Plumbers Welfare Fund, Local 130 v. CVS Health Corporation

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF RHODE ISLAND
SHEET METAL WORKERS LOCAL
NO. 20 WELFARE AND BENEFIT
FUND; and INDIANA CARPENTERS
WELFARE FUND,
on behalf of
themselves and all others similarly
situated,
Plaintiffs,
v.
CVS PHARMACY, INC.,
Defendant.
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C.A. No. 16-cv-046-JJM-PAS
PLUMBERS WELFARE FUND,
LOCAL 130,
on behalf of itself and all
others similarly situated,
Plaintiff,
v.
CVS PHARMACY, INC.,
Defendant.
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C.A. No. 16-cv-447-JJM-PAS
MEMORANDUM AND ORDER
JOHN J. MCCONNELL, JR., Chief Judge, United States District Court
Plaintiffs 	are 	members 	of 	a 	class 	action 	lawsuit 	brought 	against 	CVS
Pharmacy, Inc. (“CVS”). Plaintiffs have filed a motion,
see ECF No. 273,1 requesting
that this Court reconsider its prior Arbitration Orders, which had the effect of placing
1 All ECF Nos. in this order correspond with the lead case number, No. 16-cv-
046-JJM-PAS.
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some of the class members into subclasses and staying their claims.
See ECF No. 238;
Text Order (Feb. 14, 2025).
For the reasons that follow, the Court GRANTS Plaintiffs’ Motion. 	Upon
reconsideration, the Court finds that the law of the First Circuit—specifically, the
law governing nonsignatory enforcement of arbitration agreements—has changed
such that the Court must lift its stay, eliminate the previously created subclasses,
and allow some of the class members’ claims to proceed while dismissing the claims
of other class members.
I. 	FACTUAL AND PROCEDURAL BACKGROUND
This is a class action consisting of two consolidated cases. Plaintiffs are third-
party payors (“TPPs”) or health plans2 that offer their members prescription drug
insurance at subsidized or reduced costs. 	ECF No. 171 at 10. 	CVS is one of the
defendants in this lawsuit. 	There are also various pharmacy benefit managers
(“PBMs”) that have been involved in this case in various capacities, including
Caremark,3 OptumRx, 4 Express Scripts,5 Medco,6 and MedImpact.
	Id. at 11. 	The
2 “Health plans” refer to insurance companies, governmental programs (like
Medicare or Medicaid), and insurance plans sponsored by employers, pension plans,
or union-affiliated trust funds. ECF No. 171 at 10-11; ECF No. 276-1 at 5.
3 As of May 23, 2024, Defendant Caremark has been dismissed from this
lawsuit. ECF No. 238 at 4-5.
4 As of December 11, 2025, the parties have jointly stipulated to amend the
class definition to exclude claims against Defendant OptumRx.
	See ECF No. 285.
The Court entered that stipulation a day later.
	See Text Order (Dec. 12, 2025).
Accordingly, CVS’s prior Motion to Exclude Certain OptumRx-Related Absent Class
Members, or in the alternative, to Dismiss Their Claims (ECF No. 269) is now moot.
5 There is a pending motion by CVS to amend the class definition to exclude
class members related to Express Scripts.
	See ECF No. 276. 	The Court leaves
resolution of this motion for another day.
6 As of 2012, Express Scripts acquired Medco. ECF No. 273 at 5 n.17.
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PBMs act as middleperson between the TPPs and CVS by, among other things,
negotiating drug prices on behalf of the TPPs. ECF No. 171 at 11.
Plaintiffs first brought claims against CVS nearly a decade ago, 7 alleging
violations of the Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18
U.S.C. § 1961,
et seq., and state consumer protection acts, as well as claims for
negligent misrepresentation, fraud, and unjust enrichment.
	Id. at 5. 	In essence,
Plaintiffs assert that CVS conspired with certain PBMs to defraud and overcharge
Plaintiffs for prescription drugs. ECF No. 171 at 3-4.
On May 11, 2021, Judge William E. Smith8 certified a “Nationwide Class.”9
See ECF No. 179. This class is composed of over 5,000 TPPs who contracted with the
PBMs (i.e., “the TPP-PBM contracts”). 	ECF No. 174 at 1. 	Crucially, CVS is not a
party to any of these TPP-PBM contracts.
Id.;
see also ECF No. 279 at 1.
7 Plaintiffs’ first complaint was filed on February 1, 2016.
See ECF No. 1. That
complaint has since been amended by Plaintiffs.
See ECF No. 171.
8 Judge Smith retired from judicial service on January 21, 2026, and this case
was randomly assigned to the current presiding judge.
	See Text Order (Aug. 27,
2025). 9 The “Nationwide Class” is as follows:
All health plans that, at any time between November 2008 and February
1, 2016, (1) had Caremark, L.L.C., Express Scripts, Medco, OptumRx, or
MedImpact (or any of their predecessors) as their pharmacy benefit
managers, (2) paid for generic prescription drugs purchased from CVS
that were included in CVS’s Health Savings Pass program, and (3) paid
for those drugs based on a formula containing Usual and Customary
price.
ECF No. 179 at 21, 77. Judge Smith also certified three other classes in this case: (1)
an Unjust Enrichment Class; (2) an Unfair and Deceptive Conduct Consumer
Protection Class; and (3) an Omission Consumer Protection Class.
Id. at 21-22, 77.
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In its certification order, the Court acknowledged that, because some class
members may be subject to mandatory arbitration, “Defendants may pursue …
motions to compel arbitration and/or dismiss following class certification, and the
Court will employ the procedural tools at its disposable to exclude those TPPs from
the class or place them in a subclass.” ECF No. 179 at 58-59.
As part of the discovery process, the PBMs began to produce their contracts
with the TPPs. 	Several of these contracts contain alternative dispute resolution
(“ADR”) provisions, which require the parties to submit to either arbitration or
mediation. Accordingly, in 2023, PBM Caremark and CVS filed separate motions to
compel Plaintiffs to submit to the ADR provisions or, in the alternative, to dismiss
from the class any absent class member TPP with an ADR provision in its contract
with Caremark.
See ECF Nos. 211, 213. This classification applied to approximately
2,374 TPPs that had contracts with Caremark. ECF No. 273 at 5.
On May 30, 2024, Judge Smith issued an order that made several key
holdings.
	See ECF No. 238. First, the Court dismissed Caremark from this lawsuit
entirely.
	Id. at 4-5. 	Second, the Court put certain absent class members into a
“subclass” (i.e., “the Caremark Subclass”) and temporarily stayed those subclass
members’ claims.
	Id. at 8. The Caremark Subclass is specifically composed of 2,312
TPPs whose contracts with Caremark have arbitration agreements that contain
“delegation clauses,” which delegate “questions of arbitrability” to an arbitrator.
	Id.
at 6-8. 	Third, of the approximately 348 TPPs whose contracts with Caremark have
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ADR provisions that do
not contain delegation clauses, 10 the Court analyzed whether
CVS—as a nonsignatory to those contracts—could require Plaintiffs to submit to the
contracts’ ADR processes under state law principles of equitable estoppel.
