. 231). 19 Id. 20 Id. (citing Am. Compl. ¶ 59). 21 Id. 22 Id. 23 Id. 24 Id.; see also id., Ex. 25 at Tr. 112:20-113:13, Ex. 26 at Tr. 125:17-127:24.

-4- Rite Aid is a Centene network pharmacy, which means Centene members can

use their “Centene prescription drug benefit to fill their prescriptions at Rite Aid

pharmacy locations.”25 When a Rite Aid pharmacy fills a prescription for a Centene

member, Rite Aid “causes a claim for payment to be sent to Centene [Plaintiffs].”26

C. AGREEMENTS BETWEEN RITE AID AND ENVOLVE, AND DEFINITIONS OF “USUAL AND CUSTOMARY” PRICE

1. The 2003 Contract between Rite Aid and Envolve

In 2003, Rite Aid and Envolve entered into a Pharmacy Participation

Agreement (the “2003 Contract”).27 Centene Plaintiffs claim the “2003 Contract

applied to prescription drug claims submitted by Rite Aid to Envolve for the

damages period [of] September 2008 through April 30, 2013.”28 Under the 2003

Contract, Rite Aid filled drug prescriptions for Centene Health Plans members, then

Rite Aid was reimbursed by Envolve.29 There are two Sections directly relevant to

Centene Plaintiffs’ breach-of-contract claim under the 2003 Contract.30 Section 1.7

defines “Usual and Customary Charges” (“U&C”) as: “Those amounts which [Rite

Aid] normally charges its private pay patients for comparable Pharmaceutical

25 Am. Compl. ¶ 19. 26 Id. 27 See Centene Plaintiffs’ Motion for Partial Summary Judgment (“Pls.’ Mot. for Summ. J.”), Dec. 20, 2022 (D.I. 228, D.I. 229), Ex. 1 (2003 Contract / Pharmacy Participation Agreement). 28 Id. at 7. 29 Id. at 7-8 (citing Plaintiffs’ Exhibit 1). 30 See id. (discussing Sections 2.5 and 1.7 of the 2003 Contract); see id. at 32-34 (same).

-5- Services and as may be provided to Patient-Beneficiaries of a Third Party Payor, as

provided herein.”31 Section 2.5, titled “Claims Submission,” states:

[Rite Aid] agrees to file claims for payment via on-line communication immediately before dispensing of Pharmaceutical Products to Patient- Beneficiaries. Under circumstances where on-line communication is not possible, [Rite Aid] agrees to file claims in writing for payment, using the industry standard Universal Claims Form, within 30 days of the date the service was provided, or earlier in accordance with the terms of an applicable Contract, which [Rite Aid] has accepted.32

At its core, the dispute over the 2003 Contract concerns a “lesser-of” logic

formula; the parties differ in their respective interpretations of this formula. Centene

Plaintiffs maintain the lesser-of logic means “a pharmacy is paid the ‘lesser of’ a

negotiated rate or its U&C price for a drug” and that Rite Aid agreed to be

reimbursed by PBMs pursuant to the lesser-of logic. 33 Rite Aid posits that, under

the 2003 Contract, the U&C price was not part of the lesser-of logic.34 Rite Aid says

31 Id., Ex. 1 § 1.7. “Patient-Beneficiaries” is defined, in relevant part, as: “Members and beneficiaries of members, who rely on a Third Party Payor . . . to purchase for them or reimburse them for the purchase of medical services or pharmaceutical products.” Id., Ex. 1 § 1.4. “Pharmaceutical Services” is defined, in relevant part, as: “The providing by Pharmacy of drugs and professional services to Patient-Beneficiaries enrolled in Third Party Payor programs . . . . Pharmaceutical Services includes the dispensing of any Generic Drug or Brand Name Drug, [among others].” Id., Ex. 1 § 1.5. “Third Party Payor” is defined as: “Any entity which purchases or reimburses the purchase of medical services or pharmaceutical products and services on behalf of Patient-Beneficiaries. Such entities include, but are not limited to, insurance companies, union trusts, employers, medical care foundations, and preferred provider organizations.” Id., Ex. 1 § 1.6. 32 Id., Ex. 1 § 2.5. 33 Centene Plaintiffs’ Answering Brief (“Pls.’ Answering Br.”) at 7, Jan. 24, 2023 (D.I. 243); see also id., Ex. 5 at Tr. 206:6-9, 227:6-10, 271:7-12; Pls.’ Mot. for Summ. J. at 7, Ex. 3 at Tr. 39:22- 40:14. 34 Defendants’ Answering Brief (Defs.’ Answering Br.”) at 7-8, Jan. 24, 2023 (D.I. 237).

-6- Section 2.1 of the 2003 Contract covers the proper interpretation of “lesser-of”

logic.35 Section 2.1, titled “Terms,” states:

The following pricing applies to the On-Lok Third Party Payor only: Brand Name: AWP [Average Wholesale Price] less 12% or MAC [Maximum Allowable Cost], whichever is less, plus a $0.95 dispensing fee per 7-day supply. Generic: The lesser of AWP less 20% or MAC, whichever is less, plus a $0.95 dispensing fee per 7-day supply.36

The parties to the 2003 Contract amended Section 2.1 in 2007. The 2007

amendment changed the language: from “AWP less 12% or Mac” to “AWP less 15%

or MAC” for “Brand Name”; from “AWP less 20% or MAC” to “AWP less 25% or

MAC” for “Generic”; and from “plus a $0.95 dispensing fee” to “plus a $2.00

dispensing fee” for both “Brand Name” and “Generic.”37 Rite Aid maintains that

the 2007 amendment also does not incorporate U&C price into the lesser-of logic.38

It appears that in June 2010, the 2003 Contract was amended again.39 The

2010 amendment states in pertinent part that the “Generic Effective Rate” means:

the overall rate of reimbursement for Covered Medications that are Generic Drugs (including MAC and non-MAC), expressed as a percentage reduction of the [AWP] as calculated quarterly including single source Generic Drug Claims, Usual and Customary Charge Claims, Zero Balance Claims, and multi-source Brand Name Drugs on

35 Id. 36 Pls.’ Mot. for Summ. J., Ex. 1 § 2.1 (underlining in original); Defs.’ Mot. for Summ. J., Ex. 26 at Tr. 32:21-33:6, 34:10-15; Defs.’ Mot. for Summ. J., Ex. 25 at Tr. 94:15-95:2. 37 Defs.’ Answering Br., Ex. 3 § 2.1. 38 Id. at 8 n.29. 39 Plaintiffs’ Reply Brief (“Pls.’ Reply Br.”) at 12, Feb. 13, 2023 (D.I. 265); see also id., Ex. 8.

-7- the MAC list or that price as Generic Drugs due to the DAW designation or that price as Usual and Customary Charge Claims.40 This language states that U&C price was to be included in AWP. AWP is part

of Section 2.1’s lesser-of logic in the 2003 Contract.41

2. The 2013 Contract between Rite Aid and Envolve

In 2013, Rite Aid and Envolve entered into a Participating Pharmacy

Agreement (the “2013 Contract”).42 Centene Plaintiffs claim the “2013 Contract

applied to prescription drug claims that Rite Aid submitted to Envolve for the

damages period [of] May 1, 2013 through March 31, 2016.”43 Under the 2013

Contract, Rite Aid filled drug prescriptions for Centene Health Plans members, then

Rite Aid was reimbursed by Envolve.44 In the 2013 Contract, “Usual and

Customary” price is defined as “the lowest price [Rite Aid] would charge to a non-

contracted, cash-paying customer with no insurance for an identical Pharmaceutical

Service on the date and at the location that the product is dispensed, inclusive of all

applicable discounts, promotions, or other offers to attract customers.”45 The parties

40 Id., Ex. 8 § 6. 41 See Pls.’ Mot. for Summ. J., Ex. 1 § 2.1. 42 See id., Ex. 2 (2013 Contract / Participating Pharmacy Agreement). 43 Id. at 9 (citing Plaintiffs’ Exhibit 2). 44 Id. 45 Id., Ex. 2 § 1(U).

-8- agree that U&C price was included as a component of the lesser-of logic,46 but they

disagree over whether Rite Aid’s Rx Savings Card Program (as explained further

below) prices and price-matched prices (also explained further below) were

incorporated into the 2013 Contract’s U&C definition.47 The 2013 Contract defines

the lesser-of logic as:

On Claims for an Extended Day Supply, [Rite Aid] agrees to accept the lesser of (i) the Usual and Customary price, (ii) the AWP discount and dispensing fee for the Extended Day Supply, and (iii) three (3) times the amount of the AWP discount and dispensing fee for the “Open Access (83 day supply or less)” network.48

Like with the 2003 Contract, Centene Plaintiffs believe Rite Aid failed to

comply with sections in the 2013 Contract that covered claims processing and

submissions.49

D. RITE AID’S RX SAVINGS CARD PROGRAM AND PRICE-MATCHING POLICY

1. Rx Savings Card Program

In 2008, Rite Aid launched its Rx Savings Card Program (the “Program”).50

46 See Defs.’ Answering Br. at 8 (“In the 2013 Contract, U&C is included as one component of Envolve’s ‘lesser of’ logic when specified by the contract.”). 47 See Pls.’ Mot. for Summ. J. at 35 (“The plain language . . . shows that the 2013 Contract did not permit Rite Aid to exclude its [Rite Aid Rx Savings Card Program] and price-matched prices from its U&C submission to Envolve.”); Defs.’ Answering Br. at 8 (noting that in the 2013 Contract “the U&C definition was also updated to reflect that the [Rite Aid Savings Card] Program was not U&C—as it had never been”). 48 Pls.’ Mot. for Summ. J., Ex. 2 at Exhibit C-1 Fee Schedule. 49 See id. at 35-38; see also id., Ex. B § 4(C)-(D). 50 Id. at 10, Ex. 13; Defs.’ Answering Br. at 9.

