IN RE: NATIONAL PRESCRIPTION OPIATE LITIGATION
Case No. 1:17-md-2804
UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF OHIO EASTERN DIVISION
03/07/22
Judge Dan Aaron Polster
THIS DOCUMENT RELATES TO: Track Three Cases: County of Lake, Ohio v. Purdue Pharma, L.P., et al., Case No. 18-op-45032; County of Trumbull, Ohio v. Purdue Pharma, L.P., et al., Case No. 18-op-45079;
OPINION AND ORDER
Before the Court are Defendants’ Rule 50(b) Motions for Judgment as a Matter of Law (Doc. ##: 4202, 4203, 4206, and 4207).1 Plaintiffs filed an omnibus response (Doc. #: 4241), and Defendants filed replies (Doc. ##: 4256, 4257, 4259, and 4260). For the reasons stated below, the Motions are DENIED.
* * *
Legal Standard
Under
The standard for granting judgment as a matter of law “mirrors” the standard for summary judgment, “such that ‘the inquiry under each is the same.‘” Reeves, 530 U.S. at 150 (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250-51 (1986)). “In entertaining a motion for judgment as a matter of law, the court should review all of the evidence in the record. In doing so, however, the court must draw all reasonable inferences in favor of the nonmoving party, and it may not make credibility determinations or weigh the evidence.” Id. (citing Lytle v. Household Mfg., Inc., 494 U.S. 545, 554-55 (1990)). “Credibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge.” Id. (quoting Liberty Lobby, 477 U.S. at 255). “A motion for judgment as a matter of law should be granted ‘only if reasonable minds could not come to a conclusion other than one favoring the movant.‘” ECIMOS, LLC v. Carrier Corp., 971 F.3d 616, 627 (6th Cir. 2020) (quoting Mosby-Meachem v. Memphis Light, Gas & Water Div., 883 F.3d 595, 602 (6th Cir. 2018)).
Analysis
In their joint motion, Defendants assert the trial evidence is insufficient to support liability on Plaintiffs’ absolute liability claims, arguing no reasonable juror could have found that: (1) Defendants engaged in unlawful dispensing conduct; (2) Defendants engaged in intentional, culpable conduct; or (3) Defendants’ conduct proximately caused a public nuisance in the Counties. In their separate motions, Defendants also make arguments regarding the sufficiency of the evidence as to each Defendant. Additionally, Defendants assert the public nuisance claims fail as a matter of law, regardless of the evidence presented at trial.
I. Sufficiency of the Evidence
Defendants assert the trial evidence was insufficient to support the verdicts against them. Specifically, Defendants argue that Plaintiffs failed to establish either that: (1) Defendants engaged in unlawful or intentional conduct, or (2) Defendants’ conduct proximately caused a public nuisance in the Counties. To find a Defendant liable for creating a public nuisance, the jury was required to find the Defendant engaged in intentional and/or unlawful conduct “that caused a significant and ongoing interference with a public right to health or safety.” Further, Plaintiffs had to show the Defendant‘s conduct was “a substantial factor in creating the public nuisance.” 11/15/21 Trial Tr. at 7077 (Doc. #: 4153).
A. Unlawful Conduct
Defendants first assert the trial evidence was insufficient to show they knowingly engaged in unlawful dispensing conduct. Joint Motion at 3-12 (Doc. #: 4202). At the outset, the Court rejects Defendants’ argument that Plaintiffs were required to show Defendants’ pharmacists filled specific illegitimate prescriptions in the Counties. This argument ignores the aggregate nature of Plaintiffs’ theory of proof at trial. Plaintiffs chose to demonstrate unlawful conduct by showing Defendants knowingly failed to take adequate measures to guard against diversion of prescription opioids. In particular, Plaintiffs presented evidence of Defendants’ dispensing of large quantities of highly addictive drugs in the Counties, while repeatedly failing to take legally-required, effective measures to identify and resolve “red flags” prior to dispensing, and failing to document any due diligence with respect to those red flags.2
Under the Court‘s instructions for unlawful conduct, the jury was required to find each Defendant‘s dispensing of controlled substances did not substantially comply with the Federal and Ohio Controlled Substances Acts and their accompanying regulations. 11/15/21 Trial Tr. at 7074-75 (Doc. #: 4153).3 As the Court instructed, under these laws and regulations:
A violation of the corresponding responsibility occurs when a person knowingly fills or allows to be filled an illegitimate prescription. In this context, knowingly includes when a person acts with deliberate ignorance or willful blindness to information in their possession.
11/15/21 Trial Tr. at 7075-76 (Doc. #: 4153).
Further, regarding evidence of knowledge or intent, the Court informed the jury that certain settlement agreements between Defendants and the DEA could be considered for a “limited purpose” - that is, the jury could consider these settlements only to the extent the jury believed they tended to show the Defendant‘s intent, or what notice or knowledge the Defendant received as a result of the settlements. Id. 7073. Regarding the settlements, the Court instructed: “You may not infer liability or draw any conclusions about a defendant‘s potential liability in this case based on the fact that it entered into one of those settlements.” Id.
As set forth below, the evidence introduced at trial was sufficient for a jury to reasonably conclude Plaintiffs demonstrated that each Defendant knowingly engaged in unlawful dispensing conduct.4
1. CVS
CVS contends the evidence is insufficient for a jury to find CVS acted unlawfully. Specifically, CVS maintains evidence concerning DEA and Ohio Board of Pharmacy inspections “demonstrated that the CVS pharmacies in Lake and Trumbull Counties were normal pharmacies that were dispensing prescription opioids in a lawful manner to serve their patients’ needs.” CVS Motion at 4-6 (Doc. #: 4207). CVS also insists there is no evidence to show CVS acted unlawfully at the corporate level or at the store-level in the Counties. Id. at 6-11. CVS further argues that, because it fully complied with its legal and regulatory obligations, it is entitled to safe harbor immunity from nuisance liability. Id. at 4-6.
a. CVS‘s Policies and Compliance
Plaintiffs had the burden to prove that CVS failed to take adequate measures to avoid diversion of prescription opioids. Evidence introduced at trial was sufficient for a reasonable jury to conclude that Plaintiffs carried this burden. At trial, Plaintiffs presented evidence demonstrating that CVS, both at the corporate level and in the field, was aware of
The jury also heard evidence that, despite its knowledge of these obligations, CVS knew it did not have sufficient policies in place to ensure compliance. CVS makes much of the numerous policies and systems that it contends demonstrate compliance. Id. at 7-11. Although the jury heard evidence about these policies, it also heard evidence indicating the policies were incompletely implemented and otherwise inadequate. For example, Travassos testified that a CVS program to “alert pharmacists when there‘s a red flag and stop them from filling the prescription until they document the resolution of that flag” had not yet been implemented as late as August 2020.7 Indeed, CVS policies did not even begin to mention red flags until 2010.8 Travassos also testified that she was “unaware” whether CVS had a policy requiring pharmacists to document or inform corporate headquarters of “refusals to fill,” i.e. patient interactions in which a pharmacist refuses to fill a suspicious opioid prescription, but then simply returns the prescription to the customer, who is presumably free to try to fill it elsewhere.9
Thomas Davis, CVS Vice President of Pharmacy Professional Services, testified about RxConnect, a computer system CVS provides to its pharmacists. Davis stated, “We‘ve given them the RxConnect pharmacy system, which has all the information from a data perspective that they would need to exercise corresponding responsibility.”10 But Cook testified that, even in the present, more advanced iteration of RxConnect, the system does not give pharmacists known information about the company‘s investigations into suspicious prescribers, its analysis of store dispensing habits, or whether prescribers are top volume prescribers for hydrocodone or oxycodone.11
The jury also heard evidence highlighting CVS‘s failure to consistently enforce and monitor compliance with its own policies. For example, Nicole Harrington, CVS Senior Director of Pharmacy, admitted that it is “common” for pharmacists to not document the resolution of red flags, even though CVS policy required pharmacists to “document all steps.”12 These examples
Plaintiffs adduced additional evidence that CVS entered into a settlement agreement with the DEA arising out of investigations into CVS‘s controlled substances dispensing policies and practices in Florida. In that agreement, CVS acknowledged that certain of its stores dispensed controlled substances “in a manner not fully consistent with their compliance obligations” under the
What is more, the jury heard testimony that the effectiveness of CVS‘s diversion control policies and systems was undermined by other policies that provided incentives for pharmacists to cut corners in performing and documenting due diligence. For example, CVS had a compensation policy that rewarded pharmacists for filling prescriptions within fifteen minutes. Expert witness Carmen Catizone, a national expert on pharmacy practice and regulation,15 opined that this incentive policy rewarding speed was pernicious as applied to the dispensing of opioids, because it put patients at risk. He opined that fifteen minutes does not typically give a pharmacist time to properly resolve a red flag. “The only prescriptions you could probably fill in 15 minutes or less [without regard to red flags] are maintenance medications that patients have been on for a while, medications for high blood pressure, diabetes, some other disease . . . .”16 From this evidence, the jury could have reasonably concluded that CVS was on notice of the deficiencies in its controlled substances dispensing policies.
