Prescription Care Pharmacy, LLC vs. Optumrx Pbm of Illinois, Inc.

Motion - Other

Cal. Super. - 4th Dist.August 22, 2018

© 0 0 N N o o O u B A O w N D R N O N N N N N D N N N M N N F P F FP F FP , FP , F P R , c o N N O o o u l B A W N F P O O V U 0 0 N O Y U U B s W N + H o O o 4815-6871-4 KIMBERLY A.KLINSPORT, CA Bar No. 259018 kklinsport@ foley.com JOHN J.ATALLAH, CA Bar No. 294116 jatallah@foley.com KRISTINA M. FERNANDEZ MABRIE, CA Bar No. 318315 kfernandezmabrie@ foley.com FOLEY & LARDNER LLP 555 SOUTH FLOWER STREET, SUITE 3300 LOS ANGELES, CA 90071-2411 TELEPHONE: 213.972.4500 FACSIMILE: 213.486.0065 Attorneys for Defendant OPTUMRX, INC. SUPERIOR COURT OF THE STATE OF CALIFORNIA FoR THE COUNTY OF ORANGE PRESCRIPTION CARE PHAMARCY , LLC, A FLORIDA LIMITED LIABILITY COMPANY, Case No: 30-2018-01014006-CU-BC-C)JC DEFENDANT OPTUMRX, INC.’"SNOTICE OF MOTIONAND MOTIONTOFILE DOCUMENTS UNDER SEAL; MEMORANDUM OF POINTSAND AUTHORITIESIN SUPPORTTHEREOF PLAINTIFF, V. OPTUMRX,INC.;OPTUMRX PBM OF ILLINOIS, INC.;AND DOES 1 THROUGH 10, INCLUSIVE, [FILED CONCURRENTLY WITH DECLARATION S OF JOSHUA VAN GINKEL AND JOHN J. ATALLAH, AND [PROPOSED] ORDER GRANTING MOTION TO SEAL] DEFENDANT. HEARING DATE: DECEMBER 17,2018 TIME: 2:00PM. RESERVATION ID: 72905707 DepT.: C15 JUDGE: HON. NATHAN SCOTT — — ~ ~ ~ — CASE FILED: AUGUST 22,2018 OPTUM'S MOTION TO SEAL CASE NO. 30-2018-01014006-CU-BC-CJC Le © 0 0 N N o o O u B A O w N D R N O N N N N N D N N N M N N F P F FP F FP , FP , F P R , c o N N O o o u l B A W N F P O O V U 0 0 N O Y U U B s W N + H o O o 4815-6871-4 TO ALL PARTIESANDTHEIR ATTORNEYSOF RECORD: PLEASE TAKE NOTICE that on December 17, 2018, at 2:00 p.m., or as soon thereafter as counsel may be heard in Department C15 of the above-entitled Court, located at 700 Civic Center Drive West, Santa Ana, California 92701, Defendant OPTUM RX, INC. (“Optum”) will and hereby does move the Court for entry of an order sealing the following documents, lodged “Conditionally Under Seal” concurrently with the filing of Optum’s Motion to Compel Arbitration and Stay Court Proceedings (“Motion to Compel Arbitration”): a. The unredacted version of Optum’s Motion to Compel Arbitration; b. The 2011 RxSolutions, Inc. Pharmacy Network A greement with Plaintiff, attached as Exhibit 1 to the Declaration of Joshua Van Ginkel in Support of Optum’s Motion to Compel Arbitration; and C. The 2008 SX C Health Solutions, Inc. Provider Agreement with Plaintiff, attached as Exhibit 2to the Declaration of Joshua Van Ginkel in Support of Optum’s Motion to Compel Arbitration. This Motion is made pursuant to California Rules of Court 2.550 and 2.551, on the grounds that the above documents contain confidential, proprietary, and highly sensitive business information that Optum has an overriding interest in protecting from public disclosure. The disclosure of these documents would negatively affect Optum’s current and future business dealings and cause it serious commercial injury. Given the highly competitive nature of the pharmacy benefits manager (“PBM ”) industry and the number of competitors, disclosure of the terms of these contracts would destroy the value of this confidential trade secret information. Moreover,as detailed in the accompanying memorandum of points and authorities, O ptum holds the agreements and their contents in its strictest confidence, and both agreements contain strict provisions expressly prohibiting the disclosure of confidential and/or proprietary information (including the contents of those agreements) by the parties thereto. Optum’s overriding interest in protecting the information contained in these documents from public disclosure outweighs the right of public access to the documents, and a substantial probability exists that the overriding interest will be prejudiced if the records are not sealed. Moreover, the 1 OPTUM'S MOTION TO SEAL CASE NO. 30-2018-01014006-CU-BC-CJC Le = W w N o O o c e 9 O Y W n 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 4815-6871-46 Di DATE: OCTOBER 9, 2018 proposed sealing ofthis limited collection of documentsis narrowly tailored, and no less restrictive means exist to protect Optum’s overriding