SlideShare a Scribd company logo
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
ORLANDO DIVISION
JAMES P. LARWETH, an individual,
Plaintiff,
vs.
MAGELLAN HEALTH, INC., a Delaware
corporation,
Defendant.
CASE NO:
COMPLAINT AND DEMAND FOR JURY TRIAL
Plaintiff James P. Larweth, through his undersigned counsel, files this Complaint
against Magellan Health, Inc., and in support states:
INTRODUCTION
1. James P. Larweth is a former employee of Magellan Health, Inc., a multi-billion-dollar
healthcare entity. Larweth brokered drug price contracts between pharmaceutical and
insurance companies for Magellan. Larweth was good at his job: He generated tens of millions
of dollars in revenue for Magellan. For the year 2015, Larweth relied upon and operated under
the commission plan presented by Magellan. Under the terms of that commission plan,
Magellan owed Larweth more than $1 million in additional compensation. But in 2016, when
payment came due, Magellan refused to honor its representations regarding those
commissions. Unbeknownst to Larweth, from the outset, Magellan never intended to honor the
commission plan, despite repeated representations by high-level executives that it would.
2
2. In early 2018, Magellan terminated Larweth, in no small part because he refused to
drop the issue of his unpaid commissions or waive his legal right to receive those commissions.
Magellan offered him a severance package but conditioned it on the release of his claims for
his unpaid commissions. Larweth refused the severance package.
3. Following his termination, Magellan’s executives engaged in a smear campaign to
destroy Larweth’s reputation throughout the healthcare industry.
4. This action seeks redress for damages stemming from Magellan’s refusal to pay
Larweth’s 2015 commissions, fraudulent conduct, and concerted effort to damage his
professional reputation.
PARTIES, JURISDICTION, AND VENUE
5. This Court has subject matter jurisdiction over this action pursuant to 28 U.S.C. § 1332
because the amount in controversy exceeds $75,000.00, exclusive of interest, costs, and
attorneys’ fees, and is between parties of different states.
6. James P. Larweth (“Plaintiff” or “Larweth”) is a citizen and resident of Florida and a
resident of this District.
7. Magellan Health, Inc. f/k/a Magellan Health Services, Inc. (“Defendant” or
“Magellan”), is a Delaware corporation with its principal place of business located at 4800
Scottsdale Road, Suite 4400, Scottsdale, Arizona 85251.
8. Magellan conducts a significant amount of business in this District and its contacts
within this District give rise to Plaintiff’s claims.
3
9. Magellan is a resident of this District for purposes of venue. 28 U.S.C. § 1391(b)(1)
and (c)(2). Venue in this District is also proper as a substantial part of the events or omissions
giving rise to the claims in this action occurred in this District. 28 U.S.C. § 1391(b)(2).
GENERAL ALLEGATIONS
10. Magellan is a publicly traded specialty health care management company.
11. Specialty healthcare refers to the provision of healthcare services by healthcare
professionals with specialized knowledge or experience.
12. Magellan is divided into two primary divisions: Magellan Healthcare and Magellan Rx
Management (“Magellan Rx”).
13. In addition to other services, Magellan Rx manages pharmaceutical rebate contracts by
negotiating deals for drug discounts between Drug Companies1
and Insurance Companies.2
The Carve-Out Drug Rebate Business
14. Insurance Companies hold considerable leverage when negotiating drug costs with
Drug Companies: By determining what their health plans will cover, Insurance Companies
ultimately control the public’s access to drugs.
15. To incentivize their drugs’ inclusion in health plans, Drug Companies offer rebates—
price discounts—to Insurance Companies in exchange for covering specific drugs. These
1
Pharmaceutical manufacturers such as Pfizer, Inc., Novartis AG, AbbVie Inc., and Amgen,
Inc.
2
Public and private health insurance providers such as Blue Cross and Blue Shield
Association, Tufts Associated Health Plans, Inc., Independent Health Association, Inc.,
Priority Health Managed Benefits, Inc., and UPMC Health Plan, Inc.
4
discounts are memorialized in “rebate contracts” executed by Drug Companies and Insurance
Companies.
16. Insurance Companies leverage competition among Drug Companies to achieve lower
drug prices by way of higher rebates. Thus, if multiple Drug Companies produce the same or
similar drugs, the rebate amount will increase.
17. A massive industry grew out of the demand for and use of rebate contracts, leading to
the rise of intermediaries like Magellan Rx. Such companies broker and manage rebate
contracts on behalf of Drug and Insurance Companies.
18. Magellan Rx extracts hundreds of millions of dollars annually from rebate contracts in
two ways: (1) Charging Drug Companies administrative fees for brokering and processing
payments and rebates, and (2) retaining a portion of the “spread” — the gap between the
negotiated discount that an Insurance Company is willing to accept for a given drug and the
actual discount the Drug Company offers. Intermediaries such as Magellan Rx are known as
“Drug Rebate Brokers”.
19. Rebate contracts are tailored to the needs of Insurance Companies and the nature of the
drug covered. In 2015, Magellan Rx generated revenue from three types of rebates:
a. “Base Rebate.” Magellan collects a profit spread between the discounted drug price
it contracts from Drug Companies and the price it passes on to Insurance Companies.
For example, if a Drug Company offers Magellan a 10% discount on a drug,
Magellan passes a percentage of the discount to an Insurance Company and retains
the remainder of the discount for itself.
5
b. “Price Protection Rebate.” A Drug Company agrees with Magellan to place a price
limit on a given drug for a specified amount of time. If the Drug Company, for
whatever reason, increases that drug’s price by more than the specified amount, an
additional rebate is passed on to the Insurance Company that is a party to the rebate
contract. Magellan retains a portion of this rebate.
c. “Term Improvement Rebate.” Magellan renegotiates the terms of an existing
rebate contract with a Drug Company for a larger discount. As with Base Rebates,
Magellan retains a portion of the discount while passing the rest on to the Insurance
Company.
20. Drug and Insurance Companies’ understanding of Magellan’s spread is opaque at best.
Often, neither Drug Companies nor Insurance Companies are made aware of the total rebate
acquired or the spread Magellan retains.
21. With little regulation and a constantly changing industry, trust amongst Drug
Companies, Insurance Companies, and Drug Rebate Brokers is essential to negotiating,
acquiring, and maintaining rebate contracts.
22. To maximize profits, Magellan regularly and as a matter of practice retains a significant
portion of the Price Protection and Term Improvement Rebates negotiated with Drug
Companies, rather than passing the rebates to Insurance Companies.
23. Magellan also earns rebate revenue by negotiating Term Rebate Improvement contracts
with Drug Companies under the pretense that an additional rebate is necessary to maintain the
relationship with the Insurance Company.
6
24. Insurance Companies routinely cancel rebate contracts if a better deal—i.e., a larger
rebate—presents itself. As a result, rebate contracts are short-term by design, frequently lasting
only as long as the contract’s “termination without cause” provision, which is generally 30, 60,
or 90-days.
25. Magellan incentivizes its individual brokers (e.g., Larweth) to aggressively acquire and
retain rebate contracts through commission-based compensation plans.
Larweth’s Industry Experience
26. Larweth began his career at Sanofi, S.A, a Drug Company. During his twelve-year
tenure, he held several senior level positions, developed relationships with dozens of Insurance
Companies, and learned the ins-and-outs of rebate contract negotiations.
27. In October 2006, ICORE Healthcare, LLC (“ICORE”), a Magellan subsidiary, hired
Larweth as Vice President of Account Management to take advantage of his extensive industry
experience and reputation.
28. In October 2011, Larweth left ICORE and joined CDMI, LLC (“CDMI”), a start-up
health care management company created by a founder of ICORE. There, Larweth brokered
rebate contracts between Drug and Insurance Companies.3
Larweth Returns to Magellan
29. Larweth rejoined Magellan in March 2014. He was hired as Senior Vice President of
Business Development in Magellan Rx’s Specialty Carve-Out Rebate Division.
3
Roughly nine months after he joined CDMI, Magellan sued Larweth, CDMI, and CDMI’s
owner for an alleged breach of a non-compete agreement, among other claims. See Magellan
Health Services, Inc. v. CDMI, LLC, et al, Case No. 3:12-CV-01250 (JBA) (D. Conn. 2012).
That matter settled when Magellan purchased CDMI.
7
30. Larweth hired a team of salespeople and developed, managed, and negotiated rebate
contracts.
31. Magellan Rx’s Specialty Carve-Out Rebate Division is split into two subdivisions:
Manufacturer/Pharmaceutical Relations and Health Plan Sales.
32. The Manufacturer/Pharmaceutical Relations division has a handful of employees
dedicated to negotiating rebate terms with Drug Companies. Those negotiated terms are
memorialized in a draft contract that is passed on to the Health Plan Sales division, which
works to sell the Insurance Companies on the rebate contracts.
33. Larweth worked in Health Plan Sales. The Health Plan Sales division’s goal is to broker
rebate contracts with Insurance Companies, thereby generating revenue for Magellan.
34. Although the Manufacturer/Pharmaceutical Relations and Health Plan Sales divisions
were separate, Magellan Rx’s brokers in both divisions worked together to retain and develop
relationships with Drug and Insurance Companies.
Larweth Receives and Relies Upon the 2015 Commission Plan
35. On or about March 18, 2015, Mostafa Kamal (“Kamal”), then Senior Vice President
and General Manager of Magellan Rx, emailed Larweth and other brokers a Proposed
Commission Plan for Carve-Out Rebate Business Development (“Commission Plan”). The
Commission Plan is attached hereto as Exhibit “A”. Kamal authored the Commission Plan.
36. Although titled “Proposed”, this document was the only operative 2015 commission
plan, retroactively effective January 1, 2015. It, and it alone, governed Larweth’s 2015
commissions.
8
37. Larweth needed to meet a baseline rebate revenue target to earn commissions under the
Commission Plan. If the baseline was met, Larweth received 0.3% of the baseline amount.
38. The Commission Plan further provides that rebate revenue acquired in excess of the
baseline target would pay out in the following incremental commission tiers, in addition to the
baseline .3% commission:
a. $1-$1,000,000 – 7% of the incremental value;
b. $1,000,000 – $2,000,000 – 8% of the incremental value;
c. $2,000,000 – $3,0000,000 – 9% of the incremental value;
d. $3,000,000 + – 10% of the incremental value.
See Ex. A.
39. The Commission Plan allowed Magellan to “adjust for any unforeseen market
conditions that result in material changes” to the incentive structure. Id. No such conditions
arose in 2015.
40. By the Commission Plan’s March 2015 circulation, the majority of market pressures
that could or would impact Term Improvement rebate contracts in 2015 were known to
Magellan Rx.
41. Magellan also knew that the Commission Plan created the real possibility that Larweth
would earn a seven-figure bonus in 2015. But Magellan had a contingency plan: If, at the end
of the year, it deemed Larweth’s commissions too high, it would refuse to honor the
Commission Plan.
9
42. From March 2015 through March 2016, Kamal and other Magellan Rx executives
repeatedly referred to the Commission Plan as governing Larweth’s 2015 commission
compensation.
43. From March to December 2015, Larweth negotiated rebate contracts in reliance on the
Commission Plan and generated tens of millions of dollars in revenue for Magellan through
(a) Base Rebate, (b) Price Protection Rebate, and (c) Term Improvement Rebate contracts.
Magellan Refuses to Pay Larweth’s 2015 Commissions
44. In July 2015, Kamal was promoted to CEO of Magellan Rx. In his first year as CEO,
Kamal was under immense pressure from Magellan’s Board of Directors. To justify his
promotion, he desperately needed strong 2015 financials.
45. There was one problem: Larweth’s commissions. Under the Commission Plan that
Kamal drafted and adopted on behalf of Magellan, Larweth earned over $1 million in
commissions in 2015 and nearly $2 million in overall compensation. Other employees in
Larweth’s division would also have been highly compensated.
46. In the Summer of 2015, Kamal and other upper level management at Magellan Rx
realized that Larweth’s compensation under the Commission Plan was going to be significant.
47. Kamal did not want to explain to Magellan’s Board of Directors how or why Larweth
earned a seven-figure commission payout based on an incentive structure that he created.
Kamal’s face-saving solution: Magellan would continue to misrepresent its intent to honor the
Commission Plan until payment became due in the first quarter of 2016, at which point it would
refuse to pay Larweth’s proper commissions.
10
48. Kamal would have faced a mutiny without the assistance of Several Magellan Rx
executives, including Mark Lederer (“Lederer”), Vice President of Financial Operations, and
Kevin Fletemeyer (“Fletemeyer”), Chief Financial Officer and Senior Vice President.
49. Magellan, through Kamal or otherwise, never informed Larweth that it did not intend
to honor the Commission Plan. To the contrary, throughout 2015 and into 2016 Magellan
repeatedly represented to Larweth that he would be compensated in accordance with the
Commission Plan.
50. Larweth justifiably relied on Magellan’s representations.
51. In fact, he excelled. Larweth retained over $10 million in rebates above his baseline
target, qualifying all rebate revenue he generated in excess of his baseline target to a 10%
commission. See Ex. A.
52. Specifically, he retained, above his baseline target, approximately $5,200,000 in Price
Protection Rebates (by negotiating deals between Drug Companies such as AbbVie, Inc.,
Amgen, and Teva Pharmaceutical Ltd., and Insurance Companies such as Priority Health
Managed Benefits, Inc., UPMC Health Plan, Inc., Blue Cross and Blue Shield of Florida, Tufts
Health Plan, and Independent Health Association, Inc.), and $5,800,000 in Term Improvement
Rebates (by negotiating deals between AbbVie, Inc., Amgen and Priority Health Managed
Benefits, Inc., UPMC Health Plan, Inc., Blue Cross and Blue Shield of Florida, Tufts Health
Plan, and Independent Health Association, Inc.).
53. In March 2016, Magellan paid Larweth $575,000.00 in commissions for Base Rebate
contracts. However, he was entitled to $676,000.00 in commissions related to Base Rebate
contracts per the Commission Plan. Magellan never paid Larweth the additional $101,000.
11
