Case 3:17-cv-00508-JHM-CHL Document 1 Filed 08/21/17 Page 1 of 70 PageID #: 1

THE UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF KENTUCKY
LOUISVILLE DIVISION
)
LOUISVILLE/JEFFERSON COUNTY
)
METRO GOVERNMENT
)
)
)
)
Plaintiff, )
)
v.
)
)
AMERISOURCEBERGEN DRUG
)
CORPORATION;
)
)
CARDINAL HEALTH, INC.; and
)
)
)
)
)
)
McKESSON CORPORATION,
)
)
)
Defendants. )
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)

3:17-CV-508-JHM
CIVIL ACTION NO. ___________

COMPLAINT

Complaint for Public Nuisance;
Violations of Racketeer Influenced and
Corrupt Organizations Act, 18 U.S.C. §§
1961 et seq.; for Damages under
Kentucky Revised Statutes § 446.070, and
Negligence.

JURY TRIAL DEMANDED AND
ENDORSED HEREON

 Case 3:17-cv-00508-JHM-CHL Document 1 Filed 08/21/17 Page 2 of 70 PageID #: 2

Plaintiff, LOUISVILLE/JEFFERSON COUNTY METRO GOVERNMENT (“Plaintiff”
or “Louisville Metro”), brings this action against Defendants, AmerisourceBergen Drug
Corporation, Cardinal Health, Inc., and McKesson Corporation (collectively, “Defendants”), for
public nuisance; for violations of the Racketeer Influenced and Corrupt Organizations Act, 18
U.S.C. §§ 1961 et seq.; for damages under Kentucky Revised Statutes § 446.070, and for
negligence. Plaintiff alleges that certain DEA registered distributors unlawfully sold millions of
prescription opioids into Louisville/Jefferson County Metro (“Louisville Metro Area”). See
Masters Pharm., Inc. v. Drug Enf't Admin., 861 F.3d 206 (D.C. Cir. 2017). Plaintiff asserts that
such unlawful conduct resulted in the foreseeable, widespread diversion of prescription opioids
into the illicit market, 1970 U.S.C.C.A.N. §§ 4566, 4571-72, creating a serious public health and
safety crisis in Louisville Metro Area involving opioid abuse, addiction, morbidity and mortality,
and is a public nuisance.
Plaintiff alleges as follows:
I. PARTIES
A. Plaintiff.
1.

Plaintiff is authorized to bring the causes of action brought herein. Plaintiff is a

Kentucky Consolidated Local Government, under Kentucky Revised Statutes Chapter 67C,
located in the Commonwealth of Kentucky, and as such has “all powers and privileges that cities
of the first class and their counties” as well as “powers and privileges as the government may be
authorized to exercise under the Constitution and general laws of the Commonwealth of
Kentucky.” KY. REV. STAT. ANN. § 67C.101(2). See also KY. REV. STAT. ANN. § 82.081 (“Each
city shall constitute a corporation, with capacity to sue and be sued . . . .); KY. REV. STAT. ANN. §
83.420 (“In its corporate capacity the city may contract and be contracted with and may sue and

2

 Case 3:17-cv-00508-JHM-CHL Document 1 Filed 08/21/17 Page 3 of 70 PageID #: 3

be sued.”). Included among its powers, Plaintiff is specifically authorized to “prevent, abate, and
remove nuisances.” KY. REV. STAT. ANN. § 67C.101(3)(i). Accord KY. REV. STAT. ANN. (county
fiscal court charged with “abatement of public nuisances”); KY. REV. STAT. ANN. § 67C.141
(powers of county fiscal court conferred upon consolidated local government); Louisville Metro
Code of Ordinances § 96.17 (“Nothing herein shall be construed to prohibit or impair the right of
the Metro Government or any of its agencies to seek abatement of public nuisances of any kind
by the initiation of civil actions in the nature of injunctive relief, or otherwise.”).
2.

Plaintiff also has standing to bring claims under the federal RICO statute. 18

U.S.C.A. § 1961(3) (“person” includes both municipal corporations and counties); 18 U.S.C.A. §
1964 (“persons” have standing).
B. Defendants.
3.

Defendant, AMERISOURCEBERGEN DRUG CORPORATION, is registered

with the Kentucky Secretary of State as a Delaware corporation which may be served through its
registered agent for service of process, CT Corporation System, 306 West Main Street, Suite
512, Frankfort, KY 40601. AMERISOURCEBERGEN DRUG CORPORATION’s principal
place of business is located in Chesterbrook, Pennsylvania. AMERISOURCEBERGEN DRUG
CORPORATION operates distribution centers in Kentucky, including in Louisville and, until
recently, in Paducah, Kentucky.
4.

Defendant, CARDINAL HEALTH, INC. is an Ohio corporation, with its

principal office located in Dublin, Ohio. Under the name “Cardinal Health,” Defendant performs
distribution operations in Kentucky, including through a Radcliffe, Kentucky call center.1

1

Cardinal Health has registered numerous of its subsidiaries for business in Kentucky, including
CARDINAL HEALTH 100, Inc., CARDINAL HEALTH 108, LLC, CARDINAL HEALTH
110, LLC, CARDINAL HEALTH 113, LLC, CARDINAL HEALTH 132, LLC, CARDINAL

3

 Case 3:17-cv-00508-JHM-CHL Document 1 Filed 08/21/17 Page 4 of 70 PageID #: 4

5.

Defendant, McKESSON CORPORATION, is registered with the Kentucky

Secretary of State as a Delaware corporation which may be served through its registered agent
for service of process, Corporation Service Company, 421 West Main Street, Frankfort,
Kentucky 40601. McKESSON CORPORATION has its principal place of business located in
San Francisco, California. McKesson operates distribution centers in Kentucky, including in
Louisville, Kentucky.
6.

Defendants, collectively referred to herein sometimes as “Defendant Wholesale

Distributors” or “Defendants,” are in the chain of distribution of prescription opioids, namely
hydrocodone and oxycodone. Kentucky is in the midst of a public health crisis stemming from
the flood of opioids pouring into, inter alia, Louisville Metro Area.
7.

In 1970, Congress devised a “closed” chain of distribution specifically designed

to prevent the diversion of legally produced controlled substances into the illicit market.
Gonzales v. Raich, 545 U.S. 1, 12–14 (2005); 21 U.S.C. § 801(2); 21 U.S.C. §§ 821-824, 827,
880; H.R. Rep. No. 91-1444, 1970 U.S.C.C.A.N. 4566, 4572 (Sept. 10, 1970). This closedsystem imposes specific duties upon wholesale distributors to monitor, identify, halt and report
“suspicious orders” of controlled substances. 21 C.F.R. § 1301.74; Masters Pharm., Inc. v. Drug
Enf't Admin., 861 F.3d 206 (D.C. Cir. 2017).
8.

As discussed infra, it has become abundantly clear that the Defendant Wholesale

Distributors universally failed to comply with federal law. Plaintiff alleges the unlawful conduct

HEALTH 200, LLC, CARDINAL HEALTH 245, CARDINAL HEALTH 248, CARDINAL
HEALTH 404, LLC, and CARDINAL HEALTH 5, LLC. The registered agent for service of
process for substantially all registered subsidiaries is CT Corporation System, 306 West Main
Street, Suite 512, Frankfort, KY 40601.

4

 Case 3:17-cv-00508-JHM-CHL Document 1 Filed 08/21/17 Page 5 of 70 PageID #: 5

by the Defendant Wholesale Distributors is responsible for the volume of prescription opioids
plaguing our community.
9.

However, the data which reveals the identity of each wrongdoer is hidden from

public view in the DEA’s confidential ARCOS database. Madel v. USDOJ, 784 F.3d 448 (8th
Cir. 2015).

Neither the DEA2 nor the Defendant Wholesale Distributors3 will voluntarily

disclose the data necessary to identify with specificity the transactions which will form the
evidentiary basis for the claims asserted herein.
10.

Consequently, Plaintiff has named inter alia three (3) wholesale distributors (i.e.,

AmerisourceBergen Drug Corporation, Cardinal Health, Inc., and McKesson Corporation) which
dominate 85% of the market share for the distribution of prescription opioids. The “Big 3” are
Fortune 500 corporations listed on the New York Stock Exchange whose principal business is
the nationwide wholesale distribution of prescription drugs. See Fed. Trade Comm'n v. Cardinal
Health, Inc., 12 F. Supp. 2d 34, 37 (D.D.C. 1998) (describing Cardinal Health, Inc., McKesson
Corporation, and AmerisourceBergen Drug Corporation predecessors).

Each has been

investigated and/or fined by the DEA for the failure to report suspicious orders. Plaintiff has
reason to believe each has engaged in unlawful conduct which resulted in the diversion of
prescription opioids into our community and that discovery will likely reveal others who

2

See Declaration of Katherine L. Myrick, Chief, Freedom of Information (FOI)/Privacy Act Unit
(“SARF”), FOI, Records Management Section (“SAR”), Drug Enforcement Administration
(DEA), United States Department of Justice (DOJ), Madel v. USDOJ, Case 0:13-cv-02832PAM-FLN, (Document 23) (filed 02/06/14), attached hereto as Exhibit 1 (noting that ARCOS
data is “kept confidential by the DEA”).
3

See Declaration of Tina Lantz, Cardinal Health VP of Sales Operation, Madel v. USDOJ, Case
0:13-cv-02832-PAM-FLN, (Document 93) (filed 11/02/16), attached hereto as Exhibit 2
(“Cardinal Health does not customarily release any of the information identified by the DEA
notice letter to the public, nor is the information publicly available. Cardinal Health relies on
DEA to protect its confidential business information reported to the Agency.”).

5

 Case 3:17-cv-00508-JHM-CHL Document 1 Filed 08/21/17 Page 6 of 70 PageID #: 6

likewise engaged in unlawful conduct. Plaintiff names each of the “Big 3” herein as defendants
and place the industry on notice that Plaintiff is taking action to abate the public nuisance
plaguing the community. Plaintiff, to more fully identify the volume of the prescription opioids
unlawfully sold into our community, will request expedited discovery pursuant to Rule 26(d) of
the Federal Rules of Civil Procedure to secure the data, including the ARCOS data.
II. JURISDICTION AND VENUE
11.

This Court has subject matter jurisdiction over this action pursuant to 28 U.S.C. §

1331 because Plaintiff’s claims hinging on 21 U.S.C. § 823 and 21 C.F.R. 1301.74 necessarily
raise a federal issue which is actually disputed, substantial, and capable of resolution in federal
court without disrupting the federal-state balance approved by Congress. See Gunn v. Minton,
568 U.S. 251 (2013). This Court further has subject matter jurisdiction pursuant 28 U.S.C. §
1331 because Plaintiff’s RICO claims also raise a federal question. This Court has supplemental
jurisdiction over Plaintiff’s state law claims pursuant to 28 U.S.C. § 1367 because those claims
are so related to Plaintiff’s federal claims that they form part of the same case or controversy.
12.

This Court also has jurisdiction over this action in accordance with 28 U.S.C. §

1332(a), because the Plaintiff is a “citizen” of the Commonwealth of Kentucky and the named
Defendants are citizens of different states, and the amount in controversy exceeds the sum or
value of $75,000, exclusive of interest and costs.
13.