-9- The Program offered two types of discounts on generic and brand name drugs. First,

the Program offered drugs on a national “flat fee list” at lower-than-usual prices.51

Second, the Program offered “wrap” discounts for certain drugs, and these discounts

were at times substantially lower than Rite Aid’s retail price.52 Rite Aid developed

the Program in conjunction with ScriptSave.53 The parties dispute the extent of

ScriptSave’s involvement in the Program. Centene Plaintiffs claim ScriptSave was

“primarily responsible ‘for just processing claims, billing, and reporting back to

[Rite Aid].’”54 Rite Aid maintains ScriptSave “administered the Program and

adjudicated claims,” and ScriptSave’s “adjudication of the Program was essential to

its operation.”55 This dispute is material because it goes to whether Rite Aid owned

and controlled the Program. ScriptSave was replaced by EnvisionRx (now Elixir),

which is a wholly-owned subsidiary of Rite Aid.56

The Program was available to anyone and there was no enrollment fee to

become a participant in the Program.57 To enroll in the Program, a person had to

complete a form that contained demographic information, sign a HIPAA waiver, and

51 Pls.’ Mot. for Summ. J. at 10-11, Ex. 11 at Tr. 28:3-29:1, Ex. 18. 52 Id. at 11, Ex. 11 at Tr. at 57:8-12, 67:19-68:10. 53 Defs.’ Answering Br. at 9; Pls.’ Mot. for Summ. J. at 11. 54 Pls.’ Mot. for Summ. J. at 11 (quoting Pls.’ Mot. for Summ. J., Ex. 21 at Tr. 19:22-20:3). 55 Defs.’ Answering Br. at 9 (citing Defs.’ Answering Br., Ex. 25 at 32:13-19). 56 Pls.’ Mot. for Summ. J. at 12-13. 57 Id. at 13, Ex. 11 at Tr. 89:1-16.

-10- sign a marketing authorization.58 The Program also permitted customers to enroll

their family members without requiring the family member to sign the enrollment

form.59

One question the parties’ dispute is whether Program customers were “non-

contracted, cash-paying” customers. This is key to whether the prices paid by

Program customers were encompassed by the contracts’ U&C definitions and their

respective lesser-of logics. Centene Plaintiffs maintain Program customers were

simply “cash customers” and back it up with certain testimony that the Program

targeted uninsured and underinsured customers.60 Centene Plaintiffs also contend

the Program was not a contract because there was no consideration given by the

customers.61 Rite Aid maintains the prices charged to these customers were not part

of the U&C’s definition, and they point to the 2013 Contract definition of U&C that

includes the language “non-contracted, cash paying customer,” to conclude the

Program customers were not covered by the definition.62 Specifically, Rite Aid

58 Id. at 13-14; id., Ex. 11 at Tr. 95:11-18, 102:19-103:2, 104:15-105:3, 105:17-107:1. 59 Id. at 14, Ex. 11 at Tr. 102:3-10. 60 See id. at 14-15. 61 Id. at 37. 62 See Defs.’ Answering Br. at 26-27; Defs.’ Mot. for Summ. J. at 34.

-11- contends the customers did provide consideration (i.e., their personal information

and optional marketing authorization) to enroll in the Program.63

2. Price-Matching Policy From 2008 to 2015, Rite Aid had a price-matching policy that allowed

pharmacists to match a competitor’s price.64 Customers would provide a Rite Aid

pharmacist with a competitor’s verified price (subject to geographical limitations).65

This policy allowed Rite Aid to compete with other pharmacies offering lower

prices, like Walmart’s $4 generic drugs program.66

Like with the Program, the price-matching policy is relevant to whether the

matched prices were part of Rite Aid’s U&C. Centene Plaintiffs seemingly contend

the matched prices fall within the definition of U&C,67 and Rite Aid contends these

matched prices don’t.68

E. AGREEMENT BETWEEN RITE AID AND CAREMARK In 1996, Rite Aid and PBM Caremark entered into a “Provider Agreement”

(the “Caremark Contract”).69 The Caremark Contract applied to prescription drugs

63 See Defs.’ Answering Br. at 39-40. 64 Id. at 12; Pls.’ Mot. for Summ. J. at 16. 65 Pls.’ Mot. for Summ. J. at 16-17; Defs.’ Answering Br. at 12. 66 Pls.’ Mot. for Summ. J. at 17. 67 See Pls.’ Answering Br. at 3-4; Pls.’ Mot. for Summ. J. at 16-19. 68 See Defs.’ Answering Br. at 12-13. 69 See Defs.’ Mot. for Summ. J., Ex. 1 (Caremark Contract).

-12- purchased by members of the Health Plans.70 Health Net Health Plans reimbursed

Rite Aid through PBM Caremark for the period of September 1, 2008, through

December 23, 2019.71 Centene Health Plans reimbursed Rite Aid through PBM

Caremark on a rolling basis for the period of September 1, 2016, through December

23, 2019.72

Under the Caremark Contract, U&C price is defined as “the lowest price [Rite

Aid] would charge to a particular customer if such customer were paying cash for

an identical prescription on that particular day. This price must include any

applicable discounts offered to attract customers.”73 In 2019, Rite Aid and Caremark

amended the definition of U&C price. The amended definition states U&C price

“shall exclude third party cash discount card networks and/or other discount

programs that require program enrollment.”74 Caremark reimbursed Rite Aid using

lesser-of logic for prescription drugs sold to members of the Health Plans.75 The

Health Plans funded Rite Aid’s reimbursements.76

70 Pls.’ Answering Br. at 9, Ex. 5 at Tr. 220:2-19. 71 Id. at 8, Ex. 36 ¶ 11. 72 Id. at 8, Ex. 36 ¶ 13. 73 Defs.’ Mot. for Summ. J., Ex. 1 at Schedule of Terms. 74 Id., Ex. 18 § 13(f). 75 Pls.’ Answering Br. at 9, Ex. 5 at Tr. 227:6-10. 76 Id. at 9-10, Ex. 5 at Tr. 220:14-19.

-13- F. AGREEMENT BETWEEN RITE AID AND ARGUS

In 2010, Rite Aid and PBM Argus entered into a “Participating Agreement for

Pharmacy” (the “Argus Contract”).77 The Argus Contract applied to prescription

drugs purchased by members of Argus Centene Plans.78 Argus Centene Plans

reimbursed Rite Aid through PBM Argus from May 1, 2013, through December 31,

2017.79

Under the Argus Contract, U&C price is defined as “the lowest price [Rite

Aid] would charge to a cash paying, non-contracted customer for an identical

prescription on the date and at the location that the prescription is dispensed,

including any special promotions or discounts available to the public on such date

of dispensing.”80 In 2018, Rite Aid and Argus amended the definition of U&C price.

The amended definition states that U&C price “shall exclude cash discount card

networks and/or other discount programs that require enrollment.”81 It appears

undisputed that Argus reimbursed Rite Aid using a lesser-of logic for prescription

77 Defs.’ Mot. for Summ. J., Ex. 5 (Argus Contract). 78 Pls.’ Answering Br. at 10; Defs.’ Mot. for Summ. J., Ex. 5 § 3. 79 Pls.’ Answering Br. at 10, Ex. 36 ¶ 14. 80 Defs.’ Mot. for Summ. J., Ex. 5 at Ex. 1 § 1.40 (emphasis in original). 81 Pls.’ Answering Br., Ex. 13 § 4(b).

-14- drugs sold to members of Argus Centene Plans.82 Argus Centene Plans funded Rite

Aid’s reimbursements.83

G. PROCEDURAL HISTORY On December 23, 2019, Centene Plaintiffs filed their original complaint in

this action and asserted six causes of action: (1) fraud and intentional

misrepresentation (by Centene Plaintiffs and against Rite Aid), (2) breach of the

2003 Contract between Rite Aid and Envolve, (3) breach of the 2003 Contract—

third party beneficiary (by Centene Health Plans and against Rite Aid), (4) breach

of the 2013 Contract between Rite Aid and Envolve, (5) breach of the 2013

Contract—third party beneficiary (by Centene Health Plans and against Rite Aid),

and (6) unjust enrichment (by Centene Plaintiffs and against Rite Aid).84 Earlier,

Rite Aid filed a motion to dismiss the complaint invoking statute of limitations,

failure to state a claim, and the voluntary payment doctrine.85 The Court issued an

earlier opinion on that motion to dismiss.86 Therein, the Court dismissed the fraud

claim (Count I), and the third party beneficiaries breach-of-contract claims (Counts

82 See id. at 11 (“There is no evidence that Argus reimbursed Rite Aid using any methodology other than lesser-of U&C logic for prescriptions administered to members of Argus Centene Plans.”). 83 Id. 84 See Complaint ¶¶ 70-137, Dec. 23, 2019 (D.I. 1). 85 See Defendants’ Motion to Dismiss, Feb. 28, 2020 (D.I. 28, D.I. 29). 86 Memorandum Opinion (“Mem. Op.”), Jan. 15, 2021 (D.I. 62).