54. Further, Magellan informed Larweth that he was entitled to only $52,000 in excess
commissions above his baseline target for Price Protection Rebates, calculated as 1% of the
$5.2 million he retained in Price Protection Rebate revenue above his baseline target. This
number was wholly arbitrary and ignores the $520,000 he was entitled under the Commission
Plan.
55. Magellan outright denied commissions for revenue Larweth captured on Term
Improvement Rebates, ignoring the $5.8 million he generated above his baseline commission-
-thus depriving him of $580,000 owed under the Commission Plan.
56. Magellan refused to produce a detailed audit of its commission calculations, despite
Larweth’s repeated requests.
57. In February and March 2016, Lederer told Larweth that he was only entitled to a 1%
commission on Price Protection Rebates, rather than the 10% commission detailed in the
Commission Plan, because Larweth was not responsible for any of the Price Protection or Term
Improvement Rebates Magellan retained. This was false. Lederer knew it to be so: One of
Lederer’s subordinates, Denise McGinnis, worked extensively with Larweth on securing Price
Protection and Term Improvement Rebate contracts.
58. In mid-2016, Larweth met with Lederer at an airport hotel meeting room in Boston.
There, Lederer again tried to persuade Larweth that he was not entitled to commissions beyond
what he received.
59. Lederer’s story had changed: He now stated that 2015 revenue generated by Term
Improvement Rebates were “unforeseen” manufacturer term changes, rendering them non-
compensable by the Commission Plan. Again, Lederer refused to produce an accounting or
12
documentation of Magellan’s delineation between “foreseen” v. “unforeseen” term
improvements, information essential to such calculation.
60. When the conversation turned to Price Protection Rebates, Lederer stated that Larweth
was lucky to receive a 1% commission, as all 2015 Price Protection Rebates were negotiated
with Drug Companies prior to Larweth’s reemployment with Magellan and without his
involvement.
61. Magellan’s position was a duplicitous reimagining of the Commission Plan’s purpose.
As Kamal wrote in the Commission Plan, the 2015 incentive structure was designed to
maintain accounts: “[I]t is important to create a structure that heavily incents behavior
that will support retention of accounts, not just new sales.” Ex. A. Thus, the Commission
Plan’s aim was to incentivize not just Base Rebate contracts, but Term Improvement and Price
Protection Rebate contracts.
62. Soon thereafter, Lederer produced a final commission report for 2015. The report
indicated that Larweth owed Magellan money for overpaying his commissions. Notably,
Magellan never attempted to claw back the money Larweth supposedly owed.
63. On or about August 21, 2016, Larweth attended Magellan’s annual Specialty Summit
in New York City.
64. After the Summit meeting, Larweth confronted Kamal about the unpaid 2015
commissions. Kamal stated that Larweth’s large commissions would make him look poorly in
the eyes of the Board of Directors. Kamal also stated that Larweth had been compensated
“enough.”
13
65. These statements reveal a cold truth: From the Commission Plan’s inception, Magellan
never intended to honor its terms.
Magellan Terminates Larweth
66. In January 2017, Magellan Rx’s Specialty Carve-Out Rebate Division was restructured.
Philip Vecchiolli (“Vecchiolli”) was hired as Senior Vice President of Formulary
Management. Larweth lost his team and reported directly to Vecchiolli.
67. In late December 2017, Magellan gave Larweth notice that he would be terminated
without cause. Larweth was officially terminated on January 5, 2018.
68. Magellan presented Larweth with a Severance Agreement and Release (“Severance
Agreement”). The Severance Agreement provided that Larweth would explicitly waive any
rights or claims to his unpaid 2015 commissions.
69. Larweth refused the Severance Agreement.
Magellan Destroys Larweth’s Industry Relationships
70. Soon after Larweth was terminated, multiple Magellan executives, including Kamal
and Vecchiolli, launched a smear campaign to destroy Larweth's reputation.
71. In an industry as fiercely competitive as the drug rebate business, one’s reputation is of
paramount importance. Magellan knew this so it began targeting Insurance Companies with
which Larweth had worked for years, including companies that Larweth worked with prior to
his most recent tenure at Magellan.
72. On or about March 9, 2017, Vecchiolli, on behalf of Magellan Rx and at the behest of
Kamal, called the President & CEO of AscellaHealth, LLC (“AscellaHealth”). This call was
14
made with the knowledge that Larweth had a great reputation with AscellaHealth that predated
his time at Magellan. During the call, Veccholli stated that Larweth:
a. Was attempting to raid the company and encouraging individuals to leave
Magellan Rx;
b. Was unlawfully competing against Magellan and supplying seed money to help a
former Magellan Rx sales executive start a competing company; and
c. Was engaging in illegal conduct and unfair competition and would soon be
“buried” in legal fees.
73. These statements are false. Magellan made these statements fully aware of their falsity
and the impact they could have on Larweth's reputation.
74. Vecchiolli also told AscellaHealth that because Larweth declined to sign the Severance
Agreement, he knew that Larweth was illegally competing against Magellan. Vecchiolli failed
to mention Larweth had been denied the majority of his 2015 commissions or that the
Severance Agreement required he waive his entitlement to same.
75. Vecchiolli also stated that he intended to call every Magellan client he could and tell
them what he had told AscellaHealth.
76. He began doing just that: On or around March 12, 2018, Vecchiolli, on behalf of
Magellan Rx and at the behest of Kamal, contacted Health Partners Plans, Inc. (“Health
Partners”) in Philadelphia, Pennsylvania. Vecchiolli, knowing that Larweth had worked with
Health Partners both prior to and during his Magellan tenure, warned Health Partners to avoid
Larweth. But he didn’t stop there. Vecchiolli again impugned Larweth’s character, indicating
15
that he was unlawfully and unfairly competing against Magellan, engaging in illegal conduct,
and could not to be trusted. At least one of these conversations happened at Vecchiolli’s home.
77. Vecchiolli and other Magellan executives disseminated these same false statements to
Horizon Blue Cross Blue Shield, EmblemHealth/ConnectiCare, and Sentara Healthcare. As
with AscellaHealth and Health Partners, Larweth had a long-standing relationship with these
entities that predated his Magellan employment.
78. Next, Magellan executives, at the behest of Kamal, spread falsehoods regarding
Larweth’s character to numerous Magellan employees.
79. Through these and other conversations, Magellan, in minutes, intentionally destroyed
much of the good reputation that Larweth had spent years cultivating.
COUNT I – BREACH OF CONTRACT
(in the alternative to Count II and Count III)
80. Plaintiff realleges and incorporates paragraphs 1 through 79 as if fully set forth herein.
81. Defendant presented the Commission Plan to Plaintiff in March 2015.
82. The Commission Plan outlined that in exchange for Plaintiff’s services negotiating
rebate contracts, Magellan would pay Plaintiff commissions during the first quarter of 2016 in
the manner and amount outlined in the Commission Plan.
83. Plaintiff agreed to the Commission Plan’s terms and the Parties became bound by it.
84. The Commission Plan applied to the entire calendar year of 2015 and was the sole
document governing Plaintiff’s compensation. It sufficiently specified all essential terms.
85. The Commission Plan is a binding and enforceable contract.
16
86. Under the Commission Plan, Plaintiff was entitled to 0.3% commission for reaching
his baseline revenue target in 2015 and additional incentives for surpassing his baseline
revenue target.
87. Plaintiff generated over ten million dollars in revenue above his baseline revenue target
for the year 2015.
88. Plaintiff was entitled to a 10% commission for all revenue generated in excess of his
baseline target, plus 0.3% of his total baseline revenue threshold.
89. Defendant materially breached the Commission Plan when it refused to pay Plaintiff
commissions owed under the Commission Plan during the first quarter of 2016.
90. As a direct and proximate cause of Defendant’s breach of the Commission Plan,
Plaintiff suffered damages in excess of one million dollars and in an amount to be determined
at trial.
COUNT II – QUANTUM MERUIT
(in the alternative to Count I and Count III)
91. Plaintiff realleges and incorporates paragraphs 1 through 79 as if fully set forth herein.
92. In 2015, Defendant wanted to increase its rebate contract revenue. To do so, Defendant
incentivized Plaintiff through promises of commission payments for successfully meeting
various benchmarks beyond his baseline target.
93. One such benchmark was a 10% commission on all revenue Plaintiff generated above
his baseline target if he generated $3,000,000 or more above his baseline target.
94. Plaintiff worked throughout 2015, providing services that were accepted by Defendant,
under the reasonable belief that he would receive a 10% commission on all revenue he
generated above his baseline target that exceeded his baseline target by $3,000,000 or more.
17
95. Defendant was aware that Plaintiff reasonably expected to receive a 10% commission
on all revenue exceeding his baseline target by $3,000,000 or more.
96. Defendant was unjustly enriched as a result of its failure to pay Plaintiff the fair value
of his services in 2015.
COUNT III – UNJUST ENRICHMENT
(in the alternative to Count I and Count II)
97. Plaintiff realleges and incorporates paragraphs 1 through 79 as if fully set forth herein.
98. From March 2015 to March 2016, Defendant repeatedly indicated to Plaintiff that the
Commission Plan was the operative 2015 incentive structure.
99. Plaintiff justifiably relied on the Commission Plan governing his commission
compensation for 2015.
100.Defendant derived a benefit from Plaintiff by allowing him to work under the belief
that the Commission Plan was the operative compensation structure. To wit: The Commission
Plan incentivized stronger performance by Larweth.
101.Defendant knowingly and voluntarily accepted and retained the benefit of Plaintiff’s
work - millions of dollars in additional revenue - but did not compensate Plaintiff in accordance
with the Commission Plan.
102.Instead, Defendant improperly absorbed Plaintiff’s commissions into its earnings.
103.As a result of Defendant’s failure to pay Plaintiff’s commissions, Plaintiff has sustained
damages in excess of $1 million and in an amount to be determined at trial and Defendant has
been unjustly enriched at Plaintiff's expense.
104.Plaintiff lacks an adequate remedy at law.
18
105.In equity and good conscience, Defendant should not be permitted to retain monies
wrongfully withheld from Plaintiff.
COUNT IV – FRAUD
106.Plaintiff realleges and incorporates paragraphs 1 through 79 as if fully set forth herein.
107.Defendant knew when it presented the Commission Plan to Plaintiff in March 2015
that it would not honor the terms of that Plan.
108.Plaintiff was not aware of this because (1) It was hidden from him and (2) Kamal,
Lederer, and Fletemeyer, as Defendant’s agents, repeatedly and materially represented to
Plaintiff that the Commission Plan was the operative compensation structure for the 2015 year.
109.Defendant intended for those representations to induce Plaintiff to continue working
with the belief that he would be compensated in accordance with the Commission Plan.
110.Plaintiff relied on Defendant’s material misrepresentations and continued to work and
thrive for the benefit of Defendant, believing his hard work would pay off in the form of
commissions.
111.Plaintiff’s reliance on Defendant’s representations was justifiable and caused him
harm.
112.Plaintiff has been harmed by Defendant’s fraud as he has been deprived of over $1
million dollars.
113.Only after 2015 passed, and Plaintiff’s commissions became due, did Defendant reveal
that Plaintiff would not be paid in accordance with the Commission Plan.
114.As a direct and proximate cause of Defendant’s fraud, Plaintiff suffered damages in
excess of $1 million and in an amount to be determined at trial.
19
COUNT V – DEFAMATION PER SE
115.Plaintiff realleges and incorporates paragraphs 1 through 79 as if fully set forth herein.
116.In the Drug Rebate business, a good reputation is worth more than an existing
relationship. Plaintiff worked for over twenty years to cultivate his reputation amongst his
peers, as well as actual and prospective clients throughout the industry.
117.Defendant knowingly made false statements regarding Plaintiff’s character, skill, and
professional integrity in the Drug Rebate industry to numerous Insurance Companies.
118.Defendant’s false statements impugned the character, skill, and professional integrity
of Plaintiff in relation to the industry in which he dutifully served Defendant for over eleven
years.
119.Defendant’s false statements were published willfully, recklessly, and/or negligently.
120.Defendant’s false statements were repeated to a group of Plaintiff’s peers and contacts
within the industry, the full scope of which has yet to be determined.
121.Defendant’s statements have subjected Plaintiff to public ridicule and humiliation
within the Drug Rebate industry.
122.As a direct result of Defendant’s false statements, Plaintiff has suffered actual and
reputational damages.
20
PRAYER FOR RELIEF
Plaintiff requests:
a. Compensatory damages for Defendant’s breach of contract to the fullest
extent permitted by law;
b. The value of services Plaintiff rendered on behalf of Defendant in 2015,
to the fullest extent of the law;
c. Restitution for Defendant’s unjust enrichment to the fullest extent
permitted by law, including disgorgement of profits netted by Defendant as a result
of its unjust enrichment;
d. Compensatory and punitive damages for Defendant’s fraud to the fullest
extent permitted by law;
e. Compensatory damages for reputational and actual loss caused by
Defendant’s per se defamation of Plaintiff, to the fullest extent permitted by law;
f. Punitive damages for reputational and actual loss attributable to
Defendant’s per se defamation of Plaintiff, to the fullest extent permitted by law;
g. Plaintiff’s costs;
h. Pre-judgment and post-judgment interest; and
i. Such other relief this Court deems just and proper.
JURY TRIAL DEMAND
Plaintiff demands a jury on all issues so triable.
21
Dated: May 25, 2018 Respectfully submitted,
By: /s/ Jonathan Pollard
Jonathan Pollard
Florida Bar No.: 83613
jpollard@pollardllc.com
Trial Counsel
Christopher S. Prater
Florida Bar No.: 105488
cprater@pollardllc.com
David J. Yaffe
Florida Bar No.: 125488
dyaffe@pollardllc.com
Pollard PLLC
401 E. Las Olas Blvd.
Suite, #1400
Fort Lauderdale, FL 33301
Telephone: 954-332-2380
Facsimile: 866-594-5731
Attorneys for Plaintiff