This Court has personal jurisdiction over Defendants because they conduct

business in Kentucky, purposefully direct and/or directed their actions toward Kentucky,
consented to be sued in Kentucky by registering an agent for service of process, and have the
requisite minimum contacts with Kentucky necessary to constitutionally permit the Court to
exercise jurisdiction.

6

 Case 3:17-cv-00508-JHM-CHL Document 1 Filed 08/21/17 Page 7 of 70 PageID #: 7

14.

Venue is proper in the Western District of Kentucky pursuant to 28 U.S.C. § 1391

and 18 U.S.C. §1965, as well as the District’s local rules, because a substantial part of the events
or omissions giving rise to the claim occurred in this District and each Defendant transacted
affairs and conducted activity that gave rise to the claim of relief in this District. 28 U.S.C. §
1391(b); 18 U.S.C. §1965(a); Joint Civil Local Rules for Eastern and Western District of
Kentucky, Rule 3.2.
III. FACTUAL BACKGROUND
15.

Opioid analgesics hydrocodone and oxycodone are widely diverted and

improperly used, and the widespread use of these drugs has resulted in a national epidemic of
opioid overdose deaths and addictions.4 The epidemic is “directly related to the increasingly
widespread misuse of powerful opioid pain medications.”5
16.

Defendant Wholesale Distributors owe a duty under both federal law (21 U.S.C. §

823, 21 C.F.R. 1301.74) and Kentucky law (Kentucky Revised Statute § 218A.170), to monitor,
detect, investigate, refuse to fill, and report suspicious orders of prescription opioids originating
from Louisville Metro Area well as those orders which Defendants knew or should have known
were likely to be diverted into Louisville Metro Area.
17.

The foreseeable harm from a breach of this duty is the diversion of prescription

opioids for nonmedical purposes.
18.

Each Defendant Wholesale Distributor repeatedly and purposefully breached its

duties under state and federal law, which is a direct and proximate cause of, and/or substantial

4

See Nora D. Volkow, M.D. and A. Thomas McLellan, Ph.D., Opioid Abuse in Chronic Pain –
Misconceptions and Mitigation Strategies, NEW ENG. J. MED., 374;1253-63 (March 31, 2016).

5

Special Report, FDA Commissioner Robert M. Califf, M.D., A Proactive Response to
Prescription Opioid Abuse, NEW ENGL. J. MED., 374;1480-85 (April 14, 2016).

7

 Case 3:17-cv-00508-JHM-CHL Document 1 Filed 08/21/17 Page 8 of 70 PageID #: 8

factor leading to, the widespread diversion of prescription opioids for nonmedical purposes into
Louisville Metro Area.
19.

The unlawful diversion of prescription opioids is a direct and proximate cause of

and/or substantial factor contributing to the opioid epidemic, prescription opioid abuse,
addiction, morbidity and mortality in Kentucky and in Louisville Metro Area. This diversion and
the epidemic are direct causes of harms incurred by Plaintiff itself.
20.

The opioid epidemic in Kentucky, including inter alia in Louisville Metro Area,

remains an immediate hazard to public health and safety.
21.

The opioid epidemic in Louisville Metro Area, is a temporary and continuous

public nuisance and remains unabated.
22.

Plaintiff brings this civil action against the Defendant Wholesale Distributors

seeking inter alia damages necessary to recoup the costs incurred by Louisville Metro as a result
of the nuisance, damages necessary to eliminate the hazard to public health and safety as well as
abatement of the public nuisance, including an abatement fund, and a monetary award.
23.

Plaintiff further brings this action to recover inter alia damages incurred as a

result of Defendants’ RICO enterprise and Defendants’ negligence.
A. Defendants Have Affirmative Duties to Maintain Effective Controls against
Diversion of these Dangerous Drugs for Non-Legitimate, Non-Medical Purposes.
24.

Defendant Wholesale Distributors are “one of the key components of the

distribution chain. If the closed system is to function properly … distributors must be vigilant in
deciding whether a prospective customer can be trusted to deliver controlled substances only for
lawful purposes. This responsibility is critical, as … the illegal distribution of controlled

8

 Case 3:17-cv-00508-JHM-CHL Document 1 Filed 08/21/17 Page 9 of 70 PageID #: 9

substances has a substantial and detrimental effect on the health and general welfare of the
American people.”6
1. Under both federal law and Kentucky law and regulations, Defendants
are required to operate a closed system to prevent the diversion of opioids
for non-medical purposes.
25.

Opioids are a Schedule II controlled substance under Kentucky law. See 902 KY.

ADMIN. REGS. 55:020. Opioids are categorized as “Schedule II” drugs because they have a “high
potential for abuse” and the potential to cause “severe psychological or physiological
dependence.” KY. REV. STAT. ANN. § 218A.060; 21 U.S.C. § 812(b)(2)(A, C).
26.

Each Defendant has an affirmative duty under federal and Kentucky law to act as

a gatekeeper guarding against the diversion of the highly addictive, dangerous opioid drugs.
Federal law requires that Distributors of Schedule II drugs, including opioids, must maintain
“effective control against diversion of particular controlled substances into other than legitimate
medical, scientific, and industrial channels.” 21 U.S.C. § 823(b)(1). Kentucky’s minimum
requirements for wholesale drug distribution mandate that “all sales and distributions shall be in
accordance with . . . the federal controlled substances laws . . . .” KY. REV. STAT. ANN. §
218A.170.

Kentucky Board of Pharmacy licensure requirements mandate that a wholesale

distributor “continue[] to demonstrate acceptable operational procedures, including . . .
compl[iance] with all DEA regulations.” 201 KY. ADMIN. REG. 2:105 §2(4)(d).

6

See U.S. Department of Justice, Drug Enforcement Administration, letter to Cardinal Health
dated September 27, 2006 (“This letter is being sent to every commercial entity in the United
States registered with the Drug Enforcement Agency (DEA) to distribute controlled substances.
The purpose of this letter is to reiterate the responsibilities of controlled substance distributors in
view of the prescription drug abuse problem our nation currently faces.”) (a copy of letter is filed
at Cardinal Health, Inc. v. Holder, No. 1:12-cv-00185-RBW, Doc. 14-51 (filed therein in U.S.
D.C. on February 20, 2012)).

9

 Case 3:17-cv-00508-JHM-CHL Document 1 Filed 08/21/17 Page 10 of 70 PageID #: 10

27.

Federal regulations impose a non-delegable duty upon wholesale drug distributors

to “design and operate a system to disclose to the registrant suspicious orders of controlled
substances. The registrant [distributor] shall inform the Field Division Office of the
Administration in his area of suspicious orders when discovered by the registrant. Suspicious
orders include orders of unusual size, orders deviating substantially from a normal pattern, and
orders of unusual frequency.” 21 C.F.R. § 1301.74(b).
28.

In addition to reporting all suspicious orders, distributors must also stop shipment

on any order which is flagged as suspicious and only ship orders which were flagged as
potentially suspicious if, after conducting due diligence, the distributor can determine that the
order is not likely to be diverted into illegal channels. See Southwood Pharm., Inc., 72 Fed. Reg.
36,487, 36,501 (Drug Enf’t Admin. July 3, 2007); Masters Pharm., Inc. v. Drug Enf’t Admin.,
861 F.3d 206 (D.C. Cir. 2017). Regardless, all flagged orders must be reported. Id.
29.

These prescription drugs are regulated for the purpose of providing a “closed”

system intended to reduce the widespread diversion of these drugs out of legitimate
channels into the illicit market, while at the same time providing the legitimate drug industry
with a unified approach to narcotic and dangerous drug control.7
30.

As wholesale drug distributors, each Defendant was required under Kentucky law

to first be licensed by the Kentucky Cabinet for Health and Family Services. KY. REV. STAT.
ANN. § 218A.150. To receive and maintain this license, each of the Defendant Wholesale
Distributors assumed a duty to comply with “all applicable federal and state laws and regulations
relating to controlled substances.” KY. REV. STAT. ANN. § 218A.160(1)(a).

7

See 1970 U.S.C.C.A.N. 4566, 4571-72.

10

 Case 3:17-cv-00508-JHM-CHL Document 1 Filed 08/21/17 Page 11 of 70 PageID #: 11

31.

Each Defendant was further required to be licensed by the Kentucky Board of

Pharmacy. KY. REV. STAT. ANN. § 315.402. To receive and maintain this license, each of the
Defendant Wholesale Distributors assumed a duty to “demonstrates or continues to demonstrate
acceptable operational procedures, including . . . compl[iance] with all DEA regulations.” 201
KY. ADMIN. REGS. 2:105 §2(4)(d).
32.

Each Defendant was further required to register with the DEA, pursuant to the

federal Controlled Substance Act. See 21 U.S.C. § 823(b), (e); 28 C.F.R. § 0.100. Each of the
Defendant Wholesale Distributors is a “registrant” as a wholesale distributor in the chain of
distribution of Schedule II controlled substances with a duty to comply with all security
requirements imposed under that statutory scheme. Those requirements are adopted and
incorporated into Kentucky law. KY. REV. STAT. ANN. § 218A.170(4); KY. REV. STAT. ANN. §
218A.160(1)(a); 902 KY. ADMIN. REGS. 55:010(h)(2)(b); 201 KY. ADMIN. REGS. 2:105 §2(4)(d).
33.

Kentucky has declared that “[t]he regulation of controlled substances in this

Commonwealth is important and necessary for the preservation of public safety and public
health.” KY. REV. STAT. ANN. § 218A.005(1). Further, the Kentucky legislature has declared
that “effective control and regulation” of all “persons who are required to obtain a license,
certificate, or permit from the Board of Pharmacy, whether located in or outside the
Commonwealth, that distribute, manufacture, or sell drugs within the Commonwealth” is
necessary in order to “promote, preserve, and protect public health, safety, and welfare.” KY.
REV. STAT. ANN. § 315.005. Kentucky Board of Pharmacy regulations state that “[a] wholesale
distributor shall not . . . operate in a manner that endangers the public health.” 201 KY. ADMIN.
REG. 2:105 §7.

11

 Case 3:17-cv-00508-JHM-CHL Document 1 Filed 08/21/17 Page 12 of 70 PageID #: 12

2. Defendants were at all relevant times on notice of their duties vis-à-vis
suspicious opioid orders.
34.

“Suspicious orders” include orders of an unusual size, orders of unusual

frequency or orders deviating substantially from a normal pattern. See 21 C.F.R. 1301.74(b).
These criteria are disjunctive and are not all inclusive. For example, if an order deviates
substantially from a normal pattern, the size of the order does not matter and the order should be
reported as suspicious. Likewise, a wholesale distributor need not wait for a normal pattern to
develop over time before determining whether a particular order is suspicious. The size of an
order alone, regardless of whether it deviates from a normal pattern, is enough to trigger the
wholesale distributor’s responsibility to report the order as suspicious. The determination of
whether an order is suspicious depends not only on the ordering patterns of the particular
customer but also on the patterns of the entirety of the wholesale distributor’s customer base and
the patterns throughout the relevant segment of the wholesale distributor industry.
35.