	Id. at 8-
10. The Court sent to arbitration and dismissed the claims of those TPPs with non-
delegated ADR agreements governed by California, Delaware, Florida, Georgia,
Hawaii, Iowa, Massachusetts, New York, Ohio, Tennessee, Texas, and Virginia law.11
Id. at 24. 	By contrast, the Court allowed to proceed the claims of those TPPs with
non-delegated ADR agreements governed by Alabama, Colorado, Idaho, Illinois,
Indiana, and New Jersey law.12
Id.
A few months later, CVS filed another motion—this time to dismiss from the
class any absent class member TPP with an arbitration provision in its contract with
PBM MedImpact.
See ECF No. 253 at 1. Relying on the reasoning from his previous
order, Judge Smith created another subclass for absent class members whose
contracts with MedImpact contain arbitration provisions with delegation clauses (i.e.,
10 Approximately 62 of these “non-delegated” contracts contain arbitration
agreements and 286 contain mediation clauses.
See ECF No. 238 at 8.
11 These states employ some combination of the “rely on” test, the “concerted
misconduct” test, or both for equitable estoppel. 	ECF No. 238 at 19-20, 22-23.
Applying these tests, Judge Smith concluded that these TPPs were equitably
estopped, or precluded, from avoiding arbitration of their claims against CVS.
	Id.
at 11, 19-20.
12 These states either: (1) employ the “detrimental reliance” test for equitable
estoppel; or (2) do not permit nonsignatories to compel mediation absent language in
the contract that contemplates nonsignatory enforcement. ECF No. 238 at 14, 22-23.
Applying these principles, Judge Smith found that equitable estoppel did not apply
to these TPP claims and concluded that these TPPs were not required to submit to
their contracts’ ADR processes and their claims could proceed in federal court.
	Id.
at 14, 20, 23.
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“the MedImpact Subclass”), and the claims of the MedImpact Subclass were also
temporarily stayed.
	See Text Order (Feb. 14, 2025). 	The orders concerning the
Caremark and MedImpact Subclasses are referred to hereafter as the “Arbitration
Orders.”
Since then, the parties have filed various motions, including the present
motion from Plaintiffs in which they request that the Court “vacate its Arbitration
Orders, eliminate the Caremark and MedImpact Subclasses, and decide the issue of
arbitrability itself.” 	ECF No. 273 at 17. 	Plaintiffs assert that this outcome is
necessary because, since issuing the Arbitration Orders, “the law has changed in the
First Circuit.”
Id. CVS objects to this motion.
See ECF No. 279.
I. 	DISCUSSION
A. 	Legal Standard
Although styled as a “Motion to Vacate,” the Court will instead treat Plaintiffs’
motion as a “Motion for Reconsideration.” 	There is no dispute between the parties
that the Court’s earlier Arbitration Orders were interlocutory in nature rather than
final judgments. ECF No. 273 at 9; ECF No. 279 at 8;
see also Braintree Lab’ys, Inc.
v. Citigroup Global Mkts. Inc., 622 F.3d 36, 43 (1st Cir. 2010). Plaintiffs also invoke
Federal Rule of Civil Procedure 54(b), which authorizes courts to “reconsider”
interlocutory orders “within [their] sound discretion.”
Homeowner Options for Mass.
Elders, Inc. v. Brookline Bancorp, Inc., 789 F. Supp. 2d 242, 243 (D. Mass. 2011)
(quoting
Campos v. P.R. Sun Oil Co., Inc., 536 F.2d 970, 972 n.6 (1st Cir. 1976)). Rule
54(b) does not, however, provide courts with the authority to “vacate” interlocutory
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orders.
See United States v. Toth, No. 15-cv-13367-ADB, 2019 WL 7039627, at *2 (D.
Mass. Dec. 20, 2019),
aff’d, 33 F.4th 1 (1st Cir. 2022).
Accordingly, because the Arbitration Orders were interlocutory in nature, they
“may be revised at any time before the entry of a judgment adjudicating all the claims
and all the parties’ rights and liabilities.” 	Fed. R. Civ. P. 54(b);
see also Pérez-Ruiz
v. Crespo-Guillén, 25 F.3d 40, 42 (1st Cir. 1994) (“Interlocutory orders ... remain open
to trial court reconsideration, and do not constitute the law of the case.”). 	It is
important to note, however, that granting a motion for reconsideration is “an
extraordinary remedy which should be used sparingly.”
Palmer v. Champion Mortg.,
465 F.3d 24, 30 (1st Cir. 2006) (quoting 11 Charles Alan Wright et al., Federal
Practice and Procedure § 2810.1 (2d ed. 1995)).
A court may grant such a motion only in one of three limited circumstances:
(1) “if the moving party presents newly discovered evidence,” (2) “if there has been an
intervening change in the law,” or (3) “if the movant can demonstrate that the original
decision was based on a manifest error of law or was clearly unjust.”
De Giovanni v.
Jani-King Int’l, Inc., 968 F. Supp. 2d 447, 450 (D. Mass. 2013) (quoting
United States
v. Allen, 573 F.3d 42, 53 (1st Cir. 2009)). Ultimately, whether a movant satisfies this
stringent standard so as to justify reconsideration of the prior order is a decision that
rests “within the sound discretion of the Court.”
	Toth, 2019 WL 7039627, at *2
(quoting
Homeowner Options for Mass., 789 F. Supp. 2d at 243 (internal quotations
and citations omitted)).
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B. 	Analysis
Underlying Plaintiffs’ Motion for Reconsideration is the following question:
Must 	the 	Plaintiff 	TPPs, 	whose 	contracts 	with 	the 	PBMs 	contain 	arbitration
agreements 13 that delegate “questions of arbitrability” to an arbitrator, be required
to submit to CVS’s arbitration demands, even though CVS is a nonsignatory to the
TPP-PBM contracts?
In its prior Arbitration Orders, the Court held that it was without authority to
answer this question and that this was an issue delegated to an arbitrator to decide.
ECF No. 238 at 8;
see also Text Order (Feb. 14, 2025).
Plaintiffs now assert that, since the Court issued its Arbitration Orders, there
has been an “intervening change in the law” of the First Circuit, which is one of the
circumstances that permit the Court to grant a motion for reconsideration. 	ECF
No. 273 at 2;
see De Giovanni, 968 F. Supp. 2d at 450. 	Last year, the First Circuit
issued its decision in
Morales-Posada v. Cultural Care, Inc., which marked a shift in
how nonsignatories to arbitration agreements can compel signatories to those
agreements to submit to arbitration.
See 141 F.4th 301 (1st Cir. 2025).
As will be explained in more detail below, the Court agrees with Plaintiffs that
reconsideration of the Arbitration Orders is appropriate here. 	The analysis will
13 Though there are both arbitration and mediation agreements implicated in
this case, for the purposes of this motion, the Court focuses its attention on the
arbitration agreements. This is so because only the arbitration agreements, and not
the mediation agreements, contain delegation clauses.
