Third Circuit Upholds Dismissal of ERISA Class Action Seeking $65 Million in Drug Rebates
On September 25, 2024, in a precedential opinion, the Third Circuit affirmed the dismissal of a putative class action under the Employee Retirement Income Security Act, 29 U.S.C. § 1001 et seq. (“ERISA”), because the plaintiffs failed to allege the financial harm necessary to establish Article III standing. In Knudsen v. MetLife Grp., Inc., the plaintiffs, former employees of defendant MetLife Group (“MetLife”), alleged they were forced to pay higher health insurance premiums because MetLife retained $65 million in drug rebates. The savings from those rebates, according to the plaintiffs, should have been directed to the MetLife-sponsored benefits plan (the “MetLife Plan”). Had they been, the plaintiffs, along with a proposed class of participants and beneficiaries of the MetLife Plan, would have benefited through: (1) reducing their “ongoing contributions on account of the rebates collected by the [MetLife] Plan[;]” (2) realizing savings in their “co-pays and co-insurance for pharmaceutical benefits[;]” and (3) obtaining drug rebates “in proportion to [participants’] contributions to the [MetLife] Plan.” In July 2023, the district court granted MetLife’s motion to dismiss under Federal Rule of Civil Procedure 12(b)(1), holding that the plaintiffs failed to show they were owed the drug rebates. Specifically, the plaintiffs did not establish a “concrete stake in the outcome of this lawsuit and have not pled facts...