b. The McCann - Catizone Analysis
Expert testimony also showed the inadequacy of CVS‘s controls against diversion. Dr. Craig McCann, a data expert, testified that, of the 701,467 opioid prescriptions that CVS dispensed in Lake and Trumbull Counties between 2006 and 2019, over 20 percent, or 141,651 prescriptions, had red flags for diversion, as identified by Catizone, that ought to have been resolved prior to dispensing.17
Catizone further testified he analyzed a random sample of 2,000 opioid prescriptions dispensed by CVS that had at least one red flag for diversion.18 For each prescription, Catizone inspected both the digital records entered by pharmacists and the physical copy of the prescription, to see whether the pharmacist had documented any due diligence efforts to resolve the red
In addition to presenting evidence of CVS‘s consistent failure to comply with its legal requirements, Plaintiffs demonstrated that CVS dispensed massive quantities of prescription opioids between 2006 and 2019: 15,977,215 dosage units in Trumbull County and 25,528,782 dosage units in Lake County.22
Defendants adduced evidence attacking the bases for Catizone‘s and McCann‘s testimony, methodology, and conclusions, which the jury weighed. Having reviewed all of the evidence, the Court concludes the jury had a reasonable basis to find that CVS knowingly engaged in unlawful conduct by dispensing opioids without effective controls and procedures to guard against diversion.
c. Safe Harbor Immunity
In the face of this evidence, CVS maintains it should be entitled to the protection of “safe harbor” immunity from liability because there was no evidence that either the DEA or the Ohio Board of Pharmacy (“BOP“) “ever revoked or suspended the licenses” of any of its pharmacies or “expressed any concerns about those pharmacies’ dispensing of prescription opioid medications.” CVS Motion at 5 (Doc. #: 4207).
In its Track Three Order denying the Pharmacy Defendants’ motion to dismiss, the Court addressed the question of safe harbor immunity and considered whether regulatory inspections were sufficiently thorough to confer such immunity. The Court ruled that, under Ohio law, “‘safe harbor’ immunity from absolute nuisance liability is available only to those who perform in accordance with their applicable licensing and regulatory obligations.” CT3 MTD Order at 29-30 (Doc. #: 3403)23 (citing Bakers MTD Order at 45-47 (Doc. #: 3177)).24 In addressing a similar argument
the ultimate determination of whether a defendants’ compliance was substantial, or whether it falls somewhere short of that mark, is best left to a jury. In the end, it will be for the factfinder to determine how much weight to give the [defendants‘] DEA and OBOP inspections and how much weight to give Plaintiffs’ evidence that, despite those inspection results, the [defendants], in fact, violated their statutory duties to guard against diversion.
CT3 GE MSJ Order at 6 (Doc. #: 3913).25
The jury heard evidence that Ohio BOP inspections of CVS pharmacies were brief, cursory, and infrequent, lasting two and a half to three hours and occurring every year or two for each store. When asked whether he looked at CVS policies for dispensing controlled substances to “determine whether or not they conformed with your understanding of either the federal Controlled Substances Act or the state regulations,” retired Ohio BOP agent George Pavlich stated, “I don‘t recall looking at those policies.”26 Ohio BOP agent Trey Edwards also testified he did not review pharmacy policies for dispensing controlled substances.27 Edwards confirmed that his inspections did not include any systematic or regular review of individual prescriptions to check whether pharmacies were resolving red flags.28 The Ohio BOP inspections were generally directed at other principal concerns, such as physical security.
Put simply, given the nature of the DEA and Ohio BOP‘s inspections, the fact that CVS passed those inspections does not establish it was in substantial compliance with all of its legal obligations under the
2. Walgreens
Similarly, Plaintiffs introduced evidence sufficient to show that Walgreens engaged in unlawful conduct by failing to take adequate measures to avoid diversion of prescription opioids. The Court reviews a sampling of such evidence below.
a. Walgreens’ Policies and Compliance
The evidence showed that Walgreens had a poor record of compliance with its anti-diversion obligations. For example, a Walgreens document indicated that, as of 2010, retail employees received no periodic training for dispensing controlled substances.29 Moreover, Walgreens was aware of its obligation to ensure that its pharmacists documented the resolution of red-flag prescriptions. A 2018 document setting out Walgreens’ policy on “Good Faith Dispensing” stated: “It is imperative that pharmacists document all efforts used to validate good faith dispensing.”30 And Natasha Polster,31 Walgreens Divisional Vice President of Pharmacy Compliance Patient Safety,
Despite these explicit policies, however, the jury also heard evidence that Walgreens pharmacists regularly did not document the resolution of red flags, and that Walgreens was aware its pharmacists were not complying with the requirements of its own Good Faith Dispensing policy. For example, pharmacist Amy Stossel testified on cross-examination that she regularly did not take the time to document her resolution of red flags. She stated that time constraints prevented her from doing so, noting there are never two pharmacists working a shift at her pharmacy at the same time.33 Similarly, Polster testified that, as of 2012, Walgreens had a bonus program that rewarded pharmacy staff based, in part, on the number of opioid prescriptions they dispensed.34 Specifically, this program provided financial incentives for pharmacists to fill more prescriptions than they had in the prior year, taking into account the total number of prescriptions filled, including prescriptions for controlled substances.35
In addition, Plaintiffs introduced a memorandum of agreement that Walgreens entered into with the DEA in 2013, under which Walgreens agreed to significant enhancements in its controlled substances policies.36 A 2014 internal audit to investigate whether Walgreens pharmacies were adhering to these enhanced policies,37 however, revealed that 59 percent of its stores were not in compliance with relevant aspects of the Good Faith Dispensing Policy.38 The audit further found that some 35,000 Walgreens employees had not timely completed their Good Faith Dispensing training.39
The jury also heard about other Walgreens policies that suggested its diversion control policies were inadequate. For example, in response to a juror‘s question, Stossel testified that, in cases where a pharmacist refused to fill a patient‘s prescription for opioids, Walgreens’ policy was to return the prescription to the patient without scanning and entering it into the computer system.40 This would allow the customer to try his luck at another Walgreens store or return to the same store when another pharmacist is on duty.
Based on this evidence, the jury could reasonably have concluded Walgreens failed to implement effective controls against diversion. Additionally, Plaintiffs introduced Catizone‘s analysis showing that Walgreen‘s documented red-flag prescriptions inadequately.
b. The McCann - Catizone Analysis
The jury heard expert testimony from Dr. McCann and Catizone relating the
documentation of due diligence.44 As noted above, Catizone concluded that, overall, 90 percent of the entire red-flag sample set lacked adequate documentation to show the pharmacist had identified and resolved the red flag before dispensing.45 Further, Dr. McCann testified this estimation could be extrapolated to the entire set of red-flag opioid prescriptions identified by Catizone,46 including approximately 90 percent of the 175,609 red-flag prescriptions dispensed by Walgreens.
Further, Plaintiffs adduced evidence that between 2006 and 2019, Walgreens’ pharmacies dispensed a total of 25,346,069 dosage units of prescription opioids in Lake County, and 27,969,541 dosage units in Trumbull County.47
Again, having reviewed the evidence, the Court concludes the jury had a reasonable basis to find that Walgreens knowingly engaged in unlawful conduct by dispensing opioids without effective controls and procedures to guard against diversion.