interest. This Motion is based on this Notice of Motion, the accompanying memorandum of points and authorities, the Declarations of Joshua Van Ginkel and John J. Atallah, and any arguments as may be raised at the hearing on this matter. FOLEY & LARDNER LLP KIMBERLY A. KLINSPORT JOHN J. ATALLAH KRISTINA M. FERNANDEZ MABRIE JOHN J. ATALLA Attgrneys for Defendant OPTUMRX,INC. By: 2 OPTUM’S MOTION TO SEAL CASE NO. 30-2018-01014006-CU-BC-CJC © 0 0 N N o o O u B A O w N D R N O N N N N N D N N N M N N F P F FP F FP , FP , F P R , c o N N O o o u l B A W N F P O O V U 0 0 N O Y U U B s W N + H o O o 4815-6871-4 MEMORANDUM OF POINTSANDAUTHORITIES l. INTRODUCTION By this Motion, Defendant OPTUMRX,, INC. (“Optum”) seeks to safeguard the confidentiality of select documents (the “L odged Documents”) relevant to Optum’s Motion to Compel Arbitration and Stay Court Proceedings (“M otion to Compel Arbitration”). The Lodged Documents contain confidential, proprietary, and highly sensitive business information that O ptum has an overriding interest in protecting from public disclosure. For the reasons set forth in further detail below, Optum respectfully requests that the Court issue an order sealing the Lodged D ocuments. Il. STATEMENT OF FACTS Optum’s Motion to Compel Arbitration, a redacted public version of which is filed concurrently herewith, relies upon various provisions of the 2008 SX C Health Solutions, Inc. Provider A greement and the 2011 RxSolutions, Inc. Pharmacy Network Agreement with Plaintiff Prescription Care Pharmacy. By and through this Motion, Optum seeks an order sealing the following L odged Documents that were lodged concurrently with the filing of this Motion and Optum’s Motion to Compel Arbitration: a. The unredacted version of Optum’s Motion to Compel Arbitration; b. The 2011 RxSolutions, Inc. Pharmacy Network Agreement with Plaintiff (the “2011 Pharmacy Network Agreement”), attached as Exhibit 1to the Declaration of Joshua Van Ginkel in Support of Optum’s Motion to Compel Arbitration; and C. The 2008 SX C Health Solutions, Inc. Provider Agreement with Plaintiff (the “2008 Provider Agreement”), attached as Exhibit 2to the Declaration of Joshua V an Ginkel in Support of Optum’s Motion to Compel Arbitration. The 2008 Provider Agreementis clearly marked “Proprietary and Confidential” at the bottom of each page and further expressly prohibits Plaintiff from “shar[ing] information concerning the terms of this A greement or other proprietary information” with any third party. [Declaration of Joshua an Ginkel (“Van Ginkel Decl.”) 117, Ex. 2 at 93.3.] Likewise, the 2011 Pharmacy Network A greement “and all documentation now and hereafter related to [its] performance” are, by the A greement’s own terms, Optum’s proprietary information and are subjectto strict non-disclosure requirements. [/d., EX. 1,991.1, 8.2.] Every Optum employee exposed to these documents - or to the strategies utilized to 1 OPTUM'S MOTION TO SEAL CASE NO. 30-2018-01014006-CU-BC-CJC Le © 0 0 N N o o O u B A O w N D R N O N N N N N D N N N M N N F P F FP F FP , FP , F P R , c o N N O o o u l B A W N F P O O V U 0 0 N O Y U U B s W N + H o O o 4815-6871-4 develop and negotiate them - is required to sign a strict confidentiality agreement to maintain the secrecy of the information reflected in these documents, and access to Optum’s electronic database on which the documents are stored is password protected. [/d.] As explained in greater detail below, the Lodged Documents contain confidential, proprietary, and highly sensitive business information, the disclosure of which would harm Optum. The publicly filed versions of Optum’s Motion to Compel Arbitration and the Declaration of Joshua Van Ginkel have been redacted selectively to preserve the confidentiality of the terms of the 2011 Pharmacy Network Agreement and 2008 Provider Agreement. [Declaration of John]. Atallah ISO Motion to Seal (“). Atallah Decl.”) 94.] In accordance with California Rule of Court 2.551(d)(2), Optum has labeled the L odged Documents “Conditionally Under Seal” and lodged them with this Court. [J. Atallah Decl. § 3.] Ill. ARGUMENT Pursuant to California Rules of Court Rule 2.550(d), the