Different entities supervise the discrete links in the chain that separate a consumer

from a controlled substance. Statutes and regulations carefully define each participant's role and
responsibilities. See Brief for Healthcare Distribution Management Association8 (HDMA) and
National Association of Chain Drug Stores9 (NACDS) as Amici Curiae in Support of Neither
Party, Masters Pharmaceuticals, Inc. v. U.S. Drug Enforcement Admin., 2016 WL 1321983, *22
(April 4, 2016, filed in D.C. Cir.) (hereinafter “Brief for HDMA and NACDS”).
8

The Healthcare Distribution Management Association (HDMA or HMA) is a national, not-forprofit trade association that represents the nation’s primary, full-service healthcare distributors
whose membership includes, among others: AmerisourceBergen Drug Corporation, Cardinal
Health, Inc., and McKesson Corporation.
9

The National Association of Chain Drug Stores (NACDS) is a national, not-for-profit trade
association that represents traditional drug stores and supermarkets and mass merchants with
pharmacies whose membership includes, among others: Walgreen Company, CVS Health, Rite
Aid Corporation and Walmart.

12

 Case 3:17-cv-00508-JHM-CHL Document 1 Filed 08/21/17 Page 13 of 70 PageID #: 13

36.

The Defendant Wholesale Distributors have admitted that they are responsible for

reporting suspicious orders.10
37.

The DEA sent a letter to each of the Defendant Wholesale Distributors on

September 27, 2006, warning that it would use its authority to revoke and suspend registrations
when appropriate. The letter expressly states that a distributor, in addition to reporting
suspicious orders, has a “statutory responsibility to exercise due diligence to avoid filling
suspicious orders that might be diverted into other than legitimate medical, scientific, and
industrial channels.”11 The letter also instructs that “distributors must be vigilant in deciding
whether a prospective customer can be trusted to deliver controlled substances only for lawful
purposes.”12 The DEA warns that “even just one distributor that uses its DEA registration to
facilitate diversion can cause enormous harm.”13
38.

The DEA sent a second letter to each of the Defendant Wholesale Distributors on

December 27, 2007.14 This letter reminds the Defendant Wholesale Distributors of their statutory
and regulatory duties to “maintain effective controls against diversion” and “design and operate a

10

See Brief for HDMA and NACDS, 2016 WL 1321983, *4, Masters Pharmaceuticals, Inc. v.
U.S. Drug Enforcement Admin. (regulations “in place for more than 40 years require distributors
to report suspicious orders of controlled substances to DEA based on information readily
available to them (e.g., a pharmacy’s placement of unusually frequent or large orders).”).
11

Letter from Joseph T. Rannazzisi, Deputy Assis. Admin., Office of Diversion Control, to
Cardinal Health (Sept. 27, 2006), at page 2 (discussing 21 U.S.C. § 823(e)) (a copy of letter is
filed at Cardinal Health, Inc. v. Holder, No. 1:12-cv-00185-RBW, Doc. 14-51 (filed in U.S.
D.C. on February 20, 2012)).

12

Id., at page 1.

13

Id., at page 2.

14

See Letter from Joseph T. Rannazzisi, Deputy Assis. Admin., Office of Diversion Control, to
Cardinal Health (Dec. 27, 2007) (a copy of letter is filed at Cardinal Health, Inc. v. Holder, No.
1:12-cv-00185-RBW, Doc. 14-8 (filed in U.S. D.C. on February 20, 2012)).

13

 Case 3:17-cv-00508-JHM-CHL Document 1 Filed 08/21/17 Page 14 of 70 PageID #: 14

system to disclose to the registrant suspicious orders of controlled substances.”15 The letter
further explains:
The regulation also requires that the registrant inform the local DEA
Division Office of suspicious orders when discovered by the registrant. Filing a
monthly report of completed transactions (e.g., “excessive purchase report” or
“high unity purchases”) does not meet the regulatory requirement to report
suspicious orders. Registrants are reminded that their responsibility does not end
merely with the filing of a suspicious order report. Registrants must conduct an
independent analysis of suspicious orders prior to completing a sale to determine
whether the controlled substances are likely to be diverted from legitimate
channels. Reporting an order as suspicious will not absolve the registrant of
responsibility if the registrant knew, or should have known, that the controlled
substances were being diverted.
The regulation specifically states that suspicious orders include orders of
unusual size, orders deviating substantially from a normal pattern, and orders of
an unusual frequency. These criteria are disjunctive and are not all inclusive. For
example, if an order deviates substantially from a normal pattern, the size of the
order does not matter and the order should be reported as suspicious. Likewise, a
registrant need not wait for a “normal pattern” to develop over time before
determining whether a particular order is suspicious. The size of an order alone,
whether or not it deviates from a normal pattern, is enough to trigger the
registrant’s responsibility to report the order as suspicious. The determination of
whether an order is suspicious depends not only on the ordering patterns of the
particular customer, but also on the patterns of the registrant’s customer base and
the patterns throughout the segment of the regulated industry.
Registrants that rely on rigid formulas to define whether an order is
suspicious may be failing to detect suspicious orders. For example, a system that
identifies orders as suspicious only if the total amount of a controlled substance
ordered during one month exceeds the amount ordered the previous month by a
certain percentage or more is insufficient. This system fails to identify orders
placed by a pharmacy if the pharmacy placed unusually large orders from the
beginning of its relationship with the distributor. Also, this system would not
identify orders as suspicious if the order were solely for one highly abused
controlled substance if the orders never grew substantially. Nevertheless,
ordering one highly abused controlled substance and little or nothing else deviates
from the normal pattern of what pharmacies generally order.
When reporting an order as suspicious, registrants must be clear in their
communication with DEA that the registrant is actually characterizing an order as
suspicious. Daily, weekly, or monthly reports submitted by registrant indicating

15

Id.

14

 Case 3:17-cv-00508-JHM-CHL Document 1 Filed 08/21/17 Page 15 of 70 PageID #: 15

“excessive purchases” do not comply with the requirement to report suspicious
orders, even if the registrant calls such reports “suspicious order reports.”
Lastly, registrants that routinely report suspicious orders, yet fill these
orders without first determining that order is not being diverted into other than
legitimate medical, scientific, and industrial channels, may be failing to maintain
effective controls against diversion. Failure to maintain effective controls against
diversion is inconsistent with the public interest as that term is used in 21 USC
823 and 824, and may result in the revocation of the registrant’s DEA Certificate
of Registration.16
Finally, the DEA letter references the final order issued in Southwood Pharmaceuticals, Inc., 72
FR 36487 (2007) [2007 WL 1886484], which discusses the obligation to report suspicious orders
and “some criteria to use when determining whether an order is suspicious.”17
39.

Defendant Wholesale Distributors “have not only statutory and regulatory

responsibilities to detect and prevent diversion of controlled prescription drugs, but undertake
such efforts as responsible members of society.”18
40.

Defendant Wholesale Distributors knew they were required to monitor, detect,

report, and refuse to fill suspicious orders. Industry compliance guidelines established by the
Healthcare Distribution Management Association, the trade association of pharmaceutical
distributors, explain that distributors are “[a]t the center of a sophisticated supply chain” and
therefore “are uniquely situated to perform due diligence in order to help support the security of
the controlled substances they deliver to their customers.” The guidelines set forth recommended
steps in the “due diligence” process, and note in particular: If an order meets or exceeds a
distributor’s threshold, as defined in the distributor’s monitoring system, or is otherwise
16

Id.

17

Id.

18

See Amicus Curiae Brief of Healthcare Distribution Management Association in Support of
Appellant Cardinal Health, Inc., Cardinal Health, Inc. v. United States Dept. Justice, 2012 WL
1637016, *2 (C.A. D.C.) (May 9, 2012).

15

 Case 3:17-cv-00508-JHM-CHL Document 1 Filed 08/21/17 Page 16 of 70 PageID #: 16

characterized by the distributor as an order of interest, the distributor should not ship to the
customer, in fulfillment of that order, any units of the specific drug code product as to which the
order met or exceeded a threshold or as to which the order was otherwise characterized as an
order of interest.
3. At all relevant times, each Defendant was acting under a duty to guard
against the diversion of prescription opioids for non-medical purposes.
41.

Each of the Defendant Wholesale Distributors sold prescription opioids, including

hydrocodone and/or oxycodone, to retailers in Louisville Metro Area and/or to retailers from
which Defendants knew drugs were likely to be delivered and/or diverted into Louisville Metro
Area.
42.

Defendant Wholesale Distributors owe a duty to maintain effective controls to

prevent diversion in Louisville Metro Area, including a duty to monitor, detect, report, and
refuse to fill suspicious orders of prescription opioids originating from Louisville Metro Area
and/or orders of prescription opioids which Defendants knew or should have known were likely
to be delivered and/or diverted into Louisville Metro Area.
43.

Defendant Wholesale Distributors owe a duty to detect suspicious orders of

prescription opioids originating from Louisville Metro Area and/or orders of prescription opioids
which Defendants knew or should have known were likely to be delivered and/or diverted into
Louisville Metro Area.
44.

Defendant Wholesale Distributors owe a duty to investigate suspicious orders of

prescription opioids originating from Louisville Metro Area and/or orders of prescription opioids
which Defendants knew or should have known were likely to be delivered and/or diverted into
Louisville Metro Area. See Masters Pharmaceuticals, Inc.; Decision and Order, 80 FR 5541801, 55477 (September 15, 2015).

16

 Case 3:17-cv-00508-JHM-CHL Document 1 Filed 08/21/17 Page 17 of 70 PageID #: 17

45.

Defendant Wholesale Distributors owe a duty to refuse suspicious orders of

prescription opioids originating from Louisville Metro Area and/or orders of prescription opioids
which Defendants knew or should have known were likely to be delivered and/or diverted into
Louisville Metro Area.
46.

Defendant Wholesale Distributors owe a duty to report suspicious orders of

prescription opioids originating from Louisville Metro Area and/or orders of prescription opioids
which Defendants knew or should have known were likely to be delivered and/or diverted into
Louisville Metro Area.
47.

Defendant Wholesale Distributors owe a duty to maintain effective controls

against the diversion of prescription opioids into illicit markets in Louisville Metro Area.
48.

The foreseeable harm resulting from a breach of these duties is the diversion of

prescription opioids for nonmedical purposes.
49.

The foreseeable harm resulting from the diversion of prescription opioids for

nonmedical purposes is abuse, addiction, morbidity and mortality in Louisville Metro Area, and
the damages caused thereby.
B. Deliberately, Knowingly, and for Profit, Defendants Breached Their Duties.
1. Defendant Wholesale Distributors’ Compliance with their legal duties is
critical, particularly considering the sharp increase in, and large numbers
of, opioid prescriptions.
50.

Because distributors handle such large volumes of controlled substances, and are

the first major line of defense in the movement of legal pharmaceutical controlled substances
from legitimate channels into the illicit market, it is incumbent on distributors to maintain

17

 Case 3:17-cv-00508-JHM-CHL Document 1 Filed 08/21/17 Page 18 of 70 PageID #: 18

effective controls to prevent diversion of controlled substances. Should a distributor deviate from
these checks and balances, the closed system collapses.19
51.

The United States consumes opioid pain relievers at a greater rate than any other

52.

