Taft Indianapolis Team Successfully Defends Client Against Millions in Claims
In September 2021, Taft Indianapolis litigators Jayna Cacioppo and Kimberly DalSanto were not only successful in defending Triplefin, LLC from $7.5 million in claims in an AAA arbitration, but they were also awarded their attorneys’ fees and costs, totaling almost $700,000.
In February 2022, the claimant, Magellan Rx Management, LLC, challenged the arbitration award in Maricopa County Court, arguing that the arbitrator exceeded his authority and ruled on a matter not submitted to him. The Court denied the Motion to Vacate and ordered Triplefin to submit its application for attorneys’ fees.
Triplefin manages pharmaceutical savings card programs for large pharmaceutical companies and contracted with Magellan to serve as its pharmacy benefit manager and push those programs down to the client and pharmacy level. As part of the parties’ contract, Magellan promised to perform in accordance with specified performance guarantees. After repeated performance failures by Magellan, including the failure to track and report its performance on a quarterly basis, Triplefin terminated the contract early for breach. Magellan then filed a Complaint for Arbitration against Triplefin. As part of its claims, Magellan sought $7.5 million in damages against Triplefin, plus punitive damages and its attorney fees. The contract’s dispute resolution clause provided that the losing party would reimburse the prevailing party’s attorneys’ fees and arbitration costs.
The case culminated in a three-day binding arbitration hearing. Taft convinced the arbitrator that the contract did require Magellan to track and report quarterly on its performance, as the agreement incorporated industry standards in the “program design,” and the contract required parties to cure defects “in subsequent quarters.” The arbitrator denied Magellan’s two claims, and awarded Triplefin, as the prevailing party, its full $700,000 in attorney fees and recoverable arbitration costs. The Court invited Triplefin to seek reimbursement for the fees incurred defending the arbitration award.
Magellan then claimed the arbitrator overstepped his authority by awarding Triplefin its fees and costs under the Federal Arbitration Act (9 USC §§ 10 or 11). Magellan argued that because Triplefin had not explicitly asked for attorneys’ fees and costs in the Arbitration Answering Statement, it had waived its right to recover under Delaware law. Following oral argument in August 2022, the Court held that the AAA Commercial Arbitration Rules do not impose a requirement to plead entitlement to attorneys’ fees and expressly allow for attorneys’ fees if it is authorized by their agreement. (Rule R-47(d)).
Indianapolis senior counsel Donald Morgan assisted Cacioppo and DalSanto by writing the winning opposition to summary judgment brief, and researching and drafting the post-closing brief and fee petition. Indianapolis associate Vivek Hadley was brought in to assist in defending against the Motion to Vacate the Arbitration Award.
Cacioppo is a partner and chair of Taft’s Indianapolis Litigation practice group. She concentrates her practice in the areas of complex commercial, civil, and white-collar criminal litigation. DalSanto has experience in all aspects of litigation, and has represented clients in both state and federal courts in cases involving complex business, construction, environmental, and probate litigation matters. Morgan is an experienced appellate advocate, litigator, and advisor to clients who leverages his experience as a former general counsel and in-house litigation chief. Hadley is a litigation associate in Indianapolis with significant experience in commercial litigation and dispositive motions practice.
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