Osterhaus Pharmacy, Inc. v. Cvs Health Corporation

── Osterhaus Pharmacy, Inc. v. Cvs Health Corporation ── Court: Court of Appeals for the Ninth Circuit Date: May 15, 2026 Category: General NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS MAY 15 2026 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT OSTERHAUS PHARMACY, INC.; No. 25-1467 CAMMACK'S PHARMACIES, INC., D.C. No. doing business as Jims Pharmacy and Home 2:24-cv-01539-JJT Health; JCH PHARMACY HOLDINGS, INC.; CALLS COMMUNITY MEMORANDUM* PHARMACY, LLC, on behalf of themselves and all others similarly situated, Plaintiffs - Appellants, v. CVS HEALTH CORPORATION; CVS PHARMACY, INC.; CAREMARK RX, LLC, formerly known as Caremark RX, Inc.; CAREMARK, LLC; CAREMARKPCS, LLC; CAREMARKPCS HEALTH, LLC; CAREMARK IPA, LLC; CAREMARK PART D SERVICES, LLC; AETNA INC.; AETNA HEALTH HOLDINGS, LLC; AETNA HEALTH MANAGEMENT, LLC, Defendants - Appellees. OSTERHAUS PHARMACY, INC.; No. 25-1843 CAMMACK'S PHARMACIES, INC.; JCH PHARMACY HOLDINGS, INC.; CALLS * This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. COMMUNITY PHARMACY, LLC, D.C. No. 2:24-cv-01539-JJT Plaintiffs - Appellees, v. CVS HEALTH CORPORATION; CVS PHARMACY, INC.; CAREMARK RX, LLC; CAREMARK, LLC; CAREMARKPCS, LLC; CAREMARKPCS HEALTH, LLC; CAREMARK IPA, LLC; CAREMARK PART D SERVICES, LLC; AETNA INC.; AETNA HEALTH HOLDINGS, LLC; AETNA HEALTH MANAGEMENT, LLC, Defendants - Appellants. Appeal from the United States District Court for the District of Arizona John Joseph Tuchi, District Judge, Presiding Argued and Submitted March 3, 2026 Phoenix, Arizona Before: CLIFTON, BYBEE, and MILLER, Circuit Judges. Appellants Osterhaus Pharmacy, Inc., Cammack’s Pharmacies, Inc., JCH Pharmacy Holdings, Inc., and Calls Community Pharmacy, LLC (collectively, “Plaintiffs”) appeal the district court’s order compelling arbitration of Plaintiffs’ claims against Caremark and its affiliates (collectively, “Caremark”) and dismissing the action without prejudice (Case No. 25-1467). Plaintiffs allege anticompetitive conduct by pharmacy benefit managers regarding prescriptions filled by pharmacies under Medicare health plans. Caremark cross-appeals the 2 25-1467 district court’s order declining to enforce the delegation clause of the arbitration agreement (Case No. 25-1843). Caremark filed a motion to compel arbitration of Plaintiffs’ claims based on an arbitration agreement within Caremark’s standard provider agreement. Plaintiffs opposed the motion on the grounds that certain provisions rendered the arbitration agreement substantively unconscionable and thereby unenforceable: (1) the fee- shifting provision, (2) the unilateral modification provision, (3) the uneven remedies provision, (4) the escrow provision, (5) the confidentiality provision, and (6) the limitations provision. Having concluded that the court, instead of an arbitrator, should decide the threshold issue of arbitrability (the subject of the cross-appeal), the district court then considered whether the arbitration agreement was unenforceable as applied to Plaintiffs’ claims. The district court held the uneven remedies provision, escrow provision, and confidentiality provision to be substantively unconscionable. The court concluded that the three unconscionable provisions were severable, and that the other challenged provisions and the agreement as a whole, absent those