Court may orderthat a record be filed under seal if: (1) there exists an overriding interest that overcomes the right of public access to the record; (2) the overriding interest supports sealing the record; (3) a substantial probability exists that the overriding interest will be prejudiced if the record is not sealed; (4) the proposed sealing is narrowly tailored; and (5) no less restrictive means exists to achieve the overriding interest. Rule 2.550(d) “vest[s] the trial court with a considerable amount of discretion in deciding whether to seal or unseal portions of ajudicial record.” (In re Providian Credit Card Cases (2002) 96 Cal. A pp. 4th 292, 295.) In this case, the avoidance of competitive harm, protection of highly sensitive business information from disclosure, and breach of the parties’ mutual agreements together constitute an “overriding interest” which overcomes the right of public access to the record and supports sealing of the documents at issue. (Universal City Studios, Inc. v. Superior Court (2003) 110 Cal. App. 4th 1273, 1286; see also H.B. Fuller Co. v. Doe (2007) 151 Cal. App. 4th 879, 883.) Here, the Lodged Documents, contain confidential, proprietary, and highly sensitive business information. Optum’s overriding interest in protecting the information contained in these documents from public disclosure outweighs the right of public access to the documents, and a substantial probability exists that the overriding interests will be prejudiced if the records are not sealed. Further, each of the exhibits among the Lodged Documents contains provisions expressly prohibiting the disclosure of confidential and/or 2 OPTUM'S MOTION TO SEAL CASE NO. 30-2018-01014006-CU-BC-CJC Le © 0 0 N N o o O u B A O w N D R N O N N N N N D N N N M N N F P F FP F FP , FP , F P R , c o N N O o o u l B A W N F P O O V U 0 0 N O Y U U B s W N + H o O o 4815-6871-4 proprietary information, including the text of the agreements themselves. Moreover, the 2011 Pharmacy Network Agreement and the 2008 Provider A greement, including the various addenda thereto, contain the nonpublic information and proprietary business, technical, and financial information of Optum. [Van Ginkel Decl. §16.] Optum considers these materials highly confidential because they reflect the unique and confidential strategies that Optum has developed,at great effort and expense, to be competitive in the pharmacy benefits manager (“PBM "”) marketplace. [Id.] Specifically, these documents contain detailed descriptions of Optum’s business operations, including commercially sensitive reimbursement and pricing rates and structures that O ptum’s pharmacy providers receive, a detailed description of the confidential claims submission and processing systems that Optum has developed over years of experience, and the confidential fees that O ptum assessesto its pharmacy providers in the conduct of their business. [/d.] Optum’s claims submission process and any other business strategy that is specified in the 2011 Pharmacy Network Agreement and 2008 Provider A greement are the product of a significant monetary and personnel investment, and have economic value because they are not known or used by Optum’s competitors. [Id., 118.] The disclosure of these documents would negatively affect Optum’s current and future business dealings and cause it serious commercial injury. [/d.] Given the highly competitive nature of the PBM industry and the number of competitors, disclosure of the terms of these contracts would destroy the value of this confidential trade secret information. [/d.] Optum holds these documents and their contents in its strictest confidence, and takes great effort to shield this proprietary information from its competitors. [/d., §117.] Every Optum employee exposed to these documents - or to the strategies utilized to develop and negotiate them - is required to sign a strict confidentiality agreement to maintain the secrecy of the information reflected in these documents, and access to Optum’s electronic database on which the documentsare stored is password protected. [ld.] Furthermore, the public interest in transparency of court proceedings typically considered in the context of a motion to seal is not applicable here. Ordinarily, courts consider the public interest in access to court records because “[plublic access to civil proceedings serves to . . . demonstrate that justice is meted out fairly, thereby promoting public confidence in such governmental proceedings.” 