4th Circuit Redirects County’s Opioid Case Against Pharmacies to Federal Court

A published opinion written by Judge A. Marvin Quattlebaum of the Fourth Circuit on Monday held that the Arlington County, Virginia’s case against Express Scripts Pharmacy Inc. and ESI Mail Pharmacy Service Inc. (collectively, ESI defendants) belongs in federal rather than state court. The lawsuit, one of several thousand filed by governmental entities against opioid manufacturers, distributors, and pharmacies seeks to recover damages of at least $150 million and punitive damages of $350,000 per defendant for the purported harm resulting from widespread opioid abuse.

This week’s opinion explains that Arlington sued the ESI defendants, pharmacies that fill opioid prescriptions, for causing or contributing to the local opioid epidemic. Previously, the ESI defendants removed the suit to the Eastern District of Virginia under the federal officer removal statute. They claimed they were “acting under” the U.S. Department of Defense (DOD) because they operate the TRICARE Mail Order Pharmacy (TMOP) as subcontractors of Express Scripts Inc., a corporate affiliate that is under contract with the DOD.

Arlington then moved to remand the case to state court, contending that the ESI defendants did not satisfy the requirements of the federal officer removal statute. The lower court granted the motion, underscoring that ESI operated the TMOP as subcontractors, and that their interactions with the DOD were too loose, infrequent, and tangential to satisfy the “acting under” requirement.

The appellate panel disagreed, finding that the ESI defendants met their burden of showing that they were “acting under” the DOD. The opinion explained that the district court failed to address the other two requirements of the removal statute, possession of a colorable federal defense and a causal relationship between the government-directed conduct and the plaintiffs’ claims.

By contrast, the appellate tribunal found that the ESI defendants satisfied the additional requirements through demonstration of their contractual obligations to the DOD. In concluding that removal predicated on the federal officer statute was warranted, the court remarked that “judicial economy favors resolution of those questions without a time-consuming and costly remand.”

The ESI defendants are represented by Kobre & Kim LLP, and Arlington by Sanford Heisler Sharp LLP, The Cicala Law Firm PLLC, and Kaufman & Canoles P.C.