Wal-Mart, others, claim AG's lawsuit is a class action

John O'Brien Dec. 3, 2009, 3:40pm


CHARLESTON, W.Va. (Legal Newsline) - West Virginia Attorney General Darrell McGraw and a group of prescription drug retailers are debating how the federal law regarding class action lawsuits pertains to actions brought by state attorneys general.

As the two sides argue about where McGraw's lawsuit should be heard, one of the sticking points has become whether the suit is a class action. CVS, Walgreen, Target, Kmart, Wal-Mart and Kroger all claim McGraw has filed a class action that should be handled in federal court.

McGraw, through private attorneys he hired to represent the State, alleges the companies have been filling prescriptions with generic drugs and not passing savings along to consumers.

"The Attorney General brings enforcement actions such as this one not as class actions on behalf of a class of citizens (as in a class action), but under authority conveyed by state law. No court has held otherwise," the firms representing West Virginia wrote Monday.

"Nonetheless, defendants claim that this case - which was not brought as a class action, requires no class certification, and lacks the essential qualities of a class action - somehow fits the definition of 'class action' in the Class Action Fairness Act."

"That term is defined narrowly in CAFA, and recent Fourth Circuit precedent requires it be construed strictly in favor of remand. Any reasonable construction of the term, much less a strict one, demonstrates this case is not a 'class action' under CAFA, a conclusion bolstered by abundant evidence of congressional intent to exclude state attorney general enforcement actions like this one."

McGraw's attorneys are attempting to have the case remanded to Boone County. The companies disagree, however.

"(B)y bringing this suit to recover alleged damages for and on behalf of a defined group of West Virginia citizens, the Attorney General plainly has brought a 'class action' for the purpose of CAFA, however he may try to characterize it," they wrote Nov. 10.

The companies note a Senate Judiciary Committee wrote that the definition of "class action" should "be interpreted liberally."

"Its application should not be confined solely to lawsuits that are labeled 'class actions' by the named plaintiff or the state rulemaking authority," the committee wrote.

The two sides dispute a ruling in an antitrust case brought by Louisiana Attorney General Buddy Caldwell against Allstate Insurance.

The U.S. Court of Appeals for the 5th Circuit ruled the case should be heard in federal court because it involved allegations of violations that impacted citizens.

"In Caldwell, because the state attorney general had sued to recover damages for certain of the state's citizens (and under a statutory provision that each citizen could have used himself), the case was a removable 'class action' under CAFA," the companies wrote.

McGraw's attorneys say the court found the action to be a "mass action," while the companies say there is no difference between the two.

"Defendants have made no assertion this case is a mass action, presumably because they must acknowledge this case does not fit the definition of a mass action, and because the thought of individually joining all persons and entities who purchased generic prescription drugs in West Virginia, frankly, is absurd," McGraw's attorneys wrote.

They added in a footnote that there is a difference between class and mass actions. A mass action, they say, is a civil action in which monetary relief claims of 100 or more persons are proposed to be tried jointly.

Bailey & Glasser is working with DiTrapano Barrett & DiPiero on McGraw's case. The two firms have contributed more than $60,000 to McGraw's campaign fund over the years, including $11,800 for his 2008 race against Republican Dan Greear, who decided Thursday to run for Kanawha County Circuit Court judge.

From Legal Newsline: Reach John O'Brien by e-mail at jobrienwv@gmail.com.

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