-15- III and V).87 The Court denied the motion to dismiss Envolve’s breach-of-contract

claims (Counts II and IV), and “the remaining Centene [Plaintiffs’] (excluding

Envolve) claim for unjust enrichment” (Count VI).88 Additionally, the Court held

the statute of limitations argument was fact-specific and unresolvable at motion to

dismiss stage; the Court found the voluntary payment doctrine did not bar the

Centene Plaintiffs’ claims.89

Thereafter, Centene Plaintiffs filed their Amended Complaint.90 The

Amended Complaint asserts three causes of action: (1) breach of the 2003 Contract

between Rite Aid and Envolve (Count II), (2) breach of the 2013 Contract between

Rite Aid and Envolve (Count IV), and (3) unjust enrichment brought by non-

Envolve Plaintiffs against Rite Aid (Count VI).91

Rite Aid has filed its instant summary judgment motion on all remaining

claims.92 Simultaneously, Centene Plaintiffs a summary judgment motion on Counts

II and IV.93 Thus, the parties have filed cross-motions for summary judgment on

Counts II and IV. During these summary judgment proceedings, Centene Plaintiffs

87 See id. at 31. 88 See id. 89 See id. at 18-21, 29-30. 90 See Am. Compl. 91 See id. ¶¶ 99-106, 122-29, 145-49. 92 See Defs.’ Mot. for Summ. J. 93 See Pls.’ Mot. for Summ. J.

-16- have also filed two Motions to Strike Rite Aid’s summary judgment exhibits—one

aimed at a deposition, and one targeting an affidavit.94 The Court here disposes of

all these motions.

II. STANDARD OF REVIEW

A. SUMMARY JUDGMENT STANDARD

“Summary judgment is appropriate where the record demonstrates that ‘there

is no genuine issue as to any material fact and that the moving party is entitled to

judgment as a matter of law.’”95 The Court’s function when deciding a motion for

summary judgment is to determine whether genuine issues of material fact exist,

“but not to decide such issues.”96 Summary judgment “will not be granted if ‘a

material fact is in dispute’ or ‘it seems desirable to inquire thoroughly into [the facts]

to clarify the application of the law to the circumstances.’”97 Initially, the movant

bears the burden of demonstrating its motion is supported by undisputed material

facts.98 If the movant succeeds in that, the burden shifts to the non-movant to

94 See D.I. 235, D.I. 236. 95 Parexel Int’l (IRL) Ltd. v. Xynomic Pharms., Inc., 2020 WL 5202083, at *4 (Del. Super. Ct. Sept. 1, 2020) (quoting Del. Super. Ct. Civ. R. 56(c)). 96 Merrill v. Crothall-American Inc., 606 A.2d 96, 99 (Del. 1992) (citation omitted); see also Oliver B. Cannon & Sons, Inc. v. Dorr-Oliver Inc., 312 A.2d 322, 325 (Del. Super. Ct. 1973). 97 Unbound P’rs Ltd. P’ship v. Invoy Hldgs. Inc., 251 A.3d 1016, 1024 (Del. Super. Ct. 2021) (alteration in original) (quoting Ebersole v. Lowengrub, 180 A.2d 467, 468-69 (Del. 1962)). 98 Moore v. Sizemore, 405 A.2d 679, 680 (Del. 1979) (citation omitted).

-17- demonstrate there is a “genuine issue for trial.”99 The Court construes the record in

the light most favorable to the non-movant to determine whether there is a genuine

issue for trial.100

“These well-established standards and rules equally apply [where] the parties

have filed cross-motions for summary judgment.”101 “[W]here cross-motions for

summary judgment are filed and neither party argues the existence of a genuine issue

of material fact, ‘the Court shall deem the motions to be the equivalent of a

stipulation for decision on the merits based on the record submitted with the[m].’”102

Even so, “the existence of cross motions for summary judgment does not act per se

as a concession that there is an absence of factual issues.”103 In other words, “the

[C]ourt is not relieved of its obligation to deny summary judgment if a material

factual dispute exists.”104 To determine whether a genuine issue of material fact

exists, the Court evaluates each motion separately.105 The Court will deny summary

99 Del. Super. Ct. Civ. R. 56(e). 100 Judah v. Del. Tr. Co., 378 A.2d 624, 632 (Del. 1977) (citation omitted). 101 IDT Corp. v. U.S. Specialty Ins. Co., 2019 WL 413692, at *5 (Del. Super. Ct. Jan. 31, 2019) (citations omitted); see Capano v. Lockwood, 2013 WL 2724634, at *2 (Del. Super. Ct. May 31, 2013) (citing Total Care Physicians, P.A. v. O'Hara, 798 A.2d 1043, 1050 (Del. Super. Ct. 2001)). 102 Radulski v. Liberty Mutual Fire Ins. Co., 2020 WL 8676027, at *4 (Del. Super. Ct. Oct. 28, 2020) (alteration in original) (quoting Del. Super. Ct. Civ. R. 56(h)). 103 United Vanguard Fund, Inc v. TakeCare, Inc., 693 A.2d 1076, 1079 (Del. 1997). 104 Fasciana v. Elec. Data Sys. Corp., 829 A.2d 160, 166 (Del. Ch. 2003). 105 See Empire of Am. Relocation Servs., Inc. v. Com. Credit Co., 551 A.2d 433, 435 (Del. 1988) (“It is imperative that the court consider whether there is a genuine issue of material fact each time [summary judgment] motions are presented.” (citation omitted)).

-18- judgment if “it is not reasonably certain that there is no triable issue” of fact.106 And

while “summary judgment is encouraged when possible, there is no absolute right

to summary judgment.”107 In the end, summary judgment “must be denied if there

is any reasonable hypothesis by which the opposing party may recover, or if there is

a dispute as to a material fact or the inferences to be drawn therefrom.”108

III. PARTIES’ CONTENTIONS

Centene Plaintiffs moved for summary judgment on their breach-of-contract

claims under the 2003 and 2013 Contracts (Counts II and IV). Centene Plaintiffs

contend the U&C price definitions in the Contracts include cash discounts Rite Aid

provided to its customers unless the parties agreed to exclude them, which Centene

Plaintiffs say didn’t happen.109 Centene Plaintiffs also contend Rite Aid is

collaterally estopped from relitigating whether its Program customers were “cash

106 Unbound Partners, 251 A.3d at 1024 (internal quotation marks omitted); see Cont’l Ins. Co. v. Rutledge & Co., Inc., 750 A.2d 1219, 1227–28 (Del. Ch. 2000) (“[T]he Court [] maintains the discretion to deny summary judgment if it decides a more thorough development of the record would clarify the law or its application.” (citing Alexander Indus., Inc. v. Hill, 211 A.2d 917, 918– 19 (Del. 1965))); cf. Jeffries v. Kent Cty. Vocational Tech. Sch. Dist. Bd. of Educ., 743 A.2d 675, 677 (Del. Super. Ct. 1999) (“[A] matter should be disposed of by summary judgment whenever an issue of law is involved and a trial is unnecessary.” (emphasis added) (citing State ex rel. Mitchell v. Wolcott, 83 A.2d 759, 761 (Del. 1951))); see also Cerberus Int’l, Ltd. v. Apollo Mgmt., L.P., 794 A.2d 1141, 1150 (Del. 2002) (“The trial court may deny summary judgment in a case where there is reason to believe that the better course would be to proceed to a full trial.” (cleaned up)). 107 AeroGlobal Cap. Mgmt., LLC v. Cirrus Indus., Inc., 871 A.2d 428, 443 (Del. 2005) (citation omitted). 108 Vanaman v. Milford Mem’l Hosp., Inc., 272 A.2d 718, 720 (Del. 1970). 109 See Pls.’ Mot. for Summ. J. at 23-29.

-19- customers” because, in their eyes, the issue was previously litigated.110 Centene

Plaintiffs take the two above contentions and conclude that Rite Aid’s failure to

incorporate its discounted and other prices into the U&C price caused Rite Aid to

breach both the 2003 Contract and the 2013 Contract, entitling Centene Plaintiffs to

money damages for overpayments made to Rite Aid.111

Rite Aid moved for summary judgment on the two contract claims and the

unjust enrichment claim (Counts II, IV, and VI). Rite Aid contends Delaware’s

three-year statute of limitations for contract claims bars all of Centene Plaintiffs’

remaining claims.112 Next, Rite Aid insists it fully complied with the contracts at

issue—the 2003 Contract, the 2013 Contract, the Caremark Contract, and the Argus

Contract.113 Rite Aid says that neither the Caremark Contract nor the Argus Contract

encompassed Program prices or price-matched prices as part of the U&C price.114

Rite Aid challenges Centene Plaintiffs have no evidence Rite Aid breached

Envolve’s 2003 or 2013 Contracts, or that Rite Aid was overpaid. 115 Rite Aid also

110 See id. at 29-31. 111 See id. at 31-39. 112 See Defs.’ Mot. for Summ. J. at 12-25. 113 See id. at 25-36. 114 See id. at 26-31; see also Defs.’ Answering Br. at 12-13. 115 See Defs.’ Mot. for Summ. J. at 31-36.

-20- contends Centene Plaintiffs cannot prove damages,116 and that the voluntary

payment doctrine defeats all of Centene Plaintiffs’ claims.117

IV. DISCUSSION

A. RITE AID IS NOT ENTITLED TO SUMMARY JUDGMENT ON STATUTE OF LIMITATIONS.

Rite Aid posits Delaware’s three-year statute of limitations bars Centene

Plaintiffs’ claims to the extent those claims accrued before December 23, 2016.118

Specifically, Rite Aid argues the claims are based on the Program prices, which

launched over a decade before this action commenced.119 Rite Aid also points out

price-matching ended in 2015.120 And, says Rite Aid, no exception to the statute of

limitations applies.121 Centene Plaintiffs deploy four counterarguments. First,

Centene Plaintiffs say a federal class action, captioned as Josten v. Rite Aid Corp.