	Contrast ECF No. 212-2
(listing those arbitration agreements that contain delegation clauses),
with ECF
No. 212-3 (listing mediation agreements, none of which contain delegation clauses).
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proceed as follows. First, the Court will briefly recount the First Circuit’s holding in
Morales-Posada. Next, the Court will discuss that decision’s applicability to this case.
Finally, the Court will conclude by reconsidering its earlier Arbitration Orders, which
had the effect of staying the claims of the Caremark and MedImpact Subclasses, that
is, absent TPP class members whose contracts with Caremark and MedImpact
contained arbitration agreements with delegation clauses.
	See ECF No. 238; Text
Order (Feb. 14, 2025).
1. 	The Holding in
Morales-Posada
The First Circuit issued its decision in
Morales-Posada in June 2025. 141 F.4th
301. 	That case concerned four au pairs who brought a class action lawsuit against
Cultural Care, a Massachusetts company that places au pairs with host families
throughout the United States.
	Id. at 305. The plaintiffs had signed a contract with
International Care Ltd. (“ICL”), a Swiss company “separate and distinct” from
Cultural Care.
	Id. 	That contract (i.e., “the ICL contract”) contained an arbitration
agreement between the plaintiffs and ICL, requiring the parties to arbitrate their
disputes in “the arbitrational tribunals of Switzerland.”
Id. at 306. Importantly, the
arbitration agreement made no reference to Cultural Care, nor was Cultural Care a
signatory to the ICL contract itself.
Id.
When 	the 	plaintiffs 	subsequently 	brought 	wage-and-hour 	claims 	against
Cultural Care in federal court, Cultural Care moved to compel arbitration and cited
the ICL contract as a basis for doing so.
	Id. 	At the outset, Cultural Care sought to
send the matter out of federal court and to an arbitrator, arguing that a provision of
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the ICL contract delegated to arbitrators the exclusive means to decide whether
Cultural Care could compel arbitration in the first place.
Id. at 309.
The First Circuit ruled that Cultural Care could not invoke this provision (i.e.,
“the delegation provision”). 	The court noted that, “as a general rule, contractual
agreements bind only the parties to the agreement and may be enforced only by those
parties.”
	Id. at 309 (citing
McCarthy v. Azure, 22 F.3d 351, 362 (1st Cir. 1994)). As
a nonsignatory to the ICL contract, Cultural Care had to first establish its right to
enforce the delegation provision through one or more of the “traditional principles” of
contract law that permit nonsignatory enforcement.
	Id. at 309-10 (citing
Arthur
Andersen LLP v. Carlisle, 556 U.S. 624, 631 (2009)). 	Such “traditional principles”
include “assumption, piercing the corporate veil, alter ego, incorporation by reference,
third-party beneficiary theories, waiver and estoppel.”
	Arthur Andersen, 556 U.S.
at 631 (quoting 21 Williston on Contracts § 57:19 (4th ed. 2001)). 	The First Circuit
found that Cultural Care could not show that it was entitled to nonsignatory
enforcement of the delegation provision.
Id. at 310-11.
Cultural Care separately argued that “to the extent that the question of
arbitrability
is for the court to decide,” then the company had the power to enforce
the ICL contract’s arbitration agreement either as a third-party beneficiary to the
contract or under a theory of equitable estoppel.
Id. at 311. The First Circuit rejected
both arguments. First, the court held that Cultural Care could not demonstrate with
the requisite “special clarity” that the parties to the ICL contract intended to make
Culture Care a third-party beneficiary with the authority to compel arbitration.
	Id.
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at 318 (citing
McCarthy, 22 F.3d at 362). This was bolstered by the fact that Cultural
Care was not at all referenced in the parties’ arbitration agreement.
	Id. (citing
Mowbray v. Moseley, Hallgarten, Estabrook & Weeden, Inc., 795 F.2d 1111, 1118 (1st
Cir. 1986);
Cortés-Ramos v. Martin-Morales, 894 F.3d 55, 60 (1st Cir. 2018)).
Second, 	because 	the 	plaintiffs’ 	claims 	against 	Cultural 	Care 	were 	not
“sufficiently intertwined” with and “exist[ed] in the absence of” the ICL contract, the
court determined that there was no basis for applying equitable estoppel as to
Cultural Care. 14
	Id. at 319-20 (quoting
P.R. Fast Ferries LLC v. SeaTran Marine,
LLC, 102 F.4th 538, 550 n.10 (1st Cir. 2024)). 	In sum, the First Circuit concluded
that Cultural Care, as a nonsignatory to the ICL contract, could not compel the
plaintiffs (who
were signatories) to resolve their claims through arbitration.
	Id.
at 305.
2.	
Morales-Posada’s Applicability to This Case
This case shares a common issue of law with
Morales-Posada. 	Here, the
contracts 	at 	issue 	are 	between 	the 	Plaintiff 	TPPs 	and 	the 	PBMs. 	As 	CVS
acknowledges, the company has not signed any of the TPP-PBM contracts. 	ECF
No. 279 	at 1 	(acknowledging 	CVS’s 	“non-signatory” 	status 	to 	the 	TPP-PBM
14 The parties in
Morales-Posada conceded that “federal common law” governed
the question over whether Cultural Care could, as a nonsignatory, enforce the
arbitration agreement under a theory of equitable estoppel.
	Morales-Posada, 141
F.4th at 307-08. 	As such, the First Circuit utilized the “intertwined” equitable
estoppel test that governs under federal common law.
By contrast, in the equitable estoppel analysis that follows in this case, the
Court will apply state equitable estoppel principles. 	This is so because the parties
agree that state law controls under the circumstances of this case.
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contracts). Like Cultural Care, CVS would like to invoke the arbitration agreements
contained in the TPP-PBM contracts, and the company argues that at least some of
those 	agreements15 	contain 	“delegation 	clauses” 	that 	delegate 	questions 	of
arbitrability to an arbitrator. ECF No. 279 at 10-12.
The Supreme Court has previously held that, with a delegation clause, parties
to an arbitration agreement can agree to delegate all arbitrability questions to an
arbitrator.
	Henry Schein, Inc. v. Archer & White Sales, Inc., 586 U.S. 63, 65 (2019).
Arbitrability questions include even “threshold arbitrability questions,”16 such as:
Does this dispute actually belong in arbitration, or should it proceed in federal court?
Id. Where a delegation clause exists, “a court possesses no power to decide” questions
of arbitrability, and it must respect the parties’ decision to delegate such questions to
an arbitrator.
Id. at 71.
So, what happens when a
nonparty to an arbitration agreement with a
delegation 	provision 	tries 	to 	compel 	a 	party 	to 	that 	agreement 	to 	submit 	to
arbitration? 	Does a court decide whether the nonparty can do so? 	Or is that an
“arbitrability question” that only an arbitrator can determine? In its May 2024 order,
the Court recognized that “whether CVS as a nonsignatory … can invoke the [TPP-
15 The parties agree that there are 2,303 Caremark plans and 48 MedImpact
plans that contain delegation clauses.