3. Walmart
Evidence introduced at trial also showed that Walmart engaged in unlawful conduct by failing to take effective measures to avoid the diversion of prescription opioids.
a. Walmart‘s Policies and Compliance
Walmart knew it was required to resolve red flags before dispensing opioids. Susanne Hiland, Walmart Senior Director for Patient Safety, testified that Walmart policies direct “pharmacists that if they identify a red flag, they should resolve the red flag before dispensing the medication.”48 Additionally, a Walmart policy document entered into evidence states: “pharmacist[s] must use professional judgment to resolve all red flags prior to dispensing a controlled substance prescription” and the “results of the red flag evaluation” are to be documented in the “Rx Notes field” of a Walmart system called Connexus,49 which is Walmart‘s “work flow management system” that “processes [prescriptions] and
Despite this knowledge, there was evidence that Walmart knew it did not have sufficient policies in place to ensure compliance. For example, an email sent to Brad Nelson, former Walmart Senior Manager for Controlled Substances, from C. Scott Ortolani, a Walmart Market Director, describes a conversation that Ortolani had with an inspector who voiced concerns that Walmart‘s “more liberal policies on dispensing pain meds” were making Walmart a “funnel” for Schedule II controlled substances such as opioids.51 Nelson also testified he was not aware of Walmart having any systems that would show pharmacists at one store if a customer‘s opioid prescription had previously been rejected as illegitimate at another Walmart store.52
Additionally, Plaintiffs adduced evidence from which the jury could have reasonably concluded that Walmart policies were not only insufficient, but also were not timely or effectively implemented. Specifically, Hiland testified that an internal system known as Archer, “a computer program that Walmart uses to log compliance activity from the stores,” was not made available to pharmacists through Connexus until 2015.53 Hiland further testified that Walmart provided aggregate reporting regarding refusal-to-fill information to company leadership starting in 2011, but failed to “push that down to the stores.”54
On top of evidence casting doubt on the adequacy and effective implementation of Walmart policies, Plaintiffs also presented evidence regarding whether Walmart sufficiently monitored compliance with its own policies. For example, Nelson testified: “My job was to communicate the policies and train [employees] about the policies. It was not to enforce that [the policies] were followed.”55 Nelson so testified even though a key part of his job description was “to drive the company‘s compliance with federal and state regulatory requirements related to [the handling, distribution, and dispensing] of controlled substances” and to “oversee the company‘s policies and assessments related to the controlled substances by analyzing state and federal guidelines to ensure the company‘s programs meet the requirements.”56
Furthermore, the jury heard testimony demonstrating that the effectiveness of Walmart‘s diversion control policies and systems was undermined by other policies or corporate incentives. For example, evidence showed Walmart personnel voiced concerns that they were afraid of being terminated for refusing to fill prescriptions, regardless of the presence of red flags.57 Other evidence indicated that pharmacists had complained “they don‘t have time to check all these prescriptions for good faith.”58
Expert evidence also showed the inadequacy of Walmart‘s controls against diversion. Dr. McCann testified that, of the 229,006 opioid prescriptions dispensed by Walmart in the Counties between 2006 to 2018, 37,379 prescriptions had one or more red flags associated with them.59 Catizone, again conveying the results of his red flag analysis, testified that of the 1,800 sample red-flag prescriptions dispensed by Walmart, only two prescriptions “contained no information across all relevant comment fields,” but “the majority of the information contained in these comment fields would not qualify as adequate or even relevant due diligence.”60 Catizone also testified that the hard copy notes did not “reflect adequate due diligence.”61 When cross-examined by counsel for Walmart, Catizone testified he could not “recall a [Walmart] prescription where there was appropriate documentation to the extent that would be required.”62 As noted above, Catizone determined that 90 percent of the entire sample set contained inadequate documentation of due diligence, and McCann testified this estimate could be extrapolated to the entire set of red-flag opioid prescriptions identified by Catizone, including approximately 90 percent of the 37,379 red-flag prescriptions dispensed by Walmart.63
The jury also heard evidence of the sheer volume of opioids that Walmart dispensed in the Counties. From January 2006 through April 2018, Walmart pharmacies dispensed 9,890,771 dosage units of prescription opioids into Lake County and 5,228,488 dosage units into Trumbull County.64
Having reviewed the evidence, the Court concludes the jury had a reasonable basis to find Walmart knowingly engaged in unlawful conduct by dispensing opioids without effective controls and procedures to guard against diversion.
B. Intentional Conduct
Defendants contend the trial evidence is insufficient to show Defendants engaged in intentional and culpable conduct. Specifically, Defendants argue Plaintiffs failed to establish that Defendants acted to produce a specific result - namely, “an interference with public heath or safety resulting from the oversupply and diversion of prescription opioids in Lake and Trumbull Counties.” Joint Motion at 13 (Doc. #: 4042).
As the Court instructed the jury, to find a person engaged in intentional conduct, “it is enough that the person intended to act and knew, or was substantially certain, that the circumstances resulting from that act would interfere with public health or public safety.” 11/15/21 Trial Tr. at 7072 (Doc. #: 4153).65 The Court further instructed:
At trial, Plaintiffs presented evidence demonstrating that each Defendant knew prescription opioids were highly addictive and had a high potential for abuse, and that diversion of prescription opioids would likely lead to significant harms in the community. Further, as discussed above, the evidence also showed that, despite this knowledge, each Defendant dispensed massive quantities of opioids into Plaintiffs’ communities without taking necessary steps to protect against diversion. Additionally, the record revealed each Defendant continued this dispensing conduct even after it had notice that diversion of prescription opioids was, in fact, contributing to high numbers of death and addiction. Based on these facts, as discussed below, a jury could reasonably conclude that each Defendant intentionally dispensed opioids under circumstances which it knew or was substantially certain would interfere with public health or public safety.
1. CVS
Plaintiffs presented evidence demonstrating that CVS well understood the highly addictive nature of opioids and harms that would result from diversion thereof. Thomas Davis, CVS Vice President of Pharmacy Professional Services, testified that Schedule II drugs, including oxycodone and hydrocodone, have a “high potential for abuse and addiction.”66 CVS Pharmacist and District Leader Kenneth Cook agreed that opioids are “highly addictive.”67 Further, Michelle Travassos, CVS Manager of Pharmacy Professional Services, testified that controlled substances are more closely regulated because they have “more risk associated with misuse,” including risk of diversion.68 As Travassos put it, “Anytime an opioid is used for something it‘s not intended to be used for [it] could be a risk to the public.”69
Despite this knowledge, the evidence demonstrated that CVS dispensed massive quantities of prescription opioids without implementing effective policies to guard against diversion, and even implemented policies incentivizing its pharmacists to cut corners to save time. See § I.A.1, supra (CVS‘s dispensing conduct). Further, the evidence showed CVS‘s conduct continued even after it understood the devastating harm to public health and safety. For instance, in 2015, Nicole Harrington, CVS Senior Director of Pharmacy, presented a power point presentation stating that 52 million people over the age of 12 had used prescription drugs nonmedically, and that prescription drugs were killing more people
2. Walgreens
Likewise, the evidence showed that Walgreens was well aware of harmful risks associated with diversion of prescription opioids. For instance, in 2010, Natasha Polster, Walgreens’ Divisional Vice President of Pharmacy Compliance Patient Safety, circulated an internal email with information stating, inter alia: “The abuse of prescription drugs, especially controlled substances, is a serious social and health problem in the United States.”71 Further, Polster testified that, in 2013, she was aware of and speaking with the market leadership team about “the problems with opiates.”72
During this same time, Walgreens knew of severe public harm occurring as a result of diversion. In 2013, Polster noted in a national power point presentation that prescription pain abuse was the leading cause of accidental death in the United States.73 As described by Brian Joyce, former Walgreens District Manager over six stores in Trumbull County: “without question, every pharmacy in the State of Ohio was well-aware of the opioid problem in every city, county, ‘burb in the state.”74 Nevertheless, in the midst of this knowledge, the evidence showed Walgreens continued to dispense millions of dosage units of prescription opioids without implementing effective controls against diversion, including not allowing their pharmacists sufficient time to document red flags. See § I.A.2, supra (Walgreens’ dispensing conduct). Based on these facts, the jury could reasonably find that Walgreens intentionally dispensed opioids under circumstances it knew or was substantially certain would interfere with public health or public safety.
3. Walmart
The evidence also established that Walmart knew of the dangers associated with diversion of prescription opioids. At trial, Brad Nelson, former Walmart Senior Manager for Controlled Substances, acknowledged that, in 2011, a drug abuse epidemic was raging across the country that included opioids. Specifically, Nelson stated: “And unfortunately, prescription medications were misused at times which contributed to a drug abuse epidemic. And opioids are certainly one of those items that was misused.”75 Also, Susanne Hiland, Senior Director for Walmart Patient Safety, testified that, in 2013, Walmart conveyed a message to its pharmacists stating, inter alia: “the abuse of controlled substances in the U.S. has increased significantly and at a concerning rate over the past ten years.”76
C. Causation
Defendants next assert the trial evidence does not support a finding of causation — the jury could not reasonably determine each Defendant‘s conduct proximately caused a public nuisance in the Counties. Specifically, Defendants contend the evidence is insufficient because Plaintiffs failed to show: (1) any Defendant filled specific prescriptions that were, in fact, illegitimate or diverted; or (2) the dispensing conduct of each Defendant was a substantial factor in creating the nuisance.79
1. Specific Prescriptions
Defendants contend the verdict is unsupported because Plaintiffs failed to present evidence of specific prescriptions filled by Defendants that were actually illegitimate or diverted.80 This argument ignores the aggregate nature of the evidence presented at trial and the natural inferences allowed therefrom. The Court previously found aggregate evidence of massive increases in the supply of prescription opioids, combined with evidence demonstrating failures by each Defendant to maintain effective controls against diversion, supported a reasonable inference that Defendants’ conduct was a substantial factor in creating the alleged nuisance. CT1 Causation MSJ Order at 8 (Doc. #: 2561).81 Under this evidentiary model, proof of specific prescriptions is not necessary. As discussed above, the trial evidence
2. Substantial Factor
Defendants also assert their individual dispensing conduct was too immaterial to be a “substantial factor” in causing the nuisance, arguing each Defendant had only a small market share in the Counties and played a “remote role” in the supply chain.85 Determining the significance of each Defendant‘s dispensing conduct, however, was a question properly left to the jury. See CT1 Small Distributors MSJ Order at 5 (Doc. #: 2559)86 (“even a very small proportional contribution by one of numerous defendants could equate with a rather large and substantial absolute quantity, both in monetary terms and in terms of the consequent harms“).
