Drug stores fight remand order in W.Va. AG's case

John O'Brien Oct. 7, 2010, 2:10pm


RICHMOND, Va. (Legal Newsline) - Six prescription drug retailers do not want the case filed against them by West Virginia Attorney General Darrell McGraw heard in a state court.

The group refuses to give up the argument that McGraw's lawsuit is a class action and should be heard in federal court rather than Boone County Circuit Court. A federal judge recently remanded it to Boone, but the drug stores are appealing that decision to the U.S. Court of Appeals for the Fourth Circuit.

The lawsuit alleges Target, Kroger, CVS, Walgreen, Wal-Mart and Kmart did not pass along savings from filling prescriptions with generic drugs on to consumers.

"Because the complaint seeks recovery of excess charges paid by consumers that, by statute, "shall... refund to the consumer" if the complaint is successful, the real parties in interest are the consumers rather than the State," attorneys for the companies wrote.

"Indeed, the complaint alleges no harm to the State."

The district court ruled McGraw was representing consumers in a parens patriae capacity. A similar case against Rite Aid has also been remanded.

McGraw hired the Charleston law firm Bailey & Glasser to represent the State. The firm has filed similar suits in other states, most notably in Michigan. A state judge there tossed the suits.

"Here, the right to removal is especially strong because the AG has retained private attorneys to represent him and they are functioning, in essence, as class action counsel," the companies argue.

The companies say they are seeking guidance on an issue "of great significance to litigants." If the lower court's remand order is allowed to stand, it would undermine Congress' attempts at "expanding federal oversight of class action complaints and encourage forum shopping," they add.

McGraw also hired DiTrapano Barrett & DiPiero to pursue the drug store cases. 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.

McGraw's attorneys argued in May that the case is not a class action. McGraw has the ability to represent individuals in need of protection in his parens patriae capacity. The term is Latin for "parent of the nation."

"Inasmuch as Rite Aid has failed to establish a 'substantial and actually disputed' federal issue embedded within the plaintiff's state-law claims, the court declines to find federal question jurisdiction," U.S. District Judge John Copenhaver wrote in remanding the Rite Aid case.

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

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