Case: 2:17-cv-11184-DPH-RSW As of: 03/21/2019 02:09 PM EDT 1 of 5
U.S. District Court Eastern District of Michigan (Detroit) CIVIL DOCKET FOR CASE #: 2:17−cv−11184−DPH−RSW

J.V., on behalf of herself and all others similarly situated v. Lyon, in his official capacity only as Executive Director of the Michigan Department of Health and Human Services Assigned to: District Judge Denise Page Hood Referred to: Magistrate Judge R. Steven Whalen Cause: 28:1331 Fed. Question
Plaintiff

Date Filed: 04/14/2017 Jury Demand: Plaintiff Nature of Suit: 440 Civil Rights: Other Jurisdiction: Federal Question

J.V., on behalf of herself and all others similarly situated

represented by John M. Traylor Dickinson Wright PLLC 8550 Jamestown Dr. White Lake, MI 48386 248−245−4429 Email: jtraylor@dickinsonwright.com ATTORNEY TO BE NOTICED

Randall L. Tatem Dickinson Wright PLLC 500 Woodward Avenue Suite 4000 Detroit, MI 48226 313−223−3676 Fax: 313−223−3598 Email: rtatem@dickinsonwright.com ATTORNEY TO BE NOTICED

Robert P. Young , Jr. Dickinson Wright 38525 Woodward Avenue Suite 2000 Bloomfield Hills, MI 48304−2970 248−646−4300 Fax: 313−223−3756 Email: ryoung@dickinsonwright.com TERMINATED: 06/05/2018 ATTORNEY TO BE NOTICED

Aaron V. Burrell Dickinson Wright, PLLC 500 Woodward Ave. Suite 4000 Detroit, MI 48226 313−223−3500 Fax: 313−223−3598 Email: aburrell@dickinsonwright.com ATTORNEY TO BE NOTICED

V.
Defendant
Nick Lyon, in his official capacity only as Executive Director of the Michigan Department of Health and Human Services

represented by Joshua S. Smith MI Department of Attorney General Health Education and Family Services P.O. Box 30758 Lansing, MI 48909 517−335−7603 Email: smithj46@michigan.gov ATTORNEY TO BE NOTICED

Case: 2:17-cv-11184-DPH-RSW As of: 03/21/2019 02:09 PM EDT 2 of 5

Kelley Turnock McLean Department of Attorney General 3030 W. Grand Boulevard Suite 10−200 Detroit, MI 48202 313−456−0280 Email: mcleank@michigan.gov ATTORNEY TO BE NOTICED

Date Filed 04/14/2017
04/14/2017 04/17/2017 04/19/2017 04/19/2017 04/21/2017 04/27/2017 04/27/2017 05/08/2017
05/08/2017 05/09/2017
05/19/2017 05/19/2017 05/24/2017

# Docket Text
1 COMPLAINT − Class Action filed by J.V., on behalf of herself and all others similarly situated against Nick Lyon, in his official capacity only as Executive Director of the Michigan Department of Health and Human Services with Jury Demand. Plaintiff requests summons issued. Fee Required − Fee Not Paid. County of 1st Plaintiff: Macomb − County Where Action Arose: Macomb − County of 1st Defendant: Macomb. [Previously dismissed case: No] [Possible companion case(s): None] (Burrell, Aaron) (Entered: 04/14/2017)
2 MOTION to Proceed Under A Pseudonym by J.V., on behalf of herself and all others similarly situated. (Burrell, Aaron) (Entered: 04/14/2017)
3 Notice of Filing Fee Not Paid. Correction due by 4/24/2017 (SOso) (Entered: 04/17/2017)
FILING FEE Received in the amount of $400.00 by All Plaintiffs − Receipt No. DET103030 [No Image Associated with this docket entry] (Huff, W.) (Entered: 04/19/2017)
4 SUMMONS Issued for *Nick Lyon, in his official capacity only as Executive Director of the Michigan Department of Health and Human Services* (Huff, W.) (Entered: 04/19/2017)
5 NOTICE OF HEARING on 2 MOTION to Proceed Under A Pseudonym. Motion Hearing set for 7/26/2017 02:30 PM before District Judge Denise Page Hood (LSau) (Entered: 04/21/2017)
6 ATTORNEY APPEARANCE: Joshua S. Smith appearing on behalf of Nick Lyon, in his official capacity only as Executive Director of the Michigan Department of Health and Human Services (Smith, Joshua) (Entered: 04/27/2017)
7 ATTORNEY APPEARANCE: Kelley Turnock McLean appearing on behalf of Nick Lyon, in his official capacity only as Executive Director of the Michigan Department of Health and Human Services (Turnock McLean, Kelley) (Entered: 04/27/2017)
8 CERTIFICATE of Service/Summons Returned Executed. Nick Lyon, in his official capacity only as Executive Director of the Michigan Department of Health and Human Services served on 4/21/2017, answer due 5/12/2017. (Burrell, Aaron) (Entered: 05/08/2017)
9 CERTIFICATE of Service/Summons Returned Executed.. (Burrell, Aaron) (Entered: 05/08/2017)
10 STIPULATION AND ORDER to Extend Time for Defendant to File Responsive Pleadings and Response to Motion to Proceed Under A Pseudonym as to 2 :( Response due by 6/9/2017) Signed by District Judge Denise Page Hood. (LSau) (Entered: 05/09/2017)
11 STIPULATED ORDER Granting Plaintiff's Motion to Proceed Under A Pseudonym. Signed by District Judge Denise Page Hood. (LSau) (Entered: 05/19/2017)
TEXT−ONLY NOTICE: Motion Hearing on July 26, 2017 is Cancelled re 5 Notice of Hearing on Motion. (LSau) (Entered: 05/19/2017)
12 NOTICE of Appearance by Robert P. Young, Jr on behalf of J.V., on behalf of herself and all others similarly situated. (Young, Robert) (Entered: 05/24/2017)

Case: 2:17-cv-11184-DPH-RSW As of: 03/21/2019 02:09 PM EDT 3 of 5

05/31/2017 06/06/2017 06/23/2017
06/26/2017 07/07/2017 07/17/2017 08/25/2017
09/15/2017 10/04/2017 10/05/2017 10/05/2017 10/06/2017

13 STIPULATION AND ORDER to Extend Time for Defendant to File Responsive Pleadings re 1 Complaint, ( Response due by 6/23/2017) Signed by District Judge Denise Page Hood. (LSau) (Entered: 05/31/2017)
14 STIPULATION AND ORDER to Extend Page Limitations re 1 Complaint,, Set Motion and R&R Deadlines/Hearings as to 1 Complaint, :( Responsive Pleading due by 6/23/2017) Signed by District Judge Denise Page Hood. (TMcg) (Entered: 06/06/2017)
15 MOTION to Dismiss and/or for Summary Judgment by Nick Lyon, in his official capacity only as Executive Director of the Michigan Department of Health and Human Services. (Attachments: # 1 Index of Exhibits, # 2 Exhibit 1 − Quarter Watch, # 3 Exhibit 2 − CEP Report, # 4 Exhibit 3 − Kabiri, et al., # 5 Exhibit 4 − Treatment Action Group v FDA−Complaint, # 6 Exhibit 5 − Annals of Internal Medicine−HCV, # 7 Exhibit 6 − Ahmed, et al., # 8 Exhibit 7 − Senate Finance Committee Executive Summary, # 9 Exhibit 8 − National Governors Assn, # 10 Exhibit 9 − SFC Report−Appendix F, # 11 Exhibit 10 − SFC Full Report, # 12 Exhibit 11 −SFC Report−Appendix A, # 13 Exhibit 12 − Express Scripts, # 14 Exhibit 13 − Neff Affidavit, # 15 Exhibit 14 − B.E. v Teeter, # 16 Exhibit 15 − Jackson Order Denying Mtn to Dismiss, # 17 Exhibit 16 − Jackson Docket Sheet, # 18 Exhibit 17 − CMS Release No. 172, # 19 Exhibit 18 − B.E. v Teeter Docket Sheet, # 20 Exhibit 19 − Cunningham v Birch, # 21 Exhibit 20 − J.E.M. v Tidball−Order, # 22 Exhibit 21 − Smith v Capots, # 23 Exhibit 22 − Chart of Private Insurance DAA Coverage, # 24 Exhibit 23 − Fernanders v Dept of Military and Vet Affairs, # 25 Exhibit 24 − MDHHS Prior Authorization Criteria, # 26 Exhibit 25 − Medicaid Provider Manual−Pharmacy, # 27 Exhibit 26 − Hepatitis C Prior Authorization Form, # 28 Exhibit 27 − Denial Letters) (Smith, Joshua) (Entered: 06/23/2017)
16 NOTICE of Appearance by Randall L. Tatem on behalf of All Plaintiffs. (Tatem, Randall) (Entered: 06/26/2017)
17 NOTICE OF HEARING on 15 MOTION to Dismiss and/or for Summary Judgment. Motion Hearing set for 9/6/2017 03:00 PM before District Judge Denise Page Hood (LSau) (Entered: 07/07/2017)
18 STIPULATION AND ORDER to Extend Time to File Responsive Pleading to Defendant's 15 MOTION to Dismiss and/or for Summary Judgment and for Defendant to File a Reply Brief :( Response due by 8/25/2017, Reply due by 9/15/2017, Motion Hearing REset for 10/4/2017 at 3:30 PM before District Judge Denise Page Hood.) Signed by District Judge Denise Page Hood. (TMcg) (Entered: 07/17/2017)
19 RESPONSE to 15 MOTION to Dismiss and/or for Summary Judgment filed by All Plaintiffs. (Attachments: # 1 Index of Exhibits Index of Exhibits, # 2 Exhibit Exhibit 1, # 3 Exhibit Exhibit 2, # 4 Exhibit Exhibit 3, # 5 Exhibit Exhibit 4, # 6 Exhibit Exhibit 5, # 7 Exhibit Exhibit 6, # 8 Exhibit Exhibit 7, # 9 Exhibit Exhibit 8, # 10 Exhibit Exhibit 9, # 11 Exhibit Exhibit 10, # 12 Exhibit Exhibit 11, # 13 Exhibit Exhibit 12, # 14 Exhibit Exhibit 13, # 15 Exhibit Exhibit 14, # 16 Exhibit Exhibit 15, # 17 Exhibit Exhibit 16, # 18 Exhibit Exhibit 17, # 19 Exhibit Exhibit 18, # 20 Exhibit Exhibit 19, # 21 Exhibit Exhibit 20, # 22 Exhibit Exhibit 21) (Burrell, Aaron) (Entered: 08/25/2017)
20 REPLY to Response re 15 MOTION to Dismiss and/or for Summary Judgment filed by Nick Lyon, in his official capacity only as Executive Director of the Michigan Department of Health and Human Services. (Smith, Joshua) (Entered: 09/15/2017)
TEXT−ONLY NOTICE: Motion Hearing on October 4, 2017 is Cancelled. (LSau) (Entered: 10/04/2017)
21 STIPULATION AND ORDER for Mediation and to Adjourn Oral Argument. Signed by District Judge Denise Page Hood. (LSau) (Entered: 10/05/2017)
22 ORDER REFERRING OTHER MATTERS to Magistrate Judge Whalen : Settlement Conference. Signed by District Judge Denise Page Hood. (LSau) (Entered: 10/05/2017)
23 NOTICE TO APPEAR: Settlement Conference set for 11/30/2017 at 01:30 PM before Magistrate Judge R. Steven Whalen. Please see Notice for additional information. (THac) (Entered: 10/06/2017)

Case: 2:17-cv-11184-DPH-RSW As of: 03/21/2019 02:09 PM EDT 4 of 5

11/29/2017 12/05/2017 01/17/2018 03/07/2018 03/23/2018 03/29/2018 04/16/2018
04/18/2018
04/18/2018 04/26/2018 04/27/2018
04/27/2018 05/24/2018
05/29/2018 05/30/2018

TEXT−ONLY NOTICE: Hearing on 11/30/2017 is Cancelled re 23 Notice to Appear − ***TO BE RESET*** (CCie) (Entered: 11/29/2017)
24 AMENDED NOTICE TO APPEAR: Settlement Conference reset for 1/17/2018 at 01:30 PM before Magistrate Judge R. Steven Whalen. SEE NOTICE FOR ADDITIONAL INFORMATION. (THac) (Entered: 12/05/2017)
Minute Entry for proceedings before Magistrate Judge R. Steven Whalen: Settlement Conference held on 1/17/2018 − Disposition: Settlement reached/Notice of Settlement will be submitted to District Judge. (Court Reporter: Digitally Recorded) (CCie) (Entered: 01/17/2018)
25 STIPULATION AND ORDER for In−Person Status Conference, ( Status Conference set for 3/29/2018 03:00 PM before District Judge Denise Page Hood) Signed by District Judge Denise Page Hood. (LSau) (Entered: 03/07/2018)
26 ORDER Dismissing Motion Without Prejudice 15 . Signed by District Judge Denise Page Hood. (LSau) (Entered: 03/23/2018)
Minute Entry for proceedings before District Judge Denise Page Hood: Status Conference held on 3/29/2018, [Motion for Preliminary Approval to be filed by 4/30/18] (LSau) (Entered: 03/29/2018)
27 Joint MOTION to Certify Class , Appoint Class Counsel, Approve Notice to Class Members, Grant Preliminary Approval of Proposed Class Action Settlement and Set Date for Fairness Hearing by J.V., on behalf of herself and all others similarly situated. (Attachments: # 1 Index of Exhibits, # 2 Exhibit A−Settlement and Release Agreement, # 3 Exhibit B−Proposed Settlement Notice, # 4 Exhibit C−Order for Notice to the Class, # 5 Exhibit D−Stipulated Order to Certify Class) (Burrell, Aaron) (Entered: 04/16/2018)
28 NOTICE OF HEARING on 27 Joint MOTION to Certify Class , Appoint Class Counsel, Approve Notice to Class Members, Grant Preliminary Approval of Proposed Class Action Settlement and Set Date for Fairness Hearing. Motion Hearing set for 5/1/2018 03:30 PM before District Judge Denise Page Hood (LSau) (Entered: 04/18/2018)
29 NOTICE TO APPEAR: Status Conference set for 5/1/2018 03:30 PM before District Judge Denise Page Hood (LSau) (Entered: 04/18/2018)
30 NOTICE by J.V., on behalf of herself and all others similarly situated re 27 Joint MOTION to Certify Class , Appoint Class Counsel, Approve Notice to Class Members, Grant Preliminary Approval of Proposed Class Action Settlement and Set Date for Fairness Hearing Notice of Corrected Exhibit (Burrell, Aaron) (Entered: 04/26/2018)
Set/Reset Deadlines as to 27 Joint MOTION to Certify Class , Appoint Class Counsel, Approve Notice to Class Members, Grant Preliminary Approval of Proposed Class Action Settlement and Set Date for Fairness Hearing. Motion Hearing set for 5/24/2018 03:00 PM before District Judge Denise Page Hood (LSau) (Entered: 04/27/2018)
Set Deadlines/Hearings: Status Conference RESET for 5/24/2018 03:00 PM before District Judge Denise Page Hood (LSau) (Entered: 04/27/2018)
Minute Entry for proceedings before District Judge Denise Page Hood: Motion Hearing held on 5/24/2018 re 27 Joint MOTION to Certify Class , Appoint Class Counsel, Approve Notice to Class Members, Grant Preliminary Approval of Proposed Class Action Settlement and Set Date for Fairness Hearing filed by J.V., on behalf of herself and all others similarly situated Disposition: Motion taken under advisement (Court Reporter: Cheryl Daniel) (LSau) (Entered: 05/24/2018)
31 ORDER GRANTING Joint Motion to Certify Class, Appoint Class Counsel, Approve Notice to Class Members, Grant Preliminary Approval of Proposed Class Action Settlement and Set Date for Fairness Hearing 27 . Signed by District Judge Denise Page Hood. (KJac) (Entered: 05/29/2018)
32 NOTICE TO APPEAR: Fairness Hearing set for 8/8/2018 03:00 PM before District Judge Denise Page Hood (LSau) (Entered: 05/30/2018)