(C.A. No. 3:18-cv-00152 (S.D. Cal.)) tolled the statute of limitations in this action.122

Second, Centene Plaintiffs say the “inherently unknowable doctrine” tolled the

statute of limitations starting in September 2008 when Rite Aid began the

116 See id. at 36-39. 117 See id. at 39-41. 118 Id. at 12. 119 Id. 120 Defs.’ Answering Br. at 12-13. 121 Defs.’ Mot. for Summ. J. at 12. 122 Pls.’ Answering Br. at 14-15.

-21- Program.123 Third, Centene Plaintiffs contend the fraudulent concealment doctrine

tolled the statute of limitations starting in September 2008.124 Fourth, Centene

Plaintiffs maintain they “were not on inquiry notice of Rite Aid’s wrongful acts more

than three years before bringing this suit, let alone more than three years before

Josten was filed.”125

In Delaware, contract claims are subject to a three-year statute of

limitations.126 And those claims must be brought within three years “from the date

that the cause of action accrued.”127 A breach-of-contract claim accrues “at the time

the contract is broken, not at the time when the actual damage results or is

ascertained.”128 Stated differently, “the statute is triggered as soon as the breach

occurs, even if the aggrieved plaintiff is ignorant of the breach.” 129 When a claim

falls outside the limitations period on its face, “the plaintiff bears the burden of

123 Id. at 16-17. 124 Id. at 19-20. 125 Id. at 20. 126 See DEL. CODE ANN. tit. 10, § 8106(a). 127 Levy v. Brownstone Asset Mgmt., LP, 76 A.3d 764, 768 (Del. 2013) (citation omitted). 128 Worrel v. Farmers Bank of State of Del., 430 A.2d 469, 472 (Del. 1981) (internal quotation marks and citation omitted). 129 Intermec IP Corp. v. TransCore, LP, 2021 WL 3620435, at *21 (Del. Super. Ct. Aug. 16, 2021) (citing Wal-Mart Stores, Inc. v. AIG Life Ins. Co., 860 A.2d 312, 319 (Del. 2004)); see also SmithKline Beecham Pharms. Co. v. Merck & Co., Inc., 766 A.2d 442, 450 (Del. 2000) (observing that Delaware’s contractual statute of limitations “is not a discovery statute” and so, absent tolling, constructive knowledge of the breach is enough to trigger the statutory period (internal quotations marks omitted)).

-22- pleading facts leading to a reasonable inference that a tolling exception applies.”130

“Ignorance of the cause of action will not toll the statute, absent concealment or

fraud, or unless the injury is inherently unknowable and the claimant is blamelessly

ignorant of the wrongful act and the injury complained of.”131

Rite Aid, as the movant, must prove the evidence supports the conclusion that

the limitations period has lapsed.132 If Rite Aid meets its burden, the burden shifts

to Centene Plaintiffs to demonstrate that circumstances exist to justify tolling.133

There is no dispute the claims accrued, i.e., the alleged breaches occurred, more than

three years before this action was filed.134 As such, Centene Plaintiffs must

demonstrate an exception applies to toll the running of the limitations period.

This action was filed on December 23, 2019. Thus, claims that accrued before

December 23, 2016, are barred unless an exception applies. Centene Plaintiffs have

carried their burden to show a genuine issue of material fact exists over whether an

exception to toll the limitations period applies, specifically as it relates to the

130 Intermec IP Corp., 2021 WL 3620435, at *21 (citation omitted). 131 Coleman v. Pricewaterhousecoopers, LLC, 854 A.2d 838, 842 (Del. 2004) (citation omitted). 132 See id. at 843 (holding that the lower court erred in granting summary judgment on the statute of limitations when genuine issues of material fact existed regarding the plaintiff’s notice of the wrongful acts leading to the cause of action). 133 Ins. Co. of N. Am. V. NVF Co., 2000 WL 305338, at *2 (Del. Super. Ct. Jan. 20, 2000) (citing U.S. Cellular Inv. Co. of Allentown v. Bell Atl. Mobile Sys. Inc., 677 A.2d 497 (Del. 1996)). 134 See Pls.’ Answering Br. at 14-24 (arguing four exceptions justify tolling the statute of limitations, but not that the action was commenced within three years of any breach).

-23- “inherently unknowable doctrine.” Under this doctrine, the statute of limitations

begins to run “upon the discovery of facts constituting the basis of the cause of action

or the existence of facts sufficient to put a person of ordinary intelligence and

prudence on inquiry which if pursued, would lead to the discovery of such facts.”135

Centene Plaintiffs maintain their injury caused by the exclusion of discount

prices was “inherently unknowable until 2017” when they became aware of a

“whistleblower lawsuit” claiming Rite Aid inflated its U&C prices.136 Moreover,

Centene Plaintiffs state that the injury was not reasonably knowable until 2017

because Rite Aid set its U&C price and did not share how it formulated that price.137

Centene Plaintiffs contend that as a result of the confidential nature of Rite Aid’s

pricing formula, they had no way to know Rite Aid did not include its Program prices

in its U&C price until the 2017 whistleblower lawsuit.138

135 See Coleman, 854 A.2d at 842 (emphasis in original) (internal quotation marks and citation omitted). 136 See Pls.’ Answering Br. at 17; Defs.’ Mot. for Summ. J., Ex. 19 at 10-11(Q: “Identify the date each Plaintiff became aware and describe how each Plaintiff became aware of Defendants’ purported ‘scheme’ alleged in paragraphs 44 and 45 of the Complaint.” A: “[I]n 2017, based upon information in public litigation and government investigations of which it became aware, [Plaintiffs] began to suspect Rite Aid was falsely reporting its U&C charges to [Plaintiffs], resulting in potential overcharges for prescription drug reimbursement claims.”). Compare Complaint ¶¶ 44-45, with Am. Compl. ¶¶ 56-57. 137 See Pls.’ Answering Br. at 17-18. Rite Aid’s counsel stated in a February 2019 letter to Envolve that Rite Aid’s “proprietary pricing algorithm” involved “highly confidential information.” See id., Ex. 21 at 2. 138 See id. at 17-18.

-24- Rite Aid, at bottom, argues Centene Plaintiffs were on notice and/or knew

Program prices and price-matched prices were not incorporated into U&C more than

three years before Centene Plaintiffs commenced this action.139

In support thereof, Rite Aid has latched onto a 2010 email between an Envolve

employee and HEB, a regional grocery chain based in Texas.140 HEB, like Rite Aid,

was a Centene Corporation vendor.141 The 2010 email between that Envolve

employee and HEB stated that HEB did not include any discounts or special program

pricing as part of its U&C price.142 Rite Aid contends this is enough to put Centene

Plaintiffs on inquiry notice, or at least that Centene Plaintiffs were required to

investigate further after they received this information.143 Centene Plaintiffs counter

that other stores, like Walmart, did include discount prices in its U&C metric.144

The standard here is whether Centene Plaintiffs were aware of facts, more

than three years before this action commenced, that constitute “the basis of the cause

of action or the existence of facts sufficient to put a person of ordinary intelligence

and prudence on inquiry which if pursued, would lead to the discovery of such

139 See Defendants’ Reply Brief (“Defs.’ Reply Br.”) at 1-6, Feb. 13, 2023 (D.I. 264). 140 See Defs.’ Mot. for Summ. J. at 17-19; Pls.’ Answering Br. at 22; Defs.’ Reply Br. at 2-3. 141 Defs.’ Mot. for Summ. J., Ex. 25 at Tr. 55:19-56:14. 142 See id., Ex. 25 at Tr. 58:10-21. 143 Defs.’ Reply Br. at 2-3. 144 See Pls.’ Answering Br. at 20-21.

-25- facts.”145 Even “[a]ssuming without deciding that [Centene Plaintiffs] were on

inquiry notice, it cannot be determined, on the present record, whether a diligent

inquiry by [Centene Plaintiffs] would have uncovered facts sufficient for them to

assert” their breach-of-contract claims.146

Rite Aid also contends it clarified the U&C definition in the 2013 Contract.

Specifically, Rite Aid argues the 2013 Contract addressed the Program, and the term

“non-contracted” in the 2013 Contract U&C definition proves this.147 Rite Aid cites

testimony from its own witness to support this “understanding,” but no Centene

Plaintiffs’ witness. This is not enough; there remains a genuine issue of material

fact. Whether Centene Plaintiffs were on inquiry notice, and, if they were, whether

a diligent inquiry would’ve uncovered facts sufficient to assert their claims, is a

disputed question of fact that “preclude[s] a determination as a matter of law.”148

145 See Coleman, 854 A.2d at 842 (emphasis in original) (internal quotation marks and citation omitted). 146 See id. at 843. 147 Defs.’ Reply Br. at 4-5 (citing Defs.’ Mot. for Summ. J. at 33-36). 148 Coleman, 854 A.2d at 843 (emphasis in original). Rite Aid additionally argues the statute of limitations bars Centene Plaintiffs’ claim for unjust enrichment under the Caremark Contract. See Defs.’ Mot. for Summ. J. at 28-29. In July 2011, Caremark announced a change to its U&C definition for its Federal Employee Program (“FEP”). See Defs.’ Mot. for Summ. J., Ex. 6. Rite Aid says this put Centene Plaintiffs on inquiry notice that Program prices were not part of U&C. Defs.’ Mot. for Summ. J. at 28-29. Again, this is not enough. The FEP plan is entirely distinct from the contracts at issue in this case. And the FEP announcement gives no indication that Program prices were never part of U&C for other Caremark contracts. See Defs.’ Mot. for Summ. J., Ex. 6. As such, the statute of limitations does not bar Centene Plaintiffs’ Caremark Contract unjust enrichment claim.

