Walmart, CVS Appeal of Opioid Loss Has Good Chance, Experts Say

While a Cleveland jury concluded Walmart Inc., CVS Health Corp. and Walgreens Boots Alliance Inc. exacerbated Ohio’s opioid epidemic with lax oversight of prescription painkillers, the verdict may not survive on appeal, according to legal experts.

The companies, who vowed to appeal, may not have to work hard to make their case, said Carl Tobias, a University of Richmond law professor who follows the litigation. Overturning the verdict could be justified by the decision of the judge overseeing the trial to not grant a mistrial, even after a juror admitted to doing Internet research about claims against the pharmacy operators, Tobias said. Jurors are only permitted to consider evidence and arguments presented in court.

The two Ohio counties that won in court on Tuesday “are definitely at risk here for this verdict to be set aside” by the U.S. Sixth Circuit Court of Appeal in Cincinnati, Tobias said. “There are plenty of grounds available to the appeals court judges to order a retrial.”

Jurors concluded after a trial that the companies endangered “public health and safety” through slipshod oversight of prescriptions for the highly-addictive drugs. U.S. District Judge Dan Polster, who presided at the trial, will decide later whether the municipalities deserve $2.4 billion in compensation to replenish drug treatment, social services and policing budgets depleted by fighting opioid addictions and overdoses.

It was the first jury verdict in the sprawling, four-year opioid litigation, in which states and local governments across the U.S. have accused opioid makers, distributors and sellers of understating addiction risks and sacrificing patient safety for billions in profits. It also was the first trial of more than 3,000 opioid cases consolidated before Polster.

Read More: Walmart, CVS, Walgreens Fueled Opioid Crisis, Jury Concludes

Still, other public-nuisance rulings in opioid cases have been invalidated on appeal.

Earlier this month, the Oklahoma Supreme Court threw out a decision by a judge who ordered Johnson & Johnson to pay $465 million to the state over the marketing of opioid painkillers. The appeals court found the trial judge misconstrued Oklahoma’s public-nuisance law by extending it from its traditional use in real-estate disputes to drug marketing.

According to Tobias, a similar argument could be made in the Ohio case, where Lake and Trumbull Counties accused pharmacy owners of creating a “public nuisance” by failing to properly monitor illegitimate opioid prescriptions.

“If a pharmacy had dumped thousands of opioid pills onto the public road, there might indeed be a public nuisance claim,” Michael Krauss, professor emeritus at George Mason University’s Law School, Krauss said in a statement after the verdict. “Legally dispensing apparently legally written prescriptions is not a public nuisance any more than legally dispensing gasoline would be.”

Polster’s failure to declare a mistrial over the juror research may be the strongest basis for an appeal, according to Tobias.

Not only did the juror violate the judge’s admonition against outside research, but she shared the information she got with her colleagues on the jury, Tobias said. Defense lawyers argued at the time that their clients were prejudiced by the juror’s misconduct.

“Appellate courts often show deference to trial judges who are on the scene, but this one may be a little too far gone for that,” Tobias said.

Mark Lanier, the Ohio counties’ lawyer, said Wednesday if the appeals court flips the case, he’s eager to take on pharmacy owners in a re-trial. “We’ll beat ‘em again,” he said.

The consolidated case before Polster is In Re National Prescription Opioid Litigation, 17-md-2804, U.S. District Court, Northern District of Ohio (Cleveland).

To contact the reporter on this story:
Jef Feeley in Wilmington, Delaware at jfeeley@bloomberg.net

To contact the editors responsible for this story:
Katia Porzecanski at kporzecansk1@bloomberg.net

Steve Stroth

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