SPRINGFIELD – Supreme Court Justices confirmed the jurisdiction of St. Clair County Circuit Judge Heinz Rudolf to decide whether pharmacists must arbitrate claims against prescription manager Optum Rx.
On Sept. 29, they denied leave for Optum Rx to appeal an appellate court decision finding Rudolf properly denied a motion to stay his proceedings.
Optum Rx, a California business, claimed a California judge must decide whether to compel arbitration.
Keith Short of Alton sued Optum Rx in May 2020, on behalf of 45 independent pharmacy owners in 15 states.
He claimed Optum Rx underpaid reimbursements in violation of its own manuals and statutes of various states.
Last August, Optum Rx moved to compel arbitration and stay the court proceedings pending the outcome.
On Nov. 6, before the pharmacies had filed their opposition to arbitration, Optum Rx filed an arbitration petition at U.S. district court in Los Angeles.
The petition called for an injunction stopping the Illinois action.
On Nov. 16, in Rudolf’s court, Short argued that the arbitration clauses were unconscionable and they didn’t apply retroactively.
On Nov. 25, Optum Rx moved to stay the Illinois proceedings pending a ruling on the California petition.
In January, the pharmacies opposed the motion and Rudolf heard argument.
He denied a stay in March, finding California’s relation to the litigation was no greater than that of Illinois.
He found 12 plaintiffs were Illinois citizens with claims arising from sale of prescription drugs to Illinois citizens.
He found none of the pharmacies in the California action resided or conducted business there.
He found the manuals provided only that the venue for arbitration was California.
He found the manuals didn’t require that a California court adjudicate a motion to compel arbitration.
Optum Rx appealed, and Fifth District judges Judy Cates, Thomas Welch, and Milton Wharton affirmed Rudolf in June.
“While there is no evidence that the defendant filed the federal action to harass the plaintiffs, the filing of the second action has served to delay the proceedings in Illinois, including an expeditious, substantive determination of the arbitration issues,” Cates wrote.
“Regardless of the two pending motions related to compelling arbitration, discovery should proceed absent some factor to the contrary.
“Whether the contracts at issue here contain valid and enforceable arbitration clauses under the Federal Arbitration Act are matters which the circuit court could decide.”
Michael Nester and Douglas Hewitt represent Optum Rx in Illinois.
In Los Angeles, the pharmacies opposed the arbitration petition in March and moved to dismiss the action in April.
District Judge Fernando Aenlle-Rocha set a hearing in May but vacated it, finding he didn’t need oral argument.
He hadn’t ruled as of Oct. 1.