State ex rel. Jennings v. Purdue Pharma L.P., Not Reported in Atl. Rptr. (2019) 2019 WL 446382 L.P. & The Purdue Frederick Company (“Purdue Pharma”). 2019 WL 446382 Only the Westlaw citation is currently available. Michael P. Kelly, Esq., Steven P. Wood, Esq., Daniel J. Brown, Esq., Hayley J. Reese, Esq., McCarter & English, UNPUBLISHED OPINION. CHECK Wilmington Delaware; John A. Freedman, Esq. (Argued), COURT RULES BEFORE CITING. Arnold & Porter Kay Scholer LLP, Washington, District Superior Court of Delaware. of Columbia; Sean O. Morris, Esq., Arnold & Porter Kay Scholer LLP, Los Angeles, California, Attorneys for STATE of Delaware, EX REL. Kathleen JENNINGS, Defendant Endo Pharmaceuticals, Inc. & Endo Health Attorney General of the State of Delaware, Plaintiff, Solutions, Inc. (“Endo”). v. Kevin B. Collins, Esq., Katherine B. Shaffer, Esq., PURDUE PHARMA L.P.; Purdue Pharma Covington & Burling, Washington, District of Columbia; Inc.; The Purdue Frederick Company; Endo Neil K. Roman, Esq., Covington & Burling, New York, Health Solutions Inc.; Endo Pharmaceuticals New York; A. Thompson Bayliss, Esq., Michael A. Inc.; McKesson Corporation; Cardinal Health Barlow, Esq. (Argued), Sarah E. Delia, Esq., David Inc.; AmerisourceBergen Corporation; A. Seal, Esq., Daniel J. McBride, Esq., Abrams & Anda Pharmaceuticals, Inc.; H.D. Smith, Bayliss, Wilmington, Delaware, Attorneys for Defendant LLC; CVS Health Corporation; and McKesson Corporation. Walgreens Boots Alliance, Inc., Defendants. David A. Felice, Esq., Bailey & Glasser LLP, Wilmington, C.A. No. N18C-01-223 MMJ CCLD Delaware; Steven Pyser, Esq., Ashley W. Hardin, Esq. | (Argued), Joshua D. Tully, Williams & Connolly, Submitted: November 15, 2018 Washington, District of Columbia, Attorneys for | Defendant Cardinal Health, Inc. Decided: February 4, 2019 Jennifer C. Wasson, Esq. (Argued), Jesse L. Noa, Esq., Upon Defendants' Motions to Dismiss and Motion to Strike Carla M. Jones, Esq., Potter, Anderson, & Corroon LLP, Wilmington, Delaware; Louis W. Schack, Esq., Attorneys and Law Firms Shannon E. McClure, Esq., Neil A. Hlawatsch, Esq., Reed Smith LLP, Philadelphia, Pennsylvania, Attorneys Ryan P. Newell, Esq., Shaun Michael Kelly, Esq., Kyle for Defendant AmerisourceBergen Corporation. Evans Gay, Esq., Connolly Gallagher, LLP, Wilmington, Delaware; Richard W. Fields, Esq., Fields PLLC, Jami B. Nimeroff, Esq., Brown, Garry, Nimeroff, Washington, District of Columbia; Scott W. Gilbert, Wilmington, Delaware; James W. Matthews, Esq. Esq., Richard Shore, Esq. (Argued), Mark A. Packman, (Argued), Katy E. Koski, Esq., Jaclyn V. Piltch, Esq., Jenna A. Hudson, Esq. (Argued), Michael B. Rush, Esq., Redi Kasollja, Esq., Foley & Lardner, Esq. (Argued), Monique T. Abrishami, Esq., Richard J. Boston, Massachusetts, Attorneys for Defendant Anda Leveridge, Esq., Gilbert LLP, Washington, District of Pharmaceuticals, Inc. Columbia; Kathleen Jennings, Attorney General, Michael Vild, Esq., Michelle Whalen, Esq., Delaware Department Thomas E. Hanson, Esq., Barnes & Thornburg LLP, of Justice, Attorneys for the State of Delaware. Wilmington, Delaware; Oni N. Harton, Esq., Barnes & Thornburg LLP, Indianapolis, Indiana, Attorneys for Brian D. Tome, Esq., Kelly E. Rowe, Esq., Reilly, Defendant H.D. Smith LLC. McDevitt, & Henrich, PC, Wilmington, Delaware; Mark S. Cheffo, Esq., Hayden A. Coleman, Esq. (Argued), Daniel B. Rath, Esq., Rebecca L. Butcher, Esq., Jennifer Debra D. O'Gorman, Esq., Dechert LLP, New York, New L. Cree, Esq., Landis, Rath, & Cobb LLP, Wilmington, York; Judy L. Leone, Esq., Dechert LLP, Philadelphia, Delaware; Eric R. Delinsky, Esq., Alexandra W. Miller, Pennsylvania, Attorneys for Defendant Purdue Pharma Esq., R. Miles Clark, Esq. (Argued), Zuckerman Spaeder © 2019 Thomson Reuters. No claim to original U.S. Government Works. 1 State ex rel. Jennings v. Purdue Pharma L.P., Not Reported in Atl. Rptr. (2019) 2019 WL 446382 LLP, Washington, District of Columbia, Attorneys for State asserts that both Delaware and federal law have Defendant CVS Health Corporation. established the duties of care that Distributors must follow. The State argues that, as evidenced by prior Beth Moskow-Schnoll, Esq., William Burton, Esq., regulatory actions against Distributors for failing to Elizabeth A. Sloan, Esq., Ballard Spahr LLP, prevent diversion, Distributors have violated their duties. Wilmington, Delaware; Kaspar J. Stoffelmayr, Esq., Katherine M. Swift, Esq., Bartlit, Beck, Herman, Similarly, as to Pharmacies, the State argues that Palenchar, & Scott LLP, Chicago, Illinois; Alex J. Harris, Pharmacies have duties to prevent opioid diversion and Esq., Bartlit, Beck, Herman, Palenchar, & Scott LLP, to report any suspicious orders. The State alleges that Denver, Colorado, Attorneys for