-26- B. RITE AID IS NOT COLLATERALLY ESTOPPED FROM LITIGATING WHETHER PROGRAM CUSTOMERS ARE “CASH” CUSTOMERS. Centene Plaintiffs contend collateral estoppel bars Rite Aid from relitigating

whether its Program customers were “cash” customers. Centene Plaintiffs point to

an arbitration between Humana Health Plan, Inc., and Rite Aid (the “Humana

Arbitration”).149 On April 22, 2022, an arbitrator issued an award for Humana over

a breach-of-contract claim by Humana and against Rite Aid.150 The arbitration

decision discussed the scope of “cash” customers in participating pharmacy

agreements.151 The contracts at issue in that decision did not define U&C price.152

Rite Aid argues, inter alia, the fact that the contracts at issue in the Humana

Arbitration were not the same as those here precludes Centene Plaintiffs’ collateral

estoppel argument.153

To determine whether collateral estoppel applies to bar consideration of an issue, a court must determine whether: (1) The issue previously decided is identical with the one presented in the action in question, (2) the prior action has been finally adjudicated on the merits, (3) the party against whom the doctrine is invoked was a party or in privity with a party to the prior adjudication, and (4) the party against whom the doctrine is raised had a full and fair opportunity to litigate the issue in the prior action.154

149 See Pls.’ Mot. for Summ. J., Ex. 40 (Humana Arbitration decision). 150 See id., Ex. 40 at 49. 151 See id., Ex. 40 at 21-22. 152 Id., Ex. 40 at 12. 153 See Defs.’ Answering Br. at 23-24. 154 Betts v. Townsends, Inc., 765 A.2d 531, 535 (Del. 2000) (emphasis added) (citations omitted).

-27- “Arbitration is included among the ‘prior actions’” that might trigger collateral

estoppel.155 And trial courts have “broad discretion” to determine whether collateral

estoppel should apply in a given instance.156

Collateral estoppel does not apply to this action. The contracts at issue in the

Humana Arbitration did not define U&C price. This caused the arbitrator to look

outside the four corners for those contracts. The contracts here expressly define

U&C price. A central issue in this case is whether Rite Aid’s Program and price-

match customers were “cash” customers, and whether Program and price-matched

prices should have been included in the U&C price. No doubt, the requisite analyses

between the Humana Arbitration and this case differ. In other words, the “issue

previously decided in the” Humana Arbitration is not “identical with the one

presented” in this action.157

C. THE 2003 CONTRACT AND THE 2013 CONTRACT

The elements for a breach-of-contract claim under Delaware law are: “(1) the

existence of a contractual obligation; (2) breach of that obligation; and (3) damages

155 In re Bracket Hldg. Corp. Litig., 2017 WL 3283169, at *6 (Del. Super. Ct. July 31, 2017) (citations omitted). 156 Chrysler Corp. v. New Castle Cnty., 464 A.2d 75, 82 (Del. Super. Ct. 1983); Boone v. Oy Partek Ab, 724 A.2d 1150, 1154 (Del. Super. Ct. 1997). 157 See Betts, 765 A.2d at 535 (citation omitted).

-28- resulting from the breach.”158 Delaware courts “adhere[] to the ‘objective’ theory of

contracts, i.e.[,] a contract’s construction should be that which would be understood

by an objective, reasonable third party.”159 “When the contract is clear and

unambiguous, [the Court] will give effect to the plain-meaning of the contract’s

terms and provisions.”160 But a contract is ambiguous when it is subject to multiple

reasonable interpretations.161 When a contract is ambiguous, that “rais[es] factual

issues requiring consideration of extrinsic evidence to determine the intended

meaning of the provision[s] in light of the expectations of the contracting parties.”162

1. The 2003 Contract

Both parties move for summary judgment on breach of the 2003 Contract

between Envolve and Rite Aid (Count II). Centene Plaintiffs contend Rite Aid did

not accurately report its U&C price; in support thereof they point to two things. First,

the National Council for Prescription Drug Programs (“NCPDP”) sets industry

standards for transmitting prescription-drug claims information, including U&C

price; NCPDP defines U&C as the “[a]mount charged cash customers for the

158 Buck v. Viking Hldg. Mgmt. Co. LLC, 2021 WL 673459, at *3 (Del. Super. Ct. Feb. 22, 2021) (citing VLIW Tech., LLC v. Hewlett-Packard Co., 840 A.2d 606, 612 (Del. 2003)). 159 Osborn ex rel. Osborn v. Kemp, 991 A.2d 1153, 1159 (Del. 2010) (citing NBC Universal v. Paxson Commc’ns, 2005 WL 1038997, at *5 (Del. Ch. Apr. 29, 2005)). 160 Id. at 1159-60 (citing Rhone-Poulenc Basic Chems. Co. v. Am. Motorists Ins. Co., 616 A.2d 1192, 1195 (Del. 1992)). 161 Id. at 1160. 162 Eagle Indus., Inc. v. DeVilbiss Health Care, Inc., 702 A.2d 1228, 1229 (Del. 1997).

-29- prescription exclusive of sales tax or other amounts claimed”; and the NCPDP

standards govern the 2003 Contract.163 Second, the Seventh Circuit in United States

ex rel. Garbe v. Kmart Corporation164 held that a pharmacy’s U&C price must

include discount prices that are widely and consistently available to uninsured cash

customers unless those discount prices are expressly excluded from U&C by

contract or law.165 In Centene Plaintiffs’ view, the 2003 Contract does not deviate

from NCPDP standards or Garbe, and so Rite Aid had a duty to include Program or

price-matched prices when reporting its U&C price to Envolve.166 Centene Plaintiffs

say that because Rite Aid excluded these prices, Rite Aid breached the 2003 Contract

and Envolve suffered damages.167

Not so, counters Rite Aid. According to Rite Aid, the 2003 Contract’s

reimbursement lesser-of logic did not include U&C price.168 As support, Rite Aid

points out that while Centene Plaintiffs assert Rite Aid breached 2003 Contract

163 See Pls.’ Mot. for Summ. J. at 2, 31-32. 164 824 F.3d 632 (7th Cir. 2016). 165 See Pls.’ Mot. for Summ. J. at 3, 31-32. 166 See id. at 32. 167 See id. at 32-34, 38-39. 168 See Defs.’ Answering Br. at 29-30.

-30- Sections 1.7 (definition of U&C) and 2.5 (claim submissions), the reimbursement

payments are actually governed by Section 2.1 (lesser-of logic).169

At the outset, the plain words of the 2003 Contract control. Centene Plaintiffs

focus on 2003 Contract Sections 1.7 and 2.5. But Centene Plaintiffs’ breach claim

is, at its core, based on reimbursements via the 2003 Contract’s lesser-of logic. 170

And that’s laid out in Section 2.1. Avoiding Section 2.1, Centene Plaintiffs ask the

Court to look to the NCPDP standards and Garbe. But that’s extrinsic evidence the

Court cannot consider unless the contract terms are ambiguous.171 In other words,

“[e]xtrinsic evidence is not to be used to interpret contract language where that

language is plain and clear on its face.”172

Section 2.1’s lesser-of logic language controls here and it’s unambiguous.

Section 2.1 states:

The following pricing applies to the On-Lok Third Party Payor only: Brand Name: AWP [Average Wholesale Price] less 12% or MAC [Maximum Allowable Cost], whichever is less, plus a $0.95 dispensing

169 See Defs.’ Mot. for Summ. J. at 32 n.117; see also Pls.’ Mot. for Summ. J., Ex. 1 §§ 1.7, 2.1, 2.5. 170 See Pls.’ Mot. for Summ. J. at 8 (contending that Rite Aid doesn’t dispute the Envolve was reimbursing Rite Aid under a “’lesser of’ U&C logic as of September 2008), 7 (noting that generally under a lesser-of logic, “a pharmacy is paid the lesser of a negotiated rate for the drug and the pharmacy’s U&C price for that drug”). 171 See Eagle Indus., Inc., 702 A.2d at 1232 (“If a contract is unambiguous, extrinsic evidence may not be used to interpret the intent of the parties, to vary the terms of the contract or to create an ambiguity.”). 172 O’Brien v. Progressive N. Ins. Co., 785 A.2d 281, 289 (Del. 2001) (internal quotation marks and citation omitted).

-31- fee per 7-day supply. Generic: The lesser of AWP less 20% or MAC, whichever is less, plus a $0.95 dispensing fee per 7-day supply.173 U&C price is not included in this definition. U&C price also is not included in the

2007 amendment to Section 2.1.174 The Court is bound by the plain meaning of an

unambiguous contract. Centene Plaintiffs offer scads of extrinsic evidence and facts

to suggest the parties’ course of dealing did not follow the 2003 Contract.175 Maybe

so, but having before it an express breach-of-contract claim, the Court cannot

consider this evidence when the operable language—that of Section 2.1—is

unambiguous.176

Turning to Sections 1.7 and 2.5, neither saves Centene Plaintiffs. Section 1.7

defines U&C price as “[t]hose amounts which [Rite Aid] normally charges its private

pay patients for comparable Pharmaceutical Services and as may be provided to

Patient-Beneficiaries of a Third Party Payor, as provided herein.”177 But again, U&C

