Drug stores: No excuse for delay in class action

John O'Brien Nov. 1, 2011, 4:38pm


MINNEAPOLIS (Legal Newsline) - A group of drug stores is objecting to a federal magistrate judge's recommendation that a class action lawsuit filed against it by a West Virginia firm should be heard in state court.

The U.S. Court of Appeals for the Eighth Circuit ruled earlier this year that the district court should determine if the motion to remand the case to state court was filed in a timely fashion. It took Bailey & Glasser of Charleston, W.Va., 104 days after the case was removed to federal court to ask for its remand.

Magistrate Judge Janie Mayeron wrote last month that plaintiffs attorneys didn't realize they had a reasonable basis for pursuing remand until a Michigan federal court remanded three similar lawsuits.

"That Plaintiffs have no legitimate response is highlighted by the various ephemeral responses they have offered - the proverbial moving target," says the drug stores' objection, filed Thursday.

"In their opening brief on remand, Plaintiffs argued that they had noticed their remand motion for hearing 'the day following the Michigan district court's decision' remanding a similar case on the basis of the local controversy provision.

"In other words, Plaintiffs wanted this court to believe that their counsel was incapable of reading (the Class Action Fairness Act's) statutory text, and only capable of realizing 'that the same threshold issue needed to be addressed and resolved in this case' after the Michigan decision was issued."

The drug stores - which include CVS, Target and Wal-Mart - are alleged to have not passed savings on generic drugs to consumers. They argue that the plaintiffs continued to litigate the case after it was removed and only asked for remand after former U.S. District Judge James Rosenbaum dismissed the complaint.

Rosenbaum allowed the plaintiffs to amend the complaint then granted remand. When the drug stores appealed, the Eighth Circuit said the district court should rule on the timeliness issue. Judge Michael Davis was assigned the case after Rosenbaum retired.

In November 2009, Rosenbaum was annoyed that the complaint, filed against 13 defendants on behalf of unions that provide health care for their members, contained specific pricing information about only two of them.

"(T)his Complaint utterly fails to state a cause of action on any basis. There are no, none, factual allegations touching any defendant other than CVS and Walgreen's," Rosenbaum said.

"There being no facts from which a fact finder could infer any liability concerning (the other defendants), and you asked me to sustain a complaint based upon that. It's not only laughable, it's absolutely reprehensible.

"There's not a lawsuit here. There is not a claim. There is not an allegation. I've got words on a page."

The lawsuits in Michigan were dismissed by a state judge because the only specific pricing information was obtained by a West Virginia whistleblower who worked at Kroger.

The firm is also representing West Virginia Attorney General Darrell McGraw's office in a suit filed in the Mountain State. Currently, the two sides are fighting over whether the lawsuit should be heard in federal court, with the drug stores claiming it is a class action. They have appealed a Fourth Circuit ruling to the U.S. Supreme Court.

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

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