As the Court instructed the jury:
An individual defendant‘s conduct need not be independently capable, all by itself, of causing the public nuisance. There may be multiple causes of a public nuisance. The fact that some other cause or causes combined with the defendant‘s conduct in creating the public nuisance does not relieve that defendant from liability if the plaintiff can prove that the conduct the defendant engaged in was a
substantial factor in creating the public nuisance. A defendant‘s conduct is substantial if a reasonable person would regard that conduct as the cause, or one of the material, meaningful, or considerable causes, of the nuisance. If you find that the conduct of any defendant proximately caused a public nuisance, it is not a defense to liability that some other entity may also be to blame.
11/15/21 Trial Tr. at 7077 (Doc. #: 4153).87
At trial, the evidence showed each Defendant dispensed millions of prescription opioids in the Counties,88 and that even a small portion of diverted pills could have a significant impact on opioid-related deaths and harms in the community.89 Further, experts described the importance of the pharmacies’ role as the “last stop” or “last line of defense” to ensure that prescriptions are correct and patients are not harmed.90 This evidence amply supports the jury‘s conclusion that the conduct of each Defendant played a substantial role in creating the nuisance.
Defendants contend many independent and intervening factors contributed to the nuisance, making Defendants’ role “far too remote for liability.” Joint Motion at 19 (Doc. #4202). Defendants point to other potentially contributing causes, including opioid manufacturers, opioid distributors, governmental entities, prescribing doctors, illicit opioids, and criminal acts.91 However, none of these potential causes shifts Defendants’ independent responsibility to take effective measures to prevent diversion, or otherwise mandates a verdict for Defendants as a matter of law. See, e.g., CT3 MTD Order at 30-32 (Doc. #: 3403)
II. Legal Challenges to Public Nuisance Claims
Defendants assert Plaintiffs’ public nuisance claims fail as a matter of law, regardless of the evidence presented at trial. Joint Motion at 24-45 (Doc. #: 4202). Defendants raise a number of arguments challenging the legality of Plaintiffs’ claims including: (1) the public nuisance claims are precluded by Ohio statutory or common law; (2) the claims are properly based on Defendants’ CSA dispensing duties; and (3) assorted legal arguments including lack of standing, the economic loss doctrine, statute of limitations, and improper admission of expert testimony. The vast majority of these arguments have been previously raised and rejected by this Court. As set forth below, the Court reaffirms its prior rulings and denies Defendants’ Motion for the additional reasons stated.
A. Ohio Statutory Law
1. Ohio Product Liability Act
Defendants contend the Ohio Product Liability Act (“OPLA“) abrogates Plaintiffs’ public nuisance claims.93 Joint Motion at 25 (Doc. #: 4202). The Court rejected this argument in Track One, finding
Upon careful review, the Court reaffirms its Track One holding here. In so doing, the Court notes that, on all accounts, the Track Three public nuisance claims clearly fall outside the scope of the OPLA. More specifically, under the plain language of
Most obviously, Plaintiffs’ public nuisance claims do not satisfy the second requirement of a “product liability claim” because Plaintiffs do not seek compensatory damages for harm. Instead, Plaintiffs seek the equitable remedy of abatement, which is “intended to compensate the plaintiff for the costs to rectify the nuisance, going forward.”97 CT1 Daubert Order re: Abatement at 2 (Doc. #: 2519).98 In other words, Plaintiffs seek prospective relief for economic loss that is pecuniary in nature.
to property,” the OPLA did not abrogate its common law nuisance claim seeking abatement based on alleged misrepresentations regarding the effectiveness and safety of prescription opioids); see also Hardwick v. 3M Co., No. 2:18-cv-1185, 2019 WL 4757134, at *13 (S.D. Ohio Sept. 30, 2019) (holding the OPLA did not abrogate plaintiff‘s common law negligence and battery claims seeking only injunctive, equitable, and declaratory relief).
Further, Plaintiffs’ public nuisance claims do not satisfy either the first or third requirements of a “product liability claim.” Plaintiffs’ claims do not arise from a defective aspect of prescription opioids.101 Rather, Plaintiffs’ claims arise from an alleged oversupply of otherwise safe and non-defective drugs that were diverted into the black market, resulting in widespread opioid misuse and addiction. Stated differently, Plaintiffs’ claims do not stem from the products themselves, but from the manner in which Defendants dispensed the products – that is, Defendants’ failure to provide effective controls to detect “red flags” and prevent diversion. These allegations do not state claims for relief under the OPLA. See
concerns a product, it does not sound in products liability“), adopted in relevant part by Muscogee/Blackfeet MTD Order (Doc. #: 1680).104
Defendants’ argument rests entirely on a 2007 Amendment adding language to the definition of “product liability claim,” stating the term “also includes any public nuisance claim or cause of action at common law in which it is alleged that the design, manufacture, supply, marketing, distribution, promotion, advertising, labeling, or sale of a product unreasonably interferes with a right common to the general public.” CT1 MTD Order at 24 (Doc. #: 1203) (quoting
2. ORC § 4729.35
Defendants contend Plaintiffs’ common law public nuisance claims are precluded because
Contrary to Defendants’ contentions, the Ohio legislature has not “codified” the law or provided a comprehensive statutory or regulatory scheme precluding Plaintiffs’ ability to seek public nuisance remedies at common law.
B. Ohio Common Law
1. Expansion of Nuisance Liability
The Pharmacies challenge the viability of Plaintiffs’ public nuisance claim on public policy grounds, asserting that “extending public nuisance to the opioid crisis would allow consumers to convert almost every products liability action into a public nuisance claim.” Joint Motion at 26-27 (Doc. #: 4202) (internal quotation marks and citation omitted). Defendants’ argument relies exclusively on decisions from other states. See id. at 26-27 & n.2. For example, Defendants cite Hunter v. Johnson & Johnson, 499 P.3d 719 (Okla. 2021), which concluded the State could not assert public nuisance claims against opioid manufacturers under Oklahoma law based on the manufacturing, marketing, and selling of a lawful product. Id. at 723-731. In reaching this conclusion, the Oklahoma Supreme Court was guided by the fact that, for 100 years, it had limited liability under Oklahoma‘s public nuisance statute to defendants: “(1) committing crimes constituting a nuisance, or (2) causing physical injury to property or participating in an offensive activity that rendered the property uninhabitable.” Id. at 724. The Hunter court concluded that permitting public nuisance claims to address “policy problems” would leave Oklahoma‘s nuisance statute “impermissibly vague.” Id. at 731; see also Joint Motion at 26-27 & n.2 (Doc. #: 4202).
But Defendants do not explain why Hunter (or any other case Defendants cite) should supplant Ohio law and apply to the claims in this case. The Ohio Supreme Court has recognized that Ohio‘s law of public nuisance is broad enough to embrace, for example, claims that gun manufacturers “created a nuisance through their ongoing conduct of marketing, distributing, and selling firearms in a manner that facilitated their flow into the illegal secondary market.” Cincinnati v. Beretta U.S.A. Corp., 768 N.E.2d 1136, 1143 (Ohio 2002). Unlike the Hunter court‘s approach, the Beretta court specifically emphasized the adaptability of Ohio law to new circumstances, noting: “although we have often applied public nuisance law to actions connected to real property or to statutory or regulatory violations involving public health or safety, we have never held that public nuisance law is strictly limited to these types of actions.” Id. at 1142 (internal citations omitted). Put simply, Oklahoma law is different and inapplicable.
Plaintiffs bring their public nuisance claim under Ohio law and Defendants do not persuade the Court to adjudicate the claim under contrary law of other jurisdictions.
