CVS’s Abrupt Dismissal Of SCOTUS Case Was Surprise To Opposing Counsel

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By Allison Frankel, REUTERS

November 12, 2021

(Reuters) – Public interest lawyer Gerald Flanagan of Consumer Watchdog was deep in preparations for his first-ever U.S. Supreme Court argument when he saw what he called a “strangely worded” press release issued Wednesday by CVS Pharmacy Inc, Flanagan’s opponent in a case scheduled to be argued on Dec. 7.

The press release touted CVS’s partnership with disability rights groups to assure equal access to healthcare. That’s the issue in Flanagan’s case, in which several John Doe plaintiffs with HIV challenged a CVS policy that required them to receive their medication only by mail, not in person at store pharmacies. CVS’s argument at the Supreme Court has been that the ACA and a 1973 predecessor bar only intentionally discriminatory policies, not those that have a disparate impact on disabled people.

The press release didn’t exactly renounce that argument, but it dropped a bomb in its second paragraph: CVS said it was dropping the Supreme Court case.

That was news to Flanagan and his co-counsel from Whatley Kallas and Public Citizen. “We got no heads up before the press release,” Flanagan said. In fact, he said, the first official word he received about the demise of the case was an email early Thursday morning from CVS counsel Lisa Blatt of Williams & Connolly.

“There is a selfish disappointment,” Flanagan told me Friday. “But that’s irrational. We won unanimously at the 9th [U.S. Circuit Court of Appeals]. I’m relieved that our clients are not at risk of losing at the Supreme Court.”

So why did CVS ditch the case just weeks before oral argument? CVS counsel Blatt declined to comment. CVS spokespeople provided an email statement that’s short on specifics: “We’ve agreed to pursue policy solutions in collaboration with the disability community to help protect access to affordable health plan programs that apply equally to all members,” the statement said.

But Flanagan and Scott Nelson of Public Citizen, who came into the case over the summer to draft the Does’ brief arguing that the law bars both intentional discrimination and policies with a discriminatory impact, offered insights about the case’s unexpected swerve into obsolescence.

The key, they said, appears to have been pressure on the company from disability and civil rights groups, including groups that CVS has longstanding relationships with.

Disability rights advocates made a show of force as amici in the Supreme Court case, arguing that CVS’s position would, in the words of one powerful amicus brief from 17 advocacy groups, “set back the clock on the hard-earned, long-overdue civil rights of people with disabilities.”

Nelson said he noticed that disability advocates also seemed to be ramping up an outreach campaign to inform their members and the public about the CVS case. He and Flanagan both said they didn’t know what the advocacy groups were doing in private, since ethics rules prohibited them from coordinating with amici about approaching the other side. But when they saw CVS’s press release, they realized that some disabilities rights groups that had previously worked with CVS were urging the company behind the scenes to drop the case.

“The optics for the company were just really bad,” Flanagan said.

Nelson said he thinks the strong amicus showing for the Doe plaintiffs helped disability advocates make their case to CVS executives. “I doubt the corporate types understood that their position was so anathema to groups they work with and are supporting,” he said. “The briefs were evidence that the position CVS was taking had far-reaching, structural implications.”

Flanagan said the Justice Department’s brief backing his clients may also have contributed to CVS’s decision to ditch the case. DOJ’s position should not have been a surprise, said Nelson, since the government’s view of the broad scope of anti-discrimination language in the ACA and the Rehabilitation Act of 1973 has been consistent across Democratic and Republican administrations. But Flanagan said that with CVS partnering with the government in COVID-19 testing and vaccination, the company may have been sensitive about splitting with the DOJ in oral arguments at the Supreme Court.

The CVS dismissal is the third of the Supreme Court term, following the dismissal in September of Servotronics, Inc v. Rolls-Royce PLC and the Boeing Company, which addressed whether parties in private foreign arbitration can obtain discovery through U.S. courts; and in October of Pivotal Software, Inc v. Superior Court of California, which presented the question of whether shareholders with Securities Act claims in state court are entitled to early discovery. CVS counsel Blatt also represented Rolls-Royce in the Servotronics case, so she’s seen two cases tossed this term.

CVS did not say in its press release whether it intends to discontinue its policy of distributing AIDS medication only by mail. In response to my query about whether it will settle the Does’ case, a company spokesperson said by email that further proceedings will take place on remand to the trial court. “We’re not discussing our legal strategy at this time,” the spokesperson said.

Flanagan said he’s still hoping the company will settle the Does’ case. In the meantime, he’s going to put in some work on a backyard trellis instead of prepping for a moot court session at the Georgetown Law Supreme Court Institute. “Then I’ll go right on to the next issue,” he said.

Nelson, a longtime Supreme Court advocate, said the ending of the Supreme Court case was a good reminder that litigation is full of surprises. “It’s interesting,” he said, “how you can be doing something for more than 30 years and then have something happen that has never happened to you before.”

Opinions expressed here are those of the author. Reuters News, under the Trust Principles, is committed to integrity, independence and freedom from bias.


Alison Frankel has covered high-stakes commercial litigation as a columnist for Reuters since 2011. A Dartmouth college graduate, she has worked as a journalist in New York covering the legal industry and the law for more than three decades. Before joining Reuters, she was a writer and editor at The American Lawyer. Frankel is the author of Double Eagle: The Epic Story of the World’s Most Valuable Coin.

Mary Kozanian
Mary Kozanian
Mary Kozanian is a Glendale native who graduated with a B.A. in Communication and Public Relations from California State University Los Angeles in 2014. After five years in the Markting industry, she went on to manage a brick & mortar shop that spcialized in manufacturing and distribution throughout Southern California. She has accreditations in marketing, consumer relations, and operations management. In her spare time, she serves as Director of Public Relations for Society of Orphaned Armenian Relief and commits herself to being of service to her community. Outside of work, her passions are theatre and quality time with friends and family.

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