CVS Taps Williams & Connolly to Boost Court Team as Judge Digs Into Aetna Merger
A team from Williams & Connolly recently joined Dechert in advocating for the CVS-Aetna merger, as a judge in Washington raises his concerns.
December 20, 2018 at 06:45 PM
5 minute read
The original version of this story was published on National Law Journal
CVS Health Corp. turned to Williams & Connolly trial lawyers this month as its $69 billion merger with Aetna Inc. faced an unexpected degree of scrutiny from a federal judge, who harangued the companies and the U.S. Justice Department for appearing to treat him as a “rubber stamp operation.”
The hiring of Williams & Connolly partner Enu Mainigi, along with two other lawyers at the firm, followed a hearing at which U.S. District Judge Richard Leon lambasted a Justice Department attorney for keeping him “in the dark” about CVS and Aetna combining their operations before the merger received any formal approval. The Justice Department in October approved the merger, with conditions.
Mainigi, working with Williams & Connolly partners Craig Singer and Jonathan Pitt, co-chairman of the firm's antitrust practice, joined a team from Dechert team that had been representing CVS in the U.S. District Court for the District of Columbia.
CVS declined to comment on the court appearances of additional outside counsel. Mainigi was not immediately reached for comment.
According to Mainigi's profile on the firm's website, she previously defended CVS Caremark in a whistleblower lawsuit accusing the company of Medicare fraud. The CVS subsidiary prevailed against the lawsuit in a Philadelphia federal court, winning summary judgment in a decision that was later upheld by the U.S. Court of Appeals for the Third Circuit.
Leon has suggested that CVS and Aetna keep their operations separate while he reviews their October settlement with the Justice Department, which allowed the $69 billion deal to proceed on the condition that Aetna sell off its Medicare drug plan business.
To address Leon's concerns, CVS and Aetna have volunteered to keep some aspects of their operations separate. Aetna, for instance, is retaining control over its prices and what it sells, and the two companies are maintaining a firewall to prevent the exchange of competitively sensitive information.
At a hearing Tuesday, Leon proposed having an outside compliance monitor ensure that the two companies take those steps to stay apart—a move that would expand the duties of Julie Myers Wood, chief executive of the firm Guidepost Solutions. Wood was appointed earlier to oversee the divestiture of Aetna's prescription drug plan business to WellCare Health Plans Inc.
Mainigi pushed back against Leon's suggestion, saying she was unsure “how easy it would be to have a monitor come in to monitor these particular commitments.”
“And I think it would also—you know, could be a bit more time-consuming than we might want to engage in for not a significant amount of value,” she said.
Leon questioned whether the added task would overly burden Wood.
“Perhaps it's my lack of knowledge or perhaps it's your lack of knowledge that would lead me to think that this wouldn't be really that difficult for her to do,” Leon responded. “I mean, she essentially would be contacting the appropriate parties within the companies to make sure that these four things are continuing to be implemented and then report to the court periodically, say, every 90 days, that they are. I don't view that as a particularly cumbersome or even intricate responsibility. Maybe I'm missing something.”
In a letter to the judge Thursday, Mainigi said there is “no need for an order from this court or oversight from a monitor.” But she said CVS would commit to filing declarations every three months certifying under oath that it was taking steps to keep certain operations apart as the merger proceeds.
Leon has also raised questions about the thoroughness of the Justice Department's review of the deal. The Justice Department has argued that the scope of Leon's review is limited to what antitrust enforcers found problematic about the deal. Citing the Tunney Act, a federal law that subjects merger settlements to court approval, the Justice Department has argued that Leon has the authority to reject the proposed settlement but cannot prevent the two companies from combining their operations in the midst of his review.
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