2. Violation of a Public Right
Defendants contend Plaintiffs’ nuisance claim fails to demonstrate interference with a public right. They argue the claim is based only on an aggregation of private rights that derive from individual injuries and a risk of harm created by persons who misused prescription opioids. Joint Motion at 27-28 (Doc. #: 4202); Joint Reply at 16-17 & n.4 (Doc. #: 4256). Numerous prior rulings of the Court found that position unpersuasive and recognized a commonly held public right to be free from negative consequences of the opioid crisis that interfere with public health and
Defendants’ reliance on the recent Oklahoma Supreme Court decision, Hunter v. Johnson & Johnson, 499 P.3d 719 (Okla. 2021), is unavailing. Hunter concluded that the “damages the State seeks are not for a communal injury but are instead more in line with a private tort action for individual injuries sustained from use of a lawful product and in providing medical treatment or preventive treatment to certain, though numerous, individuals.” Id. at 727. The Hunter decision, however, examined the “legal interpretation of Oklahoma‘s nuisance statutes,” id. at 723 (emphasis added), which differ from Ohio‘s statutory and common law public nuisance law. Notably, Defendants undertake no comparison of the two states’ public nuisance laws. Nor do they identify any reason to alter the Court‘s prior ‘public right’ rulings.
3. Regulated Conduct
Defendants contend that, as entities authorized to dispense controlled substances, they are extensively regulated by federal and state law and cannot be held liable for undertaking those activities; therefore, Plaintiffs’ nuisance claims are not actionable. Joint Motion at 28-29 (Doc. #: 4202). In response, Plaintiffs point to the Court‘s previous rejections of that argument and its conclusion that Plaintiffs sufficiently stated common law absolute nuisance claims based on intentional and unlawful conduct resulting in harm. Response at 104 (Doc. #: 4241).
Applying well-settled Ohio law, the Court has repeatedly analyzed and rejected Defendants’ position, finding that “‘safe harbor’ immunity from absolute nuisance liability is available only to those who perform in accordance with their applicable licensing regulatory obligations, which Plaintiffs alleged Defendants did not do.” Bakers MTD Order at 45-47 (Doc. #: 3177); see also CT3 GE MSJ Order at 4-5 (Doc. #: 3913); CT3 MTD Order at 29-30 (Doc. #: 3403). Most recently, the Court addressed the argument that, having passed DEA and Ohio Board of Pharmacy inspections on numerous occasions, it would be unfair to Defendants to allow “a jury to overrule the favorable on-the-ground determinations made by these agencies and impose a post hoc finding” of liability. CT3 GE MSJ Order at 2 (Doc. #: 3913). The Court reiterated what it had “repeatedly instructed: safe harbor immunity is available only to those who perform in accordance with their regulatory obligations,” id. at 4-5 (emphasis in original), concluding that evidence submitted by Plaintiffs “tend[ed] to show material non-compliance with the CSA and related state obligations” raising triable issues of material fact, id. at 6-7.
Defendants have not persuaded the Court to rule that their conduct, albeit authorized and subject to regulations, is sheltered from nuisance liability.
4. Control Over the Instrumentality Causing the Nuisance
Asserting that Plaintiffs failed to allege or prove the “traditional control element” of their public nuisance claims, Defendants posit the instrumentality creating or contributing to the alleged nuisance is the opioid medication. Defendants further contend that, once opioids are dispensed, Defendants lack control of the physical opioid pills and, therefore, are unable to prevent the alleged nuisance. Joint Motion at 29-30 (Doc. #: 4202). As discussed above, Plaintiffs’ claims “do not stem from the products themselves, but from the
5. Predicate “Safety Statutes”
Reiterating a position raised in their Track One-B proposed jury instructions, Defendants contend Plaintiffs are unable to prove liability based on unlawful conduct because they cannot establish the violation of a “safety statute” that sets forth a specific, protective legal requirement and provides a private right of action. Joint Motion at 30-31 (Doc. #: 4202) (citing 1 Ohio Jury Instructions CV 621.01).
Defendants endeavor to validate this conclusion by piecing together portions of numerous cases (id.),108 but this effort is strained, unpersuasive, and the Court previously rejected it. Furthermore, the contention that Plaintiffs’ claims fail because the CSA does not confer a private right of action is inconsequential. Plaintiffs do not undertake enforcement of the federal and Ohio controlled substance laws or regulations. Rather, their common law public nuisance claims allege that Defendants engaged in conduct that was “proscribed by statute, ordinance or administrative regulation” and unreasonably interfered with public rights. Response at 105-106 (Doc. #: 4241)
(citing Restatement (Second) of Torts § 821B(2)(b)).
Previously, the Court undertook a comprehensive analysis of pharmacy duties under the C.S.A. and concluded:
Plaintiffs have sufficiently alleged the Pharmacy Defendants engaged in unlawful dispensing conduct by failing to comply with statutory and regulatory requirements to provide effective controls against diversion, including ensuring proper dispensing of controlled substances.
CT3 MTD Order at 13-25, 29 & n.31 (Doc. #: 3403) (“the CSA statutory and regulatory framework imposes specific obligations on pharmacies to protect against the diversion of controlled substances“). The Court‘s conclusion is unchanged. For these reasons, Defendants’ contention that Plaintiffs’ unlawful conduct claim fails for lack of an alleged violation of a “safety statute” is without merit.
C. Dispensing Conduct
1. Corporate-Level Dispensing Duties
From the inception of this litigation, Defendants have advanced the proposition that, while the CSA imposes a “corresponding responsibility” upon pharmacists to make sure the prescriptions they dispense are for a legitimate medical purpose, the CSA imposes no corporate-level responsibility upon a Pharmacy that may employ thousands of pharmacists across the country. Defendants have renewed this argument in their Rule 50(b) motion. Joint Motion at 32-34 (Doc. #: 4202).
corporate procedures and policies that recognize the “corresponding responsibility” of its pharmacists and require its pharmacists to adhere to it; (2) supply its pharmacists with the tools necessary to enable them to perform their “corresponding responsibility;” and (3) develop and utilize a system for monitoring the compliance of its pharmacists with their legal duties.
But the proposition that the corresponding responsibility attaches to the pharmacy, and not just pharmacists, did not originate with this Court. The DEA has expressly and consistently ruled that “[t]he corresponding responsibility to ensure the dispensing of valid prescriptions extends to the pharmacy itself.” Top RX Pharmacy, Decision and Order, 78 FR 26069-01, at 26082 (DEA May 3, 2013) (revoking a pharmacy‘s certificate of registration to dispense controlled substances based, in part, on the pharmacy‘s dispensing of unresolved “red flag” prescriptions) (citing various DEA decisions); Holiday CVS, L.L.C., d/b/a CVS/Pharmacy Nos. 219 and 5195, Decision and Order, 77 FR 62316-01, at 62341 (DEA Oct. 12, 2012) (same). In these cases, the DEA has specifically found the corresponding responsibility under
Moreover, the evidence introduced at trial by both Plaintiffs and Defendants not only refuted Defendants’ argument that the CSA imposes no corporate level responsibility, but clearly established that all three Defendant Pharmacies knew the CSA imposed corporate responsibility, and knew that the DEA, which has the responsibility to enforce the CSA, consistently took this position.