The sheer volume of prescription opioids distributed to pharmacies in Louisville

nation.

Metro Area is excessive for the medical need of the community and facially suspicious. Some
red flags are so obvious that no one who engages in the legitimate distribution of controlled
substances can reasonably claim ignorance of them. Masters Pharmaceuticals, Inc.; Decision
and Order, 80 FR 55418-01, 55482 (Sept. 15, 2015) (citing Holiday CVS, L.L.C.,
d/b/a/CVS/Pharmacy Nos. 219 and 5195, 77 FR 62,316, 62,322 (2012)); Masters Pharm., Inc. v.
Drug Enf’t Admin., 861 F.3d 206 (D.C. Cir. 2017).
2. Defendants breached their duties.
53.

Plaintiff is of the information and belief that the Defendant Wholesale

Distributors failed to report to the DEA “suspicious orders” originating from Louisville Metro
Area and/or orders of prescription opioids which Defendants knew or should have known were
likely to be delivered and/or diverted into Louisville Metro Area.
54.

Plaintiff alleges that the Defendant Wholesale Distributors unlawfully filled

suspicious orders of unusual size, orders deviating substantially from a normal pattern and/or
orders of unusual frequency in Louisville Metro Area and/or orders which Defendants knew or
should have known were likely to be delivered and/or diverted into Louisville Metro Area.

19

See Declaration of Joseph Rannazzisi, Deputy Assistant Administrator, Office of Diversion
Control, Drug Enforcement Agency, United States Department of Justice, ¶10, Cardinal Health,
Inc. v. Holder, No. 1:12-cv-00185-RBW, Doc. 14-2 (filed in U.S. D.C. on February 20, 2012).

18

 Case 3:17-cv-00508-JHM-CHL Document 1 Filed 08/21/17 Page 19 of 70 PageID #: 19

55.

Kentucky Revised Statutes Chapter 218A, including §§ 218A.160, 218A.170(4);

Kentucky Administrative Regulations, Title 902, Chapter 55; 21 U.S.C. §§ 812, 823; 21 C.F.R. §
1301.74; 28 C.F.R. § 0.100, and laws and regulations incorporated therein, are public safety
laws.
56.

The Kentucky Legislature’s intent in promulgating the Kentucky Controlled

Substances Act, was to promote the “preservation of public safety and public health.” KY. REV.
STAT. ANN. §218A.005(1).
57.

Each Defendant Wholesale Distributor breached its duty to maintain effective

controls against diversion of prescription opioids into other than legitimate medical, scientific,
and industrial channels.
58.

Each Defendant Wholesale Distributor breached its duty to design and operate a

system to disclose suspicious orders of controlled substances and failed to inform the DEA of
“suspicious orders for drugs when discovered” in violation of 21 C.F.R. § 1301.74(b) and
Kentucky laws and regulations incorporating federal requirements. KY. REV. STAT. ANN. §
218A.170(4); KY. REV. STAT. ANN. § 218A.160(1)(a); 902 KY. ADMIN. REGS. 55:010(h)(2)(b).
59.

Each Defendant Wholesale Distributor breached its duty to provide effective

controls and procedures to guard against theft and diversion of controlled substances in violation
of Kentucky regulations and federal law. See, e.g., 21 U.S.C. § 823; 21 C.F.R. § 1301.74(b); KY.
REV. STAT. ANN. § 218A.170(4); KY. REV. STAT. ANN. § 218A.160(1)(a); 902 KY. ADMIN.
REGS. 55:010(h)(2)(b).
60.

Defendant Wholesale Distributors’ violations of public safety statutes constitute

prima facie evidence of negligence under Kentucky law.

19

 Case 3:17-cv-00508-JHM-CHL Document 1 Filed 08/21/17 Page 20 of 70 PageID #: 20

61.

Defendant Wholesale Distributors breached their duty to exercise due diligence to

avoid filling suspicious orders that might be diverted into other than legitimate medical,
scientific and industrial channels. Cardinal Health, Inc. v. Holder, 846 F. Supp. 2d 203, 206
(D.D.C. 2012).
62.

Defendant Wholesale Distributors breached their duty to monitor, detect,

investigate, refuse to fill, and report suspicious orders of prescription opioids originating from
Louisville Metro Area and/or which Defendants knew or should have known were likely to be
delivered and/or diverted into Louisville Metro Area.
3. Defendants’ serial violations of the law.
63.

As a result of the decade-long refusal by the Defendant Wholesale Distributors to

abide by federal law, the DEA has repeatedly taken administrative action to force compliance.
The United States Department of Justice, Office of the Inspector General, Evaluation and
Inspections Division, reported that the DEA issued final decisions in 178 registrant actions
between 2008 and 2012. The Office of Administrative Law Judges issued a recommended
decision in a total of 117 registrant actions before the DEA issued its final decision, including 76
actions involving orders to show cause and 41 actions involving immediate suspension orders.20
These actions include the following:
(a)
On April 24, 2007, the DEA issued an Order to Show Cause and
Immediate Suspension Order against the AmerisourceBergen Orlando, Florida
distribution center (“Orlando Facility”) alleging failure to maintain effective
controls against diversion of controlled substances. On June 22, 2007,
AmerisourceBergen entered into a settlement which resulted in the suspension of
its DEA registration;

20

The Drug Enforcement Administration’s Adjudication of Registrant Actions, United States
Department of Justice, Office of the Inspector General, Evaluation and Inspections Divisions, I2014-003 (May 2014).

20

 Case 3:17-cv-00508-JHM-CHL Document 1 Filed 08/21/17 Page 21 of 70 PageID #: 21

(b)
On November 28, 2007, the DEA issued an Order to Show Cause
and Immediate Suspension Order against the Cardinal Health Auburn,
Washington Distribution Center (“Auburn Facility”) for failure to maintain
effective controls against diversion of hydrocodone;
(c)
On December 5, 2007, the DEA issued an Order to Show Cause
and Immediate Suspension Order against the Cardinal Health Lakeland, Florida
Distribution Center (“Lakeland Facility”) for failure to maintain effective controls
against diversion of hydrocodone;
(d)
On December 7, 2007, the DEA issued an Order to Show Cause
and Immediate Suspension Order against the Cardinal Health Swedesboro, New
Jersey Distribution Center (“Swedesboro Facility”) for failure to maintain
effective controls against diversion of hydrocodone;
(e)
On January 30, 2008, the DEA issued an Order to Show Cause and
Immediate Suspension Order against the Cardinal Health Stafford, Texas
Distribution Center (“Stafford Facility”) for failure to maintain effective controls
against diversion of hydrocodone;
(f)
On May 2, 2008, McKesson Corporation entered into an
Administrative Memorandum of Agreement (“2008 MOA”) with the DEA which
provided that McKesson would “maintain a compliance program designed to
detect and prevent the diversion of controlled substances, inform DEA of
suspicious orders required by 21 C.F.R. § 1301.74(b), and follow the procedures
established by its Controlled Substance Monitoring Program”;
(g)
On September 30, 2008, Cardinal Health entered into a Settlement
and Release Agreement and Administrative Memorandum of Agreement with the
DEA related to its Auburn Facility, Lakeland Facility, Swedesboro Facility and
Stafford Facility. The document also referenced allegations by the DEA that
Cardinal failed to maintain effective controls against the diversion of controlled
substances at its distribution facilities located in McDonough, Georgia; Valencia,
California; and Denver, Colorado;
(h)
On February 2, 2012, the DEA issued an Order to Show Cause and
Immediate Suspension Order against the Cardinal Health Lakeland, Florida
Distribution Center for failure to maintain effective controls against diversion of
oxycodone;
(j)
On December 23, 2016, Cardinal Health agreed to pay a $44
million fine to the DEA to resolve the civil penalty portion of the administrative
action taken against its Lakeland, Florida Distribution Center; and
(k)
On January 5, 2017, McKesson Corporation entered into an
Administrative Memorandum Agreement with the DEA wherein it agreed to pay a

21

 Case 3:17-cv-00508-JHM-CHL Document 1 Filed 08/21/17 Page 22 of 70 PageID #: 22

$150,000,000 civil penalty for violation of the 2008 MOA as well as failure to
identify and report suspicious orders at its facilities in Aurora CO, Aurora IL,
Delran NJ, LaCrosse WI, Lakeland FL, Landover MD, La Vista NE, Livonia MI,
Methuen MA, Santa Fe Springs CA, Washington Courthouse OH and West
Sacramento CA.
64.

Rather, than abide by their non-delegable duties under public safety statutes, the

Defendant Wholesale Distributors, individually and collectively through trade groups in the
industry, pressured the U.S. Dept. of Justice to “halt” prosecutions and lobbied Congress to strip
the DEA of its ability to immediately suspend distributor registrations. The result was a “sharp
drop in enforcement actions” and the passage of the “Ensuring Patient Access and Effective
Drug Enforcement Act” which, ironically, raised the burden for the DEA to revoke a
distributor’s license from “imminent harm” to “immediate harm” and provided the industry the
right to “cure” any violations of law before a suspension order can be issued.21
65.

Meanwhile, the opioid epidemic rages unabated in Louisville Metro Area.
4. Defendants knowingly breached their mandatory duties.

66.

The epidemic still rages because the fines and suspensions imposed by the DEA

do not change the conduct of the Defendant Wholesale Distributors. They pay fines as a cost of
doing business in an industry which generates billions of dollars in annual revenue. They hold
multiple DEA registration numbers and when one facility is suspended, they simply ship from
another facility. And, as bluntly noted by Cardinal Health in its filings in Cardinal Health, Inc.
v. Holder, 846 F. Supp. 2d 203 (D.D.C. 2012), “suspension … will not address the harm DEA

21

See Lenny Bernstein and Scott Higham, Investigation: The DEA slowed enforcement while
the opioid epidemic grew out of control, THE WASHINGTON POST (October 22, 2016); Lenny
Bernstein and Scott Higham, Investigation: U.S. senator calls for investigation of DEA
enforcement slowdown amid opioid crisis, THE WASHINGTON POST (March 6, 2017); Eric Eyre,
DEA agent: ‘We had no leadership’ in WV amid flood of pain pills, Charleston Gazette
(February 18, 2017).

22

 Case 3:17-cv-00508-JHM-CHL Document 1 Filed 08/21/17 Page 23 of 70 PageID #: 23

alleges because it will not prevent pharmacies filling illegitimate prescriptions from simply
obtaining controlled substances from another distributor.”22
67.

The Defendant Wholesale Distributors’ repeated shipments of suspicious orders,

over an extended period of time, in violation of public safety statutes, and without reporting the
suspicious orders to the relevant authorities, demonstrates wanton, willful, or reckless conduct or
criminal indifference to civil obligations affecting the rights of others and justifies an award of
punitive damages.
68.

The unlawful conduct by the Defendant Wholesale Distributors is purposeful and

intentional. Bluntly, they refuse to abide by the duties imposed by law which are required to
maintain a Kentucky license to distribute prescription opioids and to maintain their DEA
registration. Defendants acted with actual malice, i.e., Defendants acted with a conscious
disregard for the rights and safety of other persons, and said actions have a great probability of
causing substantial harm. Defendants acted willfully. Defendants acted with such gross
negligence as to indicate a wanton disregard of the rights of others. Punitive damages are
necessary to deter similar conduct in the future.
69.