	See ECF No. 279 at 12; ECF No. 283 at 3.
There are also 302 OptumRx plans with delegation clauses, but again the parties
jointly stipulated to exclude the OptumRx-related claims.
16 These types of questions have also been referred to as “‘gateway’ questions
of ‘arbitrability.’”
	Henry Schein, 586 U.S. at 67-68 (quoting
Rent–A–Center, West,
Inc. v. Jackson, 561 U.S. 63, 68-69 (2010)).
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PBM] contracts’ arbitration provisions is an arbitrability question.” 	ECF No. 238
at 5-6 (cleaned up). 	The Court cited to
Grabowski v. PlatePass, L.L.C., an out-of-
circuit 	decision 	that 	collected 	cases 	from 	other 	circuits 	that 	supported 	this
proposition. No. 20 C 7003, 2021 WL 1962379, at *4 (N.D. Ill. May 17, 2021) (citing
Swiger v. Rosette, 989 F.3d 501, 507 (6th Cir. 2021);
Eckert/Wordell Architects, Inc.
v. FJM Props. Of Willmar, LLC, 756 F.3d 1098, 1100 (8th Cir. 2014);
Brittania-U
Nigeria, Ltd. v. Chevron USA, Inc., 866 F.3d 709, 715 (5th Cir. 2017);
Contec Corp. v.
Remote Sol., Co., 398 F.3d 205, 211 (2d Cir. 2005)).
In fairness, the Court relied on those decisions because, up until that point, the
First Circuit had yet to squarely address the issue.17 The Court therefore concluded
that, because some of the TPP-PBM arbitration agreements contained delegation
clauses, the parties to those agreements had delegated to an arbitrator the issue over
whether CVS could compel arbitration as a nonparty. ECF No. 238 at 8. Relying on
Henry Schein, the Court stated that it was obligated to “respect those delegations”
and determined that it could not decide this threshold issue itself.
	Id. (citing
Henry
Schein, 586 U.S. at 65).
But the legal landscape has shifted since
Morales-Posada was decided. 	The
First Circuit clarified the holding in
Henry Schein and explained that deference to
17 Since then, not only has the First Circuit determined that federal courts
can
in fact determine whether nonsignatories can compel arbitration agreements in the
first place,
see Morales-Posada, 141 F.4th at 309-10, but the Seventh Circuit (which
binds the U.S. District Court for the Northern District of Illinois) has also reached
the same conclusion.
	See, e.g.,
CCC Intelligent Sols. Inc. v. Tractable Inc., 36 F.4th
721, 723 (7th Cir. 2022);
K.F.C. v. Snap Inc., 29 F.4th 835, 837 (7th Cir. 2022).
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the arbitrator is owed on questions of arbitrability only where the
parties to the
arbitration agreement are concerned.
Morales-Posada, 141 F.4th at 309. It held that,
“as a general rule, contractual agreements bind only the parties to the agreement and
may be enforced only by those parties.”
	Id. (citing
McCarthy, 22 F.3d at 362). 	By
definition, 	CVS 	is 	neither 	bound 	by 	nor 	automatically 	entitled 	to 	enforce 	an
arbitration agreement to which it is not a party.
Id. Likewise, CVS cannot ordinarily
benefit from a delegation provision to a contract it has not signed.
Id. at 310-11.
The First Circuit made clear that nonsignatories must
first establish their
right to enforce a delegation clause through one or more of the “traditional principles”
of contract law that permit nonsignatory enforcement.
	Id. at 309-10 (citing
Arthur
Andersen, 556 U.S. at 631). In other words, CVS may invoke the delegation clauses
contained in the TPP-PBM contracts
only if it can explain how it overcomes the
general rule that “contractual agreements bind only the parties to the agreement and
may be enforced only by those parties.”
	Id. (citing
McCarthy, 22 F.3d at 362). 	And
whether a nonsignatory like CVS can make this showing is squarely an issue for this
Court, rather than an arbitrator, to decide.
	Id. at 311 (affirming district court’s
decision to decide for itself the issue of nonsignatory enforcement of a delegation
provision rather than sending the issue to an arbitrator to decide).
To sum up, the law of the circuit has changed. Previously, the Court held that
it was without authority to determine whether CVS could, as a nonsignatory, enforce
the delegation provisions contained in the TPP-PBM contracts. 	Now, the First
Circuit has clarified that federal courts do in fact possess this authority. This merits
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reconsideration of the Court’s prior Arbitration Orders.
	See De Giovanni, 968 F.
Supp. 2d at 450;
Allen, 573 F.3d at 53 (holding that reconsideration of a prior
interlocutory order is appropriate where “there has been an intervening change in
the law”).
As such, the Court GRANTS Plaintiffs’ motion. 	ECF No. 273. 	Applying the
most up-to-date law of the First Circuit, the Court must now decide whether CVS
may, as a nonsignatory, enforce the delegation provisions contained in the TPP-PBM
contracts.
3. 	Whether CVS Is Entitled to Nonsignatory Enforcement
a. 	CVS Cannot Apply the “Prima Facie” Standard
As a preliminary matter, CVS argues that, under
Morales-Posada, it can
establish its right to nonsignatory enforcement by merely making a “prima facie or
presumptive showing” that it is entitled to invoke the at-issue delegation clauses.
ECF No. 279 at 14; ECF No. 271 at 7-9. 	CVS submits that this showing is “‘not
onerous,’ but rather ‘modest,’ ‘a low standard,’ and ‘quite easy to meet.’” ECF No. 271
at 8 (quoting
Dusel v. Factory Mut. Ins. Co., 52 F.4th 495, 504 (1st Cir. 2022) (internal
quotations and citations omitted)). The company also claims that it “easily meets this
low bar.”
Id. at 9 (cleaned up).
But CVS misconstrues the holding in
Morales-Posada. As Plaintiffs correctly
point out,
see ECF No. 273 at 15, the First Circuit never created such a “prima facie
test.” The court only discussed the “prima facie” standard in the context of its earlier
decision in
Apollo Computer, Inc. v. Berg, 886 F.2d 469 (1st Cir. 1989).
	Morales-
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Posada, 141 F.4th at 310.
Berg involved defendants “who were not signatories to the
contract, but who were
assigned a signatory’s contractual rights” and who could
therefore “compel arbitration under the contract’s delegation clause.”
	Id. (emphasis
added) (citing
Berg, 886 F.2d at 473). The contract at issue in
Berg included language
that 	delegated 	arbitrability 	disputes 	to 	arbitrators 	so 	long 	as 	a 	“
prima 	facie
agreement to arbitrate” existed. 886 F.2d at 473 (quoting language from contract).
The First Circuit recognized in
Morales-Posada that it only applied the “prima
facie” standard in
Berg because it was “[f]ollowing the parties’ lead” and such
language was specifically “incorporated into that contract.” 141 F.4th at 310 (citing
Berg, 886 F.2d at 473). 	There was a dispute over whether the “right [to compel
arbitration] was validly
assigned to the defendants,” but the First Circuit concluded
that the defendants put forth “prima facie evidence” to show that “an
assignment had
in fact occurred.”