Plaintiffs’ expert witness, Carmen Catizone, testified that his understanding, as a former Executive Director of the National Association of Boards of Pharmacy, is that “the CSA does not place unilateral responsibility on the pharmacist. Responsibility also rests with the pharmacy.”109 And Defendants’ own expert, Demetra Ashley, former DEA Senior Administrator in the Department of Diversion Control, confirmed her understanding, based upon her years of experience, “that a pharmacy and its pharmacists have a corresponding responsibility . . . to fill only opioid prescriptions that are issued for a legitimate medical purpose[.]”110
Additional evidence clearly supporting this proposition is that each Defendant entered into settlement agreements with the DEA acknowledging the DEA‘s position
Walgreens and Walmart expressly agreed these compliance programs would include procedures to identify red flags for diversion across the entire corporation.112
At trial, Defendants’ own compliance officers also confirmed their understanding that Defendants had a responsibility to ensure proper dispensing at the pharmacy corporate level. Following their settlements with the DEA, each Defendant implemented new policies and procedures to guard against diversion. For instance, CVS Senior Director of Pharmacy Nicole Harrington testified that, in direct response to the Holiday settlement, CVS developed new company-wide programs to monitor dispensing data and look for suspicious prescribing and dispensing patterns across all of its pharmacies nationally.113 Similarly, Walgreens Divisional Vice President of Pharmacy Compliance Patient Safety, Natasha Polster, testified that, following Walgreens’ 2011 settlement with the DEA, Walgreens rolled out its national Good Faith Dispensing policy to aid all of its pharmacists across the country in complying with the corresponding responsibility.114 Likewise, Walmart Senior Director for Patient Safety Susanne Hiland testified that, as a result of Walmart‘s memorandum of agreement with the DEA, Walmart wrote specific new corporate policies applicable to all of its pharmacies nationwide, including updates identifying, for the first time, red flags for diversion.115
The testimony of these witnesses, combined with the evidence discussed above, demonstrated that Defendants clearly understood the DEA‘s long-held position that the CSA imposes a corresponding responsibility upon the pharmacy at the corporate level to ensure proper dispensing.116
2. Penalizing Lawful Dispensing Conduct
Defendants assert Plaintiffs seek to penalize lawful conduct in violation of preemption and due process principles, arguing they cannot be held liable for dispensing activities that the DEA has “authorized.” Joint Motion at 34-36 (Doc. #: 4202). This argument is based on a flawed premise that fundamentally misconstrues the nature of Plaintiffs’ claims. Plaintiffs do not assert nuisance liability based on lawful conduct by Defendants. Plaintiffs’ claims are premised on Defendants’ alleged unlawful conduct in violating their obligations to provide effective controls to detect “red flags” and prevent diversion, and/or intentionally contributing to an oversupply of highly addictive drugs in Plaintiffs’ communities. See, e.g., Response at 108-109 n.97 (Doc. #: 4241) (plaintiffs do not seek to hold Defendants liable for simply dispensing large volumes of opioids, but for dispensing large volumes of opioids in the face of unresolved “red flags“); CT3 GE MSJ Order at 5 (Doc. #: 3913) (“if the defendant did not comply with the regulatory scheme, the conduct is actionable as a public nuisance“). Defendants’ arguments do not apply to public nuisance claims based on unlawful conduct and, thus, do not address Plaintiffs’ claims.
3. No Private Right of Action
Defendants argue the DEA has exclusive authority to enforce the CSA, and Plaintiffs have no legal right to enforce Defendants’ alleged “failure to maintain effective controls” at common law. Joint Motion at 34-36 (Doc. #: 4202). However, Plaintiffs do not seek to enforce Defendants’ statutory and regulatory duties. Response at 109 (Doc. #: 4241). Instead, Plaintiffs assert claims based on common law duties that look to statutory requirements to measure the applicable standard of care. See Plaintiffs’ Opp. re: Summit County MTD at 74-78 (Doc. #: 654). As the Court has previously concluded, Plaintiffs’ nuisance claims do not rest on a private right of action under the CSA. Muscogee R&R at 43 (Doc. #: 1499), adopted in relevant part by Muscogee/Blackfeet MTD Order (Doc. #: 1680); Summit County R&R at 74-78 (Doc. #: 1025),125 adopted in relevant part by CT1 MTD Order at 24 (Doc. #: 1203).
4. Primary Jurisdiction Doctrine
Citing the primary jurisdiction doctrine, Defendants urge the Court to refrain from adjudicating Plaintiffs’ public nuisance claims, asserting the claims require resolution of issues that fall within the “special competence” of the DEA. Joint Motion at 37 (Doc. #: 4202) (citation omitted). Defendants contend the Court should leave for the DEA‘s determination “whether Defendants have complied with the CSA.” Id. at 37. More specifically, Defendants state: “the Court should stay its hand until [the] DEA has had an opportunity to pass upon Plaintiffs’ novel theory
The primary jurisdiction doctrine allows courts, in their discretion, to refer matters for an agency determination “whenever enforcement of the claim requires the resolution of issues which, under a regulatory scheme, have been placed within the special competence of an administrative body.” Charvat v. Echostar Satellite, LLC, 630 F.3d 459, 466 (6th Cir. 2010) (quoting U.S. v. W. Pac. R.R. Co., 352 U.S. 59, 63-64 (1956)). The doctrine is “concerned with promoting the proper relationships between the courts and administrative agencies charged with particular regulatory duties.” W. Pac. R.R. Co., 352 U.S. at 63. There is no “fixed formula” for its application. Id. at 64. A variety of reasons may support an agency referral, including: (1) “to advance regulatory uniformity;” (2) “to answer a question within the agency‘s discretion;” and (3) “to benefit from technical or policy considerations within the agency‘s expertise.” Charvat, 630 F.3d at 466 (quotations and citations omitted). “In every case, the question is whether the reasons for the existence of the [primary jurisdiction] doctrine are present and whether the purposes it serves will be aided by its application in the particular litigation.” W. Pac. R.R. Co., 352 U.S. at 64.
Defendants focus on the third category of reasons for referral, arguing the “novel” question of a pharmacy‘s corporate-level CSA dispensing obligations requires the DEA‘s “expertise with a complicated statutory and regulatory framework.” Joint Reply at 18 (Doc. #: 4256). The DEA, however, has already provided clear guidance on this issue. Specifically, the DEA has determined that all registrants, including pharmacies, must “provide effective controls and procedures” to guard against diversion.
D. Additional Arguments
1. Standing
Defendants raise a new standing argument, drawing the Court‘s attention to the Supreme Court‘s recent decision in TransUnion LLC v. Ramirez, 141 S. Ct. 2190 (2021). Defendants contend that, under TransUnion, Plaintiffs cannot base Article III standing “on regulatory noncompliance or an allegedly increased risk of harm stemming from regulatory noncompliance.” Joint Motion at 38 (Doc. #: 4202). TransUnion, however, does not mandate dismissal of Plaintiffs’ claim. There, the Supreme Court explained that a plaintiff who has not suffered “any physical, monetary, or cognizable intangible” concrete harm lacks standing to proceed with a suit based only on alleged violations of regulatory statutes. The Court concluded,
An uninjured plaintiff who sues in those circumstances is, by definition, not seeking to remedy any harm to herself but instead is merely seeking to ensure a defendant‘s “compliance with regulatory law” (and, of course, to obtain some money via the statutory damages). . . . Those are not grounds for Article III standing.
141 S. Ct. 2190, 2206, 2207 n.3 (citations omitted) (emphasis added); see also Ward v. Nat‘l Patient Acct. Servs. Sols., Inc., 9 F.4th 357, 363 (6th Cir. 2021) (“Because [Plaintiff] has failed to show more than a bare procedural violation of the FDCPA, he does not have standing to bring his claims ....“). The TransUnion Court also found that, in a suit for damages, unmaterialized risk of future harm, without more, is insufficient to confer Article III standing. 141 S.Ct. 2190, 2211-2212; see also Beaudry v. TeleCheck Servs., Inc., 854 F. App‘x 44, 46 (6th Cir. 2021) (statutory damages “cannot redress a ‘risk of future harm, standing alone.‘“) (quoting TransUnion, 141 S.Ct. at 2210-11).
Defendants do not persuade this Court that TransUnion applies to strip Plaintiffs of their standing to sue. Plaintiffs’ claim is not based only on statutory violations or hypothetical risks of future harm. Nor does Defendants’ reference to the standing challenges made in Track One present any new or different reason for the Court to amend its prior finding. Plaintiffs satisfy the standing requirements by “plausibly plead[ing] an injury in fact that is fairly traceable to the actions of Defendants.” See Summit County R&R at 28-33, 100-102 (Doc. #: 1025), adopted by CT1 MTD Order at 2, 10 (Doc. #: 1203); see also Krueger v. Experian Info. Sols., Inc., 2021 WL 4145565, *2 (6th Cir. Sept. 13, 2021) (“A plaintiff has standing if he suffered an injury in fact, fairly traceable
2. Economic Loss Doctrine.
Defendants renew previous arguments challenging the Court‘s determinations that the economic loss doctrine does not apply to bar Plaintiffs’ absolute public nuisance claims. Joint Motion at 38-39 (Doc. #: 4202). Ohio caselaw clearly and uniformly limits application of this doctrine to negligence-based qualified nuisance claims and finds it does not apply to intentional torts, such as the intentional misconduct alleged by Plaintiffs. See Bakers MTD Order at 55-59 (Doc. #: 3177). Precedent cited by Defendants does not refute, but rather supports, the Court‘s prior analysis and conclusion. See id. at 58-59 & n.35.
Defendants also cite authority not raised in prior motions, but their reliance on the Restatement (Third) of Torts: Liab. For Econ. Harm § 8 cmt. g is misplaced. As Plaintiffs point out, Section 8 applies only to claims for economic loss brought by a private party who suffered an injury “distinct in kind from those suffered by members of the affected community in general.” See Response at 113-114 (Doc. #: 4241) (quoting Section 8 cmt. a). Furthermore, Section 8 expressly recognizes the authority of governmental entities to maintain public nuisance claims, instructing:
In addition to the common-law claims recognized here, public officials may bring civil or criminal actions against a defendant who creates a public nuisance. . . . An action of that type is the most common response to a defendant‘s invasion of a public right. The definition of “public nuisance” for those purposes is widely a matter of statute, and tends to be considerably broader than the common-law definition recognized by this Section as a basis for a private suit.