More Related Content

What's hot

United of Omaha Medigap Slide Show
United of Omaha Medigap Slide ShowUnited of Omaha Medigap Slide Show
United of Omaha Medigap Slide Show
Tim Barnes Clu
 
COST OF MEDICARE
COST OF MEDICARECOST OF MEDICARE
COST OF MEDICARE
gainfulhysteria13
 
CAP Rx Discount Card Presentation
CAP Rx Discount Card PresentationCAP Rx Discount Card Presentation
CAP Rx Discount Card Presentation
Steve Mischel
 
Shurwest Advisor Whitepaper-MedicareBasics_1016
Shurwest Advisor Whitepaper-MedicareBasics_1016Shurwest Advisor Whitepaper-MedicareBasics_1016
Shurwest Advisor Whitepaper-MedicareBasics_1016Pel Abbott
 

What's hot (6)

United of Omaha Medigap Slide Show
United of Omaha Medigap Slide ShowUnited of Omaha Medigap Slide Show
United of Omaha Medigap Slide Show
 
COST OF MEDICARE
COST OF MEDICARECOST OF MEDICARE
COST OF MEDICARE
 
NF3
NF3NF3
NF3
 
CAP Rx Discount Card Presentation
CAP Rx Discount Card PresentationCAP Rx Discount Card Presentation
CAP Rx Discount Card Presentation
 
Shurwest Advisor Whitepaper-MedicareBasics_1016
Shurwest Advisor Whitepaper-MedicareBasics_1016Shurwest Advisor Whitepaper-MedicareBasics_1016
Shurwest Advisor Whitepaper-MedicareBasics_1016
 
The New Normal in Medicare | 2012
The New Normal in Medicare | 2012The New Normal in Medicare | 2012
The New Normal in Medicare | 2012
 

Similar to Complaint against Magellan Health, Inc. for $1 Million Unpaid Bonus Compensation

Medical Billing Simple Manual
Medical Billing Simple ManualMedical Billing Simple Manual
Medical Billing Simple ManualKarna *
 
Infographics claim settlement
Infographics claim settlementInfographics claim settlement
Infographics claim settlement
Bayzat
 
Why Roundstone? We are the solution.
Why Roundstone?  We are the solution.Why Roundstone?  We are the solution.
Why Roundstone? We are the solution.Roundstone Management
 
About Beneplan - 2019
About Beneplan - 2019About Beneplan - 2019
About Beneplan - 2019
Beneplan
 
Product Recall - CRC Group Difference
Product Recall - CRC Group DifferenceProduct Recall - CRC Group Difference
Product Recall - CRC Group DifferenceJeffrey S. Dunn, CIC
 
Complaint in hdl v johnson and dent
Complaint in hdl v johnson and dentComplaint in hdl v johnson and dent
Complaint in hdl v johnson and dent
Marilyn Mann
 
Dr13 the future_of_health_care_insurance_whats_ahead3
Dr13 the future_of_health_care_insurance_whats_ahead3Dr13 the future_of_health_care_insurance_whats_ahead3
Dr13 the future_of_health_care_insurance_whats_ahead3Ariel Porath
 
HealthCompare Insurance - Understanding other types of insurance
HealthCompare Insurance - Understanding other types of insuranceHealthCompare Insurance - Understanding other types of insurance
HealthCompare Insurance - Understanding other types of insurance
Health Compare
 
QUIHUIS V. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY
QUIHUIS V. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY
QUIHUIS V. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY
QUIHUIS V. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY
enchantingkingd96
 
Controlling Workers’ Compensation Costs by as Much as 20% - 50%
Controlling Workers’ Compensation Costs by as Much as 20% - 50%Controlling Workers’ Compensation Costs by as Much as 20% - 50%
Controlling Workers’ Compensation Costs by as Much as 20% - 50%
Richard Swartzbaugh
 
EGWP Presentation
EGWP PresentationEGWP Presentation
EGWP PresentationLiz Weber
 
Chapter 6Alternative Responses and Initiatives of Institutions a
Chapter 6Alternative Responses and Initiatives of Institutions aChapter 6Alternative Responses and Initiatives of Institutions a
Chapter 6Alternative Responses and Initiatives of Institutions a
JinElias52
 
Healthcare Regulation: Aiding Captives?
Healthcare Regulation: Aiding Captives? Healthcare Regulation: Aiding Captives?
Healthcare Regulation: Aiding Captives?
Phillip Giles, CEBS
 
American Green Rush: Business Opportunity & Risks
American Green Rush: Business Opportunity & RisksAmerican Green Rush: Business Opportunity & Risks
American Green Rush: Business Opportunity & Risks
Ancella Simoes
 
Pharma Sales Crediting: Incentives for Accurate & Compliant Processes
Pharma Sales Crediting: Incentives for Accurate & Compliant ProcessesPharma Sales Crediting: Incentives for Accurate & Compliant Processes
Pharma Sales Crediting: Incentives for Accurate & Compliant Processes
Cognizant
 
7 Biggest Medical Malpractice Insurance Mistakes
7 Biggest Medical Malpractice Insurance Mistakes7 Biggest Medical Malpractice Insurance Mistakes
7 Biggest Medical Malpractice Insurance Mistakes
hcpnational
 
SmartBus Products Recal 09-14
SmartBus Products Recal 09-14SmartBus Products Recal 09-14
SmartBus Products Recal 09-14Karl Henley
 
The Employer Group Waiver Plan
The Employer Group Waiver PlanThe Employer Group Waiver Plan
The Employer Group Waiver PlanJay Dinunzio
 
What is a Medicaid Bond?
What is a Medicaid Bond?What is a Medicaid Bond?
What is a Medicaid Bond?
Surety Bond Authority
 

Similar to Complaint against Magellan Health, Inc. for $1 Million Unpaid Bonus Compensation (20)

Medical Billing Simple Manual
Medical Billing Simple ManualMedical Billing Simple Manual
Medical Billing Simple Manual
 
Infographics claim settlement
Infographics claim settlementInfographics claim settlement
Infographics claim settlement
 
Why Roundstone? We are the solution.
Why Roundstone?  We are the solution.Why Roundstone?  We are the solution.
Why Roundstone? We are the solution.
 
