The United States, represented by the U.S. Department of Justice (DOJ), claimed that Walmart Inc. must face the consequences of filling thousands of invalid opioid prescriptions in violation of the Controlled Substances Act (CSA) in an opposition to the defendant’s request for dismissal.
The case, filed last December, contended that Walmart fanned the nation’s opioid crisis with its unscrupulous pharmacy practices. The federal government’s April 23 opposition argued that if accepted, the retail pharmacy’s arguments in support of dismissal “would render pharmacists rubber stamps.”
The District of Delaware filing asserted that Walmart’s pharmacists filled prescriptions issued by known “pill-mill” prescribers or with “obvious red flags,” and violated the rules of professional pharmacy practice. In its role as distributor, the opposition reiterated that Walmart bucked its obligations to report suspicious orders of controlled substances. Instead, the DOJ argued, the company flagged some orders, but allegedly chose not to report or investigate them.
In February, Walmart sought dismissal on grounds that the government’s lawsuit is premised on faulty legal theories and claims that misconceive pharmacies’ obligations under federal law. The DOJ’s brief explained why it has adequately alleged each element of the three claims levelled against Walmart.
In particular, the filing tackled Walmart’s response to the DOJ’s “collective knowledge” argument, imputing liability to Walmart for the acts of its pharmacists. According to the opposition, Walmart contended that the collective knowledge theory is both defective and warrants a separate ruling.
In response, the DOJ argued that the separate ruling request is procedurally flawed in a failure to state a claim dismissal motion. The plaintiff then contended that Walmart’s argument is belied by the complaint’s contentions, and is contrary to the law of agency. “Established agency principles recognize that corporations can be liable where their agents know important information needed by other agents but knowingly keep those other agents in the dark,” the opposition stated.
Last month, in addition to the National Association of Chain Drug Stores, the Chamber of Commerce, the National Retail Federation, and the Washington Legal Foundation filed an amicus brief in support of Walmart’s motion to dismiss. Principally, the amici argued that it is wrong to hold a corporation accountable for the acts of its employees “without any allegation that the employees who filled the prescription possessed knowledge of (its) irregularities.” The parties also condemned the DOJ’s approach as “deeply troubling” because it allegedly weakens incentives for companies to implement robust compliance programs.
Walmart’s reply brief is due on April 30.
Walmart is represented by Richards, Layton & Finger P.A., Jones Day, and Wilmer Cutler Pickering Hale and Dorr LLP.