Defendant Wholesale Distributors have publicly disavowed any duty beyond

reporting suspicious orders and, even then, have claimed they were not required to report all
suspicious orders. In Masters Pharmaceuticals, Inc. v. U.S. Drug Enforcement Admin., 2016 WL
1321983 (D.C. Cir. April 4, 2016), the Healthcare Distribution Management Association and
National Association of Chain Drug Stores submitted amicus briefs regarding the legal duty of

22

Memorandum of Points of Authorities in Support of Cardinal Health’s Motion for Temporary
Restraining Order (Doc. 3-1), at p. 22, Cardinal Health, Inc. v. Holder, No. 1:12-cv-00185-RBW
(D.C. Cir. Feb. 3, 2012).

23

 Case 3:17-cv-00508-JHM-CHL Document 1 Filed 08/21/17 Page 24 of 70 PageID #: 24

wholesale distributors. Inaccurately denying the legal duties that the wholesale drug industry has
been tragically recalcitrant in performing, they argued that:
The Associations complained that the “DEA has required
distributors not only to report suspicious orders, but to investigate orders
(e.g., by interrogating pharmacies and physicians) and take action to halt
suspicious orders before they are filled.” (emphasis in original) (Brief for
HDMA and NACDS, 2016 WL 1321983, at ** 4-5);
The Associations argued that, “DEA now appears to have changed
its position to require that distributors not only report suspicious orders,
but investigate and halt suspicious orders. Such a change in agency
position must be accompanied by an acknowledgment of the change and a
reasoned explanation for it. In other words, an agency must display
awareness that it is changing position and show that there are good reasons
for the new policy. This is especially important here, because imposing
intrusive obligation on distributors threatens to disrupt patient access to
needed prescription medications.” (internal citations & quotes omitted)
(emphasis in original) (Id., at *8);
The Associations alleged (inaccurately) that nothing “requires
distributors to investigate the legitimacy of orders, or to halt shipment of
any orders deemed to be suspicious.” (Id., at *14);
The Association complained that the purported “practical
infeasibility of requiring distributors to investigate and halt suspicious
orders (as well as report them) underscores the importance of ensuring that
DEA has complied with the APA before attempting to impose such
duties.” (Id., at *22);
The Associations alleged (inaccurately) that “DEA’s regulations []
sensibly impose[] a duty on distributors simply to report suspicious
orders, but left it to DEA and its agents to investigate and halt suspicious
orders.” (emphasis in original) (Id., at **24-25); and,
Also inaccurately, the Associations argued that, “[i]mposing a duty
on distributors - which lack the patient information and the necessary
medical expertise – to investigate and halt orders may force distributors to
take a shot-in-the-dark approach to complying with DEA’s demands.” (Id.,
at *26).

24

 Case 3:17-cv-00508-JHM-CHL Document 1 Filed 08/21/17 Page 25 of 70 PageID #: 25

70.

The positions taken by the trade groups is emblematic of the position taken by the

Defendant Wholesale Distributors in a futile attempt to deny their legal obligations to prevent
diversion of the dangerous drugs.23
71.

The Court of Appeals for the District of Columbia recently issued its opinion

affirming that a wholesale drug distributor does, in fact, have a duty to report all suspicious
orders and also has duties beyond reporting. Masters Pharmaceutical, Inc. v. Drug Enf’t Admin.,
861 F.3d 206 (D.C. Cir. 2017). The Circuit Court upheld the revocation of Masters
Pharmaceutical’s license and determined that DEA regulations require that in addition to
reporting suspicious orders, distributors “must . . . decline to ship the order, or conduct some
‘due diligence’ and—if it is able to determine that the order is not likely to be diverted into
illegal channels—ship the order.” 861 F.3d at 212-13. Masters Pharmaceutical was in violation
of legal requirements not only because it failed to report suspicious orders, but also because it
failed to conduct necessary investigations and filled suspicious orders. Id. at 217-19, 222-23.
Before a distributor may ship a suspicious order, a distributor’s investigation must dispel all red
flags giving rise to suspicious circumstance. Id. at 222-23. The Circuit Court also rejected the
argument made by the Healthcare Distribution Management Association and National
Association of Chain Drug Stores, that, allegedly, the DEA had created or imposed new duties.
Id. at 221-22.
72.

Wholesale Distributor McKesson has specifically admitted to breaching its duties

to monitor, report, and prevent suspicious orders. Pursuant to an Administrative Memorandum
of Agreement (“2017 Agreement”) entered into between McKesson and the DEA in January
23

See Amicus Curiae Brief of HDMA, Cardinal Health, Inc. v. United States Dept. Justice, 2012
WL 1637016, at *3 (arguing the wholesale distributor industry “does not know the rules of the
road” because they claim (inaccurately) that the “DEA has not adequately explained them.”).

25

 Case 3:17-cv-00508-JHM-CHL Document 1 Filed 08/21/17 Page 26 of 70 PageID #: 26

2017, McKesson admitted that, at various times during the period from January 1, 2009 through
the effective date of the Agreement (January 17, 2017) it “did not identify or report to [the] DEA
certain orders placed by certain pharmacies which should have been detected by McKesson as
suspicious based on the guidance contained in the DEA Letters about the requirements set forth
in 21 C.F.R. § 1301.74(b) and 21 U.S.C. § 842(a)(5).”24

Further, the 2017 Agreement

specifically finds that McKesson “distributed controlled substances to pharmacies even though
those McKesson Distribution Centers should have known that the pharmacists practicing within
those pharmacies had failed to fulfill their corresponding responsibility to ensure that controlled
substances were dispensed pursuant to prescriptions issued for legitimate medical purposes by
practitioners acting in the usual course of their professional practice, as required by 21 C.F.R §
1306.04(a).”25 McKesson admitted that, during this time period, it “failed to maintain effective
controls against diversion of particular controlled substances into other than legitimate medical,
scientific and industrial channels by sales to certain of its customers in violation of the CSA and
the CSA's implementing regulations, 21 C.F.R. Part 1300 et seq.,” at numerous nationwide
McKesson Distribution Centers.”26
73.

The 2017 Memorandum of Agreement followed a 2008 Settlement Agreement in

which McKesson also admitted failure to report suspicious orders of controlled substances to the
DEA.27 In the 2008 Settlement Agreement, McKesson “recognized that it had a duty to monitor

24

See Administrative Memorandum of Agreement between the United States Department of
Justice, the Drug Enforcement Agency, and McKesson Corporation, effective date January 17,
2017.

25

Id. at 4.

26

Id. at 3.

27

Id. at 4.

26

 Case 3:17-cv-00508-JHM-CHL Document 1 Filed 08/21/17 Page 27 of 70 PageID #: 27

its sales of all controlled substances and report suspicious orders to DEA,” but had failed to do
so.28 The 2017 Memorandum of Agreement documents that McKesson continued to breach its
admitted duties by “fail[ing] to properly monitor its sales of controlled substances and/or report
suspicious orders to DEA, in accordance with McKesson's obligations under the 2008
Agreements, the Act, and 21 C.F.R. § 130l.74(b).”29 The 2017 Memorandum of Agreement and
the associated Settlement Agreement and Release revealed to the public that McKesson was not
complying with the 2008 Settlement Agreement. As a result of these violations, McKesson was
fined and required to pay to the United States $150,000,000.30
C. The Opioid Plague in Louisville Metro Area, Was Caused by, and Is the
Proximate Result of, Defendants’ Breaches of Mandatory Duties to Maintain
Effective Controls to Prevent the Diversion of Dangerous, Highly Addictive
Opioids.
74.

Defendant Wholesale Distributors’ failure to monitor, detect, investigate, refuse to

fill, and report suspicious orders is a direct and proximate cause of, and/or substantial factor
contributing to, the diversion of millions of doses of prescription opioids into the illicit market
for purposes other than legitimate medical use in Louisville Metro Area.
75.

The unlawful conduct by Defendant Wholesale Distributors caused the very harm

the federal and Kentucky statutes and regulations were intended to prevent; namely, the
diversion of prescription opioids for illegitimate and/or nonmedical purposes.
28

Id.

29

Id. at 4. See also Settlement Agreement and Release between the United State of America
(acting through the Department of Justice and on behalf of the Drug Enforcement
Administration) and McKesson Corporation, effective date January 17, 2017 (“2017 Settlement
Agreement and Release”) (“McKesson acknowledges that, at various times during the Covered
Time Period [2009-2017], it did not identify or report to DEA certain orders placed by certain
pharmacies, which should have been detected by McKesson as suspicious, in a manner fully
consistent with the requirements set forth in the 2008 MOA.”).
30

See 2017 Settlement Agreement and Release at p. 6.

27

 Case 3:17-cv-00508-JHM-CHL Document 1 Filed 08/21/17 Page 28 of 70 PageID #: 28

76.

The unlawful diversion of prescription opioids is a direct and proximate cause of

and/or a substantial factor leading to prescription opioid abuse, addiction, morbidity and
mortality in Louisville Metro Area.
77.

The unlawful diversion of prescription opioids is a direct and proximate cause of

and/or a substantial factor leading to the prescription opioid epidemic currently plaguing
Louisville Metro.
78.

The unlawful diversion of prescription opioids is a direct and proximate cause of

and/or a substantial factor leading to the heroin epidemic currently plaguing Louisville Metro.
79.

Opioid analgesics are widely diverted and improperly used, and the widespread

use of the drugs has resulted in a national epidemic of opioid overdose deaths and addictions.31
80.

The epidemic is “directly related to the increasingly widespread misuse of

powerful opioid pain medications.”32
81.

The increased use of prescription painkillers for reasons other than legitimate

medical use (for the high they cause), along with growing sales, has contributed to a large
number of overdoses and deaths.33
82.

There is “a parallel relationship between the availability of prescription opioid

analgesics through legitimate pharmacy channels and the diversion and abuse of these drugs and
associated adverse outcomes.”34

31

See Nora D. Volkow, M.D. and A. Thomas McLellan, Ph.D., Opioid Abuse in Chronic Pain–
Misconceptions and Mitigation Strategies, NEW ENG. J. MED., 374;1253-63 (March 31, 2016).

32

See Special Report, FDA Commissioner Robert M. Califf, M.D., et al., A Proactive Response
to Prescription Opioid Abuse, NEW ENGL. J. MED., 374;1480-85 (April 14, 2016).

33

See Press Release, Prescription painkiller overdoses at epidemic levels, U.S. Department of
Health and Human Resources, Centers for Disease Control and Prevention (November 1, 2011).

28

 Case 3:17-cv-00508-JHM-CHL Document 1 Filed 08/21/17 Page 29 of 70 PageID #: 29

83.

The CDC has identified addiction to prescription pain medication as the strongest

risk factor for heroin addiction. People who are addicted to prescription opioids are forty times
more likely to be addicted to heroin.35
84.