3 OPTUM'S MOTION TO SEAL CASE NO. 30-2018-01014006-CU-BC-CJC Le O e N N 10 11 12 13 14 15 16 17 18 19 21 22 23 24 25 26 27 28 (NBCSubsidiary (KNBCTV) Inc. v. Superior Court (1999) 20 Cal. 4th 1178, 1219.) However,that concern is not applicable here because the parties have agreed to havethis dispute resolved by private arbitration—not in a civil action before this Court—and they must promptly pursue arbitration once Optum’s confidential materials are sealed. The information contained in the Lodged Documents is intended to be kept confidential, and Optum has made every effort to safeguard such information from unnecessary disclosure. Divulging this information publicly would negatively affect Optum’s position in its business dealings, and a substantial probability exists that Optum would suffer competitive harm as a result. Optum’s overriding interest in protecting the information contained in these documents from public disclosure outweighs the right of public access to the documents, and a substantial probability exists that the overriding interests will be prejudiced if the records are not sealed. This request to seal the Lodged Documents is narrowly tailored to cover only those specific facts and documents that reveal particularly sensitive commercial information. Nothing short ofsealing these records will avoid competitive harm to Optum because Optum’s competitors would be able to use these documentsto the detriment of Optum if they are disclosed to the public. [See Van Ginkel Decl. 18.] Assuch,it is appropriate for this Court to permit the Lodged Documents to be filed underseal. IV. CONCLUSION For the reasons set forth above, Optum respectfully requests that the Court grant this Motion and issue an order sealing the Lodged Documents that were lodged with this Court “Conditionally Under Seal” concurrently with the filing of this Motion and Optum’s Motion to Compel Arbitration. DATE: OCTOBER 9,2018 FOLEY & LARDNER LLP KIMBERLY A. KLINSPORT JOHN J. ATALLAH KRISTINA M. FERNANDEZ MABRIE wo ada JOHN J. ATALLAH Attorneys for Defendant OPTUMRX,INC. 4 OPTUM’S MOTION TO SEAL CASE NO. 30-2018-01014006-CU-BC-CJC 4815-6871-46114.3 + o o L e N N D N W n 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PROOF OF SERVICE I am employed in the County of Los Angeles, State of California. Iam over the age of 18 and nota party to this action; my current business addressis 555 South Flower Street, Suite 3300, Los Angeles, CA 90071-2411. On October 9, 2018, I served the foregoing document(s) described as: DEFENDANT OPTUMRX, INC.’S NOTICE OF MOTION AND MOTION TO FILE DOCUMENTS UNDER SEAL; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF on the interested parties in this action as follows: Torin A. Dorros Dorros Law 8730 Wilshire Boulevard. Suite 350 Beverly Hills, California 90211 Telephone: (310) 997-2050 Facsimile: (310) 496-1320 tdorros@dorroslaw.com Attorneysfor Plaintiff X BY MAIL X [ am readily familiar with the firm's practice ofcollection and processing correspondence for mailing with the United States Postal Service; the firm deposits the collected correspondence with the United States Postal Service that same day, in the ordinary course of business, with postage thereon fully prepaid, at Los Angeles, California. I placed the envelope(s) for collection and mailing on the above date following ordinary business practices. BY E-MAIL X [ served the foregoing documentvia e-mail to the addressees above at the e-mail addresseslisted therein. Executed on October 9, 2018, at Los Angeles, California. I declare under penalty of perjury under the lawsofthe State ofCalifornia that the above is true and correct. I declare that I am employed in the office of a member ofthe bar ofthis court at whose direction the service was/made. i iS < > aul C. Tigue HI 5 OPTUM’S MOTION TO SEAL CASE NO. 30-2018-01014006-CU-BC-CJC 4815-6871-4614.3