Section 8 cmt. a.132
Defendants’ prior and present arguments fail to demonstrate that the “economic loss” doctrine bars Plaintiffs’ public nuisance claim.
3. Statewide Concern Doctrine
The parties incorporate by reference previous briefings regarding Ohio courts’ application of the “statewide concern” doctrine. Joint Motion at 39-40 (Doc. #: 4202); Response at 114 (Doc. # 4241). In the absence of any new arguments, the Court confirms its prior reasoning and conclusion: dismissal under the doctrine is unwarranted because Defendants fail to demonstrate “the doctrine applies to preclude lawsuits brought [by municipalities] to vindicate rights under federal or state law” and where Plaintiffs’ lawsuit did not conflict with state law. See CT1 MTD Order at 2 (Doc. #: 1203), adopting without objection Summit County R&R at 98-100 (Doc. #: 1025); see also Broward County MTD Order at 6-8 (Doc. #: 3274).133
Drawing on the analyses and conclusions of the Ohio Supreme Court and other courts across the country that declined to apply the Municipal Cost Recovery Rule (also known as the Free Public Services Doctrine),134 the Court has repeatedly refused to find the Rule precludes recovery for public costs when “an ongoing and persistent course of intentional misconduct creates an unprecedented, man-made crisis that a governmental entity plaintiff could not have reasonably anticipated as part of its normal operating budget . . . .” Muscogee/Blackfeet MTD Order (Doc. #: 1680) at 13-14, adopting Muscogee R&R at 15-17 (Doc. #: 1499) and Blackfeet R&R at 8 (Doc. #: 1500);135 Summit County R&R at 17-22 & nn.14-17 (Doc. #: 1025), adopted by CT1 MTD Order at 19 (Doc. #: 1203); Monroe County MTD Order at 23-24 (Doc. #: 3285); Broward County MTD Order at 9-11 (Doc. #: 3274). The Ohio Supreme Court, in Cincinnati v. Beretta U.S.A. Corp., 768 N.E.2d 1136, 1149-1150 (Ohio 2002), found the Rule did not bar recovery of governmental costs resulting from defendants’ ongoing and persistent misconduct. Beretta provides authoritative precedent for this Court‘s conclusion that
the costs of Plaintiff‘s governmental services are recoverable to the extent that they exceed the ordinary costs of providing those services and evidence establishes that they were incurred due to the Defendants’ violation of state law.
Muscogee R&R at 17 (Doc. #: 1499), adopted by Muscogee/Blackfeet MTD Order at 13-14 (Doc. #: 1680); see also Blackfeet R&R at 8 (Doc. #: 1500); CT1 MTD Order at 19 (Doc. #: 1203); Summit County R&R at 17-22 (Doc. #: 1025).
Defendants cite no Ohio case law applying the Rule. Rather, they rely on two cases from other states, Walker County v. Tri-State Crematory, 643 S.E.2d 324, 327 & n.3 (Ga. Ct. App. 2007), and City of Chicago v. Beretta U.S.A., 821 N.E.2d 1099, 1145 (Ill. 2004), neither of which provides a basis for the Court to reverse its prior decisions concluding that the Rule does not apply.
5. Statute of Limitations
The Pharmacies assert Plaintiffs’ suits are based on alleged conduct that evidence demonstrates ceased more than four years ago, so the claims are time barred. Joint Motion at 40-43 (Doc. #: 4202) (citing
6. Ongoing Nuisance
Defendants declare that Plaintiffs must, but do not, demonstrate an ongoing public nuisance. They posit that Plaintiffs at most purport to demonstrate the existence of “a current illicit opioid crisis, but their own evidence shows that Defendants only ever dispensed FDA-approved prescription opioids.” Joint Motion at 43 (Doc. #: 4202) (citing excerpts of Plaintiffs’ experts’ trial testimony).137 The Court construes the argument to be: having ceased the alleged misconduct, Defendants are not responsible for subsequent consequences of the oversupply and diversion of legal prescription opioids into illegitimate markets. The argument is not well taken.138
A nuisance may result either from harm caused by human activity or by a physical condition that results from the activity and continues after the conduct leading to the condition ceases. See Restatement § 821(A), cmt. b.139 Plaintiffs’ assertion that the nuisance is “continuing” fits well within the Restatement: “if the activity has resulted in the creation of a physical condition that is of itself harmful after the activity that created it has ceased, a person who carried on the activity that created the condition or who participated to a substantial extent in the activity is subject to the liability for a nuisance, for the continuing harm.” Restatement § 834, cmt. e; see also Dartron Corp. v. Uniroyal Chem. Co., 893 F. Supp. 730, 733, 741 (N.D. Ohio 1995) (denying summary judgment of claim alleging that environmental contamination nuisance continued 20 years after defendant‘s nuisance-causing activity ceased); Crown Prop. Dev., Inc. v. Omega Oil Co., 681 N.E.2d 1343, 1352 (Ohio Ct. App. 1996) (affirming denial of summary judgment of nuisance claim where evidence demonstrated that actual contamination continued despite removal of contamination sources years earlier). This authority confirms that, even if, as Defendants assert, they discontinued the conduct that led to the existence of the nuisance, they are still subject to liability for abatement of any ongoing consequential effects of the nuisance.
7. Expert Testimony
Defendants insist the Court improperly admitted the testimony of five expert witnesses at trial: (1) Dr. Caleb Alexander; (2) Carmen Catizone; (3) Dr. Katherine Keyes; (4) Dr. Anna Lembke; and (5) Dr.
a. Dr. Caleb Alexander
In its Daubert ruling, the Court found that, as a pharmacoepidemiologist, Dr. Caleb Alexander was qualified to opine on the existence of the opioid epidemic and the scope and impact of harms allegedly caused by Defendants’ conduct with respect thereto. CT3 Daubert Order re Alexander at 3-5 (Doc. #: 3948).140 In so ruling, the Court noted Plaintiffs’ agreement that Dr. Alexander‘s remedy-related opinions concerning abatement were irrelevant to issues in the Phase One trial. Id. at 3-5.
In their post-trial motion, Defendants assert Dr. Alexander‘s trial testimony was “primarily” about abatement and, therefore, irrelevant to the Phase One trial. Joint Motion at 44 (Doc. #: 4202). To support this assertion, Defendants cite to 5 pages - out of 142 total pages – of Dr. Alexander‘s trial testimony transcript. Id. (citing 10/21/21 Trial Tr. at 3533-3537 (Doc. #: 4064)). As an initial matter, the Court notes that, at trial, Defendants did not object to the testimony which they now challenge. Rather, defense counsel elicited the subject testimony on cross examination by using specific and leading questions regarding Dr. Alexander‘s previous recommendations to a United States Senate Committee about measures that could be taken to address the opioid epidemic, including: (1) improving doctors’ prescribing practices; (2) providing effective treatment to addicted individuals; and (3) disposing of excess medicines sitting in peoples’ homes. 10/21/21 Trial Tr. at 3533-3535 (Doc. #: 4064).
Contrary to Defendants’ assertions, Dr. Alexander‘s trial testimony overwhelmingly addressed his opinions regarding the existence of an opioid epidemic and the multiple causation factors thereof. Id. at 3458-3572. Dr. Alexander‘s testimony was therefore directly relevant to the issues at stake, and properly admitted as evidence, in the Phase One trial.
b. Carmen Catizone
Defendants argue Carmen Catizone offered unreliable opinions at trial, because Catizone applied his “red flag” methodology “mechanistically” and did not determine whether it actually identified prescriptions that were likely to be illegitimate or diverted. Joint Motion at 44 (Doc. #: 4202). The Court rejected these same arguments in its Daubert ruling, finding Catizone‘s extensive experience in the practice and regulation of pharmacy provided a reliable basis for him to testify regarding different “red flag” metrics that were available to pharmacists to identify and resolve potentially illegitimate prescriptions. CT3 Daubert Order re Catizone at 5-7 (Doc. #: 3947).141 The Court reaffirms its previous ruling and confirms that it was indeed helpful for the jury to hear evidence about the number of potentially suspicious prescriptions that Catizone‘s metrics would have flagged. See id. Defendants’ post-trial arguments go to the weight of Catizone‘s testimony, not its admissibility.142 Catizone‘s opinions were
c. Dr. Katherine Keyes
Defendants assert Dr. Katherine Keyes improperly expressed causation opinions that “were not based on peer-reviewed literature, and have not been scientifically tested in any way.” Joint Motion at 44 (Doc. #: 4202). Defendants made the same arguments in their Daubert motion, which the Court denied. See CT3 Daubert Order re Keyes at 9-12 (Doc. #: 3946)143 (studies and published literature sufficiently support Dr. Keyes’ causation methodology); CT3 Daubert Motion re Keyes at 1 (Doc. #: 3858-2).145 Defendants now contend that, at trial, defense counsel elicited cross examination testimony from Dr. Keyes that “discounted” her causation findings by highlighting conflicting information found in various underlying studies cited in Dr. Keyes’ report. Joint Motion at 44 (Doc. #: 4202) (citing 10/26/21 Trial Tr. at 4120-4121, 4134-4135 (Doc. #: 4090)). Defendants’ arguments clearly go to the weight of Dr. Keyes’ testimony, not its admissibility. See Daubert, 509 U.S. at 596; Lang, 717 F. App‘x at 534. The Court finds Dr. Keyes’ causation opinions were both reliable and admissible at trial. See CT3 Daubert Order re Keyes at 9-12 (Doc. #: 3946).