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06/04/2018 06/05/2018 06/08/2018 06/15/2018 06/15/2018 06/21/2018 07/03/2018 07/03/2018 07/05/2018 08/08/2018
08/08/2018 08/15/2018 08/31/2018 08/31/2018

33 NOTICE of Withdrawal of Attorney Robert P. Young, Jr for on behalf of J.V., on behalf of herself and all others similarly situated. (Young, Robert) (Entered: 06/04/2018)
34 ORDER of withdrawal of appearance of Attorney Robert P. Young, Jr. Signed by District Judge Denise Page Hood. (DPer) (Entered: 06/06/2018)
35 STIPULATION AND ORDER to Substitute Class Representative. Signed by District Judge Denise Page Hood. (Attachments: # 1 Exhibit) (LSau) (Entered: 06/08/2018)
36 NOTICE of Appearance by John M. Traylor on behalf of All Plaintiffs. (Traylor, John) (Entered: 06/15/2018)
37 MOTION for An Award of Attorneys' Fees and Reimbursemenet of Expenses by All Plaintiffs. (Attachments: # 1 Index of Exhibits Index of Exhibits, # 2 Exhibit Exhibit A, # 3 Exhibit Exhibit B) (Burrell, Aaron) (Entered: 06/15/2018)
38 NOTICE OF HEARING on 37 MOTION for An Award of Attorneys' Fees and Reimbursemenet of Expenses. Motion Hearing set for 8/8/2018 03:00 PM before District Judge Denise Page Hood (LSau) (Entered: 06/21/2018)
39 Class Member 60's Erik Leaphart's OBJECTION in part to Class Action Settlement Agreement and Release.. (NAhm) (Entered: 07/05/2018)
41 Letter from Lisa Ferrise. (NAhm) (Entered: 07/19/2018)
40 Letter from Patricia Kelly. (NAhm) (Entered: 07/06/2018)
Minute Entry for proceedings before District Judge Denise Page Hood: Motion Hearing held on 8/8/2018 re 37 MOTION for An Award of Attorneys' Fees and Reimbursemenet of Expenses filed by J.V., on behalf of herself and all others similarly situated Disposition: Motion taken under advisement (Court Reporter: Darlene May) (LSau) (Entered: 08/09/2018)
Minute Entry for proceedings before District Judge Denise Page Hood: Fairness Hearing held on 8/8/2018. (Court Reporter: Darlene May) (LSau) (Entered: 08/09/2018)
42 MOTION for Final Approval of Class Settlement by J.V., on behalf of herself and all others similarly situated. (Attachments: # 1 Index of Exhibits, # 2 Exhibit A−Class Action Settlement Agreement and Release) (Burrell, Aaron) (Entered: 08/15/2018)
43 ORDER Granting Final Approval of Class Settlement 42 and Addressing Objections. Signed by District Judge Denise Page Hood. (LSau) (Entered: 08/31/2018)
44 ORDER Granting Plaintiff's Motion for an Award of Attorneys' Fees and Reimbursement of Expense 37 . Signed by District Judge Denise Page Hood. (LSau) (Entered: 08/31/2018)

 
 Case 2:17-cv-11184-DPH-RSW ECF No. 1 filed 04/14/17 PageID.1 Page 1 of 29

THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF MICHIGAN

J.V., on behalf of herself and all others similarly situated,

Plaintiff,

Civil Action No.

v.

HON.

NICK LYON, in his official capacity only as Executive Director of the MICHIGAN DEPARTMENT OF HEALTH AND HUMAN SERVICES

Defendant.

CLASS ACTION COMPLAINT

For her Class Action Complaint against Defendant, Plaintiff alleges as follows

on behalf of herself and the class of similarly situated people she seeks to represent.

I. NATURE OF CASE

1.

This is a case about the unlawful denial by the State of Michigan of

treatment to potentially thousands of Medicaid eligible individuals who are infected

by the insidious and life threatening Hepatitis C Virus. Plaintiff is a Medicaid

enrollee who suffers from this communicable disease that afflicts millions of

Americans. It is, in fact, the most deadly infectious disease in this country, killing

more Americans than the next 60 infectious diseases combined. Untreated, the

chronic Hepatitis C Viral disease not only causes serious existing symptoms such as

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pain, fatigue, depression, deteriorating overall health, and an increased risk of liver failure, but can lead to fibrosis, cirrhosis, and cancer of the liver, the need for a liver transplant, and death. Yet along with thousands of other Michigan residents, Plaintiff has been denied a cure the FDA has labeled as a “breakthrough therapy,” because she has not yet suffered measurable and potentially irreversible liver damage. The treatment denied is approved by the U.S. Food and Drug Administration; is strongly urged by the American Association for the Study of Liver Diseases and the Infectious Diseases Society of America; and is recommended by the federal agency responsible for administering Medicaid. It is provided by Medicare, the VA and the overwhelming majority of commercial health insurers. And it is the consensus medical standard of care in the United States, for the simple reason that it is the only feasible cure for the disease. The denial of this cure is effected in Michigan through the illegal imposition of a criterion of eligibility that forbids the disease-ridden individual access to the cure until the disease has caused serious liver damage. This is the story of how the State of Michigan brought about this discordant and disconsonant result. And this case is about overturning it.
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II. JURISDICTION AND VENUE

2.

Jurisdiction is proper under 28 U.S.C. § 1331, because this action

arises under the laws of the United States. Specifically, Plaintiff’s causes of action

arise under 42 U.S.C. § 1983 to redress deprivations of rights guaranteed her by 42

U.S.C. §§1396a(a)(10)(A), 1396a(a)(10)(B)(i) & (ii), and 1396a(a)(8).

3.

Venue is proper under 28 U.S.C. § 1391(b)(2), because all of the

actions, events or omissions giving rise to Plaintiff’s claims occurred in the Eastern

District of Michigan.

III. PARTIES

4.

Plaintiff, J.V., lives in Commerce Township, Michigan. She is enrolled

in Medicaid as an income-eligible recipient, and she was diagnosed as chronically

infected by the Hepatitis C Virus. Based on a liver, biopsy she has a Metavir Fibrosis

Score (“MFS”) of F01. Under current Michigan Medicaid State Plan restrictions, she

is categorically ineligible to receive Direct Acting Antiviral medications (“DAAs”),

which are now available as “breakthrough medications” to treat HCV, because her

1 The severity of liver damage due to the Hepatitis C Virus (“HCV”) is measured by a scoring system. Liver disease is graded according to the level of liver scarring and assigned a Metavir Fibrosis Score (“MFS”). An MFS of F0 or F1 indicates no or minimal liver scarring; F2 is an intermediate stage of fibrosis or liver scarring; a score of F3 indicates severe fibrosis; F4 indicates cirrhosis. HCV is a chronic inflammatory condition. Lack of liver damage does not suggest that the individual does not have the disease (which can be confirmed by blood tests) or that the individual is not suffering other, extrahepatic symptoms of the disease. All the F score measures is liver damage, which is only one of multiple effects of the disease. See generally, Gill, Ghazinian, Manch, Gish, Hepatitis C Virus as a Systemic: Reaching Beyond the Liver, HEPATOLOGY INTERNATIONAL, Vol. 9, No. 4 (2015).
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MFS is less than F2. J.V.’s doctor submitted a Prior Authorization forms to the

Michigan Department of Health and Human Services (“MDHHS”) requesting that

J.V. be provided with DAAs. MDHHS denied those applications because J.V.’s MFS

was F0. Based on her MFS, J.V. remains ineligible for DAA treatment under the

categorical restrictions embodied in the current Policy. J.V. is distraught with the

knowledge that the disease could kill her, that she could pass it on to others, and that

it will continue to limit her physically. She has agreed to participate in this litigation

not only to secure treatment for herself, but to help others in her position secure

treatment as well.

5.

Defendant Nick Lyon is the Director of MDHHS. MDHHS is a

department of the State of Michigan and is the sole state agency responsible for

administering the Michigan Medicaid State Plan. It is MDHHS that has established

and is implementing the restriction on access to the DAAs challenged here.

IV. THE ESSENTIAL STORY

The Disease

6.

Hepatitis is an inflammation of the liver. The condition can be self-

limiting or can progress to fibrosis (scarring), cirrhosis (liver impairment due to

scarring) or liver cancer. Chronic Hepatitis viruses are the most common cause of

Hepatitis in the world, but other infections, toxic substances, and autoimmune

diseases can also cause Hepatitis.

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7.

Chronic HCV is one of the viruses that can cause Hepatitis. It is a life-

threatening, communicable, blood-borne viral disease which, when left untreated, can

cause liver damage, liver failure, liver cancer, and death. There is no vaccine for it.

8.

HCV is mostly transmitted through exposure to infected blood. This

may happen through transfusions of HCV-contaminated blood and blood products,

transplants of infected organs and tissues, contaminated injections during medical

procedures, and through injection drug use. Sexual transmission is also possible, but

is much less common, because the disease must be passed by blood. However, there

are patients who get HCV without any known exposure to blood or to drug use.

9.

Those individuals most at risk for HCV infection are people who had

blood transfusions, blood products, or organ transplants before June 1992, when

sensitive tests for HCV were introduced for blood screening. Also at risk are health

care workers from needle-sticks involving HCV-positive blood, and infants born to

HCV-positive mothers.

10. Infection with HCV is an inflammatory disease in and of itself,

regardless of liver involvement.

11. Actual damage to the liver is an acute and severe result of infection

with HCV. The severity of liver damage due to HCV is measured by the Metavir

Fibrosis Score scoring system described in footnote 1. As noted there, lack of liver

