Corcoran et al v. CVS Health Corporation

Northern District of California, cand-4:2015-cv-03504

Exhibit K

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Exhibit K Filed in The District Court of Travis County, Texas | 19 2019 RNEY GEN KERA H IN 09:31 to m. IS At Velva L. Price, District Clerk KEN PAXTON ATTORNEY GENERAL OF TEXAS June 19, 2019 VIA ELECTRONIC MAIL Ms. Enu Mainigi Mr. Grant A. Geyerman Williams & Connolly LLP 725 12th Street, N.W. Washington, D.C. 20005 RE: The State of Texas, ex rel. Myron D. Winkelman and Stephani Martinsen v. CVS Health Corporation et al.; Cause No. D-1-GV-14-000388; in the 126th Judicial District Court of Travis County, Texas. Counsel: This letter ("Rule 11 Settlement Term Letter") is intended to confirm the Parties? agreement regarding the terms for settlement of the claims asserted by the State of Texas ("Texas" or "State") and Relators Myron D. Winkelman and Stephani Martinsen (collectively, "Relators") against your clients, CVS Health Corporation and CVS Pharmacy, Inc. (collectively, "CVS" or "Defendant"), in the above-referenced cause. Specifically, in exchange for the mutual consideration of the terms herein, Texas and Relators on the one hand, and CVS on the other (collectively, the "Parties") agree to the material terms as follows: CVS agrees to pay to the State of Texas the total sum of Twenty-Two Million Dollars ($22,000,000.00), referred to herein as the "Settlement Amount." The Settlement Amount shall be paid within ten (10) days of the execution of the Final Settlement Agreement. CVS expressly acknowledges and agrees that CVS is not entitled to direct or influence the manner in which the State allocates the Settlement Amount. The State may allocate and distribute to the United States Government a pro rata share of the Settlement Amount in accordance with state and federal law, if and only to the extent such allocation is required; provided, however, that the Parties agree that no portion of the Settlement Amount shall be allocated or attributed to the payment of fines, penalties, or other punitive assessments, or to disgorgement of revenues. The Parties agree not to seek to recover attorneys' fees or any other costs from the other side in the above-referenced case. CVS has no responsibility for paying any attorneys' fees or costs borne by Relators in this matter; provided, however that the State and Relators may choose to allocate a portion of the Settlement Amount to cover Relators' attorneys' fees or costs. Post Office Box 12 548, Austin, Texas 78711-2548. (512) 463-2100 • www.texas attorney general.gov Ms. Enu Mainigi Mr. Grant A. Geyerman June 19, 2019 Page 2 CVS denies all liability for the conduct alleged in the State's and Relators' Second Amended Petition. The Final Settlement Agreement shall not include any injunctive provisions. CVS further agrees to submit to the jurisdiction of Texas courts in any proceeding to enforce this Agreement, and that venue for same is proper in Travis County District Court. In consideration of and subject to the terms of this agreement including, but not limited to, payment in full of the Settlement Amount, Texas and Relators agree: (i) to release CVS Health Corporation and CVS Pharmacy, Inc. (and all direct or indirect subsidiaries of either company) for any and all claims concerning or relating to usual and customary prices or 1 Tex. Admin. Code § 355.8544 from January 1, 2005 to the date of the Final Settlement Agreement (to be further defined as "Covered Conduct" in the Final Settlement Agreement); and (ii) to dismissal with prejudice of the above-captioned lawsuit. Upon dismissal with prejudice of the above-captioned lawsuit, no Party shall be entitled to enforce any interlocutory ruling made by the Travis County District Court in the above-captioned lawsuit, and the Parties agree that such rulings shall be of no force or effect in any future dispute involving any Party to this agreement. The Parties further hereby agree that this settlement is subject to and conditioned upon the Parties' execution of a full and final Settlement Agreement ("Final Settlement Agreement") containing additional standard terms consistent with those herein. The Parties shall work in good faith to sign the Final Settlement Agreement no later than thirty (30) days from the date this Rule 11 Settlement Term Letter is signed by all Parties. In the event all Parties have not signed the Final Settlement Agreement thirty (30) days from the date this Rule 11 Settlement Term Letter is signed by all Parties, any Party may seek to enter a judgment based upon the Parties' agreements set forth herein. The Parties agree to cooperate in good faith in the drafting of the additional documents contemplated in this agreement and to take all additional actions that may be reasonably necessary or appropriate to give full force and effect to the terms and intent of this agreement. The Parties further hereby agree that this agreement and settlement is subject to and conditioned upon the approval of the Executive Administration of the OAG, without which it is of no force or effect. Under Texas Rule of Civil Procedure 11, please signify your client's agreement by signing where indicated below. Please contact us if you have any questions. Ms. Enu Mainigi Mr. Grant A. Geyerman June 19, 2019 Page 3 Sincerely, I Cummin Raymond Charles Winter Assistant Attorney General Civil Medicaid Fraud Division Telephone: 512-936-1709 Facsimile: 512-499-0712 Raymond. Winter@oag.texas.gov COUNSEL FOR PLAINTIFF THE STATE OF TEXAS Patuto Patrick J. O'Connell Law Offices of Patrick O'Connell PLLC 2525 Wallingwood Dr. Bldg. 14 Austin, Texas 78701 pat@pjofca.com COUNSEL FOR RELATORS MYRON D. WINKELMAN and STEPHANI MARTINSEN AGREED: Enu Mainigi WILLIAMS & CONNOLLY LLP COUNSEL FOR DEFENDANTS CVS PHARMACY, INC. AND CVS HEALTH CORPORATION