CLEVELAND (Legal Newsline) - The plaintiff lawyers leading federal multidistrict litigation against the opioid industry have shelved their request to pull a lawsuit Walmart filed against the government in Texas into the MDL, saying the Justice Department was likely to win its motion to dismiss the case.
In a flurry of motions in Texas and Ohio on Dec. 4, the Justice Dept. said there was no reason to move Walmart’s declaratory judgment action to the court of U.S. District Judge Dan Polster, who is overseeing the opioid MDL, because the case lacks any hook giving the federal court in Texas jurisdiction.
“We stand by our complaint and look forward to addressing the serious legal issues we raised that impact health care in this country,” a Walmart spokesperson said.
Walmart filed the suit last month in an effort to block an expected lawsuit by the government accusing it of violating the Controlled Substances Act by filling too many suspicious opioid prescriptions.
“Walmart’s complaint contains no cause of action,” the Justice Dept. said, because the government hasn’t sued the company and federal court jurisdiction is limited under the U.S. Constitution to “cases or controversies” in which a claimant’s rights are in question. While Walmart cites the Declaratory Judgment Act, a federal law giving courts the power to decide disputed questions of law, the Justice Dept. said that law doesn’t by itself grant jurisdiction. Walmart’s lawsuit is “a public-relations stunt under the guise of preemptive litigation,” the government said.
That’s enough for us, the Plaintiffs Executive Committee said in another Dec. 4 filing in Judge Polster’s court in Ohio. If the government’s motion to dismiss is granted, the issue will become moot and thus “there is no benefit to transfer until such motion is resolved.”
With its declaratory judgment suit, Walmart wants to eliminate the foundation of claims against major pharmacy chains that they failed to intercept and block suspicious opioid prescriptions as required under the CSA. Walmart argues the expected Justice Dept. case against it is based upon informal guidance opinions issued by the Drug Enforcement Administration outside of the formal notice-and-comment process for federal regulations.
Walmart drew the support of the Washington Legal Foundation, the U.S. Chamber of Commerce and the National Retail Federation, which said in an amicus brief to the court that U.S. companies spend an estimated $2 trillion a year on programs to stay in compliance with thousands of federal statutes and hundreds of thousands of regulations.
“Compliance programs are frustrated, not furthered, when agencies enforce subregulatory guidance, created without notice, as if it were binding law,” the organizations said. Most companies settle, rather than risk government enforcement, they added.
“This is a case where a company did not acquiesce and has not settled,” the groups said. “This gives the Court an all-too-rare opportunity to stop the otherwise inexorable trend toward regulation by post-hoc enforcement.”
The Justice Dept. said it won’t discuss the basis for a lawsuit it hasn’t filed and may never file, but dismissed Walmart’s hypothetical concerns about being sued over informal guidance opinions. The agency’s policy since it issued the “Brand memorandum” in January 2018 is not to use guidance documents as the basis for lawsuits or criminal prosecution.
“DOJ recognizes, of course, the impropriety of bringing an enforcement action based on guidance documents — it is part of the Department of Justice Manual — and needs no reminder of its policy,” the Justice Dept. said in its motion to dismiss Walmart’s declaratory judgment suit. “But Walmart should not be heard to criticize a hypothetical complaint’s reliance on guidance documents when its own complaint relies on statements in those same documents.”
The difference of opinion between Walmart and the government over the scope of its duties under the Controlled Substances Act “does not demonstrate the existence of an actual controversy,” the government concluded. “Walmart’s grievance boils down to dissatisfaction with the government’s exercise of investigatory and prosecutorial discretion.”