After determining that at least one class representative had standing under Article III to assert ERISA claims on behalf of her plan, (see 433 F.3d 181 (2d Cir. 2005)), the U.S. Second Circuit Court of Appeals remanded for re-allocation a settlement between Merck-Medco and a class of all client ERISA Plans. Some of the self-funded plans objected to the settlement on the basis that the class had not been adequately represented, as there existed an inherent conflict between self-funded and insured plans. “While we do not here decide whether the self-funded plans in fact suffered greater injury, we think it proper to allow them to raise their claims as part of a separate subclass. The self-funded plans dispute any recovery to the insured or capitated plans, yet none of the class representatives is part of an exclusively self-funded plan that could adequately advance this position. Because of the antagonistic interests apparent in the class should be adequately and independently represented, we remand to the District Court for certification of a subclass encompassing the self-funded plans.” See Central States v. Merck-Medco, No.04-3300 (2d Cir. Oct. 4, 2007).
[Note – Steve Herman, on behalf of the Herman Mathis PBM Co-Counsel Group, represented several of the self-funded plan intervenors who supported Article III standing yet objected to the settlement on adequacy grounds.]