About Beneplan - 2019
About Beneplan - 2019About Beneplan - 2019
About Beneplan - 2019
 
Product Recall - CRC Group Difference
Product Recall - CRC Group DifferenceProduct Recall - CRC Group Difference
Product Recall - CRC Group Difference
 
Complaint in hdl v johnson and dent
Complaint in hdl v johnson and dentComplaint in hdl v johnson and dent
Complaint in hdl v johnson and dent
 
Dr13 the future_of_health_care_insurance_whats_ahead3
Dr13 the future_of_health_care_insurance_whats_ahead3Dr13 the future_of_health_care_insurance_whats_ahead3
Dr13 the future_of_health_care_insurance_whats_ahead3
 
HealthCompare Insurance - Understanding other types of insurance
HealthCompare Insurance - Understanding other types of insuranceHealthCompare Insurance - Understanding other types of insurance
HealthCompare Insurance - Understanding other types of insurance
 
QUIHUIS V. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY
QUIHUIS V. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY
QUIHUIS V. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY
QUIHUIS V. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY
 
NPKUA July Presentaion Slides (revised2)
NPKUA July Presentaion Slides (revised2)NPKUA July Presentaion Slides (revised2)
NPKUA July Presentaion Slides (revised2)
 
Controlling Workers’ Compensation Costs by as Much as 20% - 50%
Controlling Workers’ Compensation Costs by as Much as 20% - 50%Controlling Workers’ Compensation Costs by as Much as 20% - 50%
Controlling Workers’ Compensation Costs by as Much as 20% - 50%
 
EGWP Presentation
EGWP PresentationEGWP Presentation
EGWP Presentation
 
Chapter 6Alternative Responses and Initiatives of Institutions a
Chapter 6Alternative Responses and Initiatives of Institutions aChapter 6Alternative Responses and Initiatives of Institutions a
Chapter 6Alternative Responses and Initiatives of Institutions a
 
Healthcare Regulation: Aiding Captives?
Healthcare Regulation: Aiding Captives? Healthcare Regulation: Aiding Captives?
Healthcare Regulation: Aiding Captives?
 
American Green Rush: Business Opportunity & Risks
American Green Rush: Business Opportunity & RisksAmerican Green Rush: Business Opportunity & Risks
American Green Rush: Business Opportunity & Risks
 
Pharma Sales Crediting: Incentives for Accurate & Compliant Processes
Pharma Sales Crediting: Incentives for Accurate & Compliant ProcessesPharma Sales Crediting: Incentives for Accurate & Compliant Processes
Pharma Sales Crediting: Incentives for Accurate & Compliant Processes
 
7 Biggest Medical Malpractice Insurance Mistakes
7 Biggest Medical Malpractice Insurance Mistakes7 Biggest Medical Malpractice Insurance Mistakes
7 Biggest Medical Malpractice Insurance Mistakes
 
SmartBus Products Recal 09-14
SmartBus Products Recal 09-14SmartBus Products Recal 09-14
SmartBus Products Recal 09-14
 
The Employer Group Waiver Plan
The Employer Group Waiver PlanThe Employer Group Waiver Plan
The Employer Group Waiver Plan
 
What is a Medicaid Bond?
What is a Medicaid Bond?What is a Medicaid Bond?
What is a Medicaid Bond?
 

More from Pollard PLLC

Complaint - Non-Compete Abuse, Defamation, Unpaid Wages
Complaint - Non-Compete Abuse, Defamation, Unpaid WagesComplaint - Non-Compete Abuse, Defamation, Unpaid Wages
Complaint - Non-Compete Abuse, Defamation, Unpaid Wages
Pollard PLLC
 
Report & Recommendation Denying Preliminary Injunction - MDFL
Report & Recommendation Denying Preliminary Injunction - MDFLReport & Recommendation Denying Preliminary Injunction - MDFL
Report & Recommendation Denying Preliminary Injunction - MDFL
Pollard PLLC
 
Complaint - Bartender Non-Compete Case - Tampa Federal Court
Complaint - Bartender Non-Compete Case - Tampa Federal CourtComplaint - Bartender Non-Compete Case - Tampa Federal Court
Complaint - Bartender Non-Compete Case - Tampa Federal Court
Pollard PLLC
 
Counterclaims: Defamation, Tortious Interference & False Advertising
Counterclaims: Defamation, Tortious Interference & False AdvertisingCounterclaims: Defamation, Tortious Interference & False Advertising
Counterclaims: Defamation, Tortious Interference & False Advertising
Pollard PLLC
 
Complaint - Woodbridge Liquidation Trustee vs. Woodbridge's Lawyers
Complaint - Woodbridge Liquidation Trustee vs. Woodbridge's LawyersComplaint - Woodbridge Liquidation Trustee vs. Woodbridge's Lawyers
Complaint - Woodbridge Liquidation Trustee vs. Woodbridge's Lawyers
Pollard PLLC
 
Representatives Nunes Sues CNN for Defamation & $435 Million in Damages
Representatives Nunes Sues CNN for Defamation & $435 Million in DamagesRepresentatives Nunes Sues CNN for Defamation & $435 Million in Damages
Representatives Nunes Sues CNN for Defamation & $435 Million in Damages
Pollard PLLC
 
District of Columbia vs. DoorDash
District of Columbia vs. DoorDashDistrict of Columbia vs. DoorDash
District of Columbia vs. DoorDash
Pollard PLLC
 
SDFL - Order Dismissing Various Claims - Jurisdiction - Trade Secrets
SDFL - Order Dismissing Various Claims - Jurisdiction - Trade SecretsSDFL - Order Dismissing Various Claims - Jurisdiction - Trade Secrets
SDFL - Order Dismissing Various Claims - Jurisdiction - Trade Secrets
Pollard PLLC
 
Motion to Dismiss - Trade Secrets & Tortious Interference Claims
Motion to Dismiss - Trade Secrets & Tortious Interference ClaimsMotion to Dismiss - Trade Secrets & Tortious Interference Claims
Motion to Dismiss - Trade Secrets & Tortious Interference Claims
Pollard PLLC
 
Appellate Brief - Appeal of Preliminary Injunction - United States Court of A...
Appellate Brief - Appeal of Preliminary Injunction - United States Court of A...Appellate Brief - Appeal of Preliminary Injunction - United States Court of A...
Appellate Brief - Appeal of Preliminary Injunction - United States Court of A...
Pollard PLLC
 
Middle District of Florida - Recent Decision Denying Trade Secret Injunction
Middle District of Florida - Recent Decision Denying Trade Secret InjunctionMiddle District of Florida - Recent Decision Denying Trade Secret Injunction
Middle District of Florida - Recent Decision Denying Trade Secret Injunction
Pollard PLLC
 
Order Denying Motion to Dismiss False Advertising & Defamation Claims
Order Denying Motion to Dismiss False Advertising & Defamation ClaimsOrder Denying Motion to Dismiss False Advertising & Defamation Claims
Order Denying Motion to Dismiss False Advertising & Defamation Claims
Pollard PLLC
 
FLSA Litigation - Federal Court - MDFL Tampa - Fee Entitlement & Mootness
FLSA Litigation - Federal Court - MDFL Tampa - Fee Entitlement & MootnessFLSA Litigation - Federal Court - MDFL Tampa - Fee Entitlement & Mootness
FLSA Litigation - Federal Court - MDFL Tampa - Fee Entitlement & Mootness
Pollard PLLC
 
MDFL - Order Denying Motion to Dismiss Trade Secret & Fraud Claims
MDFL - Order Denying Motion to Dismiss Trade Secret & Fraud ClaimsMDFL - Order Denying Motion to Dismiss Trade Secret & Fraud Claims
MDFL - Order Denying Motion to Dismiss Trade Secret & Fraud Claims
Pollard PLLC
 
Schwartz v. Abers et. al.
Schwartz v. Abers et. al. Schwartz v. Abers et. al.
Schwartz v. Abers et. al.
Pollard PLLC
 
Order Denying Motion to Dismiss False Advertising & Defamation Claims
Order Denying Motion to Dismiss False Advertising & Defamation ClaimsOrder Denying Motion to Dismiss False Advertising & Defamation Claims
Order Denying Motion to Dismiss False Advertising & Defamation Claims
Pollard PLLC
 
Non-Compete Agreements & Antitrust
Non-Compete Agreements & AntitrustNon-Compete Agreements & Antitrust
Non-Compete Agreements & Antitrust
Pollard PLLC
 
Federal False Advertising & Trade Libel Lawsuit
Federal False Advertising & Trade Libel LawsuitFederal False Advertising & Trade Libel Lawsuit
Federal False Advertising & Trade Libel Lawsuit
Pollard PLLC
 
Answer, Counterclaims & Third Party Claims - Non-Compete & Tortious Interference
Answer, Counterclaims & Third Party Claims - Non-Compete & Tortious InterferenceAnswer, Counterclaims & Third Party Claims - Non-Compete & Tortious Interference
Answer, Counterclaims & Third Party Claims - Non-Compete & Tortious Interference
Pollard PLLC
 

More from Pollard PLLC (19)

Complaint - Non-Compete Abuse, Defamation, Unpaid Wages
Complaint - Non-Compete Abuse, Defamation, Unpaid WagesComplaint - Non-Compete Abuse, Defamation, Unpaid Wages
Complaint - Non-Compete Abuse, Defamation, Unpaid Wages
 
Report & Recommendation Denying Preliminary Injunction - MDFL
Report & Recommendation Denying Preliminary Injunction - MDFLReport & Recommendation Denying Preliminary Injunction - MDFL
Report & Recommendation Denying Preliminary Injunction - MDFL
 
