Cherokee Nation v. McKesson Corp.

• Decision Date: 29 March 2021
• Docket Number: Case No. CIV-18-056-RAW
• Parties: The CHEROKEE NATION, Plaintiff, v. MCKESSON CORPORATION; Cardinal Health, Inc.; Cardinal Health 110, LLC; AmerisourceBergen Drug Corp.; CVS Health Corporation ; CVS Pharmacy, Inc.; Oklahoma CVS Pharmacy, LLC; Walgreens Boots Alliance, Inc. ; Walgreen Co. ; Wal-Mart Stores, Inc., Defendants.
• Court: U.S. District Court — Eastern District of Oklahoma

529 F.Supp.3d 1225

The CHEROKEE NATION, Plaintiff,

v.MCKESSON CORPORATION; Cardinal Health, Inc.; Cardinal Health 110, LLC; AmerisourceBergen Drug Corp.; CVS Health Corporation ; CVS Pharmacy, Inc.; Oklahoma CVS Pharmacy, LLC; Walgreens Boots Alliance, Inc. ; Walgreen Co. ; Wal-Mart Stores, Inc., Defendants.

Case No. CIV-18-056-RAW

United States District Court, E.D. Oklahoma.

Signed March 29, 2021

Helen M. Maher, Pro Hac Vice, Shannon Prince, Pro Hac Vice, William S. Ohlemeyer, Pro Hac Vice, Boies Schiller Flexner, Armonk, NY, Ian M. Dumain, Pro Hac Vice, Cyrulnik Fattaruso, LLP, New York, NY, John C. Young, Cherokee Nation Attorney General's Office, Tahlequah, OK, Martin F. Cunniff, Pro Hac Vice, Richard W. Fields, Pro Hac Vice, Fields, PLLC, Washington, DC, Rossana Baeza, Pro Hac Vice, Stephen N. Zack, Pro Hac Vice, Tyler Ulrich, Pro Hac Vice, Boies Schiller & Flexner, Miami, FL, Bradley E. Beckworth, Trey Duck, Nix Patterson & Roach, LLP, Austin, TX, Curtis N. Bruehl, The Bruehl Law Firm, Edmond, OK, Michael Burrage, Randa Reeves, Whitten Burrage, Oklahoma City, OK, for Plaintiff The Cherokee Nation.

Alexander N. Ely, Pro Hac Vice, Emily Rae Woods, Pro Hac Vice, John J. DeBoy, Pro Hac Vice, Neil K. Roman, Pro Hac Vice, Timothy C. Hester, Pro Hac Vice, Jose E. Arvelo, Pro Hac Vice, Covington & Burling, LLP, Washington, DC, Stuart D. Campbell, Doerner Saunders Daniel & Anderson, Tulsa, OK, Kaylee Davis-Maddy, Michael English, Doerner Saunders Daniel & Anderson, Oklahoma City, OK, Micaela McMurrough, Pro Hac Vice, Covington & Burling, LLP, New York, NY, for Defendant McKesson Corporation.

Emily Renshaw Pistilli, Pro Hac Vice, Neelum J. Wadhwani, Pro Hac Vice, William Hawkins, Pro Hac Vice, Williams & Connolly, LLP, Washington, DC, James J. Proszek, Timothy Steven Posey, Hall Estill Hardwick Gable Golden & Nelson, Ryan A. Ray, Norman Wohlgemuth Chandler Jeter Barnett & Ray, Tulsa, OK, for Defendants Cardinal Health, Inc., Cardinal Health 110, LLC.

Charles Stanton Perry, Pro Hac Vice, Reed Smith, LLP, Houston, TX, Jennifer B. Jordan, Pro Hac Vice, Rachel B. Weil, Pro Hac Vice, Robert A. Nicholas, Pro Hac Vice, Shannon McClure, Pro Hac Vice, Thomas H. Suddath, Jr., Pro Hac Vice, Reed Smith, LLP, Philadelphia, PA, D. Michael McBride, III, Elliot P. Anderson, Crowe & Dunlevy, Susan E. Huntsman, US District Court, Tulsa, OK, for Defendant AmerisourceBergen Drug Corporation.