damage does not suggest that an individual infected with HCV does not have the

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disease, or that the individual is not suffering other, non-hepatic symptoms of the disease.
12. The Center for Disease Control and Prevention (“CDC”) estimates that nearly 20,000 deaths were associated with HCV in 2014, making it the most deadly infectious disease in the United States.
13. The most recent epidemiological update for Michigan provides that 7,833 cases of chronic HCV were reported in 2015. See Michigan Department of Health & Human Services Hepatitis B and C Surveillance Report 2015.2 See also Michigan Viral Hepatitis Resource and Services Directory. (Updated March 2016) (noting that 8,233 cases of chronic HCV reported in 2014 alone).3
14. It is estimated that approximately five million individuals in the United States are infected with HCV, accounting for over 1% of the population.
15. Even in the initial stages of the disease, individuals infected with HCV can experience serious symptoms, including kidney disease, hypertension, lymphoma, intractable fatigue, joint pain, arthritis, vasculitis, thyroid disease, depression, memory loss, sore muscles, mental changes, heart attacks, diabetes, nerve damage, jaundice, and various cancers.
2 Available at http://www.michigan.gov/documents/mdhhs/Hepatitis_B_and_C_Annual_Report_2015_530584_7. pdf 3 Available at http://www.michigan.gov/documents/mdhhs/MI_Resource_Guide_Final_Draft_10_12_503360_7.p df
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The Cure 16. Until recently, the standard therapy for HCV consisted of a three-drug treatment regimen consisting of boceprevir, interferon, and ribavirin. At best, this course of treatment cured HCV in only 70% of patients, and it was often accompanied by significant adverse side effects such as bone pain, muscle pain, joint pain, anemia, insomnia, memory loss, anxiety, depression, nausea, liver failure, and death. In addition, this treatment regimen was lengthy, often requiring almost one year to complete. 17. Starting in 2013, FDA has approved a series of DAAs for the treatment of HCV, which, unlike the earlier HCV drugs, are capable of curing the disease within a relatively short course of once-daily pills over the course of 8-12 weeks, with minimal side effects. They include Viekira Pak (ombitasvir, paritaprevlr, ritonavir, dasabuvir); Daklinza (daclatisvlr); Epclusa (sorosbuvir/velpatasivir); Harvoni (sofosbuvir/ledipasvir); Olysio (simeprevir); Solvadi (sofosbuvir); Technivie (ombitasvir, paritaprevir, ritonavir); Zepatier (elbasvir/grazoprevir). These medications have been shown to result in a cure for more than 90% of patients, when treated according to the recommended protocol. For example, Harvoni, approved by the FDA on October 10, 2014, has a success rate approaching 100%, and is accompanied by few, if any, side effects. All of these drugs were designated as “breakthrough therapies” by the FDA, an official classification that is reserved for
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drugs that have proven to provide substantial improvement over available therapies for patients with serious or life-threatening diseases.
18. There are no limits in the FDA approved label on whom should be treated with DAAs. The FDA has thusly approved their use on HCV infected patients regardless of fibrosis score.
19. All of the FDA approved DAAs are supported by multiple, welldesigned controlled studies or well-designed experimental studies.
20. There is no alternative treatment, or sequence of treatments, for HCV that are at least as likely to produce equivalent therapeutic results.
21. According to evidence-based, expert-developed guidelines published by the American Association for the Study of Liver Diseases and the Infectious Diseases Society of America (“AASLD/IDSA Guidelines”), DAAs are now “recommended for all patients with chronic HCV infection,” with the narrow exception of patients “with short life expectancies that cannot be remediated by treating HCV, by transplantation, or by other directed therapy.” AMERICAN ASSOCIATION FOR THE STUDY OF LIVER DISEASES & INFECTIOUS DISEASES SOCIETY OF AMERICA, HCV GUIDANCE: RECOMMENDATIONS FOR TESTING, MANAGING, AND TREATING HEPATITIS C. 4 (emphasis added).
4 Available at http://www.hcvguidelines.org/
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22. DAAs are the only medication or medical intervention for HCV that produce a Sustained Virological Response (“SVR”) in more than 90% of patients. SVR status means that the virus is virtually undetectable in a patient, and is considered to be a de facto cure of the infection. The prior treatment with boceprevir, interferon, and ribavirin produced SVR in only approximately 70% of patients, and resulted in a host of adverse side effects.
23. The AASLD/IDSA GUIDELINES specifically urge early treatment of HCV (as in patients with fibrosis scores of F0 and F1), explicitly repudiating the idea that DAA drugs should be prescribed only for patients with significant liver damage, and instead urging that virtually all individuals infected by HCV receive DAA treatments regardless of their fibrosis score.
24. The AASLD/IDSA GUIDELINES represent the professionallyaccepted clinical standard of care for treatment of HCV in the United States and in Michigan.
25. Treatment of HCV with DAAs is cost-effective. Although “expensive,” DAAs cost the same as the combination treatment for HCV given prior to the advent of the DAAs, and are cost effective to the health care system in the long term, when the costs of treating advanced liver disease, cancer and associated manifestations of HCV are considered. Not surprisingly, the treatment is the most cost-effective when provided to patients with lower fibrosis scores, because it
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provides a cure before the virus evolves into more serious diseases. 26. As a result of the consensus over treatment of HCV infected
individuals with DAAs, the Centers for Medicare and Medicaid Services (“CMS”) (the federal agency responsible for administering Medicaid) issued Guidance on November 5, 2015, advising state Medicaid agencies that the new DAAs should be included in coverage of outpatient prescription drugs. CENTERS FOR MEDICARE AND MEDICAID SERVICES, ASSURING MEDICAID BENEFICIARIES ACCESS TO HEPATITIS C (HCV) DRUGS (Release No. 172), Nov. 5, 2015.
27. In issuing this Guidance, CMS was clear that its animating purpose was its concern “that some states are restricting access to DAA HCV drugs contrary to the statutory requirements in section 1927 of the Act by imposing conditions for coverage that may unreasonably restrict access to these drugs.” Id.
28. Further, CMS warned the States that any restrictions on access to DAAs “should not result in the denial of access to effective, clinically appropriate, and medically necessary treatments using DAA drugs for beneficiaries with chronic HCV infections.” Id. Specifically, CMS identified limiting treatment to beneficiaries with fibrosis scores of F3 and F4 as an unjustifiable restriction. Id.
29. MDHHS has continued to ignore CMS’s guidance and enforced the Policy, as alleged below. Also as alleged below, it continued to ignore CMS’s guidance even when it changed its policy on February 1, 2017, and rather than
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eliminate an MFS criteria completely, took the quarter step of only reducing the fibrosis score minimum to F2.
30. Without treatment, Medicaid enrollees infected with chronic HCV will never rid themselves of the inflammatory disease, placing these Medicaid enrollees at significantly higher risk for symptoms not involving the liver. This is because, while the DAAs cure HCV, they do not reverse the effects of the virus that have already been caused, in the liver or elsewhere. Thus, delay in the provision of DAAs to infected persons until their liver deteriorates causes some irreversible non-hepatic damage and damage to their livers that may likely prove irreversible even with the delayed administration of a DAA. Moreover, the disease does not progress linearly, and someone could move from F0 to F3 in a short period of time and long before they are tested again, which belies the oft-heard excuse “oh, there’s no harm in letting an F0 patient wait for a period of time because they’re not going to have an F3 score for a while.” Moreover, researchers have determined that common methods of determining fibrosis score do not always produce accurate results, leading to delays in treatment even among individuals with already significantly damaged livers.
31. Not surprisingly, the huge populations of patients covered by the Veteran’s Administration, Medicare, and many commercial insurers are universally approved for HCV treatment with the new treatment regimens. Medicaid enrollees in Michigan are therefore being unduly subjected to a second-class standard of health
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insurance coverage for the sole reason they are poor. The Obligation to Cover the Cure
32. Medicaid is a financial, needs-based medical assistance program cooperatively funded by the federal and state governments, and administered by the states. The Medicaid Program was established under Title XIX of the Social Security Act of 1965 (42 U.S.C. Ch. 7, Subch. XIX) for the express purpose of enabling each State to furnish medical assistance to people “whose income and resources are insufficient to meet the costs of necessary medical services.” 42 U.S.C. § 1396-1 (emphasis added); see also, 42 C.F.R. § 430.0.
33. On the federal level, the Medicaid program is administered by CMS. On the state level, Medicaid in Michigan is administered by MDHHS.
34. Although state participation is voluntary, once a state opts into the Medicaid program, it must administer the program in accordance with Federal law. All states have opted in, including Michigan. Michigan has also opted into the expansion of Medicaid under the Affordable Care Act, known colloquially as “Obamacare,” which is embodied in the PATIENT PROTECTION AND AFFORDABLE CARE ACT, Pub. L. No. 111-148, 124 Stat. 119 (2010) and the HEALTH CARE AND EDUCATION RECONCILIATION ACT OF 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010).
35. In order to participate in Medicaid, a state must submit a plan to the
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Federal government for approval. Michigan’s plan can be found at the following website, which provides additional information: http://www.mdch.state.mi.us/dchmedicaid/manuals/MichiganStatePlan/MichiganStatePlan.pdf (the “MICHIGAN MEDICAID STATE PLAN”).
36. A state Medicaid plan must provide treatment that is deemed “medically necessary” in order to comport with the objectives of the Social Security Act. 42 U.S.C. § 1396a(a)(17); Beal v. Doe, 432 U.S. 438, 444–45 (1977); Weaver v. Reagen, 886 F.2d 194, 198 (8th Cir. 1989).
37. Thus, under federal law, participating states such as Michigan have a general obligation to fund covered services and treatments that are “medically necessary.” Hern v. Beye, 57 F.3d 906, 911 (10th Cir. 1995).
38. A state plan must provide “for making medical assistance available” to a wide variety of people known as “Categorically Needy” under 42 U.S.C. §1396d. 42 U.S.C.A. § 1396a(a)(10).
39. “Medical Assistance” means “payment of part or all of the cost of” identified goods and services to various defined groups of people “whose income and resources are insufficient to meet all of such cost.” 42 U.S.C. 1396d(a). Those services include prescription drugs if the state has opted to provide them. 42 U.S.C. 1396d(a)(12).
40. Michigan has opted to provide prescriptions drugs. MICHIGAN
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HEALTH PLAN PHARMACY BENEFIT. 5 It is thus required by 42 U.S.C. 1396d(a)(12) to make them available in accordance with federal law to eligible individuals. Depending on certain income requirements, eligible individuals include, among many other categories, the following major categories:
(a) Children under the age of 21, or, if the state chooses a younger age, 20, 19 or 18;
(b) Relative caretakers of dependent children; (c) Persons 65 years of age or older; (d) Certain blind or disabled people; (e) Pregnant women; and (f) Individuals under 65 years of age not otherwise covered whose
income does not exceed 133 percent of the federal poverty line.
42 U.S.C.A. § 1396d(a). 41. State Medicaid plans, including Michigan’s, are generally required to
provide coverage for any outpatient drug for its indicated use once the drug manufacturer enters into a rebate agreement and the medicine is approved by the FDA and prescribed by a provider. 42 U.S.C. §§ (a)(1), 1396r-8(d)(B), 1396r-8(k)(2)(A), 1396r-8 (k)(6); Pharm. Research & Mfrs. of Am. v. Walsh, 538 U.S. 644, 652 (2003). Covered prescription drugs, including DAAs, must be provided when medically necessary to treat an extant illness or condition. 42 U.S.C. §§ 1396a(a)(10)(A); 1396r-(d)1(B)(i); 42 U.S.C.A. § 1396r-8(k)(6); 42 CFR 440.230(d);
5 Available at http://www.michigan.gov/mdhhs/0,5885,7-339-71547_4860-380454--,00.html
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42. Michigan does not have a definition of “medical necessity.” See e.g., National Academy for State Health Policy, Medical Necessity (December 18, 2013).6 The Michigan Medicaid State Plan does contain a “medical necessity” definition for certain services, noting that “medically necessary services are health care, diagnostic services, treatments, and other measures to correct or ameliorate any disability and/or chronic condition.” For all of the reasons set forth in this Complaint, DAA treatment for Plaintiff and the class is “medically necessary.”
43. Further, under Michigan’s Medicaid program, if the treatment is covered and medically necessary, it must be provided with “reasonable promptness.” 42 U.S.C. § 1396a(a)(8).
44. In addition, medically necessary prescription drug coverage, including access to DAAs, cannot be made available in a “lesser amount, duration or scope” than the coverage made available to any other individuals eligible under the Michigan Medicaid State Plan. 42 U.S.C.§ 1396a(a)(10)(B); 42 C.F.R. § 440.240. This is known as Medicaid’s “comparability” requirement.
45. MDHHS’s coverage criteria for HCV treatment must comply with all three of these requirements. It complies with none.
6 Available at http://www.nashp.org/medical-necessity/.
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The Wrongful Denial of the Cure 46. On February 1, 2017, MDHHS amended its DAA Policy. In that amendment, MDHHS lowered the minimum MFS needed to obtain treatment to F2. This was a step in the right direction, but it remains a violation of federal law. 47. Specifically, contrary to the AASLD/IDSA GUIDELINES and the CMS Notice, MDHHS’s restriction of DAAs, to those with MFSs of F2, F3, or F4, illegally restricts the access of otherwise covered Medicaid beneficiaries to the medically necessary treatment that can be provided only by DAAs. This restriction forces (and has in the past forced) stricken individuals to wait for treatment until they have suffered measurable, and potentially irreparable and irreversible liver damage; flatly contradicts the AASLD/IDSA Guidelines, which advise that virtually all chronic HCV patients, regardless of their fibrosis score, receive DAA treatment upon diagnosis; violates the standard of medical care universally accepted throughout the United States and Michigan; and flaunts the clear instructions and warnings of CMS. Aside from the Kafkaesque effect of requiring eligible beneficiaries, who could be treated immediately and most likely cured, to wait until their disease causes actual adverse physical effects on the liver before they can access curative treatment, the policy puts the healthy population at risk from the communicability of the disease. 48. Similar restrictions have been successfully challenged in the State of Washington, where a federal district court recently issued a preliminary injunction
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enjoining the state Medicaid agency from enforcing its policy of denying treatment based on MFS scores, the very type of categorical denial Michigan Medicaid currently enforces, and ordered that DAAs be provided to beneficiaries without regards to those scores. B.E. v. Teeter, 2016 WL 3033500, at *1 (D.C. Wash. May 27, 2016). Similar litigation is pending in Indiana. Jackson v. Secretary of the Indiana Family and Social Services Administration, Case No. 1:15-cv-01874 SEB-DKL, UNITED STATES DISTRICT COURT, SOUTHERN DISTRICT OF INDIANA (INDIANAPOLIS DIVISION), Filed 11/25/15. Medicaid agencies in a number of states, including Delaware, Florida, Massachusetts, and New York, have recently responded to legal and policy advocacy by rescinding such restrictions. This Court must order Michigan to do the same.
V. WRONGS TO INDIVIDUAL PLAINTIFF 49. At all pertinent times, Plaintiff was enrolled in Michigan’s Medicaid State Program, which is administered by MDHHS. 50. Plaintiff is a “qualified individual” as defined in 42 U.S.C. § 1396a(a)(10)(A). 51. Plaintiff is currently diagnosed with chronic HCV, and has been prescribed treatment with DAAs by her treating medical provider, who is a specialist in HCV and liver diseases. 52. Plaintiff has an MFS score of F0, which disqualifies her for DAA
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treatment under MDHHS’s current Policy.
53. Plaintiff’s treating physician applied for treatment for Plaintiff with
DAAs.
54. These applications were denied because Plaintiff’s MFS score was F0,
below the required minimum of F2.
55. Treatment with the DAAs was at the time Plaintiff applied, and is now,
“medically necessary” for her. Those DAAs are likely to cure her completely; there is
no equally effective, less costly alternative prescription drug or medical intervention
available to her; and MDHHS has offered none.
56. Plaintiff remains ineligible for treatment with DAAs under HCPF’s
current policy, because her MFS is below the new F2 threshold.
VI. CLASS ALLEGATIONS
57. Class Definition. The class for which Plaintiff seeks certification
consists of all individuals:
(i) who have been, are or will in the future be enrolled in the Michigan Medicaid State Program; and
(ii) who have been or will be diagnosed as having a chronic infection of the Hepatitis C Virus;
(iii) who require, or who will in the future require treatment for the Hepatitis C Virus with a Direct Acting Antiviral medication under the Recommendations for Testing, Managing, and Treating Hepatitis C published by the American Association for the Study of Liver Diseases and the Infectious Diseases Society of America; and
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(iv) who do not meet that portion of the Defendant’s coverage criteria for Direct Acting Antiviral medication that restrict coverage to persons based on fibrosis score either: (a) because they have had a fibrosis test and obtained a fibrosis score of less than F2, and are therefore ineligible or (b) because their fibrosis score is unknown because they have not taken a test to determine that score.
The class consists exclusively of individuals diagnosed as chronically infected with the Hepatitis C Virus, who require treatment with Direct Acting Antiviral medication AND who either (i) are ineligible under the existing MDHHS criterial because they had a fibrosis test which showed a fibrosis score of less than F2 OR (ii) whose fibrosis score is unknown because they have not had a fibrosis test, which may not be practically available because of location and may require a liver biopsy, which is an unpleasant, painful and potentially risky medical procedure. All class members are injured by the existence of fibrosis criteria, either because it renders them ineligible for medically necessary treatment or requires them taking a test to determine eligibility which may prove unfruitful. All class members will benefit by the relief Plaintiff seeks of eliminating the fibrosis score restriction entirely.
58. Plaintiff seeks certification of a class under F.R.C.P. 23(b)(2). The requirements for class certification under Rule 23(a) are the following:
(a) Numerosity. The class is so numerous that joinder of all members is impracticable;
(b) Commonality. There are questions of law or fact common to the class;
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(c) Typicality. The claims or defenses of the representative parties are typical of the claims or defenses of the class; and
(d) Adequacy of Representation. The representative parties will fairly and adequately protect the interests of the class. 59. Action Common to Class. The party opposing the class has acted or
refused to act on grounds that apply generally to the class, so that final injunctive relief or corresponding declaratory relief is appropriate respecting the class as a whole. All of these requirements are satisfied here.
60. Typicality. Plaintiff claims that: (i) she is Medicaid eligible under 42 U.S.C.§1396d; (ii) she has been diagnosed as infected by the HCV Virus; (iii) her doctor has recommended treatment with one of the DAAs now on the market; and (iv) she is, has been, and will in the future be illegally categorically precluded from receiving these drugs by MDHHS’s requirement of a Metavir Fibrosis Score, now of at least F2. These are precisely the claims she wishes to litigate on behalf of the class.
61. Commonality. All legal and factual questions inherent in the ultimate question of whether the restrictions on access to DAAs based on MFSs are illegal under the Medicaid Act are common to all or members of the class.
62. Numerosity. MDHHS itself recently reported nearly 8,000 new cases of chronic HCV in 2015 alone. Thus, the class consists of at least multiple thousands of people, joinder of which is not only impracticable but impossible.
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63. Adequacy of Representation. Plaintiff will fairly and adequately protect the interests of the class. Plaintiff has no interest that is now or may be potentially antagonistic to the interests of the class. She is committed to and passionate about the case, and she fully understands her responsibilities as class representative. Plaintiff is represented by highly competent attorneys with extensive experience in litigating class action cases in federal court.
64. Action Common to the Class: The Policy challenged by Plaintiff applies class-wide and categorically to each member of the class by restricting access to coverage for DAA treatment as alleged above; and therefore, Defendant has acted or refused to act on grounds that apply generally to the class, such that final injunctive relief or corresponding declaratory relief is appropriate respecting the class as a whole.
FIRST CLAIM FOR RELIEF. (42 U.S.C. § 1983; 42 U.S.C. §1396a(a)(10)(A)) (EXCLUSION OF QUALIFIED INDIVIDUALS FROM COVERED AND NECESSARY MEDICAL ASSISTANCE UNDER THE MEDICAID ACT, IN VIOLATION OF 42 U.S.C. §1396a(a)(10)(A)) 65. Plaintiff incorporates all preceding paragraphs as if restated herein. 66. MDHHS has systematically, categorically, and uniformly denied access to all FDA approved and AASLD/IDSA recommended DAAs to qualified Medicaid beneficiaries infected with HCV by refusing to approve prescription requests for prior authorization of treatment with DAAs unless the applicant had an
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MFS score at or above a specified level. The specified minimum level is currently F2. 67. This policy directly and categorically contradicts the prevailing clinical
standard of care, and therefore denies Plaintiff and those like her medically necessary care, as defined under federal and state law.
68. Pursuant to 42 U.S.C. § 1983 and 28 U.S.C. § 2201, Plaintiff and the class are entitled to a judgment declaring that MDHHS has violated Title XIX of the Social Security Act by denying treatment with DAAs to qualified Medicaid beneficiaries chronically infected with the Hepatitis C Virus based solely on their having a Metavir Score of less than a specified minimum in violation 42 U.S.C. §1396a(a)(10)(A).
69. Based on the law governing the issuance of injunctions, and also upon 28 U.S.C. § 2202, Plaintiff and the class are also entitled to a permanent injunction enjoining MDHHS from denying treatment with DAAs to qualified Medicaid beneficiaries chronically infected with the Hepatitis C Virus based solely on their having a Metavir Score of less than a specified minimum.
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SECOND CLAIM FOR RELIEF (42 U.S.C. § 1983; 42 U.S.C. § 1396a(a)(10)(B)(i) AND (ii)) (DENIAL OF COMPARABLE TREATMENT ACCESS IN VIOLATION OF 42 U.S.C.
§1396a(a)(10)(B)(i) AND (ii) AND 42 C.F.R. § 440.240.) 70. Plaintiff incorporates all preceding paragraphs as if restated herein. 71. While denying access to DAAs to Medicaid eligible individuals infected with HCV, as alleged above, MDHHS has at the same time provided access to similarly situated Medicaid enrollees, with no medically justifiable basis for such differential treatment. 72. Pursuant to 42 U.S.C. § 1983 and 28 U.S.C. § 2201, Plaintiff and the class are entitled to a judgment declaring that MDHHS has violated Title XIX of the Social Security Act by discriminating amongst similarly situated Medicaid individuals infected with the Hepatitis C Virus by denying treatment with DAAs to those with Metavir Scores of less than a specified minimum in violation of the Medicaid Act comparability requirements under 42 U.S.C.§1396a(a)(10)(B)(i) and (ii) and 42 C.F.R. § 440.240. 73. Based on the law governing the issuance of injunctions, and upon 28 U.S.C. § 2202, Plaintiff and the class are also entitled to a permanent injunction enjoining MDHHS from discriminating amongst similarly situated Medicaid individuals infected with the Hepatitis C Virus by denying treatment with DAAs to those with Metavir Scores of less than a specified minimum in violation of the Medicaid Act comparability requirements under 42 U.S.C. §1396a(a)(10)(B)(i) and
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(ii) and 42 C.F.R. § 440.240. THIRD CLAIM FOR RELIEF
(42 U.S.C. 1983; 42U.S.C. §1396a(a)(8)) (FAILURE TO PROVIDE NECESSARY MEDICAL ASSISTANCE WITH REASONABLE PROMPTNESS IN VIOLATION OF 42U.S.C. §1396a(a)(8))
74. Plaintiff incorporates all preceding paragraphs as if restated herein. 75. By denying access to DAAs to Medicaid eligible individuals diagnosed as currently infected with HCV, as alleged above, MDHHS delays the treatment of demonstrably sick individuals until their disease has progressed to the point of causing measurable and potentially irreparable and irreversible liver damage. This constitutes a de facto rationing of treatment for Medicaid enrollees seeking the only available treatment for an extant infection with HCV, and violates the requirement that medical assistance be provided with “reasonable promptness” under 42 U.S.C. § 1396a(a)(8). 76. Pursuant to 42 U.S.C. § 1983 and 28 U.S.C. § 2201, Plaintiff and the class are entitled to a judgment declaring that MDHHS has violated the “reasonable promptness” requirement of Title XIX of the Social Security Act by implementing a policy that delays the treatment of qualified Medicaid beneficiaries chronically infected with the Hepatitis C Virus, based solely on their having a Metavir Score of less than a specified minimum, in violation of 42U.S.C. §1396a(a)(10)(A), and thus delaying treatment to demonstrably sick individuals until their disease has progressed to the point of causing measurable and potentially irreparable and irreversible liver
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damage.
77. Based on the law governing the issuance of injunctions, and upon 28
U.S.C. § 2202, Plaintiff and the class are also entitled to a permanent injunction
enjoining MDHHS from denying treatment with DAAs to qualified Medicaid
beneficiaries chronically infected with the Hepatitis C Virus based solely on their
having a Metavir Score of less than a specified minimum.
PRAYER FOR RELIEF
WHEREFORE, Plaintiff requests that the following judgments and orders be
entered against Defendant:
A. Certification of this case as a class action consisting of a class defined as
all individuals:
(i) who have been, are or will in the future be enrolled in the Michigan Medicaid State Program; and
(ii) who have been or will be diagnosed as having a chronic infection of the Hepatitis C Virus; and
(iii) who require, or who will in the future require treatment for the Hepatitis C Virus with a Direct Acting Antiviral medication under the Recommendations for Testing, Managing, and Treating Hepatitis C published by the American Association for the Study of Liver Diseases and the Infectious Diseases Society of America; and
(iv) who do not meet that portion of the Defendant’s coverage criteria for Direct Acting Antiviral medication that restrict coverage to persons based on fibrosis score either: (a) because they have had a fibrosis test and obtained a fibrosis score of less than F2, and are therefore ineligible or (b) because their fibrosis score is unknown because they have not taken a test to determine that score.
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B. An order designating J.V. as class representative; C. An Order appointing M. Reid Estes, Martin D. Holmes, and Aaron V.
Burrell as class counsel; D. A Judgment declaring that MDHHS’s policy of denying access to
Viekira Pak, Daklinza, Epclusa, Harvoni, Olysio, Solvadi, Technivie, or any other Direct Acting Antiviral medication now or hereafter approved by the U.S. Food and Drug Administration for treatment of the Hepatitis C Virus and recommended for such use by the treatment Guidelines of AASLD/IDSA of any qualified Medicaid beneficiary diagnosed as infected by the Hepatitis C Virus because of a Metavir Fibrosis Score of any level violates Title XIX of the Social Security Act (also known as the Medicaid Act): (i) by excluding qualified Medicaid recipients from medically necessary treatment as required by 42 U.S.C. §1396a(a)(10)(A); (ii) by discriminating among similarly situated Medicaid recipients on the basis of categorical restrictions that are not based upon prevailing clinical standards as forbidden by 42 U.S.C. §1396a(a)(10)(B)(i); and (ii) by denying qualified Medicaid recipients the provision of necessary medical assistance with “reasonable promptness” as required by 42 U.S.C. § 1396a(a)(8) and 42 C.F.R. § 440.240;
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E. A permanent injunction, enjoining MDHHS from promulgating, instituting, or implementing any policy or protocol that denies access to Viekira Pak, Daklinza, Epclusa, Harvoni, Olysio, Solvadi, Technivie, or any other Direct Acting Antiviral medication now or hereafter approved by the U.S. Food and Drug Administration for treatment of the Hepatitis C Virus and recommended for such use by the treatment Guidelines of AASLD/IDSA to any qualified Medicaid beneficiary diagnosed as chronically infected by the Hepatitis C Virus because of a Metavir Fibrosis Score of any level;
F. An Order requiring MDHHS to provide notice to all class members of the Court’s judgment, in a form and by means to be determined by the Court;
G. An Order requiring MDHHS to re-process, in light of paragraphs E and F, the denials of all requests for medical assistance requesting treatment with Viekira Pak, Daklinza, Epclusa, Harvoni, Olysio, Solvadi, Technivie, or any other Direct Acting Antiviral medication approved by the U.S. Food and Drug Administration for treatment of the Hepatitis C Virus and recommended for such use by the treatment Guidelines of AASLD/IDSA; and ordering MDHHS to provide notice of the Court’s judgment, and that their previously denied claims are being reprocessed
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for evaluation without regard to Metavir scores, to all affected class members, in a form and by means to be determined by the Court; H. An Order awarding Plaintiff a service award for her service as a class representative in an amount to be determined by the Court; I. An Order awarding Plaintiff and the class their attorney fees and costs pursuant to 42 U.S.C. § 1988; and J. Such other relief as the Court may deem appropriate.
DICKINSON WRIGHT PLLC

