Centene Corp. has agreed to pay more than $215 million to resolve California Attorney General Rob Bonta’s allegations that the health care company defrauded the Golden State’s Medi-Cal program by falsely reporting higher prescription drug costs incurred by two of its managed care plans, Bonta announced Wednesday.

The St. Louis, Missouri-based company, which is the country’s largest provider of Medicaid insurance plans, agreed to the nine-figure deal, roughly half of which will be paid to the Medi-Cal program in restitution, without admitting liability and in doing so, resolved Bonta’s claims against it under the California False Claims Act.

Bonta said in a statement Wednesday that Medi-Cal is a lifeline that provides access to free or affordable health care services for millions of Californians, and when companies overcharge the Medi-Cal system, it drains valuable resources from the people who rely on the program.

“Today’s settlement is a win — it brings resources directly back to our state,” Bonta said. “At the California Department of Justice, we will continue using every tool we have to fight for California’s vulnerable communities.”

Read Centene Cuts $215M False Claims Act Deal With Calif. AG.

Cohen Milstein was Relator Counsel in this matter.

The Tenth Circuit on Thursday rejected a radiology company’s bid to force into individual arbitration a federal benefits lawsuit from workers who alleged mismanagement of their employee stock ownership plan. The panel upheld an arbitration provision in ESOP plan documents as unenforceable because it blocked remedies under federal benefits law.

A three-judge panel in a 41-page published opinion sided with the workers’ argument — backed up by the U.S. Department of Labor, which participated as amicus on behalf of workers in the case — that an arbitration provision tucked in Envision workers’ ESOP plan documents impermissibly blocked remedies under the Employee Retirement Income Security Act. That triggered the so-called effective vindication doctrine under the Federal Arbitration Act, which permits a court to overrule an arbitration agreement if it blocks a party from being able to bring claims under federal law.

“[We] reject defendants’ arguments and conclude that the district court properly invoked the effective vindication exception to invalidate the arbitration provisions of the plan document,” the panel said.

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U.S. Department of Labor spokesperson Grant Vaught complemented the appellate court’s “thoroughly reasoned” decision in a statement provided to Law360 on Thursday.

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Robert Harrison and the proposed class are represented by Rachana Pathak, John Stokes and Peter K. Stris of Stris and Maher LLP and Ryan Wheeler, Michelle C. Yau and Kai H. Richter of Cohen Milstein Sellers & Toll PLLC.

A retail display manufacturing company has agreed to settle a proposed class action filed in Illinois federal court alleging it violated federal benefits law when it sold inflated company shares to workers through their employee stock ownership plan in a $106 million deal.

Triad Manufacturing Inc. workers James Smith and Jerry Honse; Triad’s board of directors; and the ESOP’s trustee, GreatBanc Trust Co., alerted the court Wednesday that they’ve reached an agreement on the financial terms of a settlement to shutter the suit alleging Employee Retirement Income Security Act violations.

U.S. District Judge Ronald A. Guzman agreed Thursday to pause court deadlines in the case given that a settlement is on the horizon, and said that the parties should file a motion for preliminary approval on the deal by March 21.

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Attorney Mary J. Bortscheller, who represents the workers, told Law360 on Thursday that she is very pleased her team has secured a settlement for their clients and the proposed class.

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The workers are represented by Michelle C. Yau, Mary J. Bortscheller and Daniel R. Sutter of Cohen Milstein Sellers & Toll PLLC and by Nina Wasow and Dan Feinberg of Feinberg Jackson Worthman & Wasow LLP.

Read the article on Law360 (subscription required).

“Plaintiffs claim that the Salvation Army was the primary beneficiary of their relationship, and back that allegation up with details about how essential and beneficial their work was for defendant, the minimal value and effectiveness of the rehabilitation services they received, and the way in which their work prevented them from pursuing rehabilitation,” the judge wrote.

The Salvation Army must face wage-and-hour claims brought by participants in its residential adult rehabilitation programs after a federal judge in Illinois found the plaintiffs may be able to prove they were employees.

In a Jan. 31 opinion, the U.S. District Court for the Northern District of Illinois Eastern Division denied the Salvation Army’s motion to dismiss a complaint alleging it has violated the Fair Labor Standards Act and related state wage-and-hour laws for years by failing to pay minimum wage to the plaintiffs, and others, who live and work in its adult rehabilitation centers.

The plaintiffs have alleged violations of the FLSA, Illinois Minimum Wage Law, and Michigan Workforce Opportunity Wage Act, arguing that they were employees of and performed work for the defendant.

. . .

Counsel for the plaintiffs, Christine Elizabeth Webber of Cohen Milstein Sellers & Toll in Washington, D.C., said she and her clients “are grateful that the court in Illinois agrees that their claims may proceed.”

“Our clients—many of whom are unhoused, suffer from mental illness, or are overcoming addiction—have been taken advantage of in the name of ‘rehabilitation,’” Webber said, adding that Shah’s ruling ”brings us one step closer to holding the Salvation Army accountable for its predatory adult rehabilitation centers, which prey on vulnerable individuals.”