173 Pls.’ Mot. for Summ. J., Ex. 1 § 2.1 (underlining in original); Defs.’ Mot. for Summ. J., Ex. 26 at Tr. 32:21-33:6; Defs.’ Mot. for Summ. J., Ex. 25 at Tr. 94:15-95:2. 174 Defs.’ Answering Br., Ex. 3 § 2.1. 175 See, e.g., Pls.’ Answering Br., Ex. 7 at Tr. 158:8-159:15 (acknowledging, as a Rite Aid representative, that Rite Aid was reimbursing Envolve under a lesser-of logic as of 2008, but noting that the 2003 Contract didn’t reference U&C in the lesser-of logic, and noting that if Rite Aid reimbursed Envolve using U&C as part of lesser-of logic it wasn’t “based on the written contract”). 176 Cf. In re Viking Pump, Inc., 148 A.3d 633, 648 (Del. 2016) (“When construing ambiguous contractual provisions, Delaware courts are permitted to consider the parties’ course of dealing.” (emphasis added) (citation omitted)). 177 Pls.’ Mot. for Summ. J., Ex. 1 § 1.7. “Patient-Beneficiaries” is defined, in relevant part, as: “Members and beneficiaries of members, who rely on a Third Party Payor . . . to purchase for them or reimburse them for the purchase of medical services or pharmaceutical products.” Id., Ex. 1 § 1.4. “Pharmaceutical Services” is defined, in relevant part, as: “The providing by Pharmacy of drugs and professional services to Patient-Beneficiaries enrolled in Third Party Payor programs . -32- price is not included in the contractual definition of the parties’ lesser-of logic.178

Section 2.5, likewise, doesn’t help Centene Plaintiffs. Centene Plaintiffs use this

Section to suggest the U&C price must track the NCPDP definition because Section

2.5 contains the language, “where on-line communication is not possible, [Rite Aid]

agrees to file claims in writing for payment using the industry standard [i.e., NCPDP]

Universal Claims Form.”179 The Court notes that simply because Section 2.5

references “industry standard,” it does not follow that the otherwise contract-defined

U&C price must track NCPDP standards. Sections 1.7 and 2.5 are separate and

distinct provisions, and nothing in the 2003 Contract suggests Centene Plaintiffs’

interpretation is reasonable.

As it relates to the June 2010 amendment to the 2003 Contract, it appears

U&C is incorporated into the lesser-of logic. Specifically, the June 2010 amendment

modified the definition of “Generic Effective Rate” or “GER.” 180 The definition

states that the GER is “expressed as a percentage reduction of the [AWP] as

calculated quarterly including[, inter alia,] Usual and Customary Charge Claims, . . .

. . . Pharmaceutical Services includes the dispensing of any Generic Drug or Brand Name Drug, [among others].” Id., Ex. 1 § 1.5. “Third Party Payor” is defined as: “Any entity which purchases or reimburses the purchase of medical services or pharmaceutical products and services on behalf of Patient-Beneficiaries. Such entities include, but are not limited to, insurance companies, union trusts, employers, medical care foundations, and preferred provider organizations.” Id., Ex. 1 § 1.6. 178 See id., Ex. 1 § 2.1. 179 See id., Ex. 1 § 2.5; see also id. at 31-32; Pls.’ Reply Br. at 7-8. 180 See Pls.’ Reply Br., Ex. 8 § 6.

-33- and multi-source Brand Name Drugs on the MAC list or . . . that price as Usual and

Customary Charge Claims.”181 Section 2.1’s lesser-of logic includes the AWP

metric for generic drugs.182 Accordingly, the June 2010 amendment incorporated

U&C price into the lesser-of logic. But the parties dispute whether the Program

prices and price-matched prices are included in the 2003 Contract’s U&C language.

U&C price is ambiguous as it relates to whether the Program and price-match are

included within the definition. Neither party cites helpful extrinsic evidence on this

point. Thus, there is a genuine issue of material fact.

Centene Plaintiffs have no bases to support their breach-of-contract claim

under the unambiguous 2003 Contract from September 2008 (the start of the

applicable time period) to June 2010. Rite Aid has carried its burden to prove there

is no genuine issue of material fact on Count II for the September 2008 to June 2010

period. But from June 2010 through April 30, 2013 (the end of the 2003 Contract

term), U&C price was included in the lesser-of logic. Even so, there is a genuine

issue of material fact over whether the Program prices and price-matched prices were

included in that U&C definition. Therefore, Centene Plaintiffs’ claim for breach of

the 2003 Contract is viable only for the period of June 2010 through the expiration

181 See id. 182 See Pls.’ Mot. for Summ. J., Ex. 1 § 2.1

-34- of the 2003 Contract (i.e., April 30, 2013). The Court DENIES summary judgment

for both parties on Count II.

2. The 2013 Contract

Both parties moved for summary judgment on breach of the 2013 Contract

between Rite Aid and Envolve (Count IV). Centene Plaintiffs contend Rite Aid did

not accurately report its U&C price on claim submissions to Envolve.183

Specifically, Centene Plaintiffs argue the 2013 Contract did not permit Rite Aid to

exclude its Program and price-matched prices from its U&C submissions.184

Centene Plaintiffs break down the 2013 Contract’s definition of U&C price and

allege: Rite Aid had a duty to report accurately; Rite Aid breached this duty; and

Envolve suffered damages as a result of the breach.185 Centene Plaintiffs also argue

the Program was not a contract between customers and Rite Aid186—that is an

important key for analyzing the definition of U&C.

Rite Aid contends the definition of U&C price in the 2013 Contract

encompasses neither the Program prices nor the price-matched prices.187

Specifically, Rite Aid insists that the language “non-contracted” in the U&C

183 See id. at 35. 184 See id. 185 See id. at 35-39. 186 See Pls.’ Answering Br. at 33-34. 187 Defs.’ Mot. for Summ. J. at 33.

-35- definition was intended to exclude Program prices and other discounts from U&C

because the Program was a contract between Rite Aid and Program members.188

Again, as a starting point, the plain words of the 2013 Contract control. In the

2013 Contract, “Usual and Customary” is defined as “the lowest price [Rite Aid]

would charge to a non-contracted, cash-paying customer with no insurance for an

identical Pharmaceutical Service on the date and at the location that the product is

dispensed, inclusive of all applicable discounts, promotions, or other offers to attract

customers.”189

a. The Program was a contract. The price-matching policy was not. The price-matching policy was a promotion, discount or other offer to attract customers.

The first issue is whether members who signed up for the Program were

“contracted.” They were. “The elements necessary to prove the existence of an

enforceable contract are: (1) the intent of the parties to be bound, (2) sufficiently

definite terms, and (3) consideration.”190 Among these, the parties most hotly

contest whether there was consideration. There was.

Rite Aid says there was consideration because “Program members offered

their personal information to Rite Aid and granted Rite Aid permission to share it

188 See id. at 33-36. 189 Pls.’ Mot. for Summ. J., Ex. 2 § 1(U). 190 Otto v. Gore, 45 A.3d 120, 138 (Del. 2012) (citation omitted).

-36- with ScriptSave in exchange for access to Program discounts.”191 Centene Plaintiffs

say there was no recognizable consideration.192 Not so. Consideration is “a benefit

to a promisor or a detriment to a promisee pursuant to the promisor’s request.”193 As

a general principle, “money is not the only acceptable form of consideration.”194

With respect to the Program, prospective Program members provided Rite Aid with

personal information in exchange for the right to receive discounted prescription

drug prices.195 No doubt there is a growing trend among courts to recognize the

value of personally identifiable information.196 With regard to the Program, the

191 Defs.’ Answering Br. at 39-40. 192 Pls.’ Mot. for Summ. J. at 36-37. 193 Cigna Health & Life Ins. Co. v. Audax Health Sols., Inc., 107 A.3d 1082, 1088 (Del. Ch. 2014) (cleaned up) (citation omitted). 194 Hennegan v. Cardiology Consultants, P.A., 2008 WL 4152678, at *1 (Del. Super. Ct. Sept. 9, 2008); see also Cox Commc’ns, Inc. v. T-Mobile US, Inc., 273 A.3d 752, 764 (Del. 2022) (“Consideration requires that each party to a contract convey a benefit or incur a legal detriment, such that the exchange is bargained for. If this requirement is met, there is no additional requirement of equivalence in the values exchanged.” (cleaned up) (citations omitted)); Cox Commc’ns, Inc., 273 A.3d at 764 (explaining that the Court limits its consideration inquiry to whether it exists and “not whether it is fair or adequate” (internal quotation marks and citation omitted)). 195 See Pls.’ Mot. for Summ. J. at 13-14. This information included “name, address, phone number, email address, birth date, and dependent information.” Defs.’ Answering Br. at 38-39. 196 See, e.g., In re Marriott Int’l, Inc., Customer Data Sec. Breach Litig., 440 F. Supp. 3d 447, 462 (D. Md. 2020) (“Neither should the Court ignore what common sense compels it to acknowledge – the value that personal identifying information has in our increasingly digital economy. Many companies . . . collect personal information. Consumers too recognize the value of their personal information and offer it in exchange for goods and services.”); In re Capital One Consumer Data Sec. Breach Litig., 488 F. Supp. 3d 374, 412 (E.D. Va. 2020) (noting the plaintiffs in that case delivered personally identifiable information to defendants “in consideration for receiving credit services”). Additionally, other comparable programs create binding contracts between a company and a customer. See, e.g., Gordon v. United Cont’l Hldg., Inc., 73 F. Supp. 3d 472, 475, 478 (D.N.J. 2014) (stating that a frequent flyer program provided by the defendant created a contract -37- Court views this personally identifiable information as sufficient consideration to

create a valid contract.197 Those customers enrolled in the Program were indeed

“contracted.”