Id. (emphasis added) (citing
Berg, 886 F.2d at 473).
The contracts at issue in this case, however, differ from the one in
Berg in two
important respects. First, the Plaintiffs note—and CVS does not deny—that none of
the TPP-PBM contracts incorporate or make reference to the “prima facie” language
included in the
Berg contract. ECF No. 273 at 15; ECF No. 283 at 5-6. Second, both
parties 	acknowledge 	that, 	unlike 	the 	defendants 	in
	Berg, 	CVS 	has 	not 	been
“assigned” the right to enforce the delegation clauses. 	ECF No. 273 at 14; ECF
No. 279 at 13. 	So, if the First Circuit determined that the defendants in
Berg
presented “prima facie evidence” to establish that “an assignment had in fact
occurred,” then it makes little sense to hold CVS to the same standard when: (1) no
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language in any of the TPP-PBM contracts utilizes the words “prima facie”; and (2)
the principle of “assignment” is not at all implicated in this case.
	Morales-Posada,
141 F.4th at 310. Put another way, CVS’s invocation of
Berg “does not aid its cause.”
Id.
b. 	Nonsignatory Enforcement Is Not a “Low Bar”
The question then becomes: If not by meeting this self-created “prima facie”
standard, then how may CVS show that it is entitled to enforce the delegation clauses
contained in the TPP-PBM contracts? Well, for starters, CVS may
not simply insist
on the Court looking to the “underlying arbitration agreement[s] and the applicable
arbitral rules to determine whether a non-signatory can invoke a delegation clause.”
ECF No. 279 at 14. 	Each of the arbitration agreements within the TPP-PBM
contracts incorporate the rules of either: (1) the American Arbitration Association
(“AAA”); (2) the Judicial Arbitration and Mediation Services (“JAMS”); or (3) the
American Health Law Association (“AHLA”).
	Id. at 14-15. And under each of those
rules, arbitrators have broad authority to decide questions of arbitrability.18
Id. at 15.
18 Rule 7(a) of the AAA Commercial Arbitration Rules & Mediation Procedures
provides that: “The arbitrator shall have the power to rule on his or her own
jurisdiction, including any objections with respect to the existence, scope, or validity
of the arbitration agreement or to the arbitrability of any claim or counterclaim,
without any need to refer such matters first to a court.” Am. Arb. Ass’n, Commercial
Arbitration 	Rules 	& 	Mediation 	Procedures 	14 	(2022),
https://www.adr.org/media/qielmf0g/2025_commercialrules_web.pdf.
Rule 11(b) of the JAMS Comprehensive Arbitration Rules & Procedures
provides that: “Jurisdictional and arbitrability disputes, including disputes over the
formation, existence, validity, interpretation or scope of the agreement under which
Arbitration is sought, and who are proper Parties to the Arbitration, shall be
submitted to and ruled on by the Arbitrator. 	The Arbitrator has the authority to
determine jurisdiction and arbitrability issues as a preliminary matter.” 	JAMS,
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There is no doubt that the Court must respect the decision of the parties to a contract
to delegate questions of arbitrability to the arbitrator.
	See, e.g.,
Henry Schein, 586
U.S. at 65, 71;
Bossé v. N.Y. Life Ins. Co., 992 F.3d 20, 29 (1st Cir. 2021) (concerning
delegation of arbitrability issues to an AAA arbitrator);
Patton v. Johnson, 915 F.3d
827, 835-36 (1st Cir. 2019) (concerning delegation of arbitrability issues to a JAMS
arbitrator).
But again, as the First Circuit has emphasized, this level of deference extends
only to the
parties to the arbitration agreement.
	Morales-Posada, 141 F.4th at 309
(“Cultural Care appears to be contending that we must enforce the claimed delegation
agreement in the ICL Contract as we would enforce a delegation agreement in an
ordinary case involving both of the parties to the contract containing that agreement.
But the ICL Contract embodies no decision reached between the only parties to this
suit -- Cultural Care and the plaintiffs. Thus, Cultural Care’s request that we enforce
the delegation agreement in the ICL Contract is not a request that we respect
the
parties’ decision as embodied in the contract.” (emphasis in original) (internal
quotations and citations omitted)). 	As a nonsignatory to the TPP-PBM contracts,
CVS must
	first establish, to the Court’s satisfaction, that it has the right to
Comprehensive 	Arbitration 	Rules 	& 	Procedures 	(2021),
https://www.jamsadr.com/rules-comprehensive-arbitration.
Section 4.1(a) of the AHLA Rules of Procedure for Commercial Arbitration
provides that: “An arbitrator has the power to: determine his or her jurisdiction,
powers, and duties under an arbitration clause.” 	Am. Health L. Ass’n, Rules of
Procedure 	for 	Commercial 	Arbitration 	(2025),
https://www.americanhealthlaw.org/dispute-resolution-services/arbitration/rules-of-
procedure-for-arbitration/commercial-arbitration.
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nonsignatory enforcement, and it must do so
before it can benefit from the language
contained in the contracts’ underlying arbitration agreements and their applicable
arbitral rules.
Id. at 309-10.
The Court also finds it unlikely that this is a “low bar” that CVS must meet, as
the company suggests. ECF No. 271 at 9;
see also id. at 8 (arguing that the requisite
showing is “modest,” “a low standard,” and “quite easy to meet”). Quite the contrary,
the First Circuit recognized that establishing nonsignatory enforcement is a “complex
issue” that requires “serious effort” on the part of the nonsignatory.
Morales-Posada,
141 F.4th at 311 (quoting
Rivera-Corraliza v. Morales, 794 F.3d 208, 224 (1st Cir.
2015)). After all, the nonsignatory must “overcome” the “general rule that a contract
does not grant enforceable rights to nonsignatories.”
	Id. at 310 (quoting
McCarthy,
22 F.3d at 362).
c. 	Application of Equitable Estoppel
So again, how might CVS demonstrate that it can enforce the delegation
clauses contained in the TPP-PBM contracts? 	As both parties agree, equitable
estoppel is one such basis that permits nonsignatory enforcement of delegation
clauses. ECF No. 279 at 12-13; ECF No. 283 at 5. In fact, as
Morales-Posada made
clear, 	equitable 	estoppel 	is 	one 	of 	the 	“‘traditional 	principles’ 	of 	contract 	law
permit[ting] nonsignatory enforcement in a given case.” 141 F.4th at 309-10 (quoting
Arthur Andersen, 556 U.S. at 631).
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In determining whether a nonsignatory is entitled to enforce a particular
arbitration 	agreement 19 	through 	equitable 	estoppel, 	the 	Supreme 	Court 	has
instructed courts to apply the equitable estoppel principles under the state law that
governs the agreement.
