Health plan participants sued their Pharmacy Benefits Manager (or “PBM”), AdvancePCS, for converting hidden rebates and other drug payments under Section 502(a)(2), and alternatively (a)(3), of ERISA. After the Harley decision came down from the Eighth Circuit, the defendant moved to dismiss on Article III grounds. The district court, in a somewhat cryptic decision, seemed to suggest that a participant did not have statutory standing to sue a “functional” fiduciary. On appeal, the Ninth Circuit Panel found that AdvancePCS easily fit the definition of an ERISA fiduciary, and therefore could be sued by a participant under the statute. The Court then, however, without even addressing ERISA’s anti-inurement provisions, found no Article III standing on the issue of redress. Without explaining who exactly could satisfy the Lujan test in this situation, the Court then rejected the principle of “representational standing”. Finally, the Court, without even addressing the Amicus Brief submitted by the U.S. Department of Labor, summarily dismissed, in a footnote, any and all claims for additional or alternative relief under Section 502(a)(3). Plaintiffs’ petition for certiorari to the U.S. Supreme Court was denied. See Glanton v. AdvancePCS, 465 F.3d 1123 (9th Cir. 2006), cert. denied, 552 U.S. 820 (2007).
Steve Herman was lead counsel for the unsuccessful plaintiffs. The material briefs, (which raise interesting questions regarding the appropriate application of Article III standing in the context of suits for damages or other relief between and among private parties, in addition to the ERISA-specific issues), can be viewed below:
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