CLEVELAND (Legal Newsline) - Giant Eagle settled multiple opioid lawsuits against it as fellow defendants in a closely watched trial testing novel public-nuisance theories filed motions to dismiss, arguing the plaintiffs failed to prove their case.
The regional grocery chain reached a settlement of 10 lawsuits by Ohio municipalities including Lake and Trumbull counties, which are the plaintiffs in an ongoing trial before U.S. District Judge Dan Aaron Polster in Cleveland. The trial is considered a key test of claims alleging pharmacies created a public nuisance by filling too many prescriptions for opioids, which the defendants say is a misapplication of Ohio law that historically has only been used to control nuisances involving property.
The remaining defendants are some of the nation’s largest pharmacy operators: CVS, Walgreens and Walmart. In filings Friday after the close of the plaintiffs’ case, they asked Judge Polster to dismiss the lawsuits by Lake and Trumbull counties as a matter of law, saying they had failed to prove their claims.
“Plaintiffs’ public nuisance claim should not have made it this far,” they said in a 54-page joint filing. Repeating arguments Judge Polster previously rejected, they said the plaintiffs based their claims on misinterpretations of the Federal Controlled Substances Act, transforming alleged bookkeeping failures into evidence the companies had broken the law, a vital element in any public nuisance lawsuit. But under a theory of “aggregate proof” the judge allowed over defense objections, the plaintiffs never presented evidence of a single illegal prescription the pharmacies filled, instead using statistical models created by their experts to suggest improper prescriptions had slipped through.
If the pharmacies were guilty of filling illegal prescriptions, the defendants argued, the Drug Enforcement Administration is the proper agency to enforce the law, “not two political subdivisions whose built-for-litigation theories will only disrupt the doctor-patient relationship.” Plaintiff experts asserted at trial that pharmacists have an equal duty along with physicians to prevent improper opioid prescriptions from being filled, even if that means second-guessing doctors and calling them with questions every time they write a narcotics scrip.
Giant Eagle’s settlement for an as-yet undisclosed amount, along with a pretrial settlement by Rite-Aid, increases the pressure on the remaining defendants to settle and avoid shocking their investors with a large jury verdict.
The plaintiffs have a lot riding on this case as well. A collection of private lawyers working on contingency say they have invested tens of millions of dollars in this litigation, at least some of it financed by hedge funds and other outside firms, and they are counting on winning at least as much from big national chains like Walmart as they have already from the nation’s Big Three drug distributors and Johnson & Johnson. The latter companies have agreed to pay $26 billion – including some $2 billion in legal fees – to end municipal litigation.
In their motion to dismiss, the pharmacies say the plaintiffs opted to file “absolute nuisance” claims under Ohio law, which require proof of illegal or intentional conduct. It is undisputed the companies complied with physical security, recordkeeping and other requirements specified under state and federal law, they said. But Judge Polster added an additional requirement, over their objections, at the corporate level, allowing plaintiffs to allege the companies hadn’t protected against diversion other than theft.
The plaintiffs then argued the corporations failed to give their front-line pharmacists the tools to detect and halt diversion, including a list of some 16 “red flags” plaintiff experts said indicate opioid prescriptions were written for an improper purpose or would end up in the wrong hands. Those red flags don’t appear in the law, however, the defendants argued, nor do the words “red flags.”
“Plaintiffs’ novel `red flags’ provide no basis for believing any pharmacist actually harbored any suspicions at the time of dispensing a particular prescription, and their documentation rules are at most plaintiffs’ expert’s opinion as to what constitutes `best practices’; they find no basis in the CSA or its regulations,” the plaintiffs argued.
The defendants also reject claims they were a proximate cause of the opioid crisis in Ohio, saying the plaintiffs failed to provide any evidence they filled wrongful prescriptions. Even if they had presented evidence of specific prescriptions for pills that wound up being diverted, the defendants said, even plaintiff experts acknowledged narcotics are frequently shared by legal patients with friends and family in what is known as “medicine cabinet diversion.”
One plaintiff expert, Dr. Katherine Keyes, acknowledged a long list of parties that contributed to the opioid crisis, including the DEA, which tripled production quotas as addiction and overdose deaths were soaring; physicians who wrote legal prescriptions some experts now consider unwise; the Food and Drug Administration, which approved opioid labeling suggesting their use for treating chronic pain; and state medical boards, which failed to discipline known “pill-mill” doctors.
Finally, the defendants repeated their argument, already rejected by Judge Polster, that the Ohio Product Liability Act expressly prohibits public nuisance claims based on the supply, distribution or sale of a product. Judge Polster maneuvered around that language by ruling that the plaintiffs were seeking “equitable relief,” normally an injunction prohibiting certain conduct but in this case money damages the judge himself will determine if the jury comes back with a finding of liability.