Opinion
12642-12642A Index No. 154379/19 Case No. 2020-02651
12-15-2020
In re EXPRESS SCRIPTS, INC., Petitioner–Appellant, v. METROPOLITAN TRANSIT AUTHORITY, et al., Respondents–Respondents.
Hodgson Russ LLP, New York (Carmine J. Castellano of counsel), for appellant. Baker & Hostetler LLP, New York (Maximillian S. Shifrin of counsel), for Metropolitan Transit Authority and New York City Transit Authority, respondents. Foley & Lardner LLP, New York (Robert A. Scher of counsel), for CaremarkPCS Health, LLC, respondent.
Hodgson Russ LLP, New York (Carmine J. Castellano of counsel), for appellant.
Baker & Hostetler LLP, New York (Maximillian S. Shifrin of counsel), for Metropolitan Transit Authority and New York City Transit Authority, respondents.
Foley & Lardner LLP, New York (Robert A. Scher of counsel), for CaremarkPCS Health, LLC, respondent.
Kapnick, J.P., Mazzarelli, Singh, Kennedy, JJ.
Orders, Supreme Court, New York County (Melissa A. Crane, J.), entered October 17, 2019, which, respectively, denied the petition seeking to annul respondents' determination, dated March 27, 2019, awarding a three-year pharmacy benefits management contract to respondent CVS and dismissed the proceeding brought pursuant to CPLR article 78; and denied petitioner's motion for leave to pursue discovery, unanimously affirmed, without costs.
Petitioner Express Scripts, Inc. (ESI) failed to show that a decision by the Metropolitan Transit Authority (MTA) to forego the competitive bidding process for a new pharmacy benefits manager (PBM) was arbitrary, capricious, or an abuse of power (see CPLR 7803 ; District Council 37, Am. Fedn. of State, County, & Mun. Empls., AFL-CIO v. City of New York, 22 A.D.3d 279, 283–284, 804 N.Y.S.2d 10 [1st Dept. 2005] ; Matter of Pell v. Board of Educ. of Union Free School Dist. No. 1 of Towns of Scarsdale & Mamaroneck, Westchester County, 34 N.Y.2d 222, 230, 356 N.Y.S.2d 833, 313 N.E.2d 321 [1974] ). Article III, paragraph C of the All Agency Service Contract Procurement Guidelines (the Guidelines), which MTA adopted pursuant to New York Public Authorities Law § 2879, allows MTA to forego the competitive selection process if an emergency or other circumstance makes competition impracticable or inappropriate. Here, MTA rationally determined that its dire financial condition, which was exacerbated by its prior three-year PBM contract with ESI that resulted in significant cost overruns, made it impracticable or inappropriate to engage in the competitive selection process (see e.g. Develop Don't Destroy Brooklyn v. Empire State Dev. Corp., 31 A.D.3d 144, 154–155, 816 N.Y.S.2d 424 [1st Dept. 2006] ).
Moreover, the Guidelines do not preclude MTA from inviting proposals from qualified service providers, despite foregoing a formal bidding process, or require that the emergency be declared before seeking these proposals. Thus, MTA's solicitations in January 2019 and its evaluation of proposals from two PBMs did not violate the Guidelines (cf. Matter of ACME Bus Corp. v. Orange County, 28 N.Y.3d 417, 45 N.Y.S.3d 852, 68 N.E.3d 671 [2016] ).
ESI's request for discovery is moot, as MTA's emergency procurement had a rational basis and the petition was properly dismissed. In any event, ESI failed to show that the discovery is "material and necessary to the prosecution or defense of [the] proceeding" ( Stapleton Studios v. City of New York, 7 A.D.3d 273, 275, 776 N.Y.S.2d 46 [1st Dept. 2004] ; accord Matter of Allocca v. Kelly, 44 A.D.3d 308, 309, 844 N.Y.S.2d 195 [1st Dept. 2007] ).