Cnty. of Lake v. Purdue Pharma, L.P. (In re Nat'l Prescription Opiate Litig.)

477 F.Supp.3d 613

IN RE: NATIONAL PRESCRIPTION OPIATE LITIGATION

This Document Relates to:

Track Three Cases:

County of Lake, Ohio v. Purdue Pharma, L.P., et al.,

County of Trumbull, Ohio v. Purdue Pharma, L.P., et al.,

MDL 2804

Case No. 1:17-MD-2804

Case No. 18-OP-45032

Case No. 18-OP-45079

United States District Court, N.D. Ohio, Eastern Division.

Signed August 6, 2020

OPINION AND ORDER

DAN AARON POLSTER, UNITED STATES DISTRICT JUDGE

Before the Court is the Pharmacy Defendants’¹ Motion to Dismiss Second Amended Complaints. Doc. #: 3340.² Plaintiffs (Ohio's Lake and Trumbull Counties) filed an opposition brief. Doc. #: 3366. Pharmacy Defendants filed a reply brief. Doc. #: 3379. For the reasons stated below, the Motion to Dismiss is DENIED .

I. Legal Standard.

The Court incorporates by reference the applicable legal standards set forth in its Opinion and Order in Cleveland Bakers & Teamsters Health & Welfare Fund v. Purdue Pharma, L.P. , Case No. 1:18-OP-45432 (Doc. #: 3177 at 4–6).³

II. Factual Allegations.

Plaintiffs each assert a claim of common law absolute public nuisance against the Pharmacy Defendants.⁴ This Opinion addresses the viability of the public nuisance claims as they arise out of Pharmacy Defendants’ activity of dispensing prescription opioids to customers. The Court previously concluded under Ohio law that nearly identical claims based on the Pharmacy Defendants’ distribution activity survive a motion to dismiss. See Opinion and Order in The County of Summit, Ohio v. Purdue Pharma L.P. , Case No. 18-OP-45090 (Doc. #: 1203).⁵

With respect to dispensing practices, Plaintiffs contend the Pharmacy Defendants violated the Federal Controlled Substances Act and also Ohio controlled substance laws by, among other things, "dispensing and selling [opioids] without maintaining effective controls against the diversion of opioids." Amended Complaint , Doc. #: 3327 at ¶630(b).⁶ In particular, Plaintiffs allege the Pharmacy Defendants failed to: "adequately train their pharmacists and pharmacy technicians on how to properly and adequately handle prescriptions for opioid painkillers," id. at 1182; "put in place effective policies and procedures to prevent their stores from facilitating diversion and selling into a black market," id. at ¶83; "conduct adequate internal or external reviews of their opioid sales to identify patterns regarding prescriptions that should not have been filled," id. ; "effectively respond to concerns raised by their own employees regarding inadequate policies and procedures regarding the filling of opioid prescriptions," id. at ¶85; and "take meaningful action to investigate or to ensure that they were complying with their duties and obligations under the law with regard to controlled substances," id. at ¶86. Plaintiffs further allege the Pharmacies "had the ability, and the obligation, to look for [ ] red flags on a patient, prescriber, and store level, and to refuse to fill and to report prescriptions that suggested potential diversion," id. at ¶541, but the Pharmacy Defendants "systemically ignored red flags that they were fueling a black market." Id. at ¶81. Plaintiffs allege the result of all this conduct is that the Pharmacy Defendants distributed and dispensed opioids "in a manner which caused prescriptions and sales of opioids to skyrocket in Plaintiff's community, flooded Plaintiff's community with opioids, and facilitated and encouraged the flow and diversion of opioids into an illegal, secondary market." Id. at ¶621.

III. Analysis.

The Pharmacy Defendants argue there are four reasons why federal and Ohio law require dismissal of Plaintiffs’ public nuisance claims based on dispensing activity. The Court considers each argument in turn.

A. Statutory Abrogation of Plaintiffs’ Public Nuisance Claims.

The Pharmacy Defendants begin their motion with the contention that Ohio statutes (and associated regulations) that govern "distribution of a drug of abuse" displace the common law and thereby entirely preclude Plaintiffs’ absolute public nuisance claims. Defendants explain that the "Ohio legislature has comprehensively regulated the field of controlled substance dispensing and distribution, and has provided specific remedies that conflict with any common law cause of action." Doc. #: 3340-1 at 1. Defendants insist the Plaintiff Counties "can bring their claim under the appropriate statute, Ohio Rev. Code ("O.R.C.") § 4729.35, or not at all." Id. at 7. The Court finds this position unpersuasive.

