WILMINGTON, Del. (Legal Newsline) - The fact the Justice Department sued Amerisource Bergen for allegedly fueling the opioid crisis isn’t enough to reopen a shareholder derivative lawsuit seeking money from the company’s officers and directors, a Delaware court ruled.
The allegations in the DOJ lawsuit filed at the end of last year are the same as claims a federal judge in West Virginia dismissed in July, ruling that two counties had failed to show Amerisource Bergen and two other distributors had created a public nuisance with wholesale sales of opioids to pharmacies. A Delaware court used those findings of fact to dismiss the derivative suit, ruling the plaintiffs had failed to prove officers and directors were so wrapped up in an illegal scheme that it would be futile to demand the corporation sue them.
Plaintiff attorneys including Bernstein Litowitz and Kessler Topaz appealed the ruling, arguing the Justice Department lawsuit filed on Dec. 29 contained “newly discovered evidence” of wrongdoing by officers and directors. Given that evidence could put them in legal peril, the lawyers argued, they should get another shot at pursuing derivative litigation under Delaware Chancery Rule 60(b).
No such luck, said Vice Chancellor James Laster in a March 21 opinion. No one disputes the DOJ complaint didn’t exist when the derivative suit was dismissed, the judge wrote. But there is a difference between “newly discovered evidence,” which is facts which existed at the time a case was dismissed, and “new evidence,” which cannot be used to support a Rule60(b) motion.
The plaintiffs in the derivative suit alleged officers and directors had acted in bad faith to prevent the company from implementing anti-diversion measures. But in the West Virginia case, the judge found after a lengthy trial that there was no evidence Amerisource Bergen had distributed opioids to pill mills or that managers had caused an oversupply in Cabell and Huntington counties, Judge Laster wrote.
The government’s allegations against Amerisource Bergen “largely parallel” the derivative complaint, the judge went on, “so they cannot support reasonable inferences in the face of the factual findings made by the West Virginia Court.”
Further undermining the plaintiffs’ arguments, the judge noted that the Justice Department hasn’t sued individual officers and directors, so there are no newly discovered facts about their conduct in the government’s complaint. Should the West Virginia ruling be overturned or more evidence about misconduct by officers and directors uncovered, the judge said, lawyers can try another derivative suit.
The ruling in this case doesn’t favor one side or the other, the judge concluded, since if the West Virginia court had ruled against the company “the plaintiffs would have eagerly called the case to the court’s attention and argued that the court should consider it.”
“This time, the plaintiffs’ ox was gored,” the judge wrote. “Next time, the beast could belong to the defendants.”