DATED: April 14. 2017

By: _/s/ Aaron v. Burrell_______________ M. Reid Estes (Admission Pending) Martin D. Holmes (Admission Pending) Aaron V. Burrell (P73708)
Attorneys for Plaintiff 500 Woodward Avenue, Suite 4000 Detroit, MI 48226 (313) 223-3500 REstes@dickinsonwright.com MDHolmes@dickinsonwright.com Aburrell@dickinsonwright.com

28

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DEMAND FOR JURY Pursuant to Fed. R. Civ. P. 38(b), Plaintiff hereby demands a jury trial on all issues triable by a jury.
DICKINSON WRIGHT PLLC

Dated: April 14, 2017

By: _/s/ Aaron v. Burrell_______________ M. Reid Estes (Admission Pending) Martin D. Holmes (Admission Pending) Aaron V. Burrell (P73708)
Attorneys for Plaintiff 500 Woodward Avenue, Suite 4000 Detroit, MI 48226 (313) 223-3500 REstes@dickinsonwright.com MDHolmes@dickinsonwright.com Aburrell@dickinsonwright.com

DETROIT 99999-200 1420883v1

29

 
 Case 2:17-cv-11184-DPH-RSW ECF No. 42 filed 08/15/18 PageID.1301 Page 1 of 28

THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION

M.R., on behalf of himself and all others similarly situated,

Plaintiff

No. 2:17-cv-11184-DPH-RSW

v.

HON. DENISE PAGE HOOD

MAG. R. STEVEN WHALEN

NICK LYON, in his official capacity Only as Executive Director of the MICHIGAN DEPARTMENT OF HEALTH AND HUMAN SERVICES,

Defendant. ______________________________________/

PLAINTIFF’S MOTION FOR FINAL APPROVAL OF CLASS SETTLEMENT

Plaintiff M.R. and Class Counsel Dickinson Wright, PLLC, for themselves

and on behalf of the certified class, hereby move for final approval of the Class

Action Settlement and Release Agreement preliminarily approved by this Court.