But the price-matching policy is not a contract. The price-matching policy

permitted any customer on any given visit to provide a Rite Aid pharmacist with a

competitor’s verified price.198 Then the pharmacist handling the individual

transaction could match the competitor’s price.199 The price-matching policy was

widely advertised.200 “An offer is the ‘signification by one person to another of his

willingness to enter into a contract with him on the terms specified in the offer.’”201

between each plaintiff and the defendant (the parties agreed there was a contract) where members could enroll for the frequent flyer program by acknowledging and agreeing to a set of rules); Hongbo Han v. United Cont’l Hldg., Inc., 762 F.3d 598, 601 (7th Cir. 2014) (acknowledging that the same frequent flyer program in Gordon, supra, created a contract and holding the plaintiff could not state a claim for breach of contract because defendant’s interpretation of that contract was reasonable); Hennessey v. Kohl’s Corp., 571 F. Supp. 3d 1060, 1071 (E.D. Mo. 2021) (finding consideration existed where the plaintiff created an online account with defendant and received website benefits such as express check-out, saved billing and shipping information, and review of pending and past online orders; such benefits constituting consideration). 197 “A valid contract requires and offer, acceptance, and consideration.” Trexler v. Billingsley, 2017 WL 2665059, at *3 (Del. June 21, 2017) (citation omitted). Centene Plaintiffs additionally argue there can be no contract because customers could enroll family members (or pets) without those family members signing or being present. Pls.’ Mot. for Summ. J. at 14. But this does not change the end result. There was an offer to enter into the Program for discounted drug prices. Prospective customers accepted the offer by signing up for the Program. And there was consideration in the form of providing personally identifiable demographic information. 198 Defs.’ Answering Br. at 12. 199 Defs.’ Mot. for Summ. J. at 25 n.92. 200 See Pls.’ Mot. for Summ. J. at 16-17. 201 Hyetts Corner, LLC v. New Castle Cnty., 2021 WL 4166703, at *7 (Del. Ch. Sept. 14, 2021) (quoting Loveman v. Nusmile, Inc., 2009 WL 847655, at *3 (Del. Super. Ct. Mar. 31, 2009)).

-38- “But a ‘mere statement of a person’s willingness to enter negotiations with another

person is in no sense an offer, and cannot be accepted so as to form a binding

contract.’”202 The price-matching policy was a statement of Rite Aid’s “willingness

to enter negotiations with” a prospective customer.203 Thus, it “cannot be accepted

so as to form a binding contract.”204

Now, the price-matching policy was a promotion or discount. “Promotion” is

defined as “the act of furthering the growth or development of something especially:

the furtherance of the acceptance and sale of merchandise through advertising,

publicity, or discounting.”205 “Discount” is “a reduction from the full amount or

value of something.”206 The price-matching policy was a promotion because the

goal was to further the “sale of [prescription drugs] through advertising, publicity,

or discounting.”207 This is highlighted by the facts that the price-match was widely

advertised, and it offered discounted prices to attract customers.208 The price-

202 Id. (quoting Salisbury v. Credit Serv., Inc., 199 A. 674, 681 (Del. Super. Ct. 1937)). 203 See id. (internal quotations omitted). 204 See id. (internal quotations omitted). 205 Promotion, MERRIAM-WEBSTER DICTIONARY, https://www.merriam- webster.com/dictionary/promotion (last visited Mar. 16, 2023) (emphasis in original). 206 Discount, BLACK’S LAW DICTIONARY (11th ed. 2019). Merriam-Webster defines “discount” as “a reduction made from the gross amount or value of something: such as a reduction made from a regular or list price.” Discount, MERRIAM-WEBSTER DICTIONARY, https://www.merriam- webster.com/dictionary/discount (last visited Mar. 16, 2023). 207 See Promotion, MERRIAM-WEBSTER DICTIONARY, https://www.merriam- webster.com/dictionary/promotion (last visited Mar. 16, 2023). 208 See Pls.’ Mot. for Summ. J. at 16-17.

-39- matching policy was also a discount because it reduced the full amount a customer

would pay for a given prescription drug to a markdown price.209 In other words,

when a customer entered Rite Aid with a verified lower price from a competitor, a

Rite Aid pharmacist could choose to match that lower price. Thus, the price-

matching policy was a promotion or discount.

At bottom, the term “non-contracted” in the 2013 Contract is unambiguous

because it’s susceptible to only one reasonable interpretation.210 And U&C

encompasses only those customers who, inter alia, did not enter into a contract with

Rite Aid for prescription drugs. Additionally, the language that states “inclusive of

all applicable discounts, promotions, or other offers to attract customers” is

unambiguous. That is, for the purposes of this action, the price-matching policy is

a discount or promotion.

So, the Program is a contract and therefore falls outside the 2013 Contract’s

U&C definition. The Program prices therefore cannot fall within the Centene

Plaintiffs’ breach of the 2013 Contract claim. The price-matching policy though is

209 See Discount, BLACK’S LAW DICTIONARY (11th ed. 2019); see also Defs.’ Answering Br. at 12; Defs.’ Mot. for Summ. J. at 25 n.92. 210 Cf. Osborn, 991 A.2d at 1160 (noting that a contract is ambiguous when it is “reasonably ascrib[able] [to] multiple and different interpretations”). Even if the Court determined that “non- contracted” is ambiguous, Rite Aid produces certain testimony from Dianne Mason, who negotiated the 2013 contract. See Defs.’ Mot. for Summ. J. at 34. Ms. Mason testified “non- contracted” was included in the 2013 Contract with the intent to exclude the Program and other discount programs on the market from the U&C definition. See id.

-40- not a contract but is a promotion or discount. The price-matched prices therefore

can support Centene Plaintiffs’ breach of the 2013 Contract claim.

b. There remains a genuine factual issue as to whether price- matching customers are “cash-paying” customers.

Centene Plaintiffs contend the price-match customers were cash-paying

customers. They take the literal approach to the U&C definition, arguing price-

match customers were solely responsible for their purchase and therefore were cash-

paying customers.211 Centene Plaintiffs also point to: (1) a July 2008 Rite Aid

Pharmacy Operations Bulletin that states price-match customers “should be treated

as cash”;212 (2) Rite Aid’s former CFO who stated that he “believe[d] [price-

matching] would have been a cash claim”;213 and (3) a former Rite Aid executive

who stated that price-matched sales were “cash prescriptions.”214 Thus, Centene

Plaintiffs conclude price-match customers fall within the “cash-paying customer”

language of the U&C definition.

Rite Aid contends the price-match customers were not “cash-paying”

customers as defined by the U&C.215 Rite Aid points to an expert report by William

211 See Pls.’ Mot. for Summ. J. at 14. 212 Id., Ex. 31. 213 Id., Ex. 6 at Tr. 86:20-87:1. 214 Id., Ex. 10 at Tr. 60:22-61:2. 215 See Defs.’ Answering Br. at 12.

-41- Wolfe.216 Mr. Wolfe stated that price-matching was an “episodic practice, premised

on a very clear policy around individual patient request[s] and other terms,” and that

“[i]t is nonsensical to suggest price matching would be factored into retail prices that

are reported as U&C.”217 Mr. Wolfe also stated price-matched prices could not be

U&C because there was no mechanism to identify when a pharmacist matched a

price.218

“When the contract is clear and unambiguous, [the Court] will give effect to

the plain-meaning of the contract’s terms and provisions.”219 But a contract is

ambiguous when it is subject to multiple reasonable interpretations.220 When a

contract is ambiguous, that “rais[es] factual issues requiring consideration of

extrinsic evidence to determine the intended meaning of the provision[s] in light of

the expectations of the contracting parties.”221

The Court holds the “cash-paying customers” language of the 2013 Contract’s

U&C definition is ambiguous. This term is subject to multiple reasonable

interpretations.222 Both parties cite extrinsic evidence to suggest their respective

216 See id.; see also id., Ex. 34. 217 Id., Ex. 34 ¶ 6. 218 Id., Ex. 30 at Tr. 137-38; id., Ex. 30 at Tr. 162. 219 Osborn, 991 A.2d at 1159-60 (citing Rhone-Poulenc Basic Chems. Co., 616 A.2d at 1195). 220 Id. at 1160. 221 Eagle Indus., Inc., 702 A.2d at 1229. 222 Osborn, 991 A.2d at 1160.

-42- interpretations are correct. There is a genuine issue of material fact over whether

price-match customers are “cash-paying customers” and whether they fall within the

2013 Contract’s U&C definition. This issue must be resolved by the trier of fact.

The Court therefore DENIES summary judgment for both parties on Count

IV.

D. THE CAREMARK CONTRACT AND THE ARGUS CONTRACT

Recall, the Court earlier decided Rite Aid’s motion to dismiss. On Count VI

(unjust enrichment), the Court partially dismissed that count with respect to

Envolve.223 But the Court held that Count VI survived with respect to the Health

Plans, who were not parties to the contracts and who were determined to not be third-

party beneficiaries either.224 Thus, Count VI survived with respect to the Health

Plans, and Rite Aid now moves for summary judgment on that remainder.

“Unjust enrichment is ‘the unjust retention of a benefit to the loss of another,

or the retention of money or property of another against the fundamental principles

of justice or equity and good conscience.’”225 “The elements of unjust enrichment

are: (1) an enrichment, (2) an impoverishment, (3) a relation between the enrichment

and impoverishment, (4) the absence of justification, and (5) the absence of a remedy

223 See Mem. Op. at 26. 224 See id. at 26-27. 225 Frederick Hsu Living Tr. v. ODN Hldg. Corp., 2017 WL 1437308, at *42 (Del. Ch. Apr. 14, 2017) (quoting Fleer Corp. v. Topps Chewing Gum, Inc., 539 A.2d 1060, 1062 (Del. 1988)).

