These appeals challenge the District Court's approval of an amended settlement agreement (the "Settlement Agreement") reached in a class action lawsuit brought against defendant-counter-claimant-appellee Merck-Medco Managed Care, L.L.C., a/k/a Medco Health Solutions, Inc., and its former parent company, Merck & Co., Inc. (collectively, "Medco"), by a plaintiff class of employee welfare benefit plans (the "Plaintiffs"). Plaintiffs, the trustees and beneficiaries of various employee welfare benefit plans, brought this action alleging that Medco breached its fiduciary duty under the Employee Retirement Income Security Act of 1974 ("ERISA") by failing to act in their best interest in its capacity as a pharmaceutical benefits manager for the plans. Movant-appellant Group Hospitalization and Medical Services, doing business as CareFirst Blue Cross Blue Shield ("CareFirst"), appealed from the judgment of the District Court denying CareFirst's motion to intervene in the class action litigation and approving the Settlement Agreement. Movants-appellants CareFirst, Central States Southeast and Southwest Areas Health and Welfare Fund ("Central States"), Sweetheart Cup Company, Inc. ("Sweetheart"), Iron Workers Tri-State Welfare Fund ("Iron Workers"), and Linda J. Cahn, Esq. ("Cahn") (collectively, "Movants-Appellants") all appealed from the same judgment of the District Court incorporating orders (i) certifying the instant action as a class action pursuant to FED.R.CIV.P. 23(a) and (b)(3); (ii) approving the amended Settlement Agreement as fair, reasonable, and adequate; (iii) awarding legal fees and disbursements; and (iv) severing cases in which the ERISA plans opted out of the settlement.
On appeal, we determined that serious questions had been raised as to whether the certified representative Plaintiffs had constitutional standing to assert ERISA claims and to enter into the Settlement Agreement on behalf of the class. Cent. States Se. & Sw. Areas Health & Welfare Fund v. Merck-Medco Managed Care, L.L.C., 433 F.3d 181, 185 (2d Cir.2005). We therefore remanded to the District Court for consideration of the standing issue and retained jurisdiction pursuant to United States v. Jacobson, 15 F.3d 19 (2d Cir.1994). Cent. States, 433 F.3d at 202-04. Following remand, the District Court reviewed additional evidence submitted by the parties and concluded that Plaintiffs had established standing. Having remanded for a limited purpose, we now resume jurisdiction of this case at the parties' request. We assume familiarity with our earlier opinion, the underlying facts, the procedural history, and the scope of issues presented on appeal, to which we refer only as necessary to explain our decision. Upon our review, we agree with the District Court that Plaintiff Marissa Janazzo has established standing, but we conclude that the court erred both in certifying the class without properly considering the conflicts of interest among members of the class and in approving the Settlement Agreement. We therefore vacate the judgment of the District Court and remand for further proceedings consistent with this Opinion. We affirm the judgment in all other respects.
Miner '56, Roger J., "Central States Southeast v. Merck-Medco, 504 F. 3d 229 - Court of Appeals, 2nd Circuit 2007" (2006). Circuit Court Opinions. 78.