Complaint - Bartender Non-Compete Case - Tampa Federal Court
Complaint - Bartender Non-Compete Case - Tampa Federal CourtComplaint - Bartender Non-Compete Case - Tampa Federal Court
Complaint - Bartender Non-Compete Case - Tampa Federal Court
 
Counterclaims: Defamation, Tortious Interference & False Advertising
Counterclaims: Defamation, Tortious Interference & False AdvertisingCounterclaims: Defamation, Tortious Interference & False Advertising
Counterclaims: Defamation, Tortious Interference & False Advertising
 
Complaint - Woodbridge Liquidation Trustee vs. Woodbridge's Lawyers
Complaint - Woodbridge Liquidation Trustee vs. Woodbridge's LawyersComplaint - Woodbridge Liquidation Trustee vs. Woodbridge's Lawyers
Complaint - Woodbridge Liquidation Trustee vs. Woodbridge's Lawyers
 
Representatives Nunes Sues CNN for Defamation & $435 Million in Damages
Representatives Nunes Sues CNN for Defamation & $435 Million in DamagesRepresentatives Nunes Sues CNN for Defamation & $435 Million in Damages
Representatives Nunes Sues CNN for Defamation & $435 Million in Damages
 
District of Columbia vs. DoorDash
District of Columbia vs. DoorDashDistrict of Columbia vs. DoorDash
District of Columbia vs. DoorDash
 
SDFL - Order Dismissing Various Claims - Jurisdiction - Trade Secrets
SDFL - Order Dismissing Various Claims - Jurisdiction - Trade SecretsSDFL - Order Dismissing Various Claims - Jurisdiction - Trade Secrets
SDFL - Order Dismissing Various Claims - Jurisdiction - Trade Secrets
 
Motion to Dismiss - Trade Secrets & Tortious Interference Claims
Motion to Dismiss - Trade Secrets & Tortious Interference ClaimsMotion to Dismiss - Trade Secrets & Tortious Interference Claims
Motion to Dismiss - Trade Secrets & Tortious Interference Claims
 
Appellate Brief - Appeal of Preliminary Injunction - United States Court of A...
Appellate Brief - Appeal of Preliminary Injunction - United States Court of A...Appellate Brief - Appeal of Preliminary Injunction - United States Court of A...
Appellate Brief - Appeal of Preliminary Injunction - United States Court of A...
 
Middle District of Florida - Recent Decision Denying Trade Secret Injunction
Middle District of Florida - Recent Decision Denying Trade Secret InjunctionMiddle District of Florida - Recent Decision Denying Trade Secret Injunction
Middle District of Florida - Recent Decision Denying Trade Secret Injunction
 
Order Denying Motion to Dismiss False Advertising & Defamation Claims
Order Denying Motion to Dismiss False Advertising & Defamation ClaimsOrder Denying Motion to Dismiss False Advertising & Defamation Claims
Order Denying Motion to Dismiss False Advertising & Defamation Claims
 
FLSA Litigation - Federal Court - MDFL Tampa - Fee Entitlement & Mootness
FLSA Litigation - Federal Court - MDFL Tampa - Fee Entitlement & MootnessFLSA Litigation - Federal Court - MDFL Tampa - Fee Entitlement & Mootness
FLSA Litigation - Federal Court - MDFL Tampa - Fee Entitlement & Mootness
 
MDFL - Order Denying Motion to Dismiss Trade Secret & Fraud Claims
MDFL - Order Denying Motion to Dismiss Trade Secret & Fraud ClaimsMDFL - Order Denying Motion to Dismiss Trade Secret & Fraud Claims
MDFL - Order Denying Motion to Dismiss Trade Secret & Fraud Claims
 
Schwartz v. Abers et. al.
Schwartz v. Abers et. al. Schwartz v. Abers et. al.
Schwartz v. Abers et. al.
 
Order Denying Motion to Dismiss False Advertising & Defamation Claims
Order Denying Motion to Dismiss False Advertising & Defamation ClaimsOrder Denying Motion to Dismiss False Advertising & Defamation Claims
Order Denying Motion to Dismiss False Advertising & Defamation Claims
 
Non-Compete Agreements & Antitrust
Non-Compete Agreements & AntitrustNon-Compete Agreements & Antitrust
Non-Compete Agreements & Antitrust
 
Federal False Advertising & Trade Libel Lawsuit
Federal False Advertising & Trade Libel LawsuitFederal False Advertising & Trade Libel Lawsuit
Federal False Advertising & Trade Libel Lawsuit
 
Answer, Counterclaims & Third Party Claims - Non-Compete & Tortious Interference
Answer, Counterclaims & Third Party Claims - Non-Compete & Tortious InterferenceAnswer, Counterclaims & Third Party Claims - Non-Compete & Tortious Interference
Answer, Counterclaims & Third Party Claims - Non-Compete & Tortious Interference
 

Recently uploaded

new victimology of indonesian law. Pptx.
new victimology of indonesian law. Pptx.new victimology of indonesian law. Pptx.
new victimology of indonesian law. Pptx.
niputusriwidiasih
 
Business and Corporate Case Update (2024)
Business and Corporate Case Update (2024)Business and Corporate Case Update (2024)
Business and Corporate Case Update (2024)
Wendy Couture
 
Donald_J_Trump_katigoritirio_stormi_daniels.pdf
Donald_J_Trump_katigoritirio_stormi_daniels.pdfDonald_J_Trump_katigoritirio_stormi_daniels.pdf
Donald_J_Trump_katigoritirio_stormi_daniels.pdf
ssuser5750e1
 
How to Obtain Permanent Residency in the Netherlands
How to Obtain Permanent Residency in the NetherlandsHow to Obtain Permanent Residency in the Netherlands
How to Obtain Permanent Residency in the Netherlands
BridgeWest.eu
 
EMPLOYMENT LAW AN OVERVIEW in Malawi.pptx
EMPLOYMENT LAW  AN OVERVIEW in Malawi.pptxEMPLOYMENT LAW  AN OVERVIEW in Malawi.pptx
EMPLOYMENT LAW AN OVERVIEW in Malawi.pptx
MwaiMapemba
 
原版仿制(aut毕业证书)新西兰奥克兰理工大学毕业证文凭毕业证雅思成绩单原版一模一样
原版仿制(aut毕业证书)新西兰奥克兰理工大学毕业证文凭毕业证雅思成绩单原版一模一样原版仿制(aut毕业证书)新西兰奥克兰理工大学毕业证文凭毕业证雅思成绩单原版一模一样
原版仿制(aut毕业证书)新西兰奥克兰理工大学毕业证文凭毕业证雅思成绩单原版一模一样
9ib5wiwt
 
Responsibilities of the office bearers while registering multi-state cooperat...
Responsibilities of the office bearers while registering multi-state cooperat...Responsibilities of the office bearers while registering multi-state cooperat...
Responsibilities of the office bearers while registering multi-state cooperat...
Finlaw Consultancy Pvt Ltd
 
Car Accident Injury Do I Have a Case....
Car Accident Injury Do I Have a Case....Car Accident Injury Do I Have a Case....
Car Accident Injury Do I Have a Case....
Knowyourright
 
The Reserve Bank of India Act, 1934.pptx
The Reserve Bank of India Act, 1934.pptxThe Reserve Bank of India Act, 1934.pptx
The Reserve Bank of India Act, 1934.pptx
nehatalele22st
 
怎么购买(massey毕业证书)新西兰梅西大学毕业证学位证书注册证明信原版一模一样
怎么购买(massey毕业证书)新西兰梅西大学毕业证学位证书注册证明信原版一模一样怎么购买(massey毕业证书)新西兰梅西大学毕业证学位证书注册证明信原版一模一样
怎么购买(massey毕业证书)新西兰梅西大学毕业证学位证书注册证明信原版一模一样
9ib5wiwt
 
Debt Mapping Camp bebas riba to know how much our debt
Debt Mapping Camp bebas riba to know how much our debtDebt Mapping Camp bebas riba to know how much our debt
Debt Mapping Camp bebas riba to know how much our debt
ssuser0576e4
 
VAWA - Violence Against Women Act Presentation
VAWA - Violence Against Women Act PresentationVAWA - Violence Against Women Act Presentation
VAWA - Violence Against Women Act Presentation
FernandoSimesBlanco1
 
一比一原版麻省理工学院毕业证(MIT毕业证)成绩单如何办理
一比一原版麻省理工学院毕业证(MIT毕业证)成绩单如何办理一比一原版麻省理工学院毕业证(MIT毕业证)成绩单如何办理
一比一原版麻省理工学院毕业证(MIT毕业证)成绩单如何办理
o6ov5dqmf
 
WINDING UP of COMPANY, Modes of Dissolution
WINDING UP of COMPANY, Modes of DissolutionWINDING UP of COMPANY, Modes of Dissolution
WINDING UP of COMPANY, Modes of Dissolution
KHURRAMWALI
 
Bharatiya Nagarik Suraksha Sanhita power.pptx
Bharatiya Nagarik Suraksha Sanhita power.pptxBharatiya Nagarik Suraksha Sanhita power.pptx
Bharatiya Nagarik Suraksha Sanhita power.pptx
ShivkumarIyer18
 
Notes-on-Prescription-Obligations-and-Contracts.doc
Notes-on-Prescription-Obligations-and-Contracts.docNotes-on-Prescription-Obligations-and-Contracts.doc
Notes-on-Prescription-Obligations-and-Contracts.doc
BRELGOSIMAT
 
Roles of a Bankruptcy Lawyer John Cavitt
Roles of a Bankruptcy Lawyer John CavittRoles of a Bankruptcy Lawyer John Cavitt
Roles of a Bankruptcy Lawyer John Cavitt
johncavitthouston
 
ADR in criminal proceeding in Bangladesh with global perspective.
ADR in criminal proceeding in Bangladesh with global perspective.ADR in criminal proceeding in Bangladesh with global perspective.
ADR in criminal proceeding in Bangladesh with global perspective.
Daffodil International University
 
Daftar Rumpun, Pohon, dan Cabang Ilmu (28 Mei 2024).pdf
Daftar Rumpun, Pohon, dan Cabang Ilmu (28 Mei 2024).pdfDaftar Rumpun, Pohon, dan Cabang Ilmu (28 Mei 2024).pdf
Daftar Rumpun, Pohon, dan Cabang Ilmu (28 Mei 2024).pdf
akbarrasyid3
 
Secure Your Brand: File a Trademark Today
Secure Your Brand: File a Trademark TodaySecure Your Brand: File a Trademark Today
Secure Your Brand: File a Trademark Today
Trademark Quick
 

Recently uploaded (20)

new victimology of indonesian law. Pptx.
new victimology of indonesian law. Pptx.new victimology of indonesian law. Pptx.
new victimology of indonesian law. Pptx.
 