Defendant does not oppose the relief sought in this Motion. This Motion is supported

by the attached brief in support and accompanying exhibits. Furthermore, this

Motion is filed on the timetable set by the Court’s Order granting Plaintiff and

Defendant’s Joint Motion to Certify Class, Appoint Class Counsel, Approve Notice

to Class Members, Grant Preliminary Approval of Proposed Class Action Settlement

Case 2:17-cv-11184-DPH-RSW ECF No. 42 filed 08/15/18 PageID.1302 Page 2 of 28
and Set Date for Fairness Hearing approved by the Court on May 29, 2018.
Respectfully submitted,
DICKINSON WRIGHT PLLC
By: /s/ Aaron V. Burrell Aaron V. Burrell (P73708) J. Mylan Traylor (P82157) Attorneys for Plaintiff 500 Woodward Avenue, Suite 4000 Detroit, MI 48226 (313) 223-3500 Aburrell@dickinsonwright.com
Dated: August 15, 2018

Case 2:17-cv-11184-DPH-RSW ECF No. 42 filed 08/15/18 PageID.1303 Page 3 of 28

THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION

M.R., on behalf of himself and all others similarly situated,

Plaintiff

No. 2:17-cv-11184-DPH-RSW

v.

HON. DENISE PAGE HOOD

MAG. R. STEVEN WHALEN

NICK LYON, in his official capacity Only as Executive Director of the MICHIGAN DEPARTMENT OF HEALTH AND HUMAN SERVICES,

