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NEW YORK ST. TEAMSTERS COUN. HEALTH v. CENTRUS PHAR. SOL.

December 10, 2002

NEW YORK STATE TEAMSTERS COUNCIL HEALTH AND HOSPITAL FUND, THROUGH ITS TRUSTEES; J. DAWSON CUNNINGHAM, ANTHONY R. SIMOES, DANIEL W. SCHMIDT, THOMAS K. WOTRING, FRANK POSATO, JOHN BULGARO, BRIAN MASTERSON AND GARY STARING, PLAINTIFFS,
V.
CENTRUS PHARMACY SOLUTIONS, DEFENDANT.



The opinion of the court was delivered by: David N. Hurd, United States District Judge

MEMORANDUM-DECISION and ORDER

I. INTRODUCTION

On May 28, 2002, the plaintiffs commenced the instant action against defendant claiming three causes of action: (1) that defendant Centrus Pharmacy Solutions breached its fiduciary duty to the New York State Teamsters Council Health and Hospital Fund (the "Fund") under the Employee Retirement Income Security Act, 29 U.S.C. § 1001, et. seq. ("ERISA"); (2) that defendant engaged in a prohibited transaction with the Fund in violation of 29 U.S.C. § 1106(a); and (3) state common law breach of contract.

Defendant moves to dismiss the Complaint pursuant to Fed.R.Civ.P. 12(b)(6). Plaintiff opposes. Oral argument was heard on October 25, 2002 in Albany, New York. Decision was reserved.

II. FACTS

The Fund is an employee benefit plan under 29 U.S.C. § 1002(3). (Compl. at ¶ 4.) In or about November 1992, the Fund entered into a Prescription Drug Services Agreement (the "Agreement") with defendant. (Compl. at ¶ 6; Compl. at Ex. A.) Pursuant to the Agreement, defendant was required to:

1. Prepare and issue identification cards to Fund participants;
2. Verify eligibility of participants in the Fund's prescription drug program;
3. Pay the prescription cost of drugs falling within certain categories;
4. Maintain a central pharmacy for the use of Fund members;
5. Process claims and verify that prescriptions fell within the scope of the prescription drug program;

6. Verify the price computation of each prescription;

7. Design and supply forms from the prescription drug program;

8. Submit statements of charges and bi-weekly reports;

9. Maintain records for compliance with Internal Revenue Service regulations and ERISA;

10. Accumulate statistics for the Fund;

11. Provide reports to the Fund;

12. Provide recommendations for changes in the prescription drug program, including adoption of a "preferred drug formulary";
13. Maintain a file for each participant in the Fund's prescription drug program;
14. Provide the Fund with the necessary data to comply with the Health Plan Employer Data and Information Set and National Committee on Quality Assurance guidelines;
15. Create and maintain a computerized system for administering the prescription drug program;
16. Arrange for the payment of qualified prescription drug claims through a ...

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