Defendant Walgreens Pharmacies repeatedly have failed to report suspicious Boots Alliance, Inc. orders made obvious to them by certain “red flags,” such as unusually large orders, repetitive orders, and JOHNSTON, J. improperly filled orders. The State argues that Pharmacies have violated their duties owed to the State, as evidenced by prior regulatory actions against Pharmacies. PROCEDURAL CONTEXT *1 The State of Delaware (“State”), ex rel. Kathleen The State argues that Defendants' collective misconduct 1 has harmed and continues to harm the State of Delaware Jennings, Attorney General of the State of Delaware, 3 brought this suit seeking compensatory, punitive, and and its citizens. The State alleges the following: other damages, as well as restitution, disgorgement, Count I: Consumer Fraud (Against Manufacturer and civil penalties. Defendants are: Purdue Pharma Defendants) L.P., Purdue Pharma Inc., The Purdue Frederick Company, Endo Health Solutions Inc., and Endo Count II: Nuisance (Against Manufacturer Pharmaceuticals Inc. (collectively, “Manufacturers”); Defendants) McKesson Corporation, Cardinal Health, Inc., AmerisourceBergen Corporation, Anda Pharmaceuticals, Count III: Negligence (Against Manufacturer Inc., and H.D. Smith, LLC (collectively, “Distributors”); Defendants) and CVS Health Corporation and Walgreens Boots Count IV: Unjust Enrichment (Against Manufacturer Alliance, Inc. (collectively, “Pharmacies”). Defendants) As to the Manufacturers, the State argues that *2 Count V: Consumer Fraud (Against Distributor Manufacturers have duties to disclose accurately the Defendants and Pharmacy Defendants) risks associated with opioid medications, specifically, the high risk of addiction and subsequent misuse. The State Count VI: Nuisance (Against Distributor Defendants contends that Manufacturers misrepresented those risks and Pharmacy Defendants) through multi-million-dollar advertising campaigns, and inaccurately claimed that those who were showing signs Count VII: Negligence (Against Distributor of addiction were not actually addicted. The State argues Defendants and Pharmacy Defendants) that these misstatements were targeted for maximum Count VIII: Unjust Enrichment (Against Distributor effect and to a specific audience. The State contends that Defendants and Pharmacy Defendants) Manufacturers knew or should have known that their statements were false and misleading. Because they knew Count IX: Civil Conspiracy (Against Manufacturer the statements were misleading, Manufacturers violated Defendants, Distributor Defendants, Pharmacy their duties to disclose accurately the risks of using Defendants). purportedly highly dangerous opioid medications. Defendants have filed Motions to Dismiss. Manufacturers As to Distributors, the State argues that Distributors joined together to file one Motion to Dismiss. Four have duties to actively prevent opioid diversion. 2 The of the five Distributors filed Motions to Dismiss: © 2019 Thomson Reuters. No claim to original U.S. Government Works. 2 State ex rel. Jennings v. Purdue Pharma L.P., Not Reported in Atl. Rptr. (2019) 2019 WL 446382 McKesson Corporation, Cardinal Health, Inc. and disclose accurately the risks associated with the use AmerisourceBergen Corporation have jointly filed one of opioids. The State claims that Manufacturers have motion. Anda Pharmaceuticals, Inc. has separately filed done this via a multi-million-dollar advertising campaign its own motion. The remaining distributor, H.D. Smith, that is run through websites, promotional materials, LLC, has not joined in or filed its own motion to dismiss, live conferences, publications for doctors, and other but did answer the complaint. The Pharmacies jointly filed vehicles. The State asserts that Manufacturers trained one motion to dismiss. Oral Argument was heard over two pharmaceutical salesmen to tell doctors that the risk days: October 24, 2018 and November 15, 2018. of opioid addiction is less than 1%, which is contrary to Center for Disease Control (“CDC”) findings that suggest that there are significant risks of serious opioid addiction and abuse. The CDC reports that about MOTION TO DISMISS STANDARD 26% of long term users experience problems with In a Rule 12(b)(6) Motion to Dismiss, the Court must addiction or dependence. 9 The State claims although determine whether the claimant “may recover under any there are warning labels approved by the Food and Drug reasonably conceivable set of circumstances susceptible of Administration (“FDA”) on the bottles of medication, proof.” 4 The Court must accept as true all well-pleaded the content in the advertising campaign is inconsistent with those warning labels in that the advertising scheme allegations. 5 Every reasonable factual inference will be significantly