RICHMOND, Va. (Legal Newsline) - Calling some of its arguments "weak" and "absurd," West Virginia Attorney General Darrell McGraw has responded to a group of pharmacies that claims his lawsuit against it is a class action.
McGraw submitted his response brief Thursday to the U.S. Court of Appeals for the Fourth Circuit, which is weighing the appeal of six prescription drug retailers that feel McGraw's case should be heard in federal court because it is a class action. A lower court ruled against them, remanding the case to Boone County Circuit Court.
The pharmacies - Kmart, Wal-Mart, Target, Kroger, CVS and Walgreen - allegedly did not pass savings on generic prescription drugs on to consumers.
"Acting under the State's parens patriae authority to protect its sovereign and quasi-sovereign interests in enforcing its own laws, the state of West Virginia, by its Attorney General, is the real party in interest in this case," McGraw wrote.
McGraw noted that the defendants have abandoned their three previous arguments for federal jurisdiction.
"This case was not filed under West Virginia Rule 23, and therefore it is not a class action," McGraw wrote. "Nor was this matter filed 'as a class action.'
"Rather, it was filed in the sovereign interest to carry out what the district court correctly described as the Attorney General's 'freestanding consumer-protection duty' and his 'broad powers to implement the (West Virginia Consumer Credit and Protection Act) and protect and promote consumer welfare in the process.'"
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."
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.
Bailey & Glasser brought similar lawsuits in Michigan and Minnesota. The Michigan suits were dismissed by a state judge because the only specific pricing information was obtained by a West Virginia whistleblower who worked at Kroger.
The Minnesota lawsuit, brought on behalf of unions that provide health care for their members, was initially dismissed in November 2009 by U.S. District Judge James Rosenbaum, who had harsh words for the plaintiffs attorneys.
Rosenbaum was peeved that the complaint, filed against 13 defendants, only contained specific pricing information about 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 Nov. 20, 2009.
"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."
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. "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 email@example.com.