-43- provided by law.”226 The last element—the absence of a remedy provided at law—

is jurisdictional.227 Where the plaintiff seeks only money “damages to correct an

unjust enrichment, jurisdiction lies in [this] Court even though the claim is

fundamentally an equitable one.”228

1. The Caremark Contract

Rite Aid moves for summary judgment on Count VI regarding the Caremark

Contract. Rite Aid argues the Caremark Contract’s U&C price was not required to

include Program prices.229 It does not appear clear whether Rite Aid believes this to

be true based on the Caremark Contract’s clear language or not. Rite Aid devotes

most of its argument to course of dealing and other extrinsic evidence.230 Rite Aid

additionally believes price-matched prices were not part of U&C.231

Centene Plaintiffs contend the plain language of the Caremark Contract’s

U&C definition included Rite Aid’s Program prices and price-matched prices

because the definition contains “no carve-outs for discounts.”232 Centene Plaintiffs

226 Nemec v. Shrader, 991 A.2d 1120, 1130 (Del. 2010) (citation omitted). 227 See St. Search P’rs, L.P. v. Ricon Int’l, L.L.C., 2005 WL 1953094, at *3 (Del. Super. Ct. Aug. 1, 2005). 228 Id. 229 See Defs.’ Mot. for Summ. J. at 26. 230 See id. at 26-30 (discussing testimony from Caremark personnel and discussing other Caremark contracts). 231 See Defs.’ Answering Br. at 12-13; see also id., Ex. 34. 232 See Pls.’ Answering Br. at 26.

-44- argue the language is clear on its face, and even if the Court finds otherwise and

looks to extrinsic evidence, “the record contains significant facts showing that both

Caremark and Rite Aid understood that the [Caremark] Contract included Rite Aid’s

[Program] prices in its definition of U&C.”233

The Caremark Contract defines U&C as “the lowest price [Rite Aid] would

charge to a particular customer if such customer were paying cash for an identical

prescription on that particular day. This price must include any applicable discounts

offered to attract customers.”234 In 2019, Rite Aid and Caremark amended the U&C

price definition. That amended definition reads U&C price “shall exclude third party

cash discount card networks and/or other discount programs that require program

enrollment.”235

At the outset, the language of the Caremark Contract controls. Initially, the

Caremark Contract’s language appears ambiguous. But there is similarity between

“cash paying customer” and “customer . . . paying cash” in the 2013 Contract and

the Caremark Contract, respectively. As noted above, “cash paying customer” is

ambiguous with respect to the price-matching policy.236 Equally here, the Court

finds that the “customer . . . paying cash” language in the Caremark Contract is

233 Id. at 27 (emphasis in original). 234 Defs.’ Mot. for Summ. J., Ex. 1 at Schedule of Terms. 235 Id., Ex. 18 § 13(f). 236 See supra Part V.C.2.b.

-45- ambiguous with respect to the price-matching policy. The Court thus looks to

extrinsic evidence.237

The extrinsic evidence mentioned in the 2013 Contract’s discussion, supra, is

of equal weight here.238 Like with the 2013 Contract, the Court finds that the

“customer . . . paying cash” language of the Caremark Contract is ambiguous and

both sides present competing extrinsic evidence. But the Court notes the price-

matching policy, as discussed supra, is an “applicable discount[] offered to attract

customers.”239 So Rite Aid has not carried its burden to show its interpretation with

respect to the price-matching policy is the only reasonable interpretation under the

Caremark Contract’s language.

Next, Rite Aid says Program prices were never included in the U&C

definition.240 Rite Aid cites to an affidavit by a Caremark Senior Vice President.241

Centene Plaintiffs say the Program prices were included in the U&C definition.242

Centene Plaintiffs cite to: (1) a 2008 email allegedly showing Caremark understood

237 See Osborn, 991 A.2d at 1160 (noting a contract is ambiguous when it is subject to multiple reasonable interpretations). 238 See supra Part V.C.2.b. 239 Defs.’ Mot. for Summ. J., Ex. 1 at Schedule of Terms; see also supra Part V.C.2.a. 240 See Defs.’ Mot. for Summ. J. at 26-29. 241 See id. at 26; see also id., Ex. 39 ¶¶ 17, 26. 242 See Pls.’ Answering Br. at 27-30.

-46- the Program to be Rite Aid’s “new U&C”;243 (2) the 2019 amendment to the

Caremark Contract that explicitly excluded “third party cash discount card networks

and/or other discount programs that require program enrollment”;244 among other

statements made by Caremark and Rite Aid personnel.245

The Court notes that the “customer . . . paying cash” language is ambiguous

with respect to the Program. First, one healthcare consulting expert with decades of

experience opined that “NCPDP has never defined ‘cash customers’ to mean every

customer not using insurance to purchase his or her prescription,” and that NCPDP

distinguishes between “some self-pay customers who pay ‘cash’ and other self-pay

customers who use a ‘discount program.’”246 Second, Rite Aid cites an affidavit by

a Caremark Senior Vice President who stated Rite Aid was not required or expected

to report Program prices as U&C.247 Third, Centene Plaintiffs cite a 2008 email from

a “CVS Caremark executive” who stated the Program is Rite Aid’s new U&C.248

Thus, there is a genuine issue of material fact regarding whether the Program should

243 See id. at 27-28; see also id., Ex. 22. 244 See id. at 28-29; see also Defs.’ Mot. for Summ. J., Ex. 18 § 13(f). 245 See Pls.’ Answering Br. at 28-30; see also id., Exs. 29-30, 26, 18-20. 246 See Defs.’ Answering Br., Ex. 32 ¶¶ 66-69 (emphasis in original). 247 See Defs.’ Mot. for Summ. J., Ex. 39 ¶¶ 17, 26. 248 See Pls.’ Answering Br., Ex. 22.

-47- have been incorporated into Rite Aid’s U&C for the Caremark Contract. Rite Aid

has failed to carry its burden; the issue must be resolved by the trier of fact.

So, summary judgment is DENIED on Count VI regarding the price-matching

policy and the Program with respect to the Caremark Contract.

2. The Argus Contract

Rite Aid moves for summary judgment on Count VI regarding the Argus

Contract. The Argus Contract defines U&C price as “the lowest price [Rite Aid]

would charge to a cash paying, non-contracted customer for an identical

prescription on the date and at the location that the prescription is dispensed,

including any special promotions or discounts available to the public on such date

of dispensing.”249 In 2018, Rite Aid and Argus amended the definition of U&C

price. The amended definition states the U&C price “shall exclude cash discount

card networks and/or other discount programs that require enrollment.”250

Up to this point, the Court has established: (1) the Program is a contract; (2)

the price-matching policy is not a contract; (3) the price-matching policy is a

discount or promotion; and (4) that “cash-paying customer” language in these

contracts is ambiguous with both parties offering competing extrinsic evidence on

their respective interpretations.

249 Defs.’ Mot. for Summ. J., Ex. 5 at Ex. 1 § 1.40 (emphasis in original). 250 Pls.’ Answering Br., Ex. 13 § 4(b).

-48- In light of the above findings, the Court finds, with regard to the Argus

Contract, that: (1) Program prices are excluded from the Argus Contract’s U&C

definition; (2) the price-matching policy falls within the “non-contracted” language

of the Argus Contract’s U&C definition; (3) the price-matching policy also falls

within the “special promotions or discounts” language of the Argus Contract’s U&C

definition; and (4) there is a genuine issue of material fact regarding whether the

price-match customers fall within the “cash paying customers” language of the

Argus Contract’s U&C definition. Accordingly, as it relates to the price-match

customers, the trier of fact—which at this stage, the Court is not—must determine

whether these customers were “cash paying customers” and whether price-matched

prices should have been included in Rite Aid’s U&C for the Argus Contract.

Rite Aid’s Motion for Summary Judgment on Count VI with respect to the

Argus Contract is DENIED.

V. CONCLUSION

For the foregoing reasons, with respect to Count II (breach of the 2003

Contract), both parties’ Motions for Summary Judgment are DENIED. With respect

to Count IV (breach of the 2013 Contract), both parties’ Motions for Summary

Judgment are DENIED. With respect to Count VI (unjust enrichment under the

-49- Caremark Contract and the Argus Contract), Rite Aid’s Motion for Summary

Judgment is DENIED.251

IT IS SO ORDERED.

_______________________ Paul R. Wallace, Judge

251 Rite Aid’s two remaining arguments—that Centene Plaintiffs can’t prove damages and that the voluntary payment doctrine defeats Centene Plaintiffs’ claims—fail. First, Rite Aid argues Centene Plaintiffs can’t prove damages because their expert’s report allegedly omits important metrics. See Defs.’ Mot. for Summ. J. at 36-37. Centene Plaintiffs counter that “Rite Aid seeks to turn a dispute over how to calculate damages into a finding that no damages occurred.” See Pls.’ Answering Br. at 36. Centene Plaintiffs are correct. On summary judgment, there must be “some credible evidence . . . that supports a claim for damages.” Torrent Pharma, Inc. v. Priority Healthcare Distrib., Inc., 2022 WL 3272421, at *13 (Del. Super. Ct. Aug. 11, 2022) (internal quotation marks and citation omitted). If Centene Plaintiffs are able to prove the other elements of their remaining claims, damages will be established based on the facts of this case. Simply put, this is a case about overpayments. If Centene Plaintiffs overpaid, they will be entitled to damages. Thus, Rite Aid’s motion for summary judgment on this ground is denied. Second, Rite Aid argues the voluntary payment doctrine defeats Centene Plaintiffs’ claims. Not so. “The voluntary payment doctrine bars recovery of payment voluntarily made with full knowledge of the facts.” Intermec IP Corp., 2021 WL 3620435, at *15 (internal quotation marks and citation omitted). Moreover, when money is paid under a mistake of fact, as opposed to a mistake of law, “the payment may be excused and recovery [is] possible.” See id. (citation omitted). As stated in the statute of limitations discussion, supra, there is a genuine issue of material fact as to whether Centene Plaintiffs were on any notice that Rite Aid did not include Program prices and other discount prices in its U&C metric and its lesser-of logic. Rite Aid has not carried its burden to show Centene Plaintiffs had “full knowledge of the facts.” Rite Aid’s motion for summary judgment on this ground is denied.

-50-