d. Dr. Anna Lembke
Defendants assert Dr. Anna Lembke improperly testified on topics regarding the Pharmacies’ national policies and dispensing practices that extended “far beyond her expertise and qualifications.” Joint Motion at 45 (Doc. #: 4202). Specifically, Defendants object to Dr. Lembke‘s trial testimony that: “(1) Defendants’ policies and procedures were not effective or adequate to detect red flags; and (2) Defendants increased the supply of opioids and failed to provide effective controls against diversion, which led to opioid misuse and addiction.” Id. (citing 10/06/21 Trial Tr. at 636-637, 540-541 (Doc. #: 4000).146
In pretrial proceedings, the Court held a Daubert hearing to determine the scope of Dr. Lembke‘s opinions, qualifications, and expertise. See 09/10/21 Hearing Tr. (Doc. #: 3944). Based on Dr. Lembke‘s pretrial testimony147 and information provided
ruling in detail throughout Lembke‘s lengthy report, stating Defendants could object at trial if Lembke testified beyond her areas of expertise. Id. at 13-14.
At trial, Lembke testified, “from a doctor‘s perspective,” that the Pharmacy Defendants’ national policies and procedures were not effective or adequate to detect red flags.150 Defendants assert these opinions exceeded the scope of Lembke‘s expertise and qualifications. Joint Motion at 45 (Doc. #: 4202). The Court disagrees. As noted, Lembke has extensive medical knowledge and expertise regarding “red flags” that signal possible opioid addiction. Against this backdrop, Lembke testified she examined the evolving policies and procedures of each Pharmacy Defendant, over a period of time, and determined the policies were ineffective or inadequate to detect “red flags” that were well-known in the medical community at the given time.151 At the Daubert hearing, Lembke explained the basis for these findings,152
Further, at trial, Lembke cited specific evidence supporting her conclusions, including her review of data showing that, in Lake and Trumbull Counties, Defendants dispensed “thousands” of prescriptions for both an opioid and a Benzodiazepine, despite the fact that this particular drug combination was “well-known” to feed addiction under the current medical literature and/or DEA enforcement decisions published at the time.154 On this record, the Court concludes Lembke‘s testimony regarding alleged inadequacies in Defendants’ policies and procedures to detect “red flags” fell squarely within the scope of her extensive medical knowledge and expertise.155
Defendants also challenge Lembke‘s testimony that “Defendants increased the supply of opioids” which, along with Defendants’ failure to provide effective controls (discussed above), “led to opioid misuse and addiction.” Joint Motion at 45 (Doc. #: 4202). It appears Defendants did not object to Lembke‘s testimony on these topics at trial and, thus, have waived the right to do so now.156 Nevertheless, even if the Court reached the merits, Defendants’ arguments would fail. At trial, Lembke testified that each Pharmacy Defendant undertook misleading promotional marketing and educational activities that are “well-known and effective strategies for influencing what medicine gets prescribed [and] creating demand for a specific medication.”157 Lembke concluded these efforts “contributed substantially” to a paradigm shift in increased opioid prescribing, thereby creating an oversupply of prescription opioids which resulted in the opioid epidemic.158 In light of Lembke‘s distinguished academic background on opioid prescribing and the history and origins of the opioid epidemic, combined with her
e. Dr. Craig McCann
Defendants contend data expert Dr. Craig McCann provided “inherently arbitrary and unreliable” opinions, because he merely programmed algorithms reflecting “red flagging” rules suggested by other experts and offered no independent opinions regarding the validity of the underlying flagging criteria. Joint Motion at 45 (Doc. #: 4202). In its Daubert ruling, the Court rejected Defendants’ identical arguments, finding Dr. McCann reliably utilized the “red flagging” methodology identified by another expert, Carmen Catizone, whom the Court also found to be reliable. See CT3 Daubert Order re McCann at 6-7 (Doc. #: 3949);160 CT3 Daubert Order re Catizone at 7 (Doc. #: 3947) (“it would be helpful to the finder of fact to hear evidence about the number of potentially suspicious prescriptions that Catizone‘s metrics would have flagged“). Together, the opinions of Dr. McCann and Catizone provided a non-speculative evidentiary framework to aid the jury‘s determination of material issues in the case, including: (1) whether Defendants employed reasonable measures to identify potentially suspicious prescriptions; (2) the number of prescriptions that Defendants could have reasonably flagged; and (3) whether Defendants employed reasonable measures to avoid dispensing suspicious prescriptions.161 Accordingly, the Court properly admitted Dr. McCann‘s testimony at trial.
Conclusion
For the foregoing reasons, the Court DENIES Defendants’ Individual and Joint Rule 50(b) Motions for Judgment as a
Further, the Court DENIES Defendants’ previously filed Rule 50(a) Motions (Doc. ##: 4098, 4100, 4102, and 4103).
IT IS SO ORDERED.
/s/ Dan Aaron Polster March 7, 2022
DAN AARON POLSTER
UNITED STATES DISTRICT JUDGE
Notes
Unlawful conduct can occur either by acting in a certain way that is prohibited by law, or by failing to act in a certain way that is required by law. Specifically, unlawful conduct occurs when a person engages in conduct that is prohibited by a statute, ordinance, or regulation that controls safety. And unlawful conduct also occurs when a statute, ordinance, or regulation that controls safety requires a person to engage in certain conduct, but the person fails to do so.
* * *
Conduct that is fully authorized by a statute, ordinance, or regulation cannot create a public nuisance because it is lawful conduct. But if a person‘s conduct does not comply with what is authorized by law, then that conduct may be unlawful conduct.
11/15/21 Trial Tr. at 7074 (Doc. #: 4153).Intentional conduct occurs when a person acts with the purpose to produce a result. A person intends an act when that act is done purposely, not accidently. The intent with which a person acts is known only to that person.
There are two ways to prove a person‘s intentional conduct. One, when a person expresses their intent to others. Or two, when a person somehow indicates their intent by their conduct.
For you to find that a person engaged intentional conduct, it is enough that the person intended to act and knew, or was substantially certain, that the circumstances resulting from that act would interfere with public health or safety. It is not necessary for you to find that the person intended to cause the nuisance.
11/15/21 Trial Tr. at 7072-73 (Doc. #: 4153).11/15/21 Trial Tr. at 7077 (Doc. #: 4153).In addition, the plaintiff must show by the greater weight of the evidence that the conduct a defendant engaged in could reasonably be expected to cause an interference with public health or safety. A defendant does not, however, need to foresee that their conduct would lead to the specific nuisance that occurred.
“Product liability claim” means a claim or cause of action that is asserted in a civil action pursuant to sections 2307.71 to 2307.80 of the Revised Code and that seeks to recover compensatory damages from a manufacturer or supplier for death, physical injury to person, emotional distress, or physical damage to property other than the product in question, that allegedly arose from any of the following: (a) The design, formulation, production, construction, creation, assembly, rebuilding, testing, or marketing of that product; (b) Any warning or instruction, or lack of warning or instruction, associated with that product; (c) Any failure of that product to conform to any relevant representation or warranty. “Product liability claim” also includes any public nuisance claim or cause of action at common law in which it is alleged that the design, manufacture, supply, marketing, distribution, promotion, advertising, labeling, or sale of a product unreasonably interferes with a right common to the general public.
Pls. Ex. P-8954 at 2 (Doc. #: 3999-7).CVS acknowledges that it has a corresponding responsibility to dispense only those prescriptions that have been issued for a legitimate medical purpose by an individual practitioner acting in the usual course of professional practice and that knowingly filling a prescription not in the usual course of professional treatment or in legitimate and authorized research subjects CVS to penalties under the CSA.