Heroin is pharmacologically similar to prescription opioids. The majority of

current heroin users report having used prescription opioids non-medically before they initiated
heroin use. Available data indicates that the nonmedical use of prescription opioids is a strong
risk factor for heroin use.36 The CDC reports that drug overdose deaths involving heroin
continued to climb sharply, with heroin overdoses more than tripling in 4 years. This increase
mirrors large increases in heroin use across the country and has been shown to be closely tied to
opioid pain reliever misuse and dependence. Past misuse of prescription opioids is the strongest
risk factor for heroin initiation and use, specifically among persons who report past-year
dependence or abuse.
D. Defendants’ Misrepresentations and Fraudulent Intent.
85.

Defendants’ intent to violate the law and engage in an enterprise to drive up their

profits from and sales of diverted opioids is evident from: (1) Defendants’ repeated violations of
the law, including notices of violations and settlements; (2) Defendants’ failures to adequately
implement stated anti-diversion policies; (3) Defendants’ failures to adequately fund antidiversion efforts; and (4) Defendants’ continued and ongoing maintenance of a corporate

34

See Richard C. Dart, M.D., Ph.D., et al., Trends in Opioid Analgesic Abuse and Mortality in
the United States, NEW ENGL. J. MED., 372;241-248, 245 (January 15, 2015).

35

See CDC Vital Signs Fact Sheet, Today’s Heroin Epidemic, U.S. Department of Health and
Human Resources, Centers for Disease Control and Prevention (July 2015).

36

See Wilson M. Compton, M.D., M.P.E., et al., Relationship between Nonmedical Prescription
Opioid Use and Heroin Use, NEW ENG. J. MED., 374;154-63 (January 14, 2016).

29

 Case 3:17-cv-00508-JHM-CHL Document 1 Filed 08/21/17 Page 30 of 70 PageID #: 30

structure that rewards increases in opioid sales and encourages the distributors’
employees/agents to turn a blind eye to suspicious conduct.
86.

To protect their registered distributor status with the Kentucky Cabinet for Health

and Family Services and the DEA, so that they can continue to generate profits, the Defendant
Wholesale Distributors undertook efforts to fraudulently assure the public that they were in fact
complying with their legal obligations. Through such statements, the Distributors attempted to
assure the public they are working to curb the opioid epidemic.
87.

For example, a Cardinal Health executive claimed that it uses “advanced

analytics” to monitor its supply chain, and assured the public it was being “as effective and
efficient as possible in constantly monitoring, identifying, and eliminating any outside criminal
activity.”37 Given the sales volumes and the company’s history of violations, this executive was
either not telling the truth, or Cardinal Health had such a system, but it ignored the results.
88.

Similarly, Defendant McKesson publicly stated that it has a “best-in-class

controlled substance monitoring program to help identify suspicious orders,” and claimed it is
“deeply passionate about curbing the opioid epidemic in our country.”38 Again, given
McKesson’s historical conduct, this statement is either false, or the company ignored outputs of
the monitoring program.
37

Lenny Bernstein et al., How drugs intended for patients ended up in the hands of illegal users:
‘No one was doing their job’, THE WASHINGTON POST, October 22, 2016, available at
https://www.washingtonpost.com/investigations/how-drugs-intended-for-patients-ended-up-inthe-hands-of-illegal-users-no-one-was-doing-their-job/2016/10/22/10e79396-30a7-11e6-8ff77b6c1998b7a0_story.html?utm_term=.744e85035bdc (last visited July 12, 2017).
38

Scott Higham et al., Drug industry hired dozens of officials from the DEA as the agency tried
to curb opioid abuse, THE WASHINGTON POST, December 22, 2016, available at
https://www.washingtonpost.com/investigations/key-officials-switch-sides-from-dea-topharmaceutical-industry/2016/12/22/55d2e938-c07b-11e6-b527949c5893595e_story.html?utm_term=.68a58d17478e (last visited July 12, 2017).

30

 Case 3:17-cv-00508-JHM-CHL Document 1 Filed 08/21/17 Page 31 of 70 PageID #: 31

89.

Moreover, through their participation in the Healthcare Distribution Management

Association (“HDMA”), the trade association of pharmaceutical distributors, the Distributors
admit that they are “[a]t the center of a sophisticated supply chain” and therefore “are uniquely
situated to perform due diligence in order to help support the security of the controlled
substances they deliver to their customers.”39 The Distributors state the HDMA Guidelines
“were prepared in recognition of the growing problem of misuse and diversion of Controlled
Substances (CS) and the critical role of each member of the supply chain in helping to enhance
security.”40 Given Defendants’ ability to know where opioids are being sent and how order
volumes change year after year, they are well aware of their unique ability to identify suspicious
sales volumes and patterns, but nonetheless chose not to report suspicious orders or take any
actions to refuse to fill suspicious orders.
E. Louisville Metro and the Public Welfare Have Been Damaged by Defendants’
Participation in the Unlawful Diversion of Dangerous, Highly Addictive Opioids.
1. Opioid-related addiction and death has reached epidemic proportions.
90.

The number of annual opioid prescriptions written in the United States is now

roughly equal to the number of adults in the population.41
91.

Many Americans are now addicted to prescription opioids, and the number of

deaths due to prescription opioid overdose is unacceptable. In 2014 there were almost 19,000
overdose deaths in the United States associated with prescription opioids.42

39

See Healthcare Distribution Management Association (HDMA) Industry Compliance
Guidelines: Reporting Suspicious Orders and Preventing Diversion of Controlled Substances
(dated in or around 2012) (“HDMA Guidelines”).

40

Id.

41

See Robert M. Califf, M.D., et al., A Proactive Response to Prescription Opioid Abuse, NEW
ENGL. J. MED., 374;1480 (April 14, 2016).

31

 Case 3:17-cv-00508-JHM-CHL Document 1 Filed 08/21/17 Page 32 of 70 PageID #: 32

92.

Barack Obama, then President of the United States, declared a prescription opioid

and heroin epidemic.43
93.

Among 47,055 drug overdose deaths that occurred in 2014 in the United States,

28,647 (60.9%) involved an opioid.44
94.

Fundamentally, prescription opioids and heroin are elements of a larger epidemic

of opioid-related disorders and death. Viewing them from a unified perspective is essential to
improving public health.45
2. While the opioid epidemic is a national tragedy, the statistics are
particularly tragic in Kentucky and Louisville Metro.
95.

Drug overdose deaths and opioid-involved deaths continue to increase in the

United States. The majority of drug overdose deaths (more than six out of ten) involve an
opioid.46
96.

From 2000 to 2015 more than half a million people died from drug overdoses. 91

Americans die every day from an opioid overdose.47

42

Id.

43

See Barack Obama, President of the United States, Proclamation 9499, Prescription Opioid
and Heroin Epidemic Awareness Week, 2016, 81 FR 65173 (September 16, 2016).

44

See Rose A. Rudd, MSPH, et al., Increases in Drug and Opioid-Involved Overdose Deaths —
United States, 2010–2015, Morbidity and Mortality Weekly Report (MMWR), Centers for
Disease Control and Prevention, 65(50-51);1445–1452 (December 30, 2016).

45

See Wilson M. Compton, M.D., M.P.E., et al., Relationship between Nonmedical Prescription
Opioid Use and Heroin Use, NEW ENGL. J. MED., 374;154 (Jan. 14, 2016).

46

Understanding the Epidemic, Drug overdose deaths in the United States continue to increase in
2015,
Centers
for
Disease
Control
and
Prevention,
available
at
https://www.cdc.gov/drugoverdose/epidemic/index.html (last visited Aug. 8, 2017).

47

Id.

32

 Case 3:17-cv-00508-JHM-CHL Document 1 Filed 08/21/17 Page 33 of 70 PageID #: 33

97.

Overdoses from prescription opioids are a driving factor in the increase in opioid

overdose deaths. Kentucky has been devastated by the opioid epidemic. In Kentucky, more
people died from an opioid drug overdose in from 2012-2016 than from motor vehicle accidents.
Jefferson County, Kentucky reported 364 overdose deaths last year, by far the most in the state
and up from 268 in 2015.48
98.

Kentucky is one of the States identified by the United States Center for Disease

Control and Prevention (CDC) as having a statistically significant drug overdose death rate
increase from 2014 to 2015.49 The percent increase from 2014 to 2015 was 21%.
99.

And yet, opioids continue to be distributed and dispensed in Kentucky at an

alarming rate. From 2012 through the middle of 2017, more than 197 million doses of
prescription opioids, including hydrocodone, oxycodone, tramadol, and oxymorphone,
were dispensed in Jefferson County, Kentucky which has a population of approximately
760,000 people. That is more than 258 doses of prescription opioids for every man, woman,
and child in Jefferson County, Kentucky. During this same time period, more than 3,500,000
doses of overdose antidotes, including naloxone, have been dispensed in Jefferson County,
Kentucky – nearly 5 per person.50
100.

The tragic opioid epidemic impacts infants. The use of opiates during pregnancy

can result in a drug withdrawal syndrome in newborns called Neonatal Abstinence Syndrome
48

Commonwealth of Kentucky, Justice & Public Safety Cabinet, Kentucky Office of Drug
Policy
2016
Overdose
Fatality
Report,
available
at
https://odcp.ky.gov/Reports/2016%20ODCP%20 Overdose%20Fatality%20Report%20Final.pdf
(last visited Aug. 17, 2017).
49

Drug
Overdose
Death
Data,
CDC,
available
https://www.cdc.gov/drugoverdose/data/statedeaths.html (last visited Aug. 8, 2017).

at

50

at

See
KASPER
Quarterly
Trend
Reports,
available
http://www.chfs.ky.gov/os/oig/kaspertrendreports (last visited Aug. 17, 2017).

33

 Case 3:17-cv-00508-JHM-CHL Document 1 Filed 08/21/17 Page 34 of 70 PageID #: 34

(NAS). There was a five-fold increase in the proportion of babies born with NAS from 2000 to
2012, when an estimated 21,732 infants were born with NAS —equivalent to one baby suffering
from opiate withdrawal born every 25 minutes.51 The cost of treating these infants is significant.
Newborns with NAS were more likely than other babies to also have low birthweight and
respiratory complications. In 2012, newborns with NAS stayed in the hospital an average of 16.9
days (compared to 2.1. days for other newborns).52
101.

The opioid epidemic has placed increased budgetary costs upon Louisville Metro

related to its health services and expenditures, criminal law enforcement expenses, and other
expenditures related to the opioid crises.
102.

Prescription opioid abuse, addiction, morbidity, and mortality are hazards to

public health and safety in Louisville Metro.
103.

Prescription opioid abuse, addiction, morbidity, and mortality are a temporary

public nuisance in Louisville Metro, which remains unabated.
104.

Heroin abuse, addiction, morbidity, and mortality are hazards to public health and

safety in Louisville Metro.
105.

Heroin abuse, addiction, morbidity, and mortality are a temporary and continuing

public nuisance in Louisville Metro, which remains unabated.

51

Dramatic Increases in maternal Opioid Use and Neonatal Abstinence Syndrome, NIH National
Institute on Drug Abuse, available at https://www.drugabuse.gov/related-topics/trendsstatistics/infographics/dramatic-increases-in-maternal-opioid-use-neonatal-abstinence-syndrome
(last visited Aug. 8, 2017).
52

Id.

34

 Case 3:17-cv-00508-JHM-CHL Document 1 Filed 08/21/17 Page 35 of 70 PageID #: 35

106.