Defendant. ______________________________________/

BRIEF IN SUPPORT OF PLAINTIFF’S MOTION FOR FINAL APPROVAL OF CLASS SETTLEMENT

Case 2:17-cv-11184-DPH-RSW ECF No. 42 filed 08/15/18 PageID.1304 Page 4 of 28
TABLE OF CONTENTS
ISSUE PRESENTED ................................................................................................ ii I. INTRODUCTION ...........................................................................................1 II. BACKGROUND .............................................................................................2 III. ARGUMENT...................................................................................................6
A. THE LEGAL STANDARDS FOR SETTLEMENT APPROVAL ......6 B. THE SETTLEMENT AGREEMENT IS FAIR, REASONABLE AND
ADEQUATE, AND FINAL APPROVAL IS WARRANTED ..........10 1. The likelihood of success on the merits weighed against the
amount and form of the relief offered in the settlement supports final approval of the Settlement Agreement. ....................................... 10 2. The risk, length, and expense of further litigation strongly support final approval of the Settlement Agreement........................ 11 3. The judgment of experienced counsel supports approval of the Settlement Agreement................................................................................... 12 4. The Settlement is based on adequate information, discovery, and evidence. ............................................................................................................. 13 5. The Settlement is fair to absent Class Members, and the sole objection to the Settlement is unfounded. ............................................. 14 6. The Settlement was the product of arm's-length negotiations. ..... 16 7. The Settlement is in the public interest. ................................................. 18 IV. CONCLUSION..............................................................................................18
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ISSUE PRESENTED Whether the Court should grant final approval of the Class Settlement Agreement, which the Court preliminarily approved on May 29, 2018 (DE 31), where it was entered into after significant and informed arm's-length negotiations and provides substantial benefits to the Class given the risks of litigation? Plaintiff answers: yes Defendant answers: yes This Court should answer: yes
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TABLE OF AUTHORITIES Cases Armstrong v. Bd. Of Sch. Dirs. Of City of Milwaukee, 616 F.2d
305 (7th Cir. 1980)................................................................................... 7
Ass’n for Disabled Ams., Inc. v. Amoco Oil Co., 211 F.R.D. 457 (S.D. Fla. 2002) ...................................................................................... 8, 13
Berry v. Sch. Dist. Of City of Benton Harbor, 184 F.R.D. 93 (W.D. Mich. 1998).................................................................................. passim
Bittinger v. Tecumseh Prods., 201 F.3d 440 (6th Cir. 1999), (per curiam) aff’g 83 F. Supp. 2d 851 (E.D. Mich. 1998)........................................... 11
Bowling v. Pfizer, Inc., 143 F.R.D. 141 (S.D. Ohio 1992) ............................... 17
Carson v. Am Brands, Inc., 450 U.S. 79 (1981) ............................................... 10, 11
City of Detroit v. Grinnel Corp., 495 F.2d 448 (2d Cir. 1974) ........................ 7
Clark Equip. Co. v. Int’l Union, Allied Indus. Workers of Am, AFL-CIO, 803 F2d 878 (6th Cir. 1986) ................................................... 6, 7, 8
Cotton v. Hinton, 559 F.2d 1326 (5th Cir. 1977)............................................... 8, 12, 13
Depoister v. Mary M. Holloway Found., 36 F.3d 582 (7th Cir. 1994).......................................................................................... 8
Detroit Police Officers Ass’n v. Young, 920 F. Supp. 755 (E.D. Mich. 1995) ................................................................................... 8
Enter. Energy Corp. v. Columbia Gas Transmission Corp., 137 F.R.D. 240 (S.D. Ohio 1991) ............................................................................. 10
Epstein v. Wittig, 2005 WL 3276390 (D. Kan. Dec. 2, 2005) .......................... 13
Fisher Bros. v. Cambridge-Lee Indus., 630 F.Supp. 482 (E.D. Pa 1985) ........................................................................................ 7
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Frank v. Eastman Kodak Co., 228 F.R.D. 174 (W.D.N.Y. 2005).................... 7 Fussell v. Wilkinson, 2005 WL 3132321 (S.D. Ohio Nov. 22, 2005) .............. 10 Gascho v. Glob Fitness Holdings, LLC, 2014 WL 1350509
(S.D. Ohio Apr. 4, 2014) aff’d. 822 F.3d 269 (6th Cir. 2016) ................ 15 Granada Invs., Inc. v. DWG Corp., 962 F.2d 1203 (6th Cir. 1992) ................. 17 In re Cardizem CD Antitrust Litig., 218 F.R.D. 508 (E.D. Mich. 2003).......... 9, 16, 18 In re Cincinnati Policing, 209 F.R.D. 395 (D. Colo. 1974) ............................. 9, 12 In re Corrugated Container Antitrust Litig. (II), 659 F.2d 1322
(5th Cir. 1981).......................................................................................... 7 In re Domestic Air Transp. Antitrust Litig., 148 F.R.D. 297
(N.D. Ga. 1993) ...................................................................................... 7 In re Gen. Tire & Rubber Co.. Sec. Litig., 726 F.2d 1075
(6th Cir. 1984).......................................................................................... 10 In re Jiffy Lube Sec. Litig., 927 F.2d 155 (4th Cir. 1991).................................. 13 In re S. Ohio Corr. Facility, 173 F.R.D. .......................................................... 6 In re Rio Hair, 1996 WL 780512 (E.D. Mich. Dec. 20, 1996) ........................ 13, 17 Int’l Union, UAW v. Gen. Motors Corp., 497 F.3d 615 (6th Cir. 2007) ........... 10 Int’l Union, United Auto., Aerospace & Agr. Implement Workers of Am.
Chrysler LLC, 2008 WL 2980046 (E.D. Mich. July 31, 2008) ............. 15 Lasalle Town Houses Coop. Ass’n. v. City of Detroit, WL 1223354
(E.D. Mich. Mar. 29, 2016) .................................................................... 17 Lazy Oil Co. v. Witco Corp., 95 F. Supp. 2d 290 (W.D. Pa 1997) (aff’d,
166 F.3d 581 (3d Cir. 1999) ................................................................... 8
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Newby v. Enron Corp., 394 F.3d 296 (5th Cir. 2004) ....................................... 13 Newman v. Stein, 464 F.2d 689 (2d Cir. 1972)................................................. 7 Oppenlander v. Standard Oil Co., 64 F.R.D. 597
(D. Colo. 1974) ....................................................................................... 9 Petrovic v. Amoco Oil Co., 200 F.3d 1140 (8th Cir. 1999) ............................... 10 Robinson v. Ford Motor Co., 2005 WL 5253339............................................. 10 Sprague v. Gen. Motors. Corp., 133 F.3d 388 (6th Cir. 1998).......................... 11 Steiner v. Fruehauf Corp., 121 F.R.D. 304 (E.D. Mich. 1988) ........................ 6, 7 Tenn. Ass’n of Health Maint. Orgs., Inc. v. Grier, 262 F.2d 559
(6th Cir. 2001).......................................................................................... 8 Thornton v. E. Tex. Motor Freight, 497 F.2d 416 (6th Cir. 1974) .................... 14 UAW v. General Motors Corp., 2006 WL 891151 (E.D. Mich.
March 31, 2006)...................................................................................... passim United States v. Oregon, 913 F.2d 576 (9th Cir. 1990) ..................................... 8 Williams v. Vukovich, 720 F.2d 909 (6th Cir. 1983) ......................................... 10 Statutes 42 U.S.C. § 1396 ............................................................................................... passim Rules Fed. R. Civ. P. 23 .............................................................................................. 2, 3 Other 4 Newberg on Class Actions § 11:45................................................................ 13
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7B Charles A. Wright, Arthur R. Miller & Mary K. Kane, Federal Practice & Procedure § 1797 (2008) ....................................... 7
Manual For Complex Litigation § 21.643 (4th ed. 2004).................................. 16
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I. INTRODUCTION Plaintiff M.R. (“Plaintiff” or “Class Representative”) filed this putative class action in the United States District Court for the Eastern District of Michigan, Southern Division alleging that Defendant Nick Lyon, in his capacity as executive director of the Michigan Department of Health and Human Services (“Defendant”), violated several provisions of the Medical Assistance Program, Title XIX of the Social Security Act, 42 U.S.C. § 1396 by use of its current prior-authorization criteria for hepatitis C treatment (the “MDHHS prior-authorization criteria”). Compl. ¶¶ 65–77. On January 17, 2018, Plaintiff’s counsel, Defendant’s counsel, and Defendant’s corporate representatives participated in a formal mediation session with Magistrate Judge R. Steven Whalen. After several rounds of negotiations, the parties reached an agreement. Defendant has denied and continues to deny the claims alleged in this Action. Defendant maintains that it has a strong, meritorious defense to the claims alleged in the Action and was prepared to fully defend the Action. Nonetheless, given the uncertainty and risks inherent in litigation, as well as the inevitable delay of a result for class members whose lives hang in the balance, the parties have concluded that is desirable and beneficial to fully and finally settle this action upon the terms and conditions set forth in their Settlement Agreement. A proposed settlement was preliminarily approved by this Court on May 29,
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2018 (DE 31) (the “Settlement Agreement”). The Settlement Agreement is attached hereto as Exhibit A.
Inasmuch as the Settlement Agreement is fair, reasonable, and adequate under Fed. R. Civ. P. 23(e)(2), Plaintiff and Class Counsel respectfully request that the Settlement Agreement be approved in all respects.
II. BACKGROUND On April 14, 2017, Plaintiff filed this putative class action in the United States District Court for the Eastern District of Michigan, Southern Division captioned J.V. on behalf of herself and all others similarly situated v. Nick Lyon, in his official capacity only as executive director of the Michigan Department of Health and Human Services, Case No.: 2:17-cv-11184- DPH-RSW (the “Action”). The complaint alleged that Defendant’s current prior-authorization criteria for Hepatitis C treatment (the “MDHHS Prior Authorization Criteria”) violates three separate provisions of the Medical Assistance Program, Title XIX of the Social Security Act, 42 U.S.C. § 1396 et seq. by: (1) excluding qualified Medicaid recipients from “medically necessary” treatment as required by 42 U.S.C. § 1396a(a)(10)(A); (2) discriminating among similarly situated Medicaid recipients in violation of 42 U.S.C. § 1396a(a)(10)(B); and (3) failing to provide medically necessary treatment with “reasonable promptness” as required by 42 U.S.C. § 1396a(a)(8). Compl. ¶¶ 65–77.
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In or around October 2017, the parties began to discuss the possibility of settlement and agreed to resolve the matter through mediation. On January 17, 2018, Plaintiff’s counsel, Defendant’s counsel, and Defendant’s corporate representatives participated in a formal mediation session with Magistrate Judge R. Steven Whalen. After several rounds of negotiations, the parties reached an agreement as to the principal terms of the Settlement Agreement, attached hereto as Exhibit A.
Defendant has denied and continues to deny the claims alleged in the Action. Defendant maintains that it has strong, meritorious defenses to the claims alleged in the Action and was prepared to fully defend the Action. Nonetheless, taking into account the uncertainty and risks inherent in litigation, Defendant has concluded that it is desirable and beneficial to Defendant that the Action be fully and finally settled and terminated in the manner and upon the terms and conditions set forth in the Settlement Agreement.
Plaintiff believes that the claims asserted in the Action against Defendant have merit, and that Plaintiff would have ultimately been successful in certifying the proposed class under Fed. R. Civ. P. 23 and in prevailing on the merits at summary judgment or trial. Nonetheless, Plaintiff and Class Counsel recognize the expense and delay associated with continued prosecution of the Action against Defendant. Therefore, Plaintiff believes that it is desirable that the Released Claims be fully and finally compromised, settled, and resolved pursuant to the terms and conditions set
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forth in the Settlement Agreement. The terms of the Settlement Agreement include
but are not limited to the following:
x Defendant agrees to replace the MDDHS Prior Authorization Criteria and institute the Amended Prior Authorization Criteria to provide coverage for direct-acting antiviral treatment to all Eligible Michigan Medicaid beneficiaries diagnosed with chronic Hepatitis C.
x Defendant agrees to expand direct-acting antiviral treatment coverage to all Eligible Michigan Medicaid beneficiaries diagnosed with chronic Hepatitis C based on the following schedule: o Defendant will provide coverage for all eligible beneficiaries with a metavir fibrosis score of F-1 and above on October 1, 2018 and o Defendant will provide coverage for all beneficiaries with a metarvir fibrosis score of F-0 an above on October 1, 2019.
x The Amended Prior Authorization Criteria will include, but is not limited to, the following provisions: o The direct-acting antiviral medication must be prescribed by a gastroenterologist, hepatologist, liver transplant or infectious disease physician. If the prescribing provider is not one of the identified specialists noted, the prescriber must submit documentation of consultation/collaboration of the specific case with one of the aforementioned specialists which reflects discussion of the history and agreement with the plan of care with the date noted in the progress note. o Documentation of the patient’s use of Illegal Drugs or abuse of alcohol must be noted (i.e., current abuse of IV drugs or alcohol or abuse within the past 6 months). The Michigan Department of Health and Human Services will consider this information for the sole purpose of optimizing treatment. o Documentation of the patient’s commitment to the planned course of treatment and monitoring (including SVR 12) as well as patient education addressing ways to reduce the risks for reinfection must be submitted. o Defendant reserves the right to revise the Amended Prior Authorization Criteria and Claim Form to incorporate updated clinical recommendations or other best practices, consistent with this Agreement.
x Defendant agrees to provide coverage for direct-acting antiviral
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medications that are (i) approved by the U.S. Food and Drug Administration for the treatment of chronic Hepatitis C; (ii) have a federal Medicaid rebate; and (iii) are listed on Defendant’s Preferred Drug List as preferred at the time the beneficiary is approved for treatment. x If a direct-acting antiviral medication is no longer approved by the U.S. Food and Drug Administration for the treatment of chronic Hepatitis C or no longer on Defendant’s Preferred Drug List, it will no longer be covered. On May 29, 2018, the Court issued an Order granting the parties’ Joint Motion to Certify Class, Appoint Class Counsel, Approve Notice to Class Members, Grant Preliminary Approval of Class Action Settlement and Set Date for Fairness Hearing (DE 31). Pursuant to the schedule laid out in that Motion, Plaintiff now submits this motion for final approval of the Settlement Agreement. On June 15, 2018, Defendant forwarded notices to the Class informing Class Members of the impending settlement. Immediately following this mailing, Class counsel received a large number of phone calls and letters inquiring as to the details of the settlement and expressing enthusiastic support. On July 3, 2018, Kirk Leaphart filed the sole substantive objection to the settlement, arguing, among other things, that the complaint was defective against the Defendant as a governmental entity, he and others who administratively appealed a prior denial should receive financial remuneration, and the fees requested were excessive. (DE 39). On August 8, 2018, the Court held a hearing on Class Counsel’s Motion for an Award of Attorney’s Fees and Reimbursement of Expenses and a Fairness
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Hearing (DE 37). Mr. Leaphart appeared for the hearing. Both Class Counsel and Defendant’s counsel offered rebuttals to Mr. Leaphart’s objections. At the conclusion of the hearing, the Court indicated that it would take the matter under advisement. Plaintiff M.R. and the certified class now submit this settlement to the Court for final approval.
III. ARGUMENT A. THE LEGAL STANDARDS FOR SETTLEMENT APPROVAL The law favors the voluntary settlement of class action litigation. UAW v. General Motors Corp., 2006 WL 891151, at *12 (E.D. Mich. March 31, 2006). See also Clark Equip. Co. v. Int'l Union, Allied Indus. Workers of Am., AFL-CIO, 803 F.2d 878, 880 (6th Cir. 1986) (per curiam); Berry v. Sch. Dist. of City of Benton Harbor, 184 F.R.D. 93, 97 (W.D. Mich. 1998). Once the district court has granted preliminary approval to a settlement, as here, “an individual who objects has a heavy burden of proving the settlement is unreasonable.” In re S. Ohio Corr. Facility, 173 F.R.D. at 211; see also UAW v. General Motors Corp., 2006 WL 891151, at *13. In reviewing a class action settlement, the role of the district court is “limited to a determination of whether the terms proposed are fair and reasonable to those affected.” Steiner v. Fruehauf Corp., 121 F.R.D. 304, 305 (E.D. Mich. 1988). Settlement embodies “a bargained give and take between the litigants that is presumptively valid,” Berry, 184 F.R.D. at 97, about which “[t]he Court should not
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substitute its judgment for that of the parties.” Steiner v. Fruehauf Crop., 121 F.R.D. 304, 306 (E.D. Mich. 1988). Further, the Court should not decide the merits of the dispute. See UAW v. General Motors Corp., 2006 WL 891151, at *14; Clark Equip. Co., 803 F.2d at 880; City of Detroit v. Grinnell Corp., 495 F.2d 448, 456 (2d Cir. 1974). Nor should the Court engage in the “detailed and thorough investigation that it would undertake if it were actually trying the case,” Berry, 184 F.R.D. at 98 (quoting Armstrong v. Bd. of Sch. Dirs. of City of Milwaukee, 616 F.2d 305, 315 (7th Cir. 1980) (citation omitted)), since the “whole purpose behind a compromise is to avoid a trial.” 7B Charles A. Wright, Arthur R. Miller & Mary K. Kane, Federal Practice & Procedure § 1797.5 (2008).
“In assessing the settlement, the Court must determine ‘whether it falls within the range of reasonableness, not whether it is the most favorable possible result in the litigation.” In re Domestic Air Transp. Antitrust Litig., 148 F.R.D. 297, 319 (N.D. Ga. 1993) (quoting Fisher Bros. v. Cambridge-Lee Indus., 630 F. Supp. 482, 489 (E.D. Pa. 1985)). An appropriate range of reasonableness recognizes the uncertainties of law and fact in any particular case and the concomitant risks and costs necessarily inherent in taking any litigation to completion.” Frank v. Eastman Kodak Co., 228 F.R.D. 174, 186 (W.D.N.Y. 2005) (quoting Newman v. Stein, 464 F.2d 689, 693 (2d Cir. 1972)). Under this standard, “[a] just result is often no more than an arbitrary point between competing notions of reasonableness.” In re
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Corrugated Container Antitrust Litig. (II), 659 F.2d 1322, 1325 (5th Cir. 1981); see Lazy Oil Co. v. Witco Corp., 95 F. Supp. 2d 290, 338 (W.D. Pa. 1997) aff'd, 166 F.3d 581 (3d Cir. 1999).
Approval of a class action settlement is committed to the discretion of the district court. Clark Equip. Co., 803 F.2d at 880; Detroit Police Officers Ass'n v. Young, 920 F. Supp. 755, 761 (E.D. Mich. 1995). In exercising that discretion, the court “may limit the fairness hearing ‘to whatever is necessary to aid it in reaching an informed, just and reasoned decision.” Tenn. Ass'n of Health Maint. Orgs., Inc. v. Grier, 262 F.3d 559, 567 (6th Cir. 2001) (quoting United States v. Oregon, 913 F.2d 576, 582 (9th Cir. 1990)). The Court may consider briefs, declarations, and the arguments of counsel, and need not conduct an evidentiary hearing. See e.g. Grier, 262 F.3d at 567 (rejecting the suggestion that “the fairness hearing must entail the entire panoply of protections afforded by a full-blown trial on the merits”); Depoister v. Mary M. Holloway Found., 36 F.3d 582, 586 (7th Cir. 1994) (“there is no requirement that an evidentiary hearing be conducted as a precondition to approving a settlement in a class action suit”). “Even when the Court becomes aware of one or more objecting parties, the Court ... may limit its proceeding to whatever is necessary to aid it in reaching an informed, just and reasoned decision.” Ass'n for Disabled Ams., Inc. v. Amoco Oil Co., 211 F.R.D. 457, 467 (S.D. Fla. 2002) (quoting Cotton v. Hinton, 559 F.2d 1326, 1331 (5th Cir. 1977)); see also UAW v. General Motors
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Corp., 2006 WL 891151, at *14. In reaching the settlement here, the parties recognized the risks and
uncertainties inherent in litigation. Although Plaintiff and Defendant disagree on the merits of their dispute, the parties recognize that the prospect of “a long, arduous [trial] requiring great expenditures of time and money on behalf of both the parties and the court” weighs in favor of settlement. In re Cincinnati Policing, 209 F.R.D. 395, 400 (S.D. Ohio 2002); see Oppenlander v. Standard Oil Co., 64 F.R.D. 597, 624 (D. Colo. 1974) (“[T]he Court should ... compare the significance of immediate recovery ... to the mere possibility of relief in the future, after protracted and expensive litigation.”).
Factors relevant to the court's evaluation of the fairness of the settlement are: (a) the likelihood of success on the merits weighed against the amount and form of the relief offered in the settlement; (b) the risks, expense, and delay of further litigation; (c) the judgment of experienced counsel who have competently evaluated the strength of their proofs; (d) the amount of discovery completed and the character of the evidence uncovered; (e) whether the settlement is fair to the unnamed class members; (f) objections raised by class members; (g) whether the settlement is the product of arm's length negotiations as opposed to collusive bargaining; and (h) whether the settlement is consistent with the public interest. UAW v. General Motors Corp., 2006 WL 891151, at *14; In re Cardizem CD Antitrust Litig., 218 F.R.D.
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508, 522 (E.D. Mich. 2003); see also, e.g., Berry, 184 F.R.D. at 98. Where the Court has already granted preliminary approval, as it did in this case, “the settlement is presumptively reasonable, and an individual who objects has a heavy burden of proving the settlement is unreasonable.” Robinson v. Ford Motor Co., 2005 WL 5253339, at *3 (citing Williams v. Vukovich, 720 F.2d 909, 921 (6th Cir. 1983)); Fussell v. Wilkinson, No. 1:03-CV-704, 2005 WL 3132321, at *3 (S.D. Ohio Nov. 22, 2005); Enter. Energy Corp. v. Columbia Gas Transmission Corp., 137 F.R.D. 240, 246 (S.D. Ohio 1991). Under these standards, the parties' settlement here is fair, reasonable and adequate, and final approval is warranted.
B. THE SETTLEMENT AGREEMENT IS FAIR, REASONABLE AND ADEQUATE, AND FINAL APPROVAL IS WARRANTED 1. The likelihood of success on the merits weighed against the amount and form of the relief offered in the settlement supports final approval of the Settlement Agreement.
According to the Sixth Circuit, “[t]he fairness of each settlement turns in large part on the bona fides of the parties' legal dispute.” Int'l Union, UAW v. Gen. Motors Corp., 497 F.3d 615, 631 (6th Cir. 2007). This inquiry requires the court to “‘weigh the plaintiff's likelihood of success on the merits against the amount and form of the relief offered in the settlement.”’ Id. (quoting Carson v. Am. Brands, Inc., 450 U.S. 79, 88 n.14 (1981)); see In re Gen. Tire & Rubber Co. Sec. Litig., 726 F.2d 1075, 1086 (6th Cir. 1984); Petrovic v. Amoco Oil Co., 200 F.3d 1140, 1150 (8th Cir. 1999). In assessing the relative risk and benefits of the settlement, the court must
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not, however, “decide the merits of the case or resolve unsettled legal questions[.]” Carson, 450 U.S. at 88 n.14. The question rather is whether the parties are using settlement to resolve a legitimate legal and factual disagreement. Id. As the record indicates, the parties both believe that they have legitimate claims and could prevail on the merits of their respective positions. Both parties are aware that regardless of how strongly they believe in the merits of their respective positions, the outcome would be subject to the inherent uncertainties of litigation. As such, there is a legitimate and bona fide disagreement that makes settlement of the parties' dispute entirely proper. Finally, and independent of the relative merits of the parties' factual and legal arguments, Plaintiff and the Class have ample reason to control the resolution of this dispute through negotiation sooner than later as many Class members need this life-saving medication as soon as possible.
2. The risk, length, and expense of further litigation strongly support final approval of the Settlement Agreement.
Complex litigation of this sort is costly and time-consuming, as demonstrated by previous class action lawsuits in this circuit. See, e.g., Sprague v. Gen. Motors Corp., 133 F.3d 388, 402 (6th Cir. 1998) (in suit challenging GM's modification of salaried retirees' benefits, GM prevailed after ten years of litigation, including a trial and a hearing); Bittinger v. Tecumseh Prods., 201 F.3d 440 (6th Cir. 1999) (per curiam), aff'g 83 F. Supp. 2d 851 (E.D. Mich. 1998) (litigation resolved in favor of employer after more than eight years of litigation). The obvious costs and
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uncertainty of such lengthy and complex litigation weigh in favor of settlement. See In re Cincinnati Policing, 209 F.R.D. 395, 400 (S.D. Ohio 2002) (“the trial of this class action would be a long, arduous process requiring great expenditures of time and money on behalf of both the parties and the court.... [That] prospect ... clearly counsels in favor of settlement.”) (internal quotations and citations omitted). Similarly, in this case, the delay necessary to litigate the parties' dispute benefits no one.
3. The judgment of experienced counsel supports approval of the Settlement Agreement.
The endorsement of the parties' counsel is entitled to significant weight and supports the fairness of the class settlement: “It is ... well recognized that the court should defer to the judgment of experienced counsel who has competently evaluated the strength of the proofs.” UAW v. General Motors Corp., 2006 WL 891151, at *18; see also Cotton v. Hinton, 559 F.2d 1326, 1329 (5th Cir. 1977) (“the trial court is entitled to rely upon the judgment of experienced counsel for the parties”); Berry v. Sch. Dist. of City of Benton Harbor, 184 F.R.D. 93, 104 (W.D. Mich. 1998) (“the court generally will give deference to plaintiffs' counsel's determination to settle a case”).
Here, counsel for all parties are reputable practitioners and trial counsel experienced in complex class action litigation. Counsel for both parties have spent significant time analyzing, negotiating, discussing, and arguing over this case and
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settlement. Thus, under the law, the parties’ respective counsels’ collective judgment in favor of the Settlement Agreement is entitled to considerable weight. Ass'n for Disabled Ams., Inc. v. Amoco Oil Co., 211 F.R.D. 457, 467 (S.D. Fla. 2002) (“the Court must rely upon the judgment of experienced counsel and, absent fraud, ‘should be hesitant to substitute its own judgment for that of counsel”’) (citation omitted).
4. The Settlement is based on adequate information, discovery, and evidence.
It is axiomatic that in order to evaluate a proposed settlement, the court need not possess sufficient “evidence to decide the merits of the issue, because the compromise is proposed in order to avoid further litigation.” 4 Newberg on Class Actions § 11:45; In re Rio Hair, 1996 WL 780512, at *13 (E.D. Mich. Dec. 20, 1996). Instead, the district judge need only have “sufficient facts before him to intelligently approve or disapprove the settlement.” Epstein v. Wittig, No. 03-4081JAR, 2005 WL 3276390, at *7 (D. Kan. Dec. 2, 2005) (internal quotation omitted). In this regard, the absence of formal discovery is not unusual or problematic, so long as the parties and the court have adequate information in order to evaluate the relative positions of the parties. See Newby v. Enron Corp., 394 F.3d 296, 306 (5th Cir. 2004) (“Formal discovery [is not] a necessary ticket to the bargaining table.”) (internal quotation and citation omitted); See Cotton, 559 F.2d at 1332 (upholding settlement despite fact that little formal discovery had been conducted); In re Jiffy Lube Sec. Litig., 927 F.2d 155, 159 (4th Cir. 1991) (“documents filed by plaintiffs
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and evidence obtained through informal discovery yielded sufficient undisputed facts” to evaluate the settlement).
There was significant information available to the parties to negotiate their compromise, and there is more than an adequate basis and evidentiary record on which the Court can assess the parties' agreement. As such, parties and the Court have been supplied with adequate information regarding the policy at issue, the treatment itself, and the position of the Class Members to make an informed decision regarding the terms of settlement.
5. The Settlement is fair to absent Class Members, and the sole objection to the Settlement is unfounded.
The Class is cohesive, and the Settlement Agreement affects similarlysituated class members the same. Under the terms of the settlement, the Class Representative would receive a small payment in the amount of $5,000.00. Such a payment is appropriate as it is well established that a class representative may be entitled to a fee award for his time and expense incurred in bringing a class action. Thornton v. E. Tex. Motor Freight, 497 F.2d 416, 420 (6th Cir. 1974) (“[T]here is something to be said for rewarding those [plaintiffs] who protest and help to bring rights to [others]”). Sixth Circuit courts have often found that where an incentive award is “fair, reasonable, and properly based on the benefits to the class members generated by the litigation,” such an award does not give preferential treatment to Class Representatives and should be granted. Gascho v. Glob Fitness Holdings,
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LLC, No. 2:11-CV-436, 2014 WL 1350509, at *26–27 (S.D. Ohio Apr 4, 2014), aff'd, 822 F3d 269 (6th Cir. 2016).
As stated above, the class members are receiving a substantial benefit by receiving access to a life-saving treatment that may save them from succumbing to a life-threatening disease. Out of the over 1,200 individuals to receive the notice, only one individual objected. In this case, the Class overwhelmingly supports the Settlement. The sole objection (DE 39) is without merit, and both parties provided arguments in response at the fairness hearing on August 8, 2018. Specifically, counsel argued that, for the reasons noted in Plaintiff’s response to the Defendant’s Motion to Dismiss (DE 19), Plaintiff properly brought this case against the Defendant; concerns relative to the administrative appeal process and the ability to change plans under Medicaid are beyond the scope of this action; and both the fees and incentive award requested are appropriate under Sixth Circuit precedent.
“A court should not withhold approval of a settlement merely because some class members object.” Int'l Union, United Auto., Aerospace & Agr. Implement Workers of Am. v. Chrysler LLC, No. 07-CV-14310, 2008 WL 2980046, at *29 (E.D. Mich. July 31, 2008); 7B Wright, et al., Federal Practice & Procedure § 1797.1 (“the fact that there is opposition does not necessitate disapproval of the settlement”). This is because even though the court must evaluate any objections, it “has an obligation to protect the interests of the silent class majority, despite vociferous opposition by
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a vocal minority to the settlement.” Id.; In re Cardizem CD Antitrust Litig., 218 F.R.D. 508, 527 (E.D. Mich. 2003) (“If only a small number of objections are received, that fact can be viewed as indicative of the adequacy of the settlement.”). See also Manual For Complex Litigation § 21.643 (4th ed. 2004) (“Unless a number of class members raise similar objections, individual objectors rarely provide much information about the overall reasonableness of the settlement.”).
Furthermore, numerous Class Members inquiring about the terms of the Settlement have been extremely pleased with the current Agreement. Indeed, one Class Member, Patricia Kelly even submitted a letter in which she stated, “I’m so happy that the Plaintiff in this Class Action lawsuit stepped forward and took it upon [himself] to help. I was beginning to lose hope that eventually something would finally change with this major drug we all need to be cured…” (DE 40). Considering the overwhelming support for the settlement among class members, and in the absence of any meritorious objections, the settlement is fair, reasonable and adequate, and should be approved.
6. The Settlement was the product of arm's-length negotiations. According to the Sixth Circuit, the district court should presume the absence of fraud or collusion unless there is evidence to the contrary. Lasalle Town Houses Coop. Ass'n v. City of Detroit, No. 4:12-CV-13747, 2016 WL 1223354, at *8 (E.D. Mich. Mar. 29, 2016). Courts customarily demand evidence of improper incentives
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for the class representative or class counsel before abandoning the presumption that the class representative and counsel handled their responsibilities with the independent vigor that the adversarial process demands. In re Rio Hair Naturalizer Prods. Liab. Litig., MDL No. 1055, 1996 WL 780512, at *14 (E.D. Mich. Dec. 20, 1996) (“Courts respect the integrity of and presume good faith in the absence of fraud or collusion in settlement negotiations, unless someone offers evidence to the contrary”); see also Granada Invs., Inc. v. DWG Corp., 962 F.2d 1203, 1205 (6th Cir. 1992) (“Absent evidence of fraud or collusion, such settlements are not to be trifled with.”) (citation omitted).
Here, as the Court is aware, there is an ongoing adversarial relationship between the Defendant and Plaintiff and the Class on the question of whether the MDHHS Policy, which denies coverage of DAA treatment based on metavir fibrosis score, violates the Medicaid Act. The Settlement was the result of comprehensive and extensive negotiations. Class counsel were provided full access to all relevant information and undertook their own independent review and analysis of the relevant issues and the possibility of settlement. Moreover, if the settlement agreement itself is fair, reasonable and adequate, the Court may assume that the negotiations were proper and free of collusion. Bowling v. Pfizer, Inc., 143 F.R.D. 141, 152 (S.D. Ohio 1992) (“In essence, under this test, if the terms of the proposed settlement are fair, then the court may assume the negotiations were proper.”).
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7. The Settlement is in the public interest. The settlement benefits both of the Class Members and Defendant, and simultaneously serves the public interest by achieving certainty for parties. Beyond that, the Settlement Agreement provides life-saving medication for thousands of Medicaid Recipients. The public interest is also served by resolving disputes in federal courts with efficiency and expediency, aiding in judicial economy. See Cardizem, 218 F.R.D. at 530 (citations omitted) (“[T]here is a strong public interest in encouraging settlement of complex litigation and class action suits because they are 'notoriously difficult and unpredictable' and settlement conserves judicial resources.”). Therefore, the public interest factor, too, favors approval of the settlement.
IV. CONCLUSION For the foregoing reasons, the Court should grant final approval of the Settlement Agreement. The record confirms that the Settlement Agreement is the result of hard-fought, arm's-length negotiations conducted after an extensive investigation and analysis of the relevant information. Given the risks of continued litigation, the absence of meaningful objections, and the significant benefits provided to the Class, the settlement is fair, reasonable, and adequate and Plaintiff respectfully requests that it be approved.
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Dated: August 15, 2018

