A & C Discount Pharmacy, L.L.C. v. Caremark, L.L.C.

A & C Discount Pharmacy LLC d/b/a Medcore Pharmacy (A&C) (plaintiff) entered into an agreement with CaremarkPCS, LLC, and Caremark LLC (collectively, Caremark) (defendants). Caremark was a pharmacy-benefits manager that contracted with its network of pharmacies to administer the benefits program as a service to its health-plan clients. A&C was one of the retail pharmacies in the Caremark network. The parties’ relationship was governed by a provider agreement the parties signed in 2015 that incorporated Caremark’s Provider Manual (the agreement). The agreement had an arbitration clause that required all disputes between the parties, including over arbitrability, to be resolved in binding arbitration under the American Arbitration Association Rules (AAA Rules). The parties’ relationship was also governed by an addendum to the agreement that A&C signed in 2015. In June and August 2015, Caremark informed A&C it was in breach of the addendum for dispensing unauthorized prescriptions and asked A&C to cease and desist or risk being terminated from the Caremark network. A&C filed suit in state court seeking a temporary restraining order (TRO) and temporary and injunctive relief. The state court granted the TRO and scheduled a temporary injunction hearing, but before the hearing could be heard, Caremark removed the case to the United States District Court for the Northern District of Texas. A&C then filed a first amended complaint, an application for TRO, and an application for temporary and permanent injunctive relief. The court allowed the TRO to expire on grounds it was erroneously granted but allowed A&C’s requests for preliminary and injunctive relief to proceed. Caremark moved to compel arbitration, contending it was mandated under the agreement’s arbitration clause. A&C opposed, arguing the AAA Rules allowed it to seek preliminary injunctive relief. Caremark countered, arguing the AAA Rules allowed emergency relief.