Read the story on Law.com.

Cohen Milstein Sellers & Toll PLLC worked on hundreds of millions of dollars worth of settlements for drug buyers, chicken consumers and poultry plant workers in the past year, marking the firm as one of Law360’s 2022 Competition Groups of the Year.

Cohen Milstein was one of the firms that successfully negotiated a $485 million settlement, thus resolving multidistrict antitrust claims accusing Ranbaxy Pharmaceuticals of improperly acquiring exclusivity periods for the antiviral drug Valcyte, high blood pressure drug Diovan and reflux medication Nexium, which set back the launch of generic versions and maintained inflated prices.

“It’s a tremendous settlement on behalf of two different classes,” Cohen Milstein antitrust partner Sharon K. Robertson said.

Cohen Milstein represented direct purchasers like wholesalers who, along with end-payer plaintiffs including health care plans, received final approval for the deal in September. However, U.S. District Judge Nathaniel M. Gorton reduced the attorneys’ initial $133 million request by about 27% to approximately $97 million, because the slice of the “megafund” they were seeking wasn’t on par with fee awards in similar cases.

Robertson argued the case is helping push “systemic change” in pharmaceuticals, a major goal of Cohen Milstein’s litigation in the industry, by discouraging settlements between drugmakers of the kind alleged here to be anti-competitive.

She pointed specifically to a reduction in a kind of settlement resolving patent infringement litigation that brand drugmakers file against would-be generics rivals, in which the brand drugmakers agree not to market their own “authorized generic” during an initial period of exclusivity enjoyed by the first generic drugmaker to file an application with the U.S. Food and Drug Administration.

So-called pay-for-delay or reverse payment litigation targeting deals staving off generic competition have gotten a major boost from the U.S. Supreme Court’s landmark 2012 Actavis decision holding such agreements to be anti-competitive under the right circumstances. But Robertson noted that the Federal Trade Commission tracked a dramatic drop in no-authorized generic and similar settlements years after Actavis.

“I think that that’s in no small part due to private plaintiffs pursuing these types of cases and demonstrating through these cases that this type of conduct is in fact anti-competitive,” Robertson said. “It makes these defendants change the way that they behave and how they settle cases going forward.”

Cohen Milstein has also scored key wins representing end-consumer plaintiffs alongside Hagens Berman Sobol Shapiro LLP in a sprawling antitrust lawsuit alleging more than a dozen major broiler chicken producers, including Sanderson Farms Inc. and Perdue Foods, conspired to limit chicken production to boost prices.

The case, currently bound for an initial trial in September, has seen a number of settlements, including consumer deals with Fieldale Farms, Peco Foods, George’s, Tyson Foods, Pilgrim’s Pride and Mar-Jac Poultry totaling $181 million that received final approval in December 2021. Consumers also scored a major victory over remaining producers in May when U.S. District Judge Thomas M. Durkin granted them, both indirect buyers and direct purchasers, class certification.

The $181 million in consumer settlements, according to antitrust practice co-chair Brent W. Johnson, is “a credit to a great collaboration” with Hagens Berman and with counsel for the other classes.

In addition to case-specific strategy, Johnson said the successes come mainly from the firm’s usual approach that includes “large, well-integrated, cohesive teams … that are able to prosecute a case against 18 defendant processors who all have slightly different stories, a ton of facts, take 180 depositions across the case and handle massive efforts to get the class certified.”

Johnson noted that one of the things that sets the case apart is its sheer size. “Its breadth in terms of how many people have actually bought the relevant product is unmatched,” he said.

Plaintiffs firms are off to a dynamic start into 2023 with diverse partner classes and a strong commitment to antitrust, MDL and health care litigation.

U.S. plaintiffs firms are kicking off the year with a strong round of partner promotions tied to growing caseload and a commitment to firm culture that emphasizes in-house elevation over lateral hires.

. . .

Other firms “might say we can’t make so many partners or we can’t make everyone a partner,” Cohen Milstein Sellers & Toll managing partner Steven Toll said. “We really don’t think that way. We really just look at the candidates and if we think they are deserving, we’ll make them a partner.”

Here are some of the takeaways in detail:

Cohen Milstein Sellers & Toll

The firm continues to grow its partner ranks in its strongest two practice areas. “The two largest areas traditionally for many years until now in the firm are antitrust and securities. That’s where probably 50 to 60% of the lawyers are,” Toll said. Overall, the firm has seen “more and more talented lawyers approaching us wanting to join a plaintiffs practice.”

Partner promotions:

Read the article on Law.com.

The Delaware Court of Chancery took a long-anticipated step this week when it ruled a McDonald’s Corp. officer had oversight obligations on par with directors, in a trailblazing decision experts say will have wide-reaching implications for corporate law in the First State.

The 65-page decision released Wednesday by Vice Chancellor J. Travis Laster drew on conclusions reached years ago in Delaware’s Supreme Court and Bankruptcy Court as well as in courts in California and elsewhere, but previously unexercised in Chancery. It found that corporate duties of loyalty, oversight and care should go forward in a derivative suit launched by stockholders in 2021 against former McDonald’s executive David Fairhurst.