DICKINSON WRIGHT PLLC
By: /s/ Aaron V. Burrell Aaron V. Burrell (P73708) J. Mylan Traylor (P82157) Attorneys for Plaintiff 500 Woodward Avenue, Suite 4000 Detroit, MI 48226 (313) 223-3500 Aburrell@dickinsonwright.com

PROOF OF SERVICE
I hereby certify that on August 15, 2018, I electronically filed the foregoing paper with the Clerk of the Court using the ECF system which will send notification of such filing to counsel of record.
/s/ Aaron V. Burrell (P73708) DICKINSON WRIGHT PLLC 500 Woodward Avenue, Suite 4000 Detroit, Michigan 48226 (313) 223-3500 aburrell@dickinsonwright.com

DETROIT 74785-1 1470997v1

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EXHIBIT A

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 Case 2:17-cv-11184-DPH-RSW ECF No. 43 filed 08/31/18 PageID.1354 Page 1 of 16

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION

M.R., on behalf of herself and all others similarly situated,1
Plaintiff,
v.
NICK LYON, in his official capacity only as Executive Director of the Michigan Department of Health and Human Services,
Defendant.

CASE NO. 17-11184 HON. DENISE PAGE HOOD
/

ORDER GRANTING FINAL APPROVAL OF CLASS SETTLEMENT AND ADDRESSING OBJECTIONS

I. BACKGROUND On August 15, 2018, Plaintiff M.R. and Class Counsel Dickinson Wright,
PLLC, for themselves and on behalf of the certified class, moved for final approval of the class action settlement and Release Agreement. The Court granted Preliminary Approval on May 29, 2018. The Defendant does not object to the Motion. A fairness hearing was held on August 8, 2018. One objection and two

