Last week, the 4th Circuit Court of Appeals ruled against several drug stores in a lawsuit brought by the West Virginia Attorney General, Darrell McGraw. As such, the drug retailers lost their bid to have their case heard by a federal court and instead, must have their action heard before the state court, under West Virginia law.
The defendants in the case include CVS Pharmacy, Kmart, Kroger, Wal-Mart, Walgreens and Target, who alleged that the claim as a "disguised class action," reports WOWK News.
The lawsuit alleges that the store pharmacies charge a higher price for certain generic drug prescriptions than otherwise allowed by the state. According to Bloomberg News, the state of West Virginia is seeking disgorgement and other civil penalties in the lawsuit, which alleges that the defendant pharmacies aren't giving their consumers the full benefit of the lower wholesale costs of refilling their prescriptions with generic substitutes. The West Virginia law actually requires the pharmacies to fill a prescription with a generic drug, if available, and pass the savings on to the consumer.
While the defendants argued that the claim was really a class action, the lawsuit was brought under the West Virginia Consumer Protection Act and the state statutes regulating the pharmacy industry. Neither of those statutes, according to the 4th Circuit opinion, includes provisions for a typical class action.
Not all of the 4th Circuit judges agreed, however. In his dissent, Judge Ronald Lee Gilman insisted that the case belonged in federal court as it had elements of a class action.
"There is a saying that if something looks like a duck, walks like a duck, and quacks like a duck, it is probably a duck," Gilman said.