The United States of America et al. v. Walgreen Company

Filing 52

MEMORANDUM OPINION & ORDER...Defendant Walgreen's May 9, 2014 motion to dismiss the Amended Complaint is granted. The Clerk of Court shall enter judgment for defendant and close the case. (Signed by Judge Denise L. Cote on 8/18/2014) (gr)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
-------------------------------------- X
:
UNITED STATES OF AMERICA, et al.,
:
ex rel. FOX RX, INC.,
:
:
Plaintiffs,
:
:
-v:
:
WALGREEN COMPANY,
:
Defendant.
:
:
-------------------------------------- X

12 Civ. 7382 (DLC)
MEMORANDUM OPINION
& ORDER

APPEARANCES:
For relator Fox Rx, Inc.:
Michael I. Leonard
LEONARD LAW OFFICES
203 N. LaSalle, Suite 1620
Chicago, IL 60601
For defendant Walgreen Co.:
Stephen A. Warnke
ROPES & GRAY LLP
1211 Ave. of the Americas
New York, NY 10036
Emily J. Derr
David J. Derusha
ROPES & GRAY LLP
800 Boylston St.
Boston, MA 02199
DENISE COTE, District Judge:
Fox Rx, Inc., the corporate parent of Fox Insurance, Inc.
(together, “Fox”), has brought this qui tam action under the

federal False Claims Act, 31 U.S.C. § 3729 et seq. (“FCA”), and
twenty-six states’ and the District of Columbia’s false claims
statutes against Walgreen Co., a major nationwide pharmacy
(“Walgreens”).
Fox filed this action on October 1, 2012 on behalf of the
United States, the District of Columbia and twenty-six states.
A Pretrial Scheduling Order of March 25, 2014 required that any
amended complaint be filed by April 14, 2014, and provided that
plaintiff would have no further opportunity to amend.
the Amended Complaint (“AC”) on April 25.

Fox filed

The United States and

the other government jurisdictions have declined to intervene in
this action. 1
The AC contains thirty counts.

Counts I and II allege

false claims for payment to Medicare Part D and Medicaid,
respectively, pursuant to 31 U.S.C. § 3729(a)(1)(A).
alleges a violation of § 3729(a)(1)(B).

Count III

The remaining counts in

the thirty-count complaint plead violations of state law.

All

claims asserted on behalf of the State of Maryland were
voluntarily dismissed on May 1, 2014.
The defendant moved to dismiss the AC on May 9, 2014.

The

motion was fully submitted on June 27.
The Government submitted express notice that it and all other
jurisdictions but the State of Indiana had elected not to
intervene in this action. The State of Indiana has not advised
the Court that it wishes to intervene in this action.
1

2

The AC in this action mirrors, in all material respects,
the Second Amended Complaint Fox filed against Omnicare, Inc.,
NeighborCare, Inc., PharMerica Corp., and MHA Long Term Care
Network in an action filed February 10, 2014.

United States v.

Omnicare, Inc., 12cv275 (S.D.N.Y.) (DLC) (“Omnicare”).

In

particular, both the AC in this action and the SAC in Omnicare
allege substantially identical conduct: (1) defendants failed to
substitute generic drugs for brand-name drugs in states that
have laws mandating such substitution yet submitted, or caused
to be submitted, claims with a certain code in the “Dispense as
Written/Product Selection” field; and (2) defendants dispensed
drugs after the termination date of a national drug code in
states that have laws prohibiting pharmacies from dispensing
drugs beyond their shelf-life expiration dates.
On August 12, 2014, this Court granted the defendants’
motions to dismiss in Omnicare, holding that Fox failed to
adequately allege that any claim made, or caused to be made, by
defendants was false, or that defendants made, or caused to be
made, any false records or statements material to a false or
fraudulent claim.

See Omnicare, 2014 WL 3928780 (S.D.N.Y. Aug.

12, 2014) (“August 12 Opinion”).

The August 12 Opinion is

hereby incorporated by reference.

For the same reasons, Fox has

failed to state a claim under the FCA or analogous D.C. and
state statutes in this action.
3

CONCLUSION
Defendant Walgreens’s May 9, 2014 motion to dismiss the
Amended Complaint is granted.

The Clerk of Court shall enter

judgment for defendant and close the case.

SO ORDERED:
Dated:

New York, New York
August 18, 2014
__________________________________
DENISE COTE
United States District Judge

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