	See Arthur Andersen, 556 U.S. at 632;
GE Energy Power
Conversion Fr. SAS, Corp. v. Outokumpu Stainless USA, LLC, 590 U.S. 432, 437
(2020) (recognizing that a nonsignatory may rely on “state-law equitable estoppel
doctrines to enforce an arbitration agreement”). 	Notably, because this class action
encompasses thousands of contracts that implicate the law of dozens of states, the
Court must conduct the equitable estoppel analysis on a state-by-state basis.
The parties disagree over how the Court should proceed. CVS claims that the
state-by-state analysis will be a “complex[ ] … endeavor” that risks undermining the
“predominance” requirement of the class action under Rule 23 of the Federal Rules of
Civil Procedure. ECF No. 279 at 17. If the Court proceeds with the equitable estoppel
analysis, CVS has requested a supplemental briefing schedule so that it can submit
its positions on each state’s law.
	Id. at 17 n.12. 	Plaintiffs counter and assert that
CVS is “invent[ing] complexity where none exists,” and the Court can decide the
question of nonsignatory enforcement itself without further delay. ECF No. 283 at 7.
Plaintiffs 	have 	the 	better 	of 	the 	argument. 	Judge 	Smith 	previously
contemplated issues of predominance when he first certified this class in 2021.
	See
ECF No. 179 at 216, 219-20. 	The Court’s certification order expressly noted that
19 Though the Court uses the term “arbitration agreements” here, it is
important to note that “[a] delegation clause is merely a specialized type of arbitration
agreement.”
New Prime, Inc. v. Oliveira, 586 U.S. 105, 112 (2019).
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“variations 	in 	the 	underlying 	state 	law 	claims 	do
	not 	undermine 	Plaintiffs’
certification efforts.”
	Id. at 220 (emphasis added). 	The Court observed that the
present case is “not unlike numerous other nationwide class actions that courts have
certified.”
Id. (citing
In re Loestrin 24 FE Antitrust Litig., 410 F. Supp. 3d 352, 375-
76, 406-07 (D.R.I. 2019) (certifying class action brought under numerous state laws
and 	analyzing 	viability 	of 	pharmaceutical 	antitrust 	claims 	under 	those 	state
statutes)). 	That point remains the same here. 	For the purposes of this order, that
the Court needs to analyze the equitable estoppel principles of various states does not
undermine Rule 23’s predominance requirement.
Fortunately, the Court need not start its equitable estoppel analysis from
scratch. 	As Plaintiffs note, the parties have already done the heavy lifting of
identifying, in table form, the governing state law for each contract that Caremark
and MedImpact have with TPP absent class members. ECF No. 283 at 3 n.8 (citing
ECF Nos. 212-2, 254-2). 	The Court has reviewed those tables and can confirm that
the contracts with delegation clauses invoke the law of 33 states and the District of
Columbia.
In addition, in his previous order, Judge Smith identified the equitable
estoppel tests employed by 16 of these states.20
See ECF No. 238 at 8-24. To be sure,
in that order, Judge Smith was conducting the equitable estoppel analysis for the
TPP-PBR contracts that did
not contain delegation clauses. 	However, as relevant
20 Judge Smith also identified the equitable estoppel tests used by Alabama
and Idaho, but those states are not at issue here because none of the TPP-PBM
contracts that invoke their state laws contain delegation clauses.
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here, there are TPP-PBR contracts
with delegation clauses that apply the law of those
same 16 states.
All that is left for this Court to do is to identify the equitable estoppel law of
the remaining 17 states, as well as the District of Columbia. From there, the Court
will group the claims into “Category 1 Claims” and “Category 2 Claims.” Category 1
Claims are those claims governed by states that apply the “rely on” test 21 and/or
“concerted misconduct” test22 for equitable estoppel.
See ECF No. 238 at 9-11, 21-22.
As will be explained in more detail below, CVS is entitled to enforce the delegation
clauses associated with these claims, and these claims must therefore be dismissed
from this lawsuit.
By contrast, Category 2 Claims are those claims governed by states that
employ the “detrimental reliance” test, 23 or that preclude nonsignatories from
enforcing arbitration agreements absent language in the agreements that expressly
contemplates nonsignatory enforcement.
See ECF No. 238 at 14, 22-23. As discussed
21 Under the “rely on” test, “equitable estoppel applies when the signatory to a
written agreement containing an arbitration clause must rely on the terms of the
written agreement in asserting its claims against the nonsignatory.”
	Grigson v.
Creative Artists Agency, L.L.C., 210 F.3d 524, 527 (5th Cir. 2000) (quoting
MS Dealer
Serv. Corp. v. Franklin, 177 F.3d 942, 947 (11th Cir. 1999)).
22 Under the “concerted misconduct” test, “equitable estoppel is warranted
when the signatory to the contract containing an arbitration clause raises allegations
of substantially interdependent and concerted misconduct by both the nonsignatory
and one or more of the signatories to the contract.”
Grigson, 210 F.3d at 527 (quoting
MS Dealer, 177 F.3d at 947).
23 Under the “detrimental reliance” test, a claim of equitable estoppel exists
where the nonsignatory shows that it “detrimentally relied on the statements or
conduct of the party signatory to an arbitration agreement who seeks to avoid
arbitration with the [nonsignatory].”
	Andreoli v. Comcast Cable Commc’ns Mgmt.,
LLC, No. 3:19-cv-00954 (JAM), 2020 WL 1242919, at *4 (D. Conn. Mar. 16, 2020).
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below, CVS is
not entitled to enforce the delegation clauses associated with these
claims. These claims can therefore proceed in court.
i. 	Category 1 Claims
As noted by Judge Smith, 12 of the states at issue in this case apply a
combination 	of 	the 	“rely 	on” 	and/or 	“concerted 	misconduct” 	tests: 	California,
Delaware, 	Florida, 	Georgia, 	Hawaii, 	Iowa, 	Massachusetts, 	New 	York, 	Ohio,
Tennessee, Texas, and Virginia.
See, e.g.,
Pac. Fertility Cases, 301 Cal. Rptr. 3d 611,
616, 619-21 (Cal. Ct. App. 2022) (applying both tests);
Wilcox & Fetzer, Ltd. v. Corbett
& Wilcox, No. Civ.A.2037-N, 2006 WL 2473665, at *5-6 (Del. Ch. Aug. 22, 2006)
(applying “concerted misconduct” test);
Greene v. Johnson, 276 So. 3d 527, 530-31
(Fla. Dist. Ct. App. 2019) (applying “concerted misconduct” test);
Ord. Homes, LLC v.
Iverson, 685 S.E.2d 304, 310 (Ga. 2009) (applying both tests);
Luke v. Gentry Realty,
Ltd., 96 P.3d 261, 268 (Haw. 2004) (applying both tests);
Wells Enters., Inc. v.
