W.Va. AG says other decisions show he hasn't filed a class action

John O'Brien Mar. 15, 2011, 1:43pm


RICHMOND, Va. (Legal Newsline) - West Virginia Attorney General Darrell McGraw says two recent decisions from California and Connecticut show that he has not filed a class action lawsuit against a group of retail drug stores.

That group - which includes Target, Wal-Mart and CVS - is calling a lawsuit filed by McGraw over their generic drug-pricing policies a class action because McGraw is representing, they say, a class of individuals allegedly affected by the prices. McGraw has called some of the group's arguments "weak" and "absurd."

McGraw says he is acting under his parens patriae authority to protect the state's interests in "enforcing its own laws." Friday, the private attorneys he hired to pursue the case wrote the court to notify it of two decisions involving under states.

If the case is deemed a class action, the defendants say it should remain in federal court. McGraw wants it remanded to Boone County Circuit Court.

A federal judge in Charleston agreed with McGraw, but the pharmacies appealed to the U.S. Court of Appeals for the Fourth Circuit.

McGraw says arguments made by the defendants have been shot down in a California federal court decision entered on Feb. 15 and in a Connecticut federal court's decision entered on Jan. 5.

It was written in the California decision that, "The fact that private parties may benefit from (California's and Washington's) actions does not negate the states' substantial interests in these cases."

In Connecticut's case against Moody's Corp., the decision found that the State was a real party in interest because of its sovereign interest in enforcing its laws, McGraw's attorneys wrote.

"These on-point decisions strongly and persuasively support the conclusion that (the Class Action Fairness Act) does not confer subject matter jurisdiction in this case," wrote John Barrett of Charleston firm, W.Va., Bailey & Glasser.

In its appeal brief, the group of pharmacies claims McGraw's lawsuit satisfies the jurisdictional requirements of the federal Class Action Fairness Act.

"The AG's allegations make abundantly clear that more than $5 million and the interests of more than 100 persons are at issue. If the rightful interests of the West Virginia consumers on whose behalf the AG has brought suit are recognized, there also is undeniably minimal diversity between at least some plaintiffs (who are West Virginia citizens) and all defendants (as none of the defendants reside in or is a citizen of West Virginia," it wrote.

The pharmacies add that any consumer who was allegedly overcharged is a real party in interest to the case.

McGraw hired two private firms - Bailey & Glasser and DiTrapano Barrett & DiPiero - to pursue the case, and another one against Rite Aid. 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.

The pharmacies brought up McGraw's use of outside counsel in their appeal brief.

"First, and at the outset, the defendants' premise - that the State's use of outside counsel somehow affects the jurisdictional analysis - is absurd," McGraw wrote in response. "The text of the statute makes no distinction between state enforcement actions brought exclusively by state attorneys general and actions brought by attorneys general with the support of private counsel."

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

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