To eliminate the hazard to public health and safety, and abate the public nuisance,

a “multifaceted, collaborative public health and law enforcement approach is urgently needed.”53
107.

“A comprehensive response to this crisis must focus on preventing new cases of

opioid addiction, identifying early opioid-addicted individuals, and ensuring access to effective
opioid addiction treatment while safely meeting the needs of patients experiencing pain.”54
3. General declaration of damages applicable to all Counts herein.
108.

The unlawful conduct by the Defendant Wholesale Distributors has created

hazards to public health and safety and a temporary and continuing public nuisance in Louisville
Metro Area, which remains unabated.
109.

Plaintiff seeks economic damages from the Defendant Wholesale Distributors as

reimbursement for the costs association with past efforts to eliminate the hazards to public health
and safety.
110.

Plaintiff seeks economic damages from the Defendant Wholesale Distributors to

pay for the damages incurred and the future costs required to permanently eliminate the hazards
to public health and safety and abate the temporary public nuisance.
111.

Plaintiff seeks to hold the Defendant Wholesale Distributors financially

responsible for the economic costs of eliminating the hazards to public health and safety and
abating the temporary public nuisance caused by the unlawful conduct recited herein.

53

See Rose A. Rudd, MSPH, et al, Increases in Drug and Opioid-Involved Overdose Deaths —
United States, 2010–2015, Morbidity and Mortality Weekly Report (MMWR), Centers for
Disease Control and Prevention, 65(50-51);1445–1452 (December 30, 2016).
54

See Alexander GC, Frattaroli S, Gielen AC, eds. The Prescription Opioid Epidemic: An
Evidence-Based Approach, Johns Hopkins Bloomberg School of Public Health, Baltimore,
Maryland: 2015, available at http://www.jhsph.edu/research/centers-and-institutes/johnshopkins-center-for-injury-research-and-policy/publications-resources/CenterPubs/2015prescription-opioid-epidemic-report.pdf (last visited Aug. 10, 2017).

35

 Case 3:17-cv-00508-JHM-CHL Document 1 Filed 08/21/17 Page 36 of 70 PageID #: 36

112.

Plaintiff seeks punitive damages to deter the Defendant Wholesale Distributors

and others from committing like offenses in the future. Defendants acted with actual malice,
willfully, and with such gross negligence as to indicate a wanton disregard for the rights of
others, and said actions have a great probability of causing substantial harm.
F. Tolling of the Statute of Limitations and Estoppel
113.

Plaintiff contends that the harm caused by the unlawful actions of the Defendant

Wholesale Distributors continues.
114.

The continued tortious conduct by the Defendant Wholesale Distributors causes a

repeated or continuous injury. The damages have not occurred all at once but have increased as
time progresses. The tort is not completed nor have all the damages been incurred until the
wrongdoing ceases. The wrongdoing has not ceased. The public nuisance remains unabated.
115.

Plaintiff’s claims are subject to both equitable estoppel, stemming from

Defendant Wholesale Distributors’ knowingly and fraudulently concealing the facts alleged
herein, and equitable tolling, stemming from Defendants’ wrongful concealment and from
Plaintiff’s inability to obtain vital information underlying its claims.
1. Defendants
Deliberately
Concealed
Their
Misconduct
Misrepresented their Compliance with their Legal Obligations.
116.

and

Defendants are estopped from relying upon a statute of limitations defense

because the Distributors undertook efforts to purposefully conceal their unlawful conduct and
fraudulently assure the public that they were undertaking efforts to comply with their obligations
under the CSA. Separate and apart from Defendants’ acts of concealment, any applicable statutes
of limitation are properly tolled because Plaintiff did not know and could not have learned the
true facts underlying their claims until shortly before filing its Complaint.

36

 Case 3:17-cv-00508-JHM-CHL Document 1 Filed 08/21/17 Page 37 of 70 PageID #: 37

117.

Indeed, Defendant Wholesale Distributors are estopped by their own fraudulent

concealment from asserting the statute of limitations as an affirmative defense against Plaintiff’s
claims.
118.

Defendants misrepresented their compliance with the law and prevented

discovery by the public and by the Plaintiff of their wrongful actions.
119.

Notwithstanding the allegations set forth above, the Defendant Wholesale

Distributors affirmatively assured the public they are working to curb the opioid epidemic.
120.

For example, a Cardinal Health executive claimed that it uses “advanced

analytics” to monitor its supply chain, and assured the public it was being “as effective and
efficient as possible in constantly monitoring, identifying, and eliminating any outside criminal
activity.”55 Given the sales volumes and the company’s history of violations, this executive was
either not telling the truth, or Cardinal Health had such a system, but it ignored the results.
121.

Similarly, McKesson publicly stated that it has a “best-in-class controlled

substance monitoring program to help identify suspicious orders,” and claimed it is “deeply
passionate about curbing the opioid epidemic in our country.”56 It was only in January 2017 that
the agreement accompanying the $150,000,000 fine against McKesson revealed that McKesson

55

Lenny Bernstein, et al., How drugs intended for patients ended up in the hands of illegal users:
‘No one was doing their job’, THE WASHINGTON POST, October 22, 2016, available at
https://www.washingtonpost.com/investigations/how-drugs-intended-for-patients-ended-up-inthe-hands-of-illegal-users-no-one-was-doing-their-job/2016/10/22/10e79396-30a7-11e6-8ff77b6c1998b7a0_story.html?utm_term=.744e85035bdc (last visited June 16, 2017).
56

Scott Higham, et al., Drug industry hired dozens of officials from the DEA as the agency tried
to curb opioid abuse, THE WASHINGTON POST, December 22, 2016, available at
https://www.washingtonpost.com/investigations/key-officials-switch-sides-from-dea-topharmaceutical-industry/2016/12/22/55d2e938-c07b-11e6-b527949c5893595e_story.html?utm_term=.68a58d17478e (last visited June 16, 2017).

37

 Case 3:17-cv-00508-JHM-CHL Document 1 Filed 08/21/17 Page 38 of 70 PageID #: 38

was, yet again, violating its legal obligations to maintain effective controls against diversion,
including through monitoring, reporting and preventing distribution of suspicious orders.
122.

Additionally, even though the Defendant Wholesale Distributors entered into

settlements and consent orders, outside of certain limited admissions made in those recently
publicized documents, Defendants have not admitted liability or any wrongdoing. On the
contrary, in connection with these settlements, the Defendant Wholesale Distributors have
repeatedly contended they were in compliance with the law.
123.

Moreover, in furtherance of their effort to affirmatively conceal their conduct and

avoid detection, the Defendant Wholesale Distributors, through their trade associations,
Healthcare Distribution Management Association (HDMA) and National Association of Chain
Drug Stores (NACDS), filed an Amicus brief in Masters Pharmaceuticals, Inc. v. U.S. Drug
Enforcement Administration, Case No. 15-1335; 2016 WL 1321983 (D.C. Cir. Apr. 4, 2016),
which made the following statements:
“HDMA and NACDS members not only have statutory and regulatory
responsibilities to guard against diversion of controlled prescription drugs, but
undertake such efforts as responsible members of society.”
“DEA regulations that have been in place for more than 40 years require
distributors to report suspicious orders of controlled substances to DEA based on
information readily available to them (e.g., a pharmacy's placement of unusually
frequent or large orders).”
“Distributors take seriously their duty to report suspicious orders, utilizing both
computer algorithms and human review to detect suspicious orders based on the
generalized information that is available to them in the ordering process.”
“A particular order or series of orders can raise red flags because of its unusual
size, frequency, or departure from typical patterns with a given pharmacy.”
“Distributors also monitor for and report abnormal behavior by pharmacies
placing orders, such as refusing to provide business contact information or
insisting on paying in cash.”

38

 Case 3:17-cv-00508-JHM-CHL Document 1 Filed 08/21/17 Page 39 of 70 PageID #: 39

Through the above statements made on their behalf by their trade associations, the Defendant
Wholesale Distributors not only acknowledged that they understood their obligations under the
law, but they further affirmatively represented that their conduct was in compliance with those
obligations.
124.

In light of their statements to the media, in legal filings, and in settlements, it is

clear that Defendant Wholesale Distributors had actual or constructive knowledge that their
conduct was deceptive, in that they consciously concealed the schemes set forth herein.
125.

Louisville Metro has diligently sought to discover and prevent the causes of the

opioid-based public nuisance in Louisville Metro Area.
126.

Defendants’ actions were affirmatively designed to prevent, and did prevent,

discovery of Louisville Metro’s cause of action. Defendants’ actions constituted actual artifice to
prevent knowledge of the facts. Defendants committed affirmative acts of concealment and
misrepresentation to exclude suspicion and prevent inquiry.
127.

Plaintiff reasonably relied on Defendants’ affirmative statements regarding their

purported compliance with their obligations under the law and consent orders.
128.

The purposes of the statutes of limitations period are satisfied because Defendants

cannot claim prejudice due to a late filing where Plaintiff filed suit promptly upon discovering
the facts essential to its claims, described herein, which Defendants knowingly concealed.
129.

Defendants continually and secretly engaged in their scheme to avoid compliance

with their reporting obligations. Only Defendants and their agents knew or could have known
about Defendants’ unlawful failure to report suspicious sales because Defendants made
deliberate efforts to conceal their conduct. As a result of the above, Plaintiff was unable to

39

 Case 3:17-cv-00508-JHM-CHL Document 1 Filed 08/21/17 Page 40 of 70 PageID #: 40

obtain vital information bearing on their claims absent any fault or lack of diligence on
Plaintiff’s part.
2. Defendant Wholesale Distributors’ Conduct Is Exposed.
130.

On December 17, 2016, the Charleston Gazette-Mail published a groundbreaking,

Pulitzer Prize-Winning story.57
131.

The journalist had been seeking drug shipping sales data since August 8, 2016,

when the Charleston Gazette-Mail Newspaper sought access to certain limited ARCOS data.
However, “[t]he wholesalers and their lawyers fought to keep the sales numbers secret in
previous court actions brought by the newspaper.”58 But, finally, “[t]he Gazette-Mail obtained
previously confidential drug shipping sales records, . . . [which] disclose the number of pills sold
to every pharmacy in the state.”59
132.

With the data in its possession, on December 17, 2016, the Gazette-Mail

published its shocking analysis of the data.60 The Gazette-Mail made the following statements,
based on the limited West Virginia ARCOS data in its possession about the Defendants conduct
in West Virginia:

57

Eric Eyre of Charleston Gazette-Mail, Charleston, WV, The 2017 Pulitzer Prize Winner in
Investigative Reporting, available at http://www.pulitzer.org/winners/eric-eyre (last visited July
3, 2017).
58

Eric Eyre, Drug firms poured 780M painkillers into WV amid rise of overdoses, Charleston
Gazette-Mail, December 17, 2016, available at http://www.wvgazettemail.com/newshealth/20161217/drug-firms-poured-780m-painkillers-into-wv-amid-rise-of-overdoses
(last
visited July 3, 2017).
59

Id.

60

Id.