The statute at issue falls under Title 47 of the Revised Code, "Occupations–Professions," which establishes professional standards applicable to 66 different occupations. Chapter 4729, titled "Pharmacists; Dangerous Drugs," governs numerous matters related to the practice of pharmacy, including: licensing; required and prohibited conduct; distribution and dispensing of prescription medication; and disciplinary actions against pharmacies and pharmacists.⁷ The Chapter also establishes a State Board of Pharmacy ("OBOP") to administer and enforce the provisions of the Chapter, and to adopt rules to carry out its purposes. O.R.C. §§ 4729.01 – 4729.99 ; see, e.g., Ohio State Bd. of Pharm. v. Dick's Pharmacy , 150 Ohio App.3d 343, 780 N.E.2d 1075, 1077-82 (2002) (affirming OBOP's imposition of a $25,000 civil fine against a pharmacy based on its determination that the pharmacy and its pharmacist-in-charge engaged in illegal dispensing of dangerous drugs).

Under the OBOP's rules, "[a]ll licensees and registrants shall provide effective and approved controls and procedures to deter and detect theft and diversion of dangerous drugs." Ohio Admin. Code §§ 4729-9-05(A), 4729-9-11, 4720-9-16(H).⁸ Section 35 of Chapter 4729 declares violations of federal or state laws and regulations governing the distribution and dispensing of opioids to constitute a public nuisance per se.⁹ It authorizes the attorney general, county prosecutors, and the OBOP to maintain a civil action "in the name of the state" to enjoin violative conduct. An injunction is the only remedy available under that section.¹⁰

Plaintiffs, however, do not assert a cause of action under O.R.C. § 4729.35. Rather, they bring common law absolute public nuisance claims, alleging that Defendants’ violations of anti-diversion laws gave rise to a public nuisance. Doc. #: 3327 at ¶¶71-599, 616-654.

The Pharmacy Defendants insist Ohio law allows only the statutory public nuisance claim provided for in O.R.C. § 4729.35, so Plaintiffs’ common law public nuisance claims must be dismissed. In support, Defendants rely on: (1) rules of statutory construction, (2) the doctrine of field preemption, and (3) assertions of irreconcilable conflict. Each topic is addressed below.

1. Rules of Construction Regarding Abrogation.

The Ohio Supreme Court has consistently recognized the following rule of statutory construction:

Statutes are to be read and construed in the light of and with reference to the rules and principles of the common law in force at the time of their enactment, and in giving construction to a statute the Legislature will not be presumed or held to have intended a repeal of the settled rules of the common law, unless the language employed by it clearly expresses or imports such intention.

State ex rel. Morris v. Sullivan , 81 Ohio St. 79, 90 N.E. 146, syllabus ¶ 3 (1909) (emphasis added). Put more succinctly, an intent to abrogate the common law "must be expressly declared by the legislature or necessarily implied in the language of the statute." LaCourse v. Fleitz , 28 Ohio St.3d 209, 503 N.E.2d 159, 161-62 (1986) (citation omitted); see also Combs v. Ohio Dep't of Nat. Res., Div. of Parks & Recreation , 146 Ohio St.3d 271, 55 N.E.3d 1073, 1078 (Ohio 2016) ("in the absence of language clearly showing the intention to supersede the common law, the existing common law is not affected by the statute, but continues in full force") (internal quotation marks and citations omitted).¹¹

As Plaintiffs note, § 4729.35 does not expressly abrogate any common law or equitable cause of action or remedy (and neither does any other section of Chapter 4729). Despite this, Defendants contend there is an exception to the Morris statutory construction rule: it "applies only to the repeal of ‘settled rules of the common law.’ " Doc. #: 3379 at 2 (emphasis added). Defendants argue that "diversion of controlled substances" had no meaning at common law, so the General Assembly had no reason to declare the common law was abrogated. Put differently, Defendants assert that common law public nuisance claims asserting diversion of controlled substances "never existed in the first place," id. at 2-3, so there was no need for § 4729.35 to include "language clearly showing the intention to supersede th[is] common law." Combs , 55 N.E.3d at 1078.

Defendants’ theory, however, constrains the Morris rule of construction to an unsupportable level of specificity. Defendants ignore that Ohio courts for many decades have recognized a common law claim for absolute public nuisance based on a defendant's unlawful conduct. See, e.g., Taylor v. Cincinnati , 143 Ohio St. 426, 55 N.E.2d 724, 727-32 (1944). Undoubtedly, the General Assembly was aware of the Morris rule of construction when it enacted § 4729.35 and could easily have abrogated some or all of the existing species of common law public nuisance claims, whether premised upon diversion of controlled substances or any other intentional, unlawful, or hazardous conduct. Indeed, the General Assembly has abrogated very specific types of common law claims in other statutes, as well as entire categories of common law claims. See, e.g., O.R.C. § 2307.98(E) ("This [shareholder liability] section is intended to codify the elements of the common law cause of action for piercing the corporate veil and to abrogate the common law cause of action and remedies relating to piercing the corporate veil in asbestos claims. "); O.R.C. § 2307.71(b) (stating that...