SHERMAN, Texas (Legal Newsline) - Plaintiff lawyers tried, and failed, to drag Walmart’s lawsuit against the U.S. Department of Justice into the court overseeing federal multidistrict opioid litigation in an effort to head off a court ruling that could undermine their claims pharmacists helped cause a nationwide epidemic of narcotic use.
In an Oct. 29 filing with the Judicial Panel on Multidistrict Litigation lawyers for Webb County, Texas, asked for Walmart’s declaratory judgment suit against the government to be declared a “tag-along” action that belongs with thousands of other lawsuits by cities and counties centralized before U.S. District Judge Dan Aaron Polster in Ohio.
The panel rejected the request Friday with a brief note explaining the clerk had determined Walmart’s case “is not appropriate for inclusion in this MDL.”
Walmart sued the U.S. Justice Department last week under a law allowing companies to seek a court ruling on whether they have violated the law. Walmart complained it is in imminent threat of a federal lawsuit accusing it of violating the Controlled Substances Act by failing to heed “red flags” indicating its pharmacists shouldn’t have filled opioid prescriptions.
In that suit, Walmart says nothing in the CSA spells out the duties it is supposed to have violated and the threatened federal lawsuit will be based upon unofficial “guidance letters” and other information outside formal regulations and statutes.
If Walmart won its Declaratory Judgment Act case – a long shot, given judges can dismiss such actions at their discretion – it could use the findings there to thwart so-called “dispensing” claims elsewhere. Pharmacy chains won a potentially important ruling in New York when the judge hearing the state’s case ruled that New York nuisance law doesn’t allow lawsuits against the corporate parents of pharmacies claiming they failed to stop diversion and misuse of opioids.
In the filing seeking to move Walmart’s declaratory judgment case to the MDL in Ohio, Joanne Cicala of the Cicala Law Firm said Webb County is suing the retailer for failing to “abide its duties and obligations relating to dispensing opioids.”
“Walmart consistently has argued that claims concerning its role in the opioid epidemic properly belong before Judge Dan A. Polster,” the lawyer wrote. The nexus between the Texas case and litigation in Ohio was demonstrated in Judge Polster’s August order rejecting Walmart’s motion to dismiss dispensing claims, she wrote, where the judge explained his view of pharmacy obligations under the CSA, the issues Walmart is seeking to clarify with its own suit. Cicala didn’t respond to a call seeking comment.
Corporate defendants have generally sought to have opioid lawsuits removed to federal courts, which are considered more predictable from a procedural standpoint and less likely to hand down ruinous verdicts.
Plaintiff lawyers working under contingency fee contracts that likely will bring them billions of dollars in fees have consistently won pretrial rulings in the MDL under Judge Polster and so have a financial incentive to bring the potentially threatening Walmart declaratory action into his court. They have also had success in state court, however, including winning more than $60 million in fees in the first state lawsuit to go to trial in Oklahoma.
In its lawsuit against the government, Walmart says federal prosecutors in Texas threatened it with criminal prosecution unless it agreed to a multibillion-dollar settlement of opioid dispensing claims. Walmart claims the pressure campaign included media leaks of information the government obtained under subpoena. Pro Publica published a lengthy story containing details from the DOJ investigation earlier this year.