Business and Corporate Case Update (2024)
Business and Corporate Case Update (2024)Business and Corporate Case Update (2024)
Business and Corporate Case Update (2024)
 
Donald_J_Trump_katigoritirio_stormi_daniels.pdf
Donald_J_Trump_katigoritirio_stormi_daniels.pdfDonald_J_Trump_katigoritirio_stormi_daniels.pdf
Donald_J_Trump_katigoritirio_stormi_daniels.pdf
 
How to Obtain Permanent Residency in the Netherlands
How to Obtain Permanent Residency in the NetherlandsHow to Obtain Permanent Residency in the Netherlands
How to Obtain Permanent Residency in the Netherlands
 
EMPLOYMENT LAW AN OVERVIEW in Malawi.pptx
EMPLOYMENT LAW  AN OVERVIEW in Malawi.pptxEMPLOYMENT LAW  AN OVERVIEW in Malawi.pptx
EMPLOYMENT LAW AN OVERVIEW in Malawi.pptx
 
原版仿制(aut毕业证书)新西兰奥克兰理工大学毕业证文凭毕业证雅思成绩单原版一模一样
原版仿制(aut毕业证书)新西兰奥克兰理工大学毕业证文凭毕业证雅思成绩单原版一模一样原版仿制(aut毕业证书)新西兰奥克兰理工大学毕业证文凭毕业证雅思成绩单原版一模一样
原版仿制(aut毕业证书)新西兰奥克兰理工大学毕业证文凭毕业证雅思成绩单原版一模一样
 
Responsibilities of the office bearers while registering multi-state cooperat...
Responsibilities of the office bearers while registering multi-state cooperat...Responsibilities of the office bearers while registering multi-state cooperat...
Responsibilities of the office bearers while registering multi-state cooperat...
 
Car Accident Injury Do I Have a Case....
Car Accident Injury Do I Have a Case....Car Accident Injury Do I Have a Case....
Car Accident Injury Do I Have a Case....
 
The Reserve Bank of India Act, 1934.pptx
The Reserve Bank of India Act, 1934.pptxThe Reserve Bank of India Act, 1934.pptx
The Reserve Bank of India Act, 1934.pptx
 
怎么购买(massey毕业证书)新西兰梅西大学毕业证学位证书注册证明信原版一模一样
怎么购买(massey毕业证书)新西兰梅西大学毕业证学位证书注册证明信原版一模一样怎么购买(massey毕业证书)新西兰梅西大学毕业证学位证书注册证明信原版一模一样
怎么购买(massey毕业证书)新西兰梅西大学毕业证学位证书注册证明信原版一模一样
 
Debt Mapping Camp bebas riba to know how much our debt
Debt Mapping Camp bebas riba to know how much our debtDebt Mapping Camp bebas riba to know how much our debt
Debt Mapping Camp bebas riba to know how much our debt
 
VAWA - Violence Against Women Act Presentation
VAWA - Violence Against Women Act PresentationVAWA - Violence Against Women Act Presentation
VAWA - Violence Against Women Act Presentation
 
一比一原版麻省理工学院毕业证(MIT毕业证)成绩单如何办理
一比一原版麻省理工学院毕业证(MIT毕业证)成绩单如何办理一比一原版麻省理工学院毕业证(MIT毕业证)成绩单如何办理
一比一原版麻省理工学院毕业证(MIT毕业证)成绩单如何办理
 
WINDING UP of COMPANY, Modes of Dissolution
WINDING UP of COMPANY, Modes of DissolutionWINDING UP of COMPANY, Modes of Dissolution
WINDING UP of COMPANY, Modes of Dissolution
 
Bharatiya Nagarik Suraksha Sanhita power.pptx
Bharatiya Nagarik Suraksha Sanhita power.pptxBharatiya Nagarik Suraksha Sanhita power.pptx
Bharatiya Nagarik Suraksha Sanhita power.pptx
 
Notes-on-Prescription-Obligations-and-Contracts.doc
Notes-on-Prescription-Obligations-and-Contracts.docNotes-on-Prescription-Obligations-and-Contracts.doc
Notes-on-Prescription-Obligations-and-Contracts.doc
 
Roles of a Bankruptcy Lawyer John Cavitt
Roles of a Bankruptcy Lawyer John CavittRoles of a Bankruptcy Lawyer John Cavitt
Roles of a Bankruptcy Lawyer John Cavitt
 
ADR in criminal proceeding in Bangladesh with global perspective.
ADR in criminal proceeding in Bangladesh with global perspective.ADR in criminal proceeding in Bangladesh with global perspective.
ADR in criminal proceeding in Bangladesh with global perspective.
 
Daftar Rumpun, Pohon, dan Cabang Ilmu (28 Mei 2024).pdf
Daftar Rumpun, Pohon, dan Cabang Ilmu (28 Mei 2024).pdfDaftar Rumpun, Pohon, dan Cabang Ilmu (28 Mei 2024).pdf
Daftar Rumpun, Pohon, dan Cabang Ilmu (28 Mei 2024).pdf
 
Secure Your Brand: File a Trademark Today
Secure Your Brand: File a Trademark TodaySecure Your Brand: File a Trademark Today
Secure Your Brand: File a Trademark Today
 