Olympic Ice Cream, 903 F. Supp. 2d 740, 746, 748-50 (N.D. Iowa 2012) (applying “rely
on” test);
Machado v. System4 LLC, 28 N.E.3d 401, 409-13 (Mass. 2015) (applying
both tests);
Hoffman v. Finger Lakes Instrumentation, LLC, 789 N.Y.S.2d 410, 415
(N.Y. Sup. Ct. 2005) (applying both tests);
Schoenfeld v. Mercedes-Benz USA, LLC,
532 F. Supp. 3d 506, 512-13 (S.D. Ohio 2021) (recognizing both but applying “rely on”
test);
Blue Water Bay at Ctr. Hill, LLC v. Hasty, No. M201602382COAR3CV, 2017
WL 5665410, at *10, *14-15 n.12 (Tenn. Ct. App. Nov. 27, 2017) (recognizing both but
applying “rely on” test);
G.T. Leach Builders, LLC v. Sapphire V.P., LP, 458 S.W.3d
502, 527-28 (Tex. 2015) (applying “rely on” test);
Decisive Analytics Corp. v. Chikar,
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No. CL 2008-6171, 2008 WL 6759965, at *5-8 (Va. Cir. July 15, 2008) (recognizing
both but applying “rely on” test).
This Court has confirmed that an additional 15 states, as well as the District
of Columbia, employ a combination of the “rely on” and/or “concerted misconduct”
tests: Arizona, the District of Columbia, Kentucky, Louisiana, Maryland, Michigan,
Minnesota, Missouri, Nevada, North Carolina, Pennsylvania, Rhode Island, South
Dakota, Utah, Washington, and West Virginia.24
See, e.g.,
Sun Valley Ranch 308 Ltd.
P’ship ex rel. Englewood Props., Inc. v. Robson, 294 P.3d 125, 134-35 (Ariz. Ct. App.
2012) (applying “rely on” test);
Riley v. BMO Harris Bank, N.A., 61 F. Supp. 3d 92,
98-99 (D.D.C. 2014) (applying “rely on” test);
Orvil Nelson & Co., Inc. v. All Am.
Homes of Tenn., No. 5:07-cv-239, 2008 WL 11347938, at *6 (E.D. Ky. April 3, 2008)
(recognizing both but applying “concerted misconduct” test);
Sturdy Built Homes,
L.L.C. v. Carl E. Woodward L.L.C., 82 So. 3d 473, 478 (La. Ct. App. 2011) (applying
“rely on” test);
Case Handyman and Remodeling Servs., LLC v. Schuele, 959 A.2d
833, 844 (Md. App. Ct. 2008),
vacated sub nom. on other grounds,
Schuele v. Case
Handyman & Remodeling Servs., LLC, 989 A.2d 210 (Md. 2010) (applying “rely on”
test);
Vascular Mgmt. Servs. of Novi, LLC v. EMG Partners, LLC, No. 360368, 2023
24 Regarding the “rely on” test, some states do not expressly refer to their tests
by that name. Washington State, for example, refers to its test as “intertwined claims
estoppel.”
David Terry Invs., 463 P.3d at 124. Ohio calls its test “alternate estoppel
theory.”
	I Sports v. IMG Worldwide, Inc., 813 N.E.2d 4, 8 (Ohio Ct. App. 2004).
Pennsylvania’s equitable estoppel rule uses “inextricably entwined” language.
White
v. Sunoco, Inc., 870 F.3d 257, 263 n.5 (3d Cir. 2017) (applying Pennsylvania law).
However, a close review of each of these tests shows that they command the same
result as the “rely on” test.
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WL 2436801, at *9 (Mich. Ct. App. Mar. 9, 2023) (applying “rely on” test);
Litke v.
Home Heritage Holdings, LLC, No. 49-CV-24-120, 2025 WL 1554181, at *4, *7 (Minn.
Ct. App. 2025) (applying both tests);
Pruteanu v. Team Select Home Care of Mo., Inc.,
No. 4:18-CV-01640-AGF, 2019 WL 7195086, at *5 n.3, *6 (E.D. Mo. Dec. 26, 2019)
(applying “rely on” test);
RUAG Ammotec GmbH v. Archon Firearms, Inc., 538 P.3d
428, 435 (Nev. 2023) (applying both tests);
Smith Jamison Constr. v. APAC-Atl., Inc.,
811 S.E.2d 635, 638 (N.C. Ct. App. 2018) (applying “rely on” test);
Elwyn v. DeLuca,
48 A.3d 457, 463 (Pa. Super. Ct. 2012) (applying “rely on” test);
Noye v. Johnson &
Johnson Servs., Inc., 765 F. App’x 742, 746-47 (3d Cir. 2019) (applying Pennsylvania
law and, though noting that its test differs from other states, concluding that it would
“produce the same result” as the “rely on” or “concerted misconduct” tests);
Defontes
v. Dell Computs. Corp., No. C.A. PC 03-2636, 2004 WL 253560, at *9 (R.I. Super. Ct.
Jan. 29, 2004),
aff’d sub nom.,
DeFontes v. Dell, Inc., 984 A.2d 1061 (R.I. 2009)
(applying “concerted misconduct” test);
Rossi Fine Jewelers, Inc. v. Gunderson, 648
N.W.2d 812, 815 (S.D. 2002) (applying “concerted misconduct” test);
CollegeAmerica
Servs., Inc. v. W. Benefit Sols., LLC, No. 2:11CV01208 DS, 2012 WL 1559745, at *3-
4 (D. Utah May 2, 2012) (applying both tests);
David Terry Invs., LLC-PRC v.
Headwaters Dev. Grp. LLC, 463 P.3d 117, 124 (Wash. Ct. App. 2020) (applying “rely
on” test);
Bluestem Brands, Inc. v. Shade, 805 S.E.2d 805, 814 (W. Va. 2017) (applying
“rely on” test).
These Category 1 Claims, which make up a portion of the Caremark and
MedImpact Subclasses that Judge Smith previously ordered stayed,
see ECF No. 238
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at 8, must now be dismissed from this lawsuit. As Judge Smith previously held, the
application of equitable estoppel under the “rely on” and “concerted misconduct” tests
preclude litigation of those claims.
	Id. at 15-20, 22-23 (“[T]he Court finds that the
TPPs … governed by [rely on/concerted misconduct] law are equitably estopped from
avoiding 	arbitration 	of 	their 	claims 	against 	CVS, 	and 	those 	claims 	are
DISMISSED.”). These tests permit CVS to invoke equitable estoppel and enforce the
delegation clauses contained in their respective TPP-PBR contracts.
Plaintiffs appear to concede that claims categorized as “Category 1 Claims”
should receive the same treatment as the claims that Judge Smith previously placed
into this category.
	See ECF No. 283 at 3 n.8 (stating that “the analysis turns on
which state law governs the contract, and which equitable estoppel doctrine is applied
by that state,” and that states can be grouped into a category that uses “the ‘rely on’
and/or concerted misconduct’ tests”);
see also ECF No. 273 at 17.
Accordingly, the Court will lift the stay and remove from the Caremark and
MedImpact Subclasses the claims of absent TPP class members with delegated
arbitration agreements governed by the law of the following 28 jurisdictions: Arizona,
California, Delaware, the District of Columbia, Florida, Georgia, Hawaii, Iowa,
Kentucky, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Missouri,
Nevada, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, South
Dakota, Tennessee, Texas, Utah, Virginia, Washington, and West Virginia. 	These
claims are DISMISSED.