1 The Parties Stipulated to change the lead Plaintiff for the Class and to change the name of the case. The case was formerly J.V. v. Lyon (Case Number: 17-cv-11184).
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letters were received by the Court. One objector addressed the Court at the fairness
hearing. The Court grants the Motion for Final Approval of Class Settlement. The
letters and objection are addressed herein.
II. STATEMENT OF FACTS
The Parties in their Joint Motion, set forth the following statement of facts:
On April 14, 2017, Plaintiff filed this putative class action in the United States District Court for the Eastern District of Michigan, Southern Division captioned J.V. on behalf of herself and all others similarly situated v. Nick Lyon, in his official capacity only as executive director of the Michigan Department of Health and Human Services, Case No.: 2:17-cv-11184- DPH-RSW (the “Action”). The complaint alleged that Defendant’s current prior-authorization criteria for Hepatitis C treatment (the “MDHHS Prior Authorization Criteria”) violates three separate provisions of the Medical Assistance Program, Title XIX of the Social Security Act, 42 U.S.C. § 1396 et seq. by: (1) excluding qualified Medicaid recipients from “medically necessary” treatment as required by 42 U.S.C. § 1396a(a)(10)(A); (2) discriminating among similarly situated Medicaid recipients in violation of 42 U.S.C. § 1396a(a)(10)(B); and (3) failing to provide medically necessary treatment with “reasonable promptness” as required by 42 U.S.C. § 1396a(a)(8).
In or around October 2017, the parties began to discuss the possibility of settlement and agreed to resolve the matter through mediation. On January 17, 2018, Plaintiff’s counsel, Defendant’s counsel, and Defendant’s corporate representatives participated in a formal mediation session with Magistrate Judge R. Steven Whalen. After several rounds of negotiations, the parties reached an agreement as to the principal terms of the Settlement Agreement, attached hereto as Exhibit A.
Defendant has denied and continues to deny the claims alleged in the Action. Defendant maintains that it has strong, meritorious defenses to the claims alleged in the Action and was prepared to fully defend the Action. Nonetheless, taking into account the uncertainty and risks inherent in litigation, Defendant has concluded that it is desirable and beneficial to Defendant that the Action be fully and finally settled
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and terminated in the manner and upon the terms and conditions set forth in the Settlement Agreement.
Plaintiff believes that the claims asserted in the Action against Defendant have merit, and that Plaintiff would have ultimately been successful in certifying the proposed class under Fed. R. Civ. P. 23 and in prevailing on the merits at summary judgment or trial. Nonetheless, Plaintiff and Class Counsel recognize the expense and delay associated with continued prosecution of the Action against Defendant. Therefore, Plaintiff believes that it is desirable that the Released Claims be fully and finally compromised, settled, and resolved pursuant to the terms and conditions set forth in the Settlement Agreement. The terms of the Settlement Agreement include but are not limited to the following: • Defendant agrees to replace the MDDHS Prior Authorization Criteria and institute the Amended Prior Authorization Criteria to provide coverage for direct-acting antiviral treatment to all Eligible Michigan Medicaid beneficiaries diagnosed with chronic Hepatitis C. • Defendant agrees to expand direct-acting antiviral treatment coverage to all Eligible Michigan Medicaid beneficiaries diagnosed with chronic Hepatitis C based on the following schedule: o Defendant will provide coverage for all eligible beneficiaries with a metavir fibrosis score of F-1 and above on October 1, 2018 and o Defendant will provide coverage for all beneficiaries with a metarvir fibrosis score of F-0 an above on October 1, 2019. • The Amended Prior Authorization Criteria will include, but is not limited to, the following provisions: o The direct-acting antiviral medication must be prescribed by a gastroenterologist, hepatologist, liver transplant or infectious disease physician. If the prescribing provider is not one of the identified specialists noted, the prescriber must submit documentation of consultation/collaboration of the specific case with one of the aforementioned specialists which reflects discussion of the history and agreement with the plan of care with the date noted in the progress note. o Documentation of the patient’s use of Illegal Drugs or abuse of alcohol must be noted (i.e., current abuse of IV drugs or alcohol or abuse within the past 6 months). The Michigan Department of Health and Human Services will consider this information for the sole purpose of optimizing treatment. o Documentation of the patient’s commitment to the planned course of treatment and monitoring (including SVR 12) as well as patient education addressing ways to reduce the risks for reinfection
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must be submitted. • Defendant reserves the right to revise the Amended Prior Authorization Criteria and Claim Form to incorporate updated clinical recommendations or other best practices, consistent with this Agreement. • Defendant agrees to provide coverage for direct-acting antiviral medications that are (i) approved by the U.S. Food and Drug Administration for the treatment of chronic Hepatitis C; (ii) have a federal Medicaid rebate; and (iii) are listed on Defendant’s Preferred Drug List as preferred at the time the beneficiary is approved for treatment. • If a direct-acting antiviral medication is no longer approved by the U.S. Food and Drug Administration for the treatment of chronic Hepatitis C or no longer on Defendant’s Preferred Drug List, it will no longer be covered.
III. CERTIFICATION OF CLASS
As to the motion for approval of class settlement, the following factors, for
final approval, are considered. The Court must first find that the class is certified
under Rule 23(a) of the Federal Rules of Civil Procedure.
1. Numerosity
A class may be certified only if “the class is so numerous that joinder of all
members is impracticable.” Fed. R. Civ. P. 23(a)(1). There is no strict numerical
test for determining impracticability of joinder. When class size reaches substantial
proportions, however, the impracticability requirement is usually satisfied by the
numbers alone. In re Am. Med. Sys., Inc., 75 F.3d 1069, 1079 (6th Cir. 1996). Here,
the parties agreed that, for purposes of settlement, joining even a fraction of the
persons who meet the settlement class definition would be impractical. It is
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estimated that 160,000 Michigan residents have chronic hepatitis C virus (“HCV”). According to the Parties, in 2016 alone, there were approximately 11,883 new reported cases of chronic HCV in Michigan. Thousands of Michigan residents enrolled in Medicaid will benefit from class certification. No one directly objected to the requirement for numerosity. One letter stated, “I do realize this is a step in the right direction even if it leaves very ill people out of receiving medication.” (Doc # 41) No other argument was made in this letter.
The numerosity requirement under Fed. R. Civ. P. 23 is satisfied. 2. Commonality A class may be certified only if “there are questions of law or fact common to the class.” Fed. R. Civ. P. 23(a)(2). A court looks for “a common issue the resolution of which will advance the litigation.” Sprague v. Gen. Motors Corp., 133 F.3d 388, 397 (6th Cir. 1998). “Class relief is peculiarly appropriate when the issues involved are common to the class as a whole and when they turn on questions of law applicable in the same manner to each member of the class.” In re Am. Med. Sys., Inc., 75 F.3d at 1080. The claim brought by Plaintiff or any putative class member requires the Court to determine whether the MDHHS Policy, which denies coverage of direct-acting antiviral medication (“DAAs”) treatment based on metavir fibrosis score, violates the Medicaid Act. That essential question is common to all putative class members. The parties agreed that commonality was met for settlement
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purposes. The Court finds that the questions of law and fact are common to the class. 3. Typicality A class may be certified only if “the claims or defenses of the representative
parties are typical of the claims or defenses of the class.” Fed. R. Civ. P. 23(a)(3). Rule 23(a)(3) is satisfied if the representative’s claim “arises from the same event or practice or course of conduct that gives rise to the claims of other class members, and if his or her claims are based on the same legal theory.” Beattie v. CenturyTel, Inc., 511 F.3d 554, 561 (6th Cir. 2007). Here, Plaintiff’s claims and those of any putative class member arise from identical conduct by the MDHHS: the denial of certain Medicaid rights on the basis of metavir fibrosis score. All the claims are based on the same legal theory. The parties also agreed the typicality requirement has been met. Plaintiff has met the typicality requirement of Rule 23(a)(3).
4. Adequacy A class may be certified only if “the representative parties will fairly and adequately protect the interests of the class.” Fed. R. Civ. P. 23(a)(4). To meet the requirements of Rule 23(a)(4), Plaintiffs must be part of the class and possess the same interest and suffer the same injury as the class members. A court “reviews the adequacy of class representation to determine whether class counsel are qualified, experienced and generally able to conduct the litigation, and to consider whether the class members have interests that are not antagonistic to one another.” Beattie, 511
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F.3d at 562-63. There did not appear to be conflict or antagonism between Plaintiff and the putative class members given the identical nature of their claims and injury. Plaintiff has a clear interest in the successful outcome of the lawsuit, seeking to eliminate the MDHHS Policy’s fibrosis score restriction to obtain life-saving treatment. Plaintiff hired counsel who are skilled practitioners in this area. The adequacy factor has been met under Rule 23(a)(4).
5. Rule 23(b)(2) In addition to satisfying Rule 23(a), a plaintiff seeking certification must satisfy one of the provisions of Rule 23(b). Rule 23(b)(2) applies when “the party opposing the class has acted or refused to act on grounds that apply generally to the class, so that final injunctive relief or corresponding declaratory relief is appropriate respecting the class as a whole.” Fed. R. Civ. P. 23(b)(2). “Rule 23(b)(2) applies only when a single injunction or declaratory judgment would provide relief to each member of the class. It does not authorize class certification when each individual class member would be entitled to a different injunction or declaratory judgment against the defendant.” Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 360 (2011). Plaintiff seeks to enter an agreement that will invalidate the current MDHHS Policy, which will benefit all class members, and is not asking the Court to make individual determinations regarding the putative class members’ medical needs. The Parties agreed that the class should be certified under Rule 23(b)(2).
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Based on the above and the Parties’ agreement, the Class is certified. IV. APPROVAL
Pursuant to Fed. R. Civ. P. 23(e), “[t]he claims, issues, or defenses of a certified class may be settled, voluntarily dismissed, or compromised only with the court’s approval.” Federal policy favors settlement of class actions. International Union United Auto., Aerospace and Agr. Implement Workers of American v. General Motors Corp., 497 F. 3d 615, 632 (6th Cir. 2007) (“And in view of the other factors we must consider—the federal policy favoring settlement of class actions . . . .”). This policy takes into account costs, delays and the risk of continued litigation that might overwhelm or delay any potential benefit to class members. Approval of class action settlements is left to “the sound discretion of the trial court.” In re U.S. Oil and Gas Litig., 967 F.2d 489, 493 (11th Cir. 1992).
For final approval of a class action settlement, the district court is “limited to a determination of whether the terms proposed are fair and reasonable to those affected.” Steiner v. Fruehauf Corp., 121 F.R.D. 304, 305 (E.D. Mich. 1988). The Parties note that the settlement “provides Class Members with consideration within the range of approval, was negotiated at arm’s length, and does not evidence unduly preferential treatment or other obvious deficiencies . . . .” (Doc # 27, Pg. 19) The Parties began their settlement discussion in October 2017, about five or six months after the Complaint was filed. In January 2018, the Parties engaged in formal
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mediation with United States Magistrate Judge R. Steven Whalen, reaching agreement on principal terms after several negotiation sessions. Each side, Plaintiff and Defendant, believe their positions relative to the case have merit, but also find the settlement fair, reasonable and adequate to Plaintiff and in the best interest of all parties to resolve through settlement. Terms of Settlement, 3.1–3.6 of the Settlement Agreement, provide no unduly preferential treatment and is within the “range of reasonableness” required for approval.
The factors to be determined at the fairness hearing are: “(1) the risk of fraud or collusion; (2) the complexity, expense and likely duration of the litigation; (3) the amount of discovery engaged in by the parties; (4) the likelihood of success on the merits; (5) the opinions of class counsel and class representatives; (6) the reaction of absent class members; and (7) the public interest.” Int’l Union, et al. v. General Motors Corp, et al., 497 F.3d 615, 631 (2007).
The Court, following the fairness hearing, finds there is no indication of fraud or collusion in this case. This case is complex, would be expensive to resolve through further litigation, and would be lengthier if continued through litigation. Although the Parties have not had extensive discovery in this matter, the Parties have the sufficient knowledge necessary to reach a resolution. Defendant does not concede he will not prevail on the merits but has agreed to the settlement taking into account the risks associated with this litigation. Plaintiff believes that the claims
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asserted against Defendant have merit. However, Plaintiff recognizes that settlement would avoid the expense and delay associated with continuing this action against Defendant and provide a remedy for Plaintiff and class members.
The opinions of class counsel and class representative—based on the Settlement Agreement entered into by the Parties—show that they favor the Agreement and agree the terms are fair. The Court notes that it is in the public interest to resolve disputes amicably and to make sure all possible class participants were notified of the Settlement Agreement. All possible class participants were notified. Two letters were received by the Court, and were titled: (1) “Re: Member of Aaron V. Burrell of Dickinson Wright, PLLC Settlement” (Doc # 41); and (2) “Magistrate Judge R. Steven Whalen Regarding Court Case M.R. Lyon Settlement Case Number: 17-CV-11184.” (Doc # 40) These two letters are generally favorable to approval of the class settlement, including praise for the Class Plaintiff bringing the action.
One objection was filed, “Class Member 60’s Kirk Leaphart’s Objections in Part to Class Action Settlement Agreement and Release.” (Doc # 39) The sole objector to the class settlement (“Objector Leaphart”) argues that the amount of attorneys’ fees requested by Class Counsel is excessive. That objection is addressed in a separate order awarding attorneys’ fees. Objector Leaphart also objects to the monetary incentive requested for the Class Representative. Class counsel requests
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that the Class Representative be awarded $5,000.00 for the time and effort he expended to achieve this benefit for the Class as a whole. (Doc #37, p. 15) Objector Leaphart argues it is unfair to limit the award to the Class Representative and not make a similar award to the “three dozen of us class members” who previously sought the relief obtained in this litigation by unsuccessful administrative action. (Doc. #39)
The Sixth Circuit has never explicitly approved or disapproved of granting “incentive awards” to class representatives. Hadix v. Johnson, 322 F. 3d 895, 897 (6th Cir. 2003). However, courts “have stressed that incentive awards are efficacious ways of encouraging members of a class to become class representatives and rewarding individual efforts taken on behalf of the class.” Id. “[A]pplications for incentive awards are scrutinized carefully by courts” concerned that such awards might lead to class representatives compromising the interest of the class for their own personal gain. Id. Courts within the Sixth Circuit deciding whether to approve an incentive award for a class representative have considered the following factors:
(1) the action taken by the Class Representatives to protect the interests of Class Members and others and whether these actions resulted in a substantial benefit to Class Members; (2) whether the Class Representatives assumed substantial direct and indirect financial risk; and (3) the amount of time and effort spent by the Class Representatives in pursuing the litigation.
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Enterprise Energy Corp. v. Columbia Gas Transmission Corp., 137 F.R.D. 240, 250 (S.D. Ohio 1991). Incentive awards are normally approved in cases where a class representative recovers a common fund for the benefit of an entire class. Hadix, 322 F. 3d at 898. In this case, Defendant has approved an incentive award for the Class Representative.
The Court finds that the Class Representative has obtained a significant, potentially life-saving benefit, for the Class. Although there is no indication that the Class Representative assumed any financial risk, the Class Representative provided significant assistance to Class Counsel during this litigation, which spanned several months. Neither Objector Leaphart, nor any of the others he claims pursued administrative remedies, are in the same position as the Class Representative. Objector Leaphart has not demonstrated a basis for providing additional class members with an incentive award. Nor has he shown that the other persons who sought administrative remedies have made such requests. None of them have assisted in the litigation. Accordingly, Objector Leaphart’s objection is denied.
Objector Leaphart also appears to suggest that the Court lacks jurisdiction because suing Defendant Nick Lyon, a state actor being sued in his official capacity, is the equivalent of suing the State of Michigan, which is not a person for purposes of Section 1983. It is well-established law, however, that “a state official sued in his official capacity, when sued for injunctive relief, would be a person under § 1983
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because ‘official-capacity actions for prospective relief are not treated as actions against the State.’” Will v. Michigan Dep’t of State Police, 491 U.S. 58, 89 n.10 (1989) (citing Kentucky v. Graham, 473 U.S. 159, 167 n.14 (1985)). As Plaintiff sought prospective relief from, and not monetary damages against, Defendant Nick Lyon, Objector Leaphart’s objection lacks merit and is denied.
Objector Leaphart expresses a concern relative to his ability to change health care insurance plans only once a year. Defendant contends that Objector Leaphart’s concerns are beyond the scope of this action, and having reviewed the Complaint and filings in this matter, the Court agrees. Accordingly, Objector Leaphart’s objection is denied.
Out of the over 1,200 individuals to receive the notice, only one objection was received by the Court. Of course one objection may have merit, but “[a] court should not withhold approval of a settlement merely because some class members object.” Int'l Union, United Auto., Aerospace & Agr. Implement Workers of Am. v. Chrysler LLC, No. 07-CV-14310, 2008 WL 2980046, at *29 (E.D. Mich. July 31, 2008); 7B Wright, et al., Federal Practice & Procedure § 1797.1 (“the fact that there is opposition does not necessitate disapproval of the settlement”). There is overwhelming class support for the Settlement.
It is also in the public interest for people to receive access to needed health care. The class members will substantially benefit from receiving access to a life-
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saving treatment that could save them from succumbing to a potentially lifethreatening disease.
The Court finds the settlement agreement is fair, reasonable, and adequate, as contemplated by Fed. R. Civ. P. 23(e)(2). The Court GRANTS approval of the Settlement Agreement. V. APPOINTMENT OF CLASS COUNSEL
As the Court determined in granting preliminary approval on May 29, 2018, Dickson Wright PLLC (the “Firm”) has invested significant time and effort identifying, researching, and investigating the claims in this action. The Firm has developed a litigation strategy for Plaintiff and the putative class members, and negotiated the proposed Settlement Agreement. The Firm has been appointed as class counsel in other recent health care-related litigation before this Court, has experience handling class actions and other complex litigation, and has the resources to represent this class in this action. The Firm is qualified to be the class counsel in this litigation pursuant to Federal Rule of Civil Procedure 23(g). VII. CONCLUSION
For the reasons set forth above, IT IS HEREBY ORDERED that this controversy is certified as a class action. IT IS FURTHER ORDERED that notice was properly executed.
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IT IS FURTHER ORDERED that the class certified is defined as the following:
All individuals that are or will be enrolled in Michigan’s Medicaid Program at the time this Order is entered; have been or will be diagnosed with a chronic infection of the Hepatitis C Virus; are 18 years of age or older; require, or in the future will require, treatment for Hepatitis C with direct-acting antiviral medication; and do not meet the Michigan Department of Health and Human Services’ current treatment criteria, which restricts direct-acting antiviral treatment to individuals with a minimum metavir fibrosis score criteria of F-2. IT IS FURTHER ORDERED that the named Plaintiff, M.R., is determined to be, and is found to be, a proper class representative to advance and protect the interests of the certified class pursuant to MCR 3.501. IT IS FURTHER ORDERED that the law firm of Dickinson Wright is hereby appointed as the proper class counsel to advance and protect the interests of the Certified Class pursuant to MCR 3.501. IT IS FURTHER ORDERED that Approval of the Parties’ class action Settlement Agreement is GRANTED. IT IS FURTHER ORDERED that the Notice of the proposed Settlement Agreement to Class members and Notice of the Fairness Hearing to Class members was properly executed as delineated in the Stipulated Order for Notice to the Putative Class (Exhibit C to Doc # 27 and Exhibits A–C therein). IT IS FURTHER ORDERED that on September 21, 2018, the Parties will
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mail notice of settlement approval and claim forms to class members. IT IS FURTHER ORDERED that on October 1, 2018, Settlement
Agreement terms will go into full effect.
S/Denise Page Hood Denise Page Hood Chief Judge, United States District Court Dated: August 31, 2018 I hereby certify that a copy of the foregoing document was served upon counsel of record on August 31, 2018, by electronic and/or ordinary mail. S/LaShawn R. Saulsberry Case Manager
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