Complaint against Magellan Health, Inc. for $1 Million Unpaid Bonus Compensation

  • 1. UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF FLORIDA ORLANDO DIVISION JAMES P. LARWETH, an individual, Plaintiff, vs. MAGELLAN HEALTH, INC., a Delaware corporation, Defendant. CASE NO: COMPLAINT AND DEMAND FOR JURY TRIAL Plaintiff James P. Larweth, through his undersigned counsel, files this Complaint against Magellan Health, Inc., and in support states: INTRODUCTION 1. James P. Larweth is a former employee of Magellan Health, Inc., a multi-billion-dollar healthcare entity. Larweth brokered drug price contracts between pharmaceutical and insurance companies for Magellan. Larweth was good at his job: He generated tens of millions of dollars in revenue for Magellan. For the year 2015, Larweth relied upon and operated under the commission plan presented by Magellan. Under the terms of that commission plan, Magellan owed Larweth more than $1 million in additional compensation. But in 2016, when payment came due, Magellan refused to honor its representations regarding those commissions. Unbeknownst to Larweth, from the outset, Magellan never intended to honor the commission plan, despite repeated representations by high-level executives that it would.
  • 2. 2 2. In early 2018, Magellan terminated Larweth, in no small part because he refused to drop the issue of his unpaid commissions or waive his legal right to receive those commissions. Magellan offered him a severance package but conditioned it on the release of his claims for his unpaid commissions. Larweth refused the severance package. 3. Following his termination, Magellan’s executives engaged in a smear campaign to destroy Larweth’s reputation throughout the healthcare industry. 4. This action seeks redress for damages stemming from Magellan’s refusal to pay Larweth’s 2015 commissions, fraudulent conduct, and concerted effort to damage his professional reputation. PARTIES, JURISDICTION, AND VENUE 5. This Court has subject matter jurisdiction over this action pursuant to 28 U.S.C. § 1332 because the amount in controversy exceeds $75,000.00, exclusive of interest, costs, and attorneys’ fees, and is between parties of different states. 6. James P. Larweth (“Plaintiff” or “Larweth”) is a citizen and resident of Florida and a resident of this District. 7. Magellan Health, Inc. f/k/a Magellan Health Services, Inc. (“Defendant” or “Magellan”), is a Delaware corporation with its principal place of business located at 4800 Scottsdale Road, Suite 4400, Scottsdale, Arizona 85251. 8. Magellan conducts a significant amount of business in this District and its contacts within this District give rise to Plaintiff’s claims.
  • 3. 3 9. Magellan is a resident of this District for purposes of venue. 28 U.S.C. § 1391(b)(1) and (c)(2). Venue in this District is also proper as a substantial part of the events or omissions giving rise to the claims in this action occurred in this District. 28 U.S.C. § 1391(b)(2). GENERAL ALLEGATIONS 10. Magellan is a publicly traded specialty health care management company. 11. Specialty healthcare refers to the provision of healthcare services by healthcare professionals with specialized knowledge or experience. 12. Magellan is divided into two primary divisions: Magellan Healthcare and Magellan Rx Management (“Magellan Rx”). 13. In addition to other services, Magellan Rx manages pharmaceutical rebate contracts by negotiating deals for drug discounts between Drug Companies1 and Insurance Companies.2 The Carve-Out Drug Rebate Business 14. Insurance Companies hold considerable leverage when negotiating drug costs with Drug Companies: By determining what their health plans will cover, Insurance Companies ultimately control the public’s access to drugs. 15. To incentivize their drugs’ inclusion in health plans, Drug Companies offer rebates— price discounts—to Insurance Companies in exchange for covering specific drugs. These 1 Pharmaceutical manufacturers such as Pfizer, Inc., Novartis AG, AbbVie Inc., and Amgen, Inc. 2 Public and private health insurance providers such as Blue Cross and Blue Shield Association, Tufts Associated Health Plans, Inc., Independent Health Association, Inc., Priority Health Managed Benefits, Inc., and UPMC Health Plan, Inc.
  • 4. 4 discounts are memorialized in “rebate contracts” executed by Drug Companies and Insurance Companies. 16. Insurance Companies leverage competition among Drug Companies to achieve lower drug prices by way of higher rebates. Thus, if multiple Drug Companies produce the same or similar drugs, the rebate amount will increase. 17. A massive industry grew out of the demand for and use of rebate contracts, leading to the rise of intermediaries like Magellan Rx. Such companies broker and manage rebate contracts on behalf of Drug and Insurance Companies. 18. Magellan Rx extracts hundreds of millions of dollars annually from rebate contracts in two ways: (1) Charging Drug Companies administrative fees for brokering and processing payments and rebates, and (2) retaining a portion of the “spread” — the gap between the negotiated discount that an Insurance Company is willing to accept for a given drug and the actual discount the Drug Company offers. Intermediaries such as Magellan Rx are known as “Drug Rebate Brokers”. 19. Rebate contracts are tailored to the needs of Insurance Companies and the nature of the drug covered. In 2015, Magellan Rx generated revenue from three types of rebates: a. “Base Rebate.” Magellan collects a profit spread between the discounted drug price it contracts from Drug Companies and the price it passes on to Insurance Companies. For example, if a Drug Company offers Magellan a 10% discount on a drug, Magellan passes a percentage of the discount to an Insurance Company and retains the remainder of the discount for itself.
  • 5. 5 b. “Price Protection Rebate.” A Drug Company agrees with Magellan to place a price limit on a given drug for a specified amount of time. If the Drug Company, for whatever reason, increases that drug’s price by more than the specified amount, an additional rebate is passed on to the Insurance Company that is a party to the rebate contract. Magellan retains a portion of this rebate. c. “Term Improvement Rebate.” Magellan renegotiates the terms of an existing rebate contract with a Drug Company for a larger discount. As with Base Rebates, Magellan retains a portion of the discount while passing the rest on to the Insurance Company. 20. Drug and Insurance Companies’ understanding of Magellan’s spread is opaque at best. Often, neither Drug Companies nor Insurance Companies are made aware of the total rebate acquired or the spread Magellan retains. 21. With little regulation and a constantly changing industry, trust amongst Drug Companies, Insurance Companies, and Drug Rebate Brokers is essential to negotiating, acquiring, and maintaining rebate contracts. 22. To maximize profits, Magellan regularly and as a matter of practice retains a significant portion of the Price Protection and Term Improvement Rebates negotiated with Drug Companies, rather than passing the rebates to Insurance Companies. 23. Magellan also earns rebate revenue by negotiating Term Rebate Improvement contracts with Drug Companies under the pretense that an additional rebate is necessary to maintain the relationship with the Insurance Company.
  • 6. 6 24. Insurance Companies routinely cancel rebate contracts if a better deal—i.e., a larger rebate—presents itself. As a result, rebate contracts are short-term by design, frequently lasting only as long as the contract’s “termination without cause” provision, which is generally 30, 60, or 90-days. 25. Magellan incentivizes its individual brokers (e.g., Larweth) to aggressively acquire and retain rebate contracts through commission-based compensation plans. Larweth’s Industry Experience 26. Larweth began his career at Sanofi, S.A, a Drug Company. During his twelve-year tenure, he held several senior level positions, developed relationships with dozens of Insurance Companies, and learned the ins-and-outs of rebate contract negotiations. 27. In October 2006, ICORE Healthcare, LLC (“ICORE”), a Magellan subsidiary, hired Larweth as Vice President of Account Management to take advantage of his extensive industry experience and reputation. 28. In October 2011, Larweth left ICORE and joined CDMI, LLC (“CDMI”), a start-up health care management company created by a founder of ICORE. There, Larweth brokered rebate contracts between Drug and Insurance Companies.3 Larweth Returns to Magellan 29. Larweth rejoined Magellan in March 2014. He was hired as Senior Vice President of Business Development in Magellan Rx’s Specialty Carve-Out Rebate Division. 3 Roughly nine months after he joined CDMI, Magellan sued Larweth, CDMI, and CDMI’s owner for an alleged breach of a non-compete agreement, among other claims. See Magellan Health Services, Inc. v. CDMI, LLC, et al, Case No. 3:12-CV-01250 (JBA) (D. Conn. 2012). That matter settled when Magellan purchased CDMI.
  • 7. 7 30. Larweth hired a team of salespeople and developed, managed, and negotiated rebate contracts. 31. Magellan Rx’s Specialty Carve-Out Rebate Division is split into two subdivisions: Manufacturer/Pharmaceutical Relations and Health Plan Sales. 32. The Manufacturer/Pharmaceutical Relations division has a handful of employees dedicated to negotiating rebate terms with Drug Companies. Those negotiated terms are memorialized in a draft contract that is passed on to the Health Plan Sales division, which works to sell the Insurance Companies on the rebate contracts. 33. Larweth worked in Health Plan Sales. The Health Plan Sales division’s goal is to broker rebate contracts with Insurance Companies, thereby generating revenue for Magellan. 34. Although the Manufacturer/Pharmaceutical Relations and Health Plan Sales divisions were separate, Magellan Rx’s brokers in both divisions worked together to retain and develop relationships with Drug and Insurance Companies. Larweth Receives and Relies Upon the 2015 Commission Plan 35. On or about March 18, 2015, Mostafa Kamal (“Kamal”), then Senior Vice President and General Manager of Magellan Rx, emailed Larweth and other brokers a Proposed Commission Plan for Carve-Out Rebate Business Development (“Commission Plan”). The Commission Plan is attached hereto as Exhibit “A”. Kamal authored the Commission Plan. 36. Although titled “Proposed”, this document was the only operative 2015 commission plan, retroactively effective January 1, 2015. It, and it alone, governed Larweth’s 2015 commissions.
  • 8. 8 37. Larweth needed to meet a baseline rebate revenue target to earn commissions under the Commission Plan. If the baseline was met, Larweth received 0.3% of the baseline amount. 38. The Commission Plan further provides that rebate revenue acquired in excess of the baseline target would pay out in the following incremental commission tiers, in addition to the baseline .3% commission: a. $1-$1,000,000 – 7% of the incremental value; b. $1,000,000 – $2,000,000 – 8% of the incremental value; c. $2,000,000 – $3,0000,000 – 9% of the incremental value; d. $3,000,000 + – 10% of the incremental value. See Ex. A. 39. The Commission Plan allowed Magellan to “adjust for any unforeseen market conditions that result in material changes” to the incentive structure. Id. No such conditions arose in 2015. 40. By the Commission Plan’s March 2015 circulation, the majority of market pressures that could or would impact Term Improvement rebate contracts in 2015 were known to Magellan Rx. 41. Magellan also knew that the Commission Plan created the real possibility that Larweth would earn a seven-figure bonus in 2015. But Magellan had a contingency plan: If, at the end of the year, it deemed Larweth’s commissions too high, it would refuse to honor the Commission Plan.
  • 9. 9 42. From March 2015 through March 2016, Kamal and other Magellan Rx executives repeatedly referred to the Commission Plan as governing Larweth’s 2015 commission compensation. 43. From March to December 2015, Larweth negotiated rebate contracts in reliance on the Commission Plan and generated tens of millions of dollars in revenue for Magellan through (a) Base Rebate, (b) Price Protection Rebate, and (c) Term Improvement Rebate contracts. Magellan Refuses to Pay Larweth’s 2015 Commissions 44. In July 2015, Kamal was promoted to CEO of Magellan Rx. In his first year as CEO, Kamal was under immense pressure from Magellan’s Board of Directors. To justify his promotion, he desperately needed strong 2015 financials. 45. There was one problem: Larweth’s commissions. Under the Commission Plan that Kamal drafted and adopted on behalf of Magellan, Larweth earned over $1 million in commissions in 2015 and nearly $2 million in overall compensation. Other employees in Larweth’s division would also have been highly compensated. 46. In the Summer of 2015, Kamal and other upper level management at Magellan Rx realized that Larweth’s compensation under the Commission Plan was going to be significant. 47. Kamal did not want to explain to Magellan’s Board of Directors how or why Larweth earned a seven-figure commission payout based on an incentive structure that he created. Kamal’s face-saving solution: Magellan would continue to misrepresent its intent to honor the Commission Plan until payment became due in the first quarter of 2016, at which point it would refuse to pay Larweth’s proper commissions.
  • 10. 10 48. Kamal would have faced a mutiny without the assistance of Several Magellan Rx executives, including Mark Lederer (“Lederer”), Vice President of Financial Operations, and Kevin Fletemeyer (“Fletemeyer”), Chief Financial Officer and Senior Vice President. 49. Magellan, through Kamal or otherwise, never informed Larweth that it did not intend to honor the Commission Plan. To the contrary, throughout 2015 and into 2016 Magellan repeatedly represented to Larweth that he would be compensated in accordance with the Commission Plan. 50. Larweth justifiably relied on Magellan’s representations. 51. In fact, he excelled. Larweth retained over $10 million in rebates above his baseline target, qualifying all rebate revenue he generated in excess of his baseline target to a 10% commission. See Ex. A. 52. Specifically, he retained, above his baseline target, approximately $5,200,000 in Price Protection Rebates (by negotiating deals between Drug Companies such as AbbVie, Inc., Amgen, and Teva Pharmaceutical Ltd., and Insurance Companies such as Priority Health Managed Benefits, Inc., UPMC Health Plan, Inc., Blue Cross and Blue Shield of Florida, Tufts Health Plan, and Independent Health Association, Inc.), and $5,800,000 in Term Improvement Rebates (by negotiating deals between AbbVie, Inc., Amgen and Priority Health Managed Benefits, Inc., UPMC Health Plan, Inc., Blue Cross and Blue Shield of Florida, Tufts Health Plan, and Independent Health Association, Inc.). 53. In March 2016, Magellan paid Larweth $575,000.00 in commissions for Base Rebate contracts. However, he was entitled to $676,000.00 in commissions related to Base Rebate contracts per the Commission Plan. Magellan never paid Larweth the additional $101,000.