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Julie Goldsmith Reiser, a partner at Cohen Milstein Sellers & Toll PLLC and co-chair of the firm’s securities litigation and investor protection practice, termed the decision far-reaching in an analysis published soon after its release.

“Accordingly, if an officer fails to share information about harm to the company with the board, the directors themselves may want to sue the officer for a breach of duty to the company,” Reiser said in the analysis on the firm’s website. “And, if the board has a potential claim, so too would a stockholder in derivative litigation, in which the shareholder sues for fiduciary breaches in the company’s stead.”

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Reiser noted in her analysis the vice chancellor’s finding that “an officer cannot act in good faith while violating company policy, breaking the law, and exposing the company to liability,” saying the same issues are triggered in sexual harassment and discrimination derivative lawsuits that Cohen Milstein has worked on across the country, including against Wynn Resorts, Alphabet, L Brands and Pinterest.

“Going forward, Vice Chancellor Laster’s ruling will be relied upon not only to support the viability of cases where officers and directors materially support toxic, inequitable workplaces, but also where officers fail to protect a company from harm based on their own officer oversight duties,” she said on the firm’s site.

Read on Law360.

  • DOJ seeks a jury trial to sidestep conservative judges
  • Legal experts say the legal theory echoes the Microsoft case

The Justice Department’s newest suit against Alphabet Inc.’s Google includes a surprising request: a jury trial.

Federal antitrust lawyers typically opt to present their cases directly to a federal judge. But in its second suit against Google, the Justice Department asks that everyday people determine whether the company’s advertising technology business violates the law.

It’s a risky move, given the complexity of the subject matter. But it could help the Justice Department sidestep the increasingly conservative judiciary, where judges have aligned with large corporations for decades and ruled against it in a string of cases last year.

“If you pull the wrong judge, the law is so defendant friendly,” said Sam Weinstein, an antitrust law professor at Cardozo Law School.

It’s possible that a jury for the Google case could allow the government to tap into the growing mainstream animosity toward the biggest tech companies. But it will be key for the Justice Department to make its case clearly and concisely in order to win over the jurors.

“There’s a real risk that the jury just doesn’t understand how these pieces fit together,” said Dan McCuaig, a partner at Cohen Milstein Sellers & Toll PLLC who served in the DOJ antitrust division for twelve years.

Beyond the jury trial demand, the Justice Department made a series of strategic decisions to improve its chances of winning. The case was filed in the Eastern District of Virginia, which is known for handling intricate business cases – particularly related to patents – more quickly than other court systems. The local rules are designed to expedite the process, and judges in the district pride themselves on moving cases quickly.

The Eastern District of Virginia’s familiarity with areas of the law like patents could mean the jurors are better prepared to handle the case, and an informed judge could make it harder for Google to delay the case for years.

. . .

But even if the jury and judge agree that Google violated the law, the biggest fight is likely to erupt around what the remedy should look like. The Justice Department is calling for Google to spin off its DoubleClick ad technology platform entirely.

“They are shooting for the moon because it would be an effective remedy and it’s not reject-out-of-hand crazy,” said McCuaig. Whether it’s attainable will depend on the judge, he added.

Read the article on Bloomberg. (Subscription required.)

Workers for a travel company asked a Pennsylvania federal judge to sign off on an $8.7 million deal to resolve their proposed class action claiming their employee stock ownership plan was overcharged when it shelled out $200 million to buy shares from three of their employer’s founders.

The employees asked the court Wednesday to greenlight the settlement between ESOP manager Prudent Fiduciary Services, Prudent founder Miguel Paredes, World Travel Inc. co-founder James A. Wells and a class of workers who said the costly stock transaction ran afoul of the Employee Retirement Income Security Act.

“A settlement avoids the risks and delays attendant with continued litigation and ensures the class members will each receive approximately $11,950 on average before fees and expenses — an amount that far exceeds most other ERISA settlements on similar issues,” the workers said.

The workers said Prudent and Paredes let them overpay in 2017 by allowing three World Travel founders to sell their shares to the ESOP at more than market value while retaining control of the company board.

The May 2021 suit said the $200 million valuation was based on unrealistic growth projections, which left the proposed class receiving smaller amounts of stock, losses to their individual accounts and “tens of millions” of dollars of debt to the plan at large.

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The employees are represented by Daniel Sutter, Laura Older Rockmore, Mary Bortscheller and Michelle C. Yau of Cohen Milstein Sellers & Toll PLLC and Patricia Mulvoy Kipnis, Gregory Y. Porter, Laura E. Babiak, Patrick O. Muench and Ryan T. Jenny of Bailey Glasser LLP.

Read the article on Law360.

In a largely unregulated industry, some residents trying to get sober are made to work 40 hours a week at restaurants – but don’t receive a paycheck. Michael Hancock, of counsel at Cohen Milstein and the former Assistant Administrator for the U.S. Department of Labor’s Wage and Hour Division, offered his thoughts.

First published by the Montana Free Press, the full article is available on The Guardian’s website.