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

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).
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“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.
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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.
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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.
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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).
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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).
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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.
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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).
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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.
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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.
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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.
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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).
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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.
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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).
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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).
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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.
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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).
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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)).
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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.
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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.
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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.
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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)).
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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).
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“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.
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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.
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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.
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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).
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“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).
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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).
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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.
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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).
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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 .
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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.
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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
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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.
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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).
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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
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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)).
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“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.
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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.
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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.
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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)).
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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.
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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.
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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.
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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.
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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).
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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
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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.
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