  • 11. 11 54. Further, Magellan informed Larweth that he was entitled to only $52,000 in excess commissions above his baseline target for Price Protection Rebates, calculated as 1% of the $5.2 million he retained in Price Protection Rebate revenue above his baseline target. This number was wholly arbitrary and ignores the $520,000 he was entitled under the Commission Plan. 55. Magellan outright denied commissions for revenue Larweth captured on Term Improvement Rebates, ignoring the $5.8 million he generated above his baseline commission- -thus depriving him of $580,000 owed under the Commission Plan. 56. Magellan refused to produce a detailed audit of its commission calculations, despite Larweth’s repeated requests. 57. In February and March 2016, Lederer told Larweth that he was only entitled to a 1% commission on Price Protection Rebates, rather than the 10% commission detailed in the Commission Plan, because Larweth was not responsible for any of the Price Protection or Term Improvement Rebates Magellan retained. This was false. Lederer knew it to be so: One of Lederer’s subordinates, Denise McGinnis, worked extensively with Larweth on securing Price Protection and Term Improvement Rebate contracts. 58. In mid-2016, Larweth met with Lederer at an airport hotel meeting room in Boston. There, Lederer again tried to persuade Larweth that he was not entitled to commissions beyond what he received. 59. Lederer’s story had changed: He now stated that 2015 revenue generated by Term Improvement Rebates were “unforeseen” manufacturer term changes, rendering them non- compensable by the Commission Plan. Again, Lederer refused to produce an accounting or
  • 12. 12 documentation of Magellan’s delineation between “foreseen” v. “unforeseen” term improvements, information essential to such calculation. 60. When the conversation turned to Price Protection Rebates, Lederer stated that Larweth was lucky to receive a 1% commission, as all 2015 Price Protection Rebates were negotiated with Drug Companies prior to Larweth’s reemployment with Magellan and without his involvement. 61. Magellan’s position was a duplicitous reimagining of the Commission Plan’s purpose. As Kamal wrote in the Commission Plan, the 2015 incentive structure was designed to maintain accounts: “[I]t is important to create a structure that heavily incents behavior that will support retention of accounts, not just new sales.” Ex. A. Thus, the Commission Plan’s aim was to incentivize not just Base Rebate contracts, but Term Improvement and Price Protection Rebate contracts. 62. Soon thereafter, Lederer produced a final commission report for 2015. The report indicated that Larweth owed Magellan money for overpaying his commissions. Notably, Magellan never attempted to claw back the money Larweth supposedly owed. 63. On or about August 21, 2016, Larweth attended Magellan’s annual Specialty Summit in New York City. 64. After the Summit meeting, Larweth confronted Kamal about the unpaid 2015 commissions. Kamal stated that Larweth’s large commissions would make him look poorly in the eyes of the Board of Directors. Kamal also stated that Larweth had been compensated “enough.”
  • 13. 13 65. These statements reveal a cold truth: From the Commission Plan’s inception, Magellan never intended to honor its terms. Magellan Terminates Larweth 66. In January 2017, Magellan Rx’s Specialty Carve-Out Rebate Division was restructured. Philip Vecchiolli (“Vecchiolli”) was hired as Senior Vice President of Formulary Management. Larweth lost his team and reported directly to Vecchiolli. 67. In late December 2017, Magellan gave Larweth notice that he would be terminated without cause. Larweth was officially terminated on January 5, 2018. 68. Magellan presented Larweth with a Severance Agreement and Release (“Severance Agreement”). The Severance Agreement provided that Larweth would explicitly waive any rights or claims to his unpaid 2015 commissions. 69. Larweth refused the Severance Agreement. Magellan Destroys Larweth’s Industry Relationships 70. Soon after Larweth was terminated, multiple Magellan executives, including Kamal and Vecchiolli, launched a smear campaign to destroy Larweth's reputation. 71. In an industry as fiercely competitive as the drug rebate business, one’s reputation is of paramount importance. Magellan knew this so it began targeting Insurance Companies with which Larweth had worked for years, including companies that Larweth worked with prior to his most recent tenure at Magellan. 72. On or about March 9, 2017, Vecchiolli, on behalf of Magellan Rx and at the behest of Kamal, called the President & CEO of AscellaHealth, LLC (“AscellaHealth”). This call was
  • 14. 14 made with the knowledge that Larweth had a great reputation with AscellaHealth that predated his time at Magellan. During the call, Veccholli stated that Larweth: a. Was attempting to raid the company and encouraging individuals to leave Magellan Rx; b. Was unlawfully competing against Magellan and supplying seed money to help a former Magellan Rx sales executive start a competing company; and c. Was engaging in illegal conduct and unfair competition and would soon be “buried” in legal fees. 73. These statements are false. Magellan made these statements fully aware of their falsity and the impact they could have on Larweth's reputation. 74. Vecchiolli also told AscellaHealth that because Larweth declined to sign the Severance Agreement, he knew that Larweth was illegally competing against Magellan. Vecchiolli failed to mention Larweth had been denied the majority of his 2015 commissions or that the Severance Agreement required he waive his entitlement to same. 75. Vecchiolli also stated that he intended to call every Magellan client he could and tell them what he had told AscellaHealth. 76. He began doing just that: On or around March 12, 2018, Vecchiolli, on behalf of Magellan Rx and at the behest of Kamal, contacted Health Partners Plans, Inc. (“Health Partners”) in Philadelphia, Pennsylvania. Vecchiolli, knowing that Larweth had worked with Health Partners both prior to and during his Magellan tenure, warned Health Partners to avoid Larweth. But he didn’t stop there. Vecchiolli again impugned Larweth’s character, indicating
  • 15. 15 that he was unlawfully and unfairly competing against Magellan, engaging in illegal conduct, and could not to be trusted. At least one of these conversations happened at Vecchiolli’s home. 77. Vecchiolli and other Magellan executives disseminated these same false statements to Horizon Blue Cross Blue Shield, EmblemHealth/ConnectiCare, and Sentara Healthcare. As with AscellaHealth and Health Partners, Larweth had a long-standing relationship with these entities that predated his Magellan employment. 78. Next, Magellan executives, at the behest of Kamal, spread falsehoods regarding Larweth’s character to numerous Magellan employees. 79. Through these and other conversations, Magellan, in minutes, intentionally destroyed much of the good reputation that Larweth had spent years cultivating. COUNT I – BREACH OF CONTRACT (in the alternative to Count II and Count III) 80. Plaintiff realleges and incorporates paragraphs 1 through 79 as if fully set forth herein. 81. Defendant presented the Commission Plan to Plaintiff in March 2015. 82. The Commission Plan outlined that in exchange for Plaintiff’s services negotiating rebate contracts, Magellan would pay Plaintiff commissions during the first quarter of 2016 in the manner and amount outlined in the Commission Plan. 83. Plaintiff agreed to the Commission Plan’s terms and the Parties became bound by it. 84. The Commission Plan applied to the entire calendar year of 2015 and was the sole document governing Plaintiff’s compensation. It sufficiently specified all essential terms. 85. The Commission Plan is a binding and enforceable contract.
  • 16. 16 86. Under the Commission Plan, Plaintiff was entitled to 0.3% commission for reaching his baseline revenue target in 2015 and additional incentives for surpassing his baseline revenue target. 87. Plaintiff generated over ten million dollars in revenue above his baseline revenue target for the year 2015. 88. Plaintiff was entitled to a 10% commission for all revenue generated in excess of his baseline target, plus 0.3% of his total baseline revenue threshold. 89. Defendant materially breached the Commission Plan when it refused to pay Plaintiff commissions owed under the Commission Plan during the first quarter of 2016. 90. As a direct and proximate cause of Defendant’s breach of the Commission Plan, Plaintiff suffered damages in excess of one million dollars and in an amount to be determined at trial. COUNT II – QUANTUM MERUIT (in the alternative to Count I and Count III) 91. Plaintiff realleges and incorporates paragraphs 1 through 79 as if fully set forth herein. 92. In 2015, Defendant wanted to increase its rebate contract revenue. To do so, Defendant incentivized Plaintiff through promises of commission payments for successfully meeting various benchmarks beyond his baseline target. 93. One such benchmark was a 10% commission on all revenue Plaintiff generated above his baseline target if he generated $3,000,000 or more above his baseline target. 94. Plaintiff worked throughout 2015, providing services that were accepted by Defendant, under the reasonable belief that he would receive a 10% commission on all revenue he generated above his baseline target that exceeded his baseline target by $3,000,000 or more.
  • 17. 17 95. Defendant was aware that Plaintiff reasonably expected to receive a 10% commission on all revenue exceeding his baseline target by $3,000,000 or more. 96. Defendant was unjustly enriched as a result of its failure to pay Plaintiff the fair value of his services in 2015. COUNT III – UNJUST ENRICHMENT (in the alternative to Count I and Count II) 97. Plaintiff realleges and incorporates paragraphs 1 through 79 as if fully set forth herein. 98. From March 2015 to March 2016, Defendant repeatedly indicated to Plaintiff that the Commission Plan was the operative 2015 incentive structure. 99. Plaintiff justifiably relied on the Commission Plan governing his commission compensation for 2015. 100.Defendant derived a benefit from Plaintiff by allowing him to work under the belief that the Commission Plan was the operative compensation structure. To wit: The Commission Plan incentivized stronger performance by Larweth. 101.Defendant knowingly and voluntarily accepted and retained the benefit of Plaintiff’s work - millions of dollars in additional revenue - but did not compensate Plaintiff in accordance with the Commission Plan. 102.Instead, Defendant improperly absorbed Plaintiff’s commissions into its earnings. 103.As a result of Defendant’s failure to pay Plaintiff’s commissions, Plaintiff has sustained damages in excess of $1 million and in an amount to be determined at trial and Defendant has been unjustly enriched at Plaintiff's expense. 104.Plaintiff lacks an adequate remedy at law.
  • 18. 18 105.In equity and good conscience, Defendant should not be permitted to retain monies wrongfully withheld from Plaintiff. COUNT IV – FRAUD 106.Plaintiff realleges and incorporates paragraphs 1 through 79 as if fully set forth herein. 107.Defendant knew when it presented the Commission Plan to Plaintiff in March 2015 that it would not honor the terms of that Plan. 108.Plaintiff was not aware of this because (1) It was hidden from him and (2) Kamal, Lederer, and Fletemeyer, as Defendant’s agents, repeatedly and materially represented to Plaintiff that the Commission Plan was the operative compensation structure for the 2015 year. 109.Defendant intended for those representations to induce Plaintiff to continue working with the belief that he would be compensated in accordance with the Commission Plan. 110.Plaintiff relied on Defendant’s material misrepresentations and continued to work and thrive for the benefit of Defendant, believing his hard work would pay off in the form of commissions. 111.Plaintiff’s reliance on Defendant’s representations was justifiable and caused him harm. 112.Plaintiff has been harmed by Defendant’s fraud as he has been deprived of over $1 million dollars. 113.Only after 2015 passed, and Plaintiff’s commissions became due, did Defendant reveal that Plaintiff would not be paid in accordance with the Commission Plan. 114.As a direct and proximate cause of Defendant’s fraud, Plaintiff suffered damages in excess of $1 million and in an amount to be determined at trial.
  • 19. 19 COUNT V – DEFAMATION PER SE 115.Plaintiff realleges and incorporates paragraphs 1 through 79 as if fully set forth herein. 116.In the Drug Rebate business, a good reputation is worth more than an existing relationship. Plaintiff worked for over twenty years to cultivate his reputation amongst his peers, as well as actual and prospective clients throughout the industry. 117.Defendant knowingly made false statements regarding Plaintiff’s character, skill, and professional integrity in the Drug Rebate industry to numerous Insurance Companies. 118.Defendant’s false statements impugned the character, skill, and professional integrity of Plaintiff in relation to the industry in which he dutifully served Defendant for over eleven years. 119.Defendant’s false statements were published willfully, recklessly, and/or negligently. 120.Defendant’s false statements were repeated to a group of Plaintiff’s peers and contacts within the industry, the full scope of which has yet to be determined. 121.Defendant’s statements have subjected Plaintiff to public ridicule and humiliation within the Drug Rebate industry. 122.As a direct result of Defendant’s false statements, Plaintiff has suffered actual and reputational damages.
  • 20. 20 PRAYER FOR RELIEF Plaintiff requests: a. Compensatory damages for Defendant’s breach of contract to the fullest extent permitted by law; b. The value of services Plaintiff rendered on behalf of Defendant in 2015, to the fullest extent of the law; c. Restitution for Defendant’s unjust enrichment to the fullest extent permitted by law, including disgorgement of profits netted by Defendant as a result of its unjust enrichment; d. Compensatory and punitive damages for Defendant’s fraud to the fullest extent permitted by law; e. Compensatory damages for reputational and actual loss caused by Defendant’s per se defamation of Plaintiff, to the fullest extent permitted by law; f. Punitive damages for reputational and actual loss attributable to Defendant’s per se defamation of Plaintiff, to the fullest extent permitted by law; g. Plaintiff’s costs; h. Pre-judgment and post-judgment interest; and i. Such other relief this Court deems just and proper. JURY TRIAL DEMAND Plaintiff demands a jury on all issues so triable.
  • 21. 21 Dated: May 25, 2018 Respectfully submitted, By: /s/ Jonathan Pollard Jonathan Pollard Florida Bar No.: 83613 jpollard@pollardllc.com Trial Counsel Christopher S. Prater Florida Bar No.: 105488 cprater@pollardllc.com David J. Yaffe Florida Bar No.: 125488 dyaffe@pollardllc.com Pollard PLLC 401 E. Las Olas Blvd. Suite, #1400 Fort Lauderdale, FL 33301 Telephone: 954-332-2380 Facsimile: 866-594-5731 Attorneys for Plaintiff