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ii. 	Category 2 Claims
Turning now to the Category 2 Claims, Judge Smith previously observed that
4 states apply the “detrimental reliance” test for equitable estoppel: Colorado,
Illinois,25 Indiana, and New Jersey.
See, e.g.,
Santich v. VCG Holding Corp., 443 P.3d
62, 63-65 (Colo. 2019);
Ervin v. Nokia, Inc., 812 N.E.2d 534, 541 (Ill. App. Ct. 2004);
Doe v. Carmel Operator, LLC, 160 N.E.3d 518, 525 (Ind. 2021);
Hirsch v. Amper Fin.
Servs., LLC, 71 A.3d 849, 858 (N.J. 2013).
The Court has confirmed that one additional state at issue in this case,
Wisconsin, employs the “detrimental reliance” test for equitable estoppel.
See Pagan
v. Integrity Sol. Servs., Inc., 42 F. Supp. 3d 932, 934 (E.D. Wis. 2014);
see also
25 The parties devote a sizable portion of their briefs to debating which test is
applied by Illinois in particular.
See ECF No. 269-1 at 10-11, 16; ECF No. 274 at 13-
15; ECF No. 283 at 7-8. 	This is not surprising given that more than 1,700 of the
contracts at issue in this case are governed by Illinois law.
CVS argues that the “detrimental reliance” test does not apply under Illinois
law because the Illinois Supreme Court has not definitively held that that is the test
to be used for nonsignatory enforcement of an arbitration agreement under a theory
of equitable estoppel. 	ECF No. 269-1 at 10-11. 	While it is true that the Illinois
Supreme Court has not made such a determination, the First Circuit has endorsed
the following of “the decisions of state intermediate appellate courts in the absence of
convincing evidence that the state’s highest court would decide otherwise.”
	Torres-
Ronda v. Nationwide Mut. Ins. Co., 18 F.4th 80, 84 (1st Cir. 2021) (citing
Candelario
Del Moral v. UBS Fin. Servs. Inc. of P.R., 699 F.3d 93, 103 n.7 (1st Cir. 2012)).
In this case, the Appellate Court of Illinois has held that the “detrimental
reliance” test applies under Illinois law.
See Ervin, 812 N.E.2d at 541. Not only that,
the Seventh Circuit, in interpreting Illinois law, has stated that “the Illinois Supreme
Court has reaffirmed its longstanding detrimental reliance standard in equitable
estoppel claims…. We hardly need to predict where it stands.”
	Sosa v. Onfido, Inc.,
8 F.4th 631, 641 (7th Cir. 2021) (citing
In re Scarlett Z.-D., 28 N.E.3d 776, 785 (Ill.
2015)). 	Accordingly, 	the 	Court 	is 	satisfied 	with 	its 	determination 	that 	the
“detrimental reliance” test applies under Illinois law.
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Scheurer v. Fromm Fam. Foods LLC, 863 F.3d 748, 753 (7th Cir. 2017) (applying
Wisconsin law).
The Court has also concluded that the state of Oregon applies a different
approach that requires placing the language of the arbitration agreement at the
“center of the inquiry.”
Livingston v. Metro. Pediatrics, LLC, 227 P.3d 796, 805 (Or.
Ct. App. 2010). Oregon permits nonsignatories to invoke arbitration only where the
language of the arbitration agreement is “broad enough to encompass claims against
nonsignatories and to support the interpretation that the parties intended that
[nonsignatories] could avail themselves of its terms.”26
	Id.;
	see also Berger v.
DIRECTV, Inc., No. 3:14-cv-01661-PK, 2015 WL 5686894, at *4 (D. Or. Sept. 22,
2015).
These Category 2 Claims make up the other portion of the Caremark and
MedImpact Subclasses that Judge Smith previously ordered stayed.
	See ECF
No. 238 at 8. 	However, unlike the Category 1 Claims, Judge Smith concluded that
these claims could proceed in federal court because CVS had not shown detrimental
reliance and because the contracts at issue did not contemplate nonsignatory
enforcement of the contracts’ ADR provisions.
	Id. at 14, 23. As such, CVS could not
26 This test closely resembles the one used by Alabama, which Judge Smith
noted applied a different approach from the other equitable estoppel tests.
See ECF
No. 238 at 22 (citing
Smith v. Mark Dodge, Inc., 934 So.2d 375, 380-81 (Ala. 2006)
(requiring, under Alabama law, that arbitration agreements contain “sufficiently
broad language that indicates that the nonsignatory was contemplated as a party”)).
Again, Alabama is not at issue here because none of the TPP-PBM contracts that
invoke Alabama law contain delegation clauses.
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compel the TPPs with Category 2 Claims to arbitrate their disputes. 	This Court
reaches the same conclusion.
Accordingly, the Court will lift the stay and remove from the Caremark and
MedImpact Subclasses the claims of absent TPP class members with delegated
arbitration agreements governed by the law of the following 6 jurisdictions: Colorado,
Illinois, Indiana, New Jersey, Oregon, and Wisconsin. These claims may proceed.
In addition, because all absent TPP class members have been removed from
the Caremark and MedImpact Subclasses, the Court will eliminate the Subclasses.
II. 	CONCLUSION
For the reasons stated, the Court GRANTS Plaintiffs’ Motion (ECF No. 273).
Upon reconsideration of its prior Arbitration Orders,
see ECF No. 238; Text Order
(Feb. 14, 2025), the Court will modify its rulings as follows:
• 	The Court’s earlier stay is LIFTED;
• 	The claims of TPPs with delegated arbitration agreements governed by
Arizona, California, Delaware, the District of Columbia, Florida, Georgia,
Hawaii, Iowa, Kentucky, Louisiana, Maryland, Massachusetts, Michigan,
Minnesota, 	Missouri, 	Nevada, 	New 	York, 	North 	Carolina, 	Ohio,
Pennsylvania, 	Rhode 	Island, 	South 	Dakota, 	Tennessee, 	Texas, 	Utah,
Virginia, Washington, and West Virginia law are DISMISSED;
• 	The claims of TPPs with delegated arbitration agreements governed by
Colorado, Illinois, Indiana, New Jersey, Oregon, and Wisconsin law may
proceed; and
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• 	The Caremark and MedImpact Subclasses are ELIMINATED.27
IT IS SO ORDERED.
s/John J. McConnell, Jr.
_________________________________
JOHN J. MCCONNELL, JR.
Chief Judge
United States District Court
February 3, 2026
27 The Court notes that this case was filed 10 years ago this week. 	As the
Reverend Dr. Martin Luther King, Jr. stated in his
Letter from Birmingham Jail:
“We must come to see, with one of our distinguished jurists, that ‘justice too long
delayed is justice denied.’” 	Martin Luther King, Jr.,
Letter from Birmingham
Jail (1963). The resolution of this case is long overdue.
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