CLEVELAND (Legal Newsline) - A federal appeals court has rebuked the judge overseeing thousands of opioid lawsuits against retail pharmacy chains, saying he overstepped his authority by allowing plaintiffs to amend their claims to include allegations they improperly filled prescriptions for narcotics.
In a nine-page order issued April 15, the U.S. Court of Appeals for the Sixth Circuit said District Judge Dan Polster “was plainly incorrect as a matter of law” when he allowed two Ohio counties to add so-called dispensing claims to lawsuits against CVS and 11 other pharmacies more than 18 months after the deadline for such changes had passed.
“This is an enormously important ruling not only for this high-stakes multidistrict litigation, but it also sends a clear signal to all parties in MDLs that they must comply with the Federal Rules of Civil Procedure and that there is no MDL exception loophole,” said Andrea Looney, executive director of Lawyers for Civil Justice, which filed an amicus brief in favor of the defendants.
The pharmacies challenged the judge’s decision as well as his order for them to turn over 20 years of sensitive nationwide prescription data. The Sixth Circuit put that sweeping discovery order on hold in February and dismissed it as moot today following its decision throwing out the dispensary claims.
The decision by a three-judge panel of the Sixth Circuit represents a rare victory for opioid defendants, who have repeatedly sought to reverse what they contend are Judge Polster’s heavy-handed attempts to force them into settling the lawsuits against them. The judge is in charge of federal multidistrict litigation, overseeing more than 2,300 lawsuits by cities, counties, Indian tribes and other plaintiffs.
In theory, MDL judges are only supposed to coordinate pretrial evidence-gathering and other activity before sending cases back to their original courts for trial. But in practice, MDL judges exercise enormous power to facilitate settlements, since corporate defendants rarely can risk bankruptcy by taking hundreds or thousands of cases to trial. Since his first public hearing, Judge Polster has made it clear he wants the opioid defendants to pay billions of dollars in settlements rather than defending themselves in court.
As part of his effort to spur settlements, Judge Polster picked Cuyahoga and Summit counties in Ohio to serve as bellwether plaintiffs in a trial against opioid distributors scheduled for trial last year. The distributors all settled for $260 million on the eve of trial, however. (The politically-connected private lawyers representing the counties reaped more than $80 million in fees, including $500,000 paid to a Washington lobbyist who represents some of the defendants in his lobbying practice.)
After the distributors settled, Judge Polster teed up the pharmacy chains for a trial now scheduled for October. The lawsuits against those defendants claimed only that they violated their duty to monitor suspicious wholesale orders, however, not that they had dispensed opioids improperly through their retail pharmacy windows. The plaintiffs expressly disavowed dispensing claims until after an April 25, 2018, deadline for amending their claims had passed.
Despite his 2018 deadline, Judge Polster allowed the plaintiff counties to add back in dispensing claims in November 2019. The pharmacies cried foul, saying the deadline had long passed and they had complied with massive discovery including millions of pages of documents on the distribution claims.
They filed a mandamus petition with the Sixth Circuit challenging Judge Polster’s order allowing the amended complaints, as well as orders expanding discovery to include virtually every prescription record nationwide and the judge’s refusal to rule on their motions to dismiss. The Sixth Circuit granted a rarely issued mandamus order on their first request saying, “not a circuit court in the country, so far as we can tell, would allow a district court to amend its scheduling order under these circumstances.”
The appeals court judges were careful to say Judge Polster is “notably conscientious and capable” and has a difficult job. “But the law governs an MDL court’s decisions just as it does a court’s decisions in any other case,” they wrote.
The decision represents notable pushback on the idea that MDL judges can exercise virtually limitless control over the cases gathered in their courts. Plaintiff lawyers have made billions of dollars utilizing the MDL process as a cudgel to negotiate settlements with companies that are unwilling or unable to mount a defense against thousands of cases under the control of a single judge.
Some of the eyebrow-raising practices common in MDLs include settlements in which plaintiff lawyers only get paid if they convince 90% or more of their clients to accept the terms the defendant offered. Plaintiff lawyers in MDLs represent a small club who appear in most such cases, and opioid litigation is no different. Joe Rice of Motley Rice, who came to fame in tobacco litigation, has a lead role, along with other lawyers who commonly sit at the top of plaintiffs’ committees in mass tort cases.
The U.S. Supreme Court has unanimously ruled that lawsuits within an MDL retain their separate identities and judges must adhere to the Federal Rules of Civil Procedure, even though they appear to be presiding over something closer to a nationwide class action. Class actions, unlike MDLs, have extensive rules dictating how the class will be represented and requiring judges to actively monitor plaintiff lawyer fees.
Multidistrict litigation tends to be more unstructured, the Sixth Circuit said, “but MDLs are not some kind of judicial border country, where the rules are few and the law rarely makes an appearance.”
The court remanded the pharmacy suits back to Judge Polster’s court for trial in October, but stripped them of the dispensing claims. In an aside, the appeals court said, “indeed, the Counties’ knowing and voluntary relinquishment of those claims arguably amounts to an outright waiver of them.”
The court declined to say whether the discovery order for nationwide prescription data was too broad, noting MDL judges have authority to demand evidence that is common to all the cases they are overseeing. The court appeared to rebuke Judge Polster for refusing to hear the pharmacies’ repeated motions to dismiss, however, saying “the district court may not refuse to adjudicate motions properly filed” under the federal rules.