Alexandra Wang Miller, Pro Hac Vice, Eric R. Delinsky, Pro Hac Vice, Paul B. Hynes, Jr., Pro Hac Vice, Zuckerman Spaeder, LLP, Washington, DC, Conor B. O'Croinin, Pro Hac Vice, J. Michael Pardoe, Pro Hac Vice, Zuckerman Spaeder, LLP, Baltimore, MD, Horton, J.D., Pro Hac Vice, Richard A. Schirtzer, Pro Hac Vice, Quinn Emanuel Urquhart & Sullivan, Los Angeles, CA, Amy D. White, G. Calvin Sharpe, Phillips Murrah, PC, Oklahoma City, OK, for Defendants CVS Pharmacy, Inc., Oklahoma CVS Pharmacy, LLC.

Alex J. Harris, Pro Hac Vice, Bartlit Beck, LLP, Denver, CO, Don W. Danz, Coffey Senger & Woodard, PLLC, Steven E. Holden, Holden Litigation, Stuart P. Ashworth, US Department of Interior, Tulsa, OK, Kaspar Stoffelmayr, Pro Hac Vice, Robert B. Tannenbaum, Pro Hac Vice, Steven E. Derringer, Pro Hac Vice, Bartlit Beck, LLP, Chicago, IL, for Defendant Walgreen Co.

Christopher Lovrien, Pro Hac Vice, Claire E. Castles, Pro Hac Vice, Sarah G. Conway, Pro Hac Vice, Jones Day, Los Angeles, CA, Karen P. Hewitt, Pro Hac Vice, Jones Day, San Diego, CA, Larry D. Ottaway, Amy Sherry Fischer, Foliart Huff Ottaway & Bottom, Jordyn Cartmell, Mansell Engel & Cole, PC, Oklahoma City, OK, Laura Jane Durfee, Andrew Junker, Jones Day, Dallas, TX, Louis P. Gabel, Pro Hac Vice, Jones Day, Detroit, MI, Paula S. Quist, Pro Hac Vice, Jones Day, Chicago, IL, William G. Laxton, Jr., Pro Hac Vice, Jones Day, Washington, DC, Jason Scott Varnado, Jones Day, Houston, TX, for Defendant Wal-Mart Stores, Inc.

ORDER

Ronald A. White, United States District Judge Before the Court is Defendants McKesson Corporation, Cardinal Health, Inc., Cardinal Health 110, LLC, and AmerisourceBergen Drug Corp.’s (Distributors) Motion to Dismiss the Cherokee Nation's (the Nation) First Amended Complaint [Docket No. 146]. The Nation has filed an omnibus response to this motion and a motion filed by the pharmacy Defendants in this matter [Docket No. 159].¹ Distributors have filed a reply to the Nation's response [Docket No. 172].

In examining a motion to dismiss, the court accepts as true all well-pleaded facts² in the Complaint and construes those facts in the light most favorable to Plaintiffs. Western Watersheds Project v. Michael , 869 F.3d 1189, 1193 (10th Cir. 2017). To survive a Rule 12(b)(6) motion to dismiss, the Complaint "must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ " Iqbal , 556 U.S. at 678, 129 S.Ct. 1937 (quoting Twombly , 550 U.S. at 570, 127 S.Ct. 1955 ). Plaintiffs must nudge their "claims across the line from conceivable to plausible." Twombly , 550 U.S. at 570, 127 S.Ct. 1955. The well-pleaded facts must "permit the court to infer more than the mere possibility of misconduct." Id. at 679, 129 S.Ct. 1937.

The Tenth Circuit has held that the " Twombly / Iqbal standard is a middle ground between heightened fact pleading, which is expressly rejected, and allowing complaints that are no more than labels and conclusions or a formulaic recitation of the elements of a cause of action, which the Court stated will not do." Khalik v. United Air Lines , 671 F.3d 1188, 1191 (10th Cir. 2012) (citing Robbins v. Oklahoma , 519 F.3d 1242, 1247 (10th Cir. 2008) ). "In other words, Rule 8(a)(2) still lives. " Id. (emphasis added). "Under Rule 8, specific facts are not necessary; the statement need only give the defendant fair notice of what the claim is and the grounds upon which it rests." Burnett v. Mortg. Elec. Registration Sys., Inc. , 706 F.3d 1231, 1235-36 (10th Cir. 2013) (quoting Khalik , 671 F.3d at 1191 ).

