SAN FRANCISCO – The ex-CEO of litigation funder Juridica Asset Management Ltd. and a team from Boies Schiller Flexner have teamed up with the Cherokee Nation to sue major pharmaceutical distributors and retail pharmacies over the opioid addiction epidemic that has ravaged the tribe and much of the rest of the country.
The suit, filed Thursday in the District Court of the Cherokee Nation in Tahlequah, Oklahoma, alleges that drug distributing giants like McKesson Corp. and retail pharmacies such as CVS Health and Walgreen Co. violated tribal and federal laws by turning a blind eye as prescription pain killers flooded the streets.
“Defendants created conditions in which vast amounts of opioids have flowed freely from manufacturers to abusers and drug dealers—with distributors regularly fulfilling suspicious orders from pharmacies, and pharmacies regularly ignoring ‘red flags,’” the 54-page complaint says.
“This kind of behavior by defendants has allowed massive amounts of opioid pills to be diverted from legitimate channels of distribution into the illicit black market in quantities that have fueled the opioid epidemic in the Cherokee Nation,” it adds.
The case was formally brought by Todd Hembree, the attorney general of the Cherokee Nation. But a number of senior Boies Schiller litigators are also listed on the complaint, with Richard Fields, who led Juridica until 2016 and then left to start Fields PLLC, acting as special counsel.
In an interview Thursday, Boies Schiller partner William Ohlemeyer, based in Armonk, New York, said that the Boies Schiller team had been introduced to Hembree by Fields. He also said that the firm was not handling the case pro bono and has a fee arrangement with the Cherokee Nation.
Ohlemeyer declined to comment on whether a third-party funder is involved in the case. “Our fee agreements with clients are confidential,” he said, noting that Fields is no longer in litigation finance.
Fields, who is based in Washington, also said he would not comment on the financial aspects of running the litigation but argued that the case is a strong one. The matter is the first that Fields has filed since he returned to private practice and started operating an essentially one-man shop.
His involvement at least raises questions about whether a funder is helping bankroll the case, and if funders are now getting interested in cases like this that have important social ramifications. The complaint cites the National Institutes of Health as reporting that prescription opioids killed 22,598 people in the United States in 2015—almost double the amount of deaths from heroin.
The genesis of the litigation is the enforcement actions taken by the federal Drug Enforcement Agency over the opioid epidemic. In January, McKesson agreed to pay a record $150 million penalty for failing to report suspicious drug orders. Last year, CVS paid $3.5 million over allegations that its pharmacists filled forged prescriptions for controlled substances—mostly addictive painkillers.
Ohlemeyer, in the interview, said that the potential damages in the Cherokee Nation’s case could rise “easily into the hundreds of millions of dollars.” The economic costs include things like healthcare and rehabilitation services, and welfare for children of parents struggling with addiction, the complaint says.
Municipal and county authorities in some U.S. states, such as West Virginia, have filed civil suits against drug distributors over opioids in the past, Ohlemeyer noted. But he said the Cherokee Nation’s case is the first to rope in retail pharmacies as well. He also said the damages are particularly high in this case because the Cherokee Nation operates what is akin to a single-payer health care system.
Boies Schiller has done work on behalf of other American Indian tribes in the past, Ohlemeyer said, although not for the Cherokee Nation. Miami-based Stephen Zack, a member of Boies Schiller’s executive committee, and partners Tyler Ulrich and Patricia Melville are also involved in the case. Also listed on the complaint are The Bruehl Firm in Oklahoma and Sonosky, Chambers, Sachse, Endreson & Perry, a firm focusing on American Indian interests.
Along with McKesson, CVS and Walgreens, the suit names pharmaceutical distributor Cardinal Health Inc., wholesaler AmerisourceBergen, and Wal-Mart Stores Inc. as defendants.
“Cardinal Health is confident that the facts and the law are on our side, and we intend to vigorously defend ourselves against the plaintiff’s mischaracterization of those facts and misunderstanding of the law,” Cardinal spokeswoman Ellen Barry said in an emailed statement.
Mike DeAngelis, a CVS Health spokesman, did not comment directly on the lawsuit but said the company “is committed to the highest standards of ethics and business practices, including complying with all federal and state laws governing the dispensing of controlled substance prescriptions, and is dedicated to reducing prescription drug abuse and diversion.”