BACKGROUND

The Nation instituted this action on January 19, 2018, in the District Court of Sequoyah County, Oklahoma. Defendants removed the case to this court on February 26, 2018. The United States Judicial Panel on Multidistrict Litigation transferred this case to the Northern District of Ohio as part of the national prescription opioid multidistrict litigation. In February 2020, the Multidistrict Litigation Panel remanded the case back to this court as part of a broad effort to resolve cases brought by certain types of plaintiffs—in this case, a Native American Tribe. The court currently has before it a pair of motions to dismiss filed by the Distributor Defendants and Pharmacy Defendants.

The First Amended Complaint encompasses eighty-seven pages and three hundred seventy paragraphs of allegations [Docket No. 136]. It would not be useful to attempt to summarize that document and its numerous allegations here. Put simply, the crux of the Nation's claims against Distributors is that they failed to combat the illegal diversion of prescription opiates to nonmedical users, contributing greatly to what has become a nationwide epidemic of opiate abuse, addiction, and overdoses. The Nation alleges four causes of action against Distributors: (1) Public Nuisance; (2) Negligence and Gross Negligence; (3) Unjust Enrichment; and (4) Civil Conspiracy. Distributors seek dismissal of each claim and rely on a wide range of grounds to support their positions.

ANALYSIS

Initially, the court recognizes the fact that the Northern District of Ohio has analyzed many of the issues presented in this Motion to Dismiss. The multidistrict litigation (MDL) court first issued a Report and Recommendation explicitly addressing claims brought by the Muscogee (Creek) Nation concerning claims of nuisance, negligence, negligence per se, unjust enrichment, and civil conspiracy against Distributors and other situated defendants. In re National Prescription Opiate Litigation , MDL No. 1:17-MD-02804, Case No. 1:18-OP-45459, 2019 WL 2468267 (N.D. Ohio April 1, 2019) (hereinafter Muscogee R&R ). The District Court adopted that Report and Recommendation almost in its entirety, with the exception being a claim related to negligence per se, in which the District Court concluded that the Muscogee (Creek) Nation was not the intended beneficiary of the statutes upon which its claim was founded. In re National Prescription Opiate Litigation , MDL No. 1:17-MD-02804, Case No. 1:18-OP-45459, 2019 WL 3737023, at *12–13 (N.D. Ohio June 13, 2019) (hereinafter Muscogee Order ). These rulings are not binding upon this court; however, to the extent they interpret and apply Oklahoma law and common law applicable to this case, they are persuasive authority that the court considers and to which it will not turn a blind eye.³

I. Parens Patriae Standing

The Nation seeks to bring its claims pursuant to its own proprietary interests as well as the doctrine of parens patriae , which allows sovereign entities to bring suits "to prevent or repair harm to its ‘quasi-sovereign’ interests." BP America, Inc. v. Oklahoma ex rel. Edmondson , 613 F.3d 1029, 1031 n.* (10th. Cir. 2010) (quoting Hawaii v. Standard Oil Co. of California , 405 U.S. 251, 257, 92 S.Ct. 885, 31 L.Ed.2d 184 (1972) ). To bring a claim under the doctrine of parens patriae , a sovereign must: (1) "articulate an interest apart from the interests of particular private parties, i.e. , the [sovereign] must be more than a nominal party"; (2) "express a quasi-sovereign interest"; and (3) allege an "injury to a sufficiently substantial segment of its population." Alfred L. Snapp & Son, Inc. v. Puerto Rico , 458 U.S. 592, 607, 102 S.Ct. 3260, 73 L.Ed.2d 995 (1982). In the context of tribal actions, the Northern District of Oklahoma has held that "a tribe must show that all or a substantial portion of its members have suffered an injury."⁴ Quapaw Tribe of Oklahoma v. Blue Tee Corp. , 653 F. Supp. 2d 1166, 1180 (N.D. Okla. 2009). The Supreme...