40

 Case 3:17-cv-00508-JHM-CHL Document 1 Filed 08/21/17 Page 41 of 70 PageID #: 41

“In six years, drug wholesalers showered the state with 780 million hydrocodone
and oxycodone pills, while 1,728 West Virginians fatally overdosed on those two
painkillers.”61
“While the death toll climbed, drug wholesalers continued to ship massive
quantities of pain pills.”62
The quantity of opioids delivered during this period “amount to 433 pain pills for
every man, woman and child in West Virginia.”63
“The nation’s three largest prescription drug wholesalers — McKesson Corp.,
Cardinal Health and AmerisourceBergen Drug Co. — supplied more than half of
all pain pills statewide.” 64
“For more than a decade, the same distributors disregarded rules to report
suspicious orders for controlled substances in West Virginia to the state Board of
Pharmacy, the Gazette-Mail found.” 65
“Year after year, the drug companies also shipped pain pills in increasing
stronger formulations, DEA data shows.” 66
133.

Given the Defendant Wholesale Distributors’ efforts to mislead the public and

conceal its unlawful conduct, as alleged above, Plaintiff did not have any reason to know of the
Defendant Wholesale Distributors’ unlawful conduct or their role in creating the opioid nuisance.
134.

Plaintiff was relieved of any duty to investigate because it reasonably and

justifiably relied on Defendants to fulfill their reporting requirements and comply with the law.
Plaintiff did not discover and could not have discovered, despite all due diligence, the schemes

61

Id.

62

Id.

63

Id.

64

Id.

65

Id.

66

Id.

41

 Case 3:17-cv-00508-JHM-CHL Document 1 Filed 08/21/17 Page 42 of 70 PageID #: 42

alleged herein. The conduct revealed in December 2016 and January 2017 concerned only West
Virginia counties (with regard to the Charleston Gazette-Mail publication) or a single distributor
(with regard to the DOJ fine against McKesson).
135.

Plaintiff’s claims were equitably tolled until Plaintiff discovered Defendants’

conduct shortly before the filing of the Complaint. Defendants are further equitably estopped by
their own actions, including their fraudulent concealment, from asserting statute of limitations
defenses to Plaintiff’s claims.
IV. CAUSES OF ACTION
COUNT I
PUBLIC NUISANCE
KENTUCKY COMMON LAW
136.

Plaintiff incorporates by reference all other paragraphs of this Complaint as if

fully set forth here, and further allege as follows.
137.

Each Defendant is liable for public nuisance because its conduct at issue has

caused an unreasonable and substantial interference with a right common to the general public,
which is the proximate cause of and/or a substantial factor leading to Plaintiff’s injury. See
Restatement Second, Torts § 821B.
138.

Kentucky has declared that “[t]he regulation of controlled substances in this

Commonwealth is important and necessary for the preservation of public safety and public
health.” KY. REV. STAT. ANN. § 218A.005(1). Further, the Kentucky legislature has declared
that “effective control and regulation” of all “persons who are required to obtain a license,
certificate, or permit from the Board of Pharmacy, whether located in or outside the
Commonwealth, that distribute, manufacture, or sell drugs within the Commonwealth” is
necessary in order to “promote, preserve, and protect public health, safety, and welfare.” KY.
REV. STAT. ANN. § 315.005. Kentucky Board of Pharmacy regulations state that “[a] wholesale

42

 Case 3:17-cv-00508-JHM-CHL Document 1 Filed 08/21/17 Page 43 of 70 PageID #: 43

distributor shall not . . . operate in a manner that endangers the public health.” 201 KY. ADMIN.
REG. 2:105 §7.
139.

By causing dangerously addictive drugs to flood the community, and to be

diverted for illicit purposes, in contravention of federal and Kentucky law, each Defendant has
injuriously affected rights common to the general public, specifically including the rights of the
people of Louisville Metro Area to public health, public safety, public peace, public comfort, and
public convenience. The public nuisance caused by Defendants’ diversion of dangerous drugs
has caused substantial annoyance, inconvenience, and injury to the public.
140.

By selling dangerously addictive opioid drugs diverted from a legitimate medical,

scientific, or industrial purpose, Defendants have committed a course of conduct that injuriously
affects the safety, health, and morals of the people of Louisville Metro Area.
141.

By failing to maintain a closed system that guards against diversion of

dangerously addictive drugs for illicit purposes, Defendants injuriously affected public rights,
including the right to public health, public safety, public peace, and public comfort of the people
of Louisville Metro Area.
142.

The residents of Louisville Metro Area have a common right to be free from

conduct that creates an unreasonable jeopardy to the public health, welfare and safety, and to be
free from conduct that creates a disturbance and reasonable apprehension of danger to person and
property. Specifically, widespread distribution of prescription opioids for illicit purposes
jeopardizes these common rights, and the illegal widespread distribution of prescription opioids
would not be possible but for the unlawful and intentional acts, or failures to act, by Defendants.
143.

Defendants intentionally, unlawfully, and recklessly distribute and sell

prescription opioids that Defendants know, or reasonably should know, will be diverted, causing

43

 Case 3:17-cv-00508-JHM-CHL Document 1 Filed 08/21/17 Page 44 of 70 PageID #: 44

widespread distribution of prescription opioids in and/or to Louisville Metro Area illegally,
resulting in addiction and abuse, an elevated level of crime, death and injuries to Louisville
Metro Area residents, a higher level of fear, discomfort and inconvenience to the residents of
Louisville Metro Area, and direct costs to Plaintiff itself.
144.

Defendants have unlawfully and/or intentionally caused and permitted dangerous

drugs under their control to be diverted such as to injure Plaintiff.
145.

Defendants have unlawfully and/or intentionally distributed opioids without

maintaining effective controls against diversion. Such conduct was illegal. Defendants violated
the federal and Kentucky Controlled Substances Acts. Defendants’ failures to maintain effective
controls against diversion include Defendants’ failures to effectively monitor for suspicious
orders, report suspicious orders, and/or stop shipment of suspicious orders.
146.

Defendants have caused a substantial and unreasonable interference with the

public health, safety, welfare, peace, comfort and convenience, and ability to be free from
disturbance and reasonable apprehension of danger to person or property. The Defendants’
conduct is proscribed by state and federal law. Here, Defendants are not in compliance with
applicable law or are otherwise negligent in carrying out their respective enterprises.
147.

Defendants’ conduct in illegally distributing and selling prescription opioids

where Defendants know, or reasonably should know, such opioids will be diverted and possessed
and/or used illegally in Louisville Metro Area is of a continuing nature and has produced a
significant effect upon the public’s rights, including the public’s right to health and safety.
148.

Defendants’ distribution of opioids while failing to maintain effective controls

against diversion was proscribed by statute and regulation.

44

 Case 3:17-cv-00508-JHM-CHL Document 1 Filed 08/21/17 Page 45 of 70 PageID #: 45

149.

Defendants’ ongoing conduct produces an ongoing nuisance, as the prescription

opioids that they allow and/or cause to be illegally distributed and possessed in Louisville Metro
Area will be diverted, leading to abuse, addiction, crime, and public health costs.
150.

As a result of the continued use and addiction caused by these illegally distributed

opioids, the public will continue to fear for its health, safety and welfare, and will be subjected to
conduct that creates a disturbance to person and property.
151.

Defendants know, and/or reasonably should know, that their conduct will have an

ongoing detrimental effect upon the public health, safety and welfare, and the public’s ability to
be free from disturbance and reasonable apprehension of danger to person and property.
152.

Defendants know, or reasonably should know, that their conduct causes an

unreasonable invasion of the public right to health, safety and welfare and the public’s ability to
be free from disturbance and reasonable apprehension of danger to person and property.
153.

Defendants are aware, and at a bare minimum certainly should be aware, of the

unreasonable interference that their conduct has caused in Louisville Metro Area. Defendants are
in the business of distributing prescription drugs, including opioids, which are specifically
known to Defendants to be dangerous under federal and Kentucky law. See, e.g., 21 U.S.C.A. §
812 (b)(2); KY. REV. STAT. ANN. § 218A.060.
154.

Defendants’ conduct in marketing, distributing, and selling prescription opioids

which the Defendants know, or reasonably should know, will likely be diverted for nonlegitimate, non-medical use, creates a strong likelihood that these illegal distributions of opioids
will cause death and injuries to Louisville Metro Area residents and otherwise significantly and
unreasonably interfere with public health, safety and welfare, and with the public’s right to be
free from disturbance and reasonable apprehension of danger to person and property.

45

 Case 3:17-cv-00508-JHM-CHL Document 1 Filed 08/21/17 Page 46 of 70 PageID #: 46

155.

It is, or should be, reasonably foreseeable to Defendants that their conduct will

cause deaths and injuries to Louisville Metro Area residents, and will otherwise significantly and
unreasonably interfere with public health, safety and welfare, and with the public’s right to be
free from disturbance and reasonable apprehension of danger to person and property.
156.

The prevalence and availability of diverted prescription opioids in the hands of

irresponsible persons and persons with criminal purposes in Louisville Metro Area not only
causes deaths and injuries, but also creates a palpable climate of fear among Louisville Metro
Area residents where opioid diversion, abuse, and addiction are prevalent and where they tend to
be used frequently.
157.

Defendants’ conduct makes it easier for persons to divert prescription opioids,

constituting a dangerous threat to the public.
158.

Defendants’ actions were, at the least, a substantial factor in opioids becoming

widely available and widely used for non-medical purposes. Because of Defendants’ unique
position within the closed system of opioid distribution, without Defendants’ actions, opioid use
would not have become so widespread, and the enormous public health hazard of prescription
opioid and heroin overuse, abuse, and addiction that now exists would have been averted.
159.

The presence of diverted prescription opioids in Louisville Metro Area, and the

consequence of prescription opioids having been diverted in Louisville Metro Area, proximately
results in significant costs to Plaintiff in order to enforce the law, equip its police force, respond
to emergencies, and treat the victims of opioid abuse and addiction.
160.

Stemming the flow of illegally distributed prescription opioids, and abating the

nuisance caused by the illegal flow of opioids, will help to alleviate this problem, save lives,
prevent injuries and make Louisville Metro Area a safer place to live.

46

 Case 3:17-cv-00508-JHM-CHL Document 1 Filed 08/21/17 Page 47 of 70 PageID #: 47

161.

Defendants’ conduct is a direct and proximate cause of and/or a substantial factor

leading to deaths and injuries to Louisville Metro Area residents, costs borne by Plaintiff, and a
significant and unreasonable interference with public health, safety and welfare, and with the
public’s right to be free from disturbance and reasonable apprehension of danger to person and
property.
162.

Defendants’ conduct constitutes a public nuisance and, if unabated, will continue

to threaten the health, safety and welfare of Louisville Metro Area’s residents, creating an
atmosphere of fear and addiction that tears at the residents’ sense of well-being and security.
Plaintiff has a clearly ascertainable right to abate conduct that perpetuates this nuisance.
163.

Defendants’ actions created and expanded the abuse of opioids, which are

dangerously addictive, and the ensuing associated plague of prescription opioid and heroin
addiction. Defendants knew the dangers to public health and safety that diversion of opioids
would create in Louisville Metro Area, however, Defendants intentionally and/or unlawfully
failed to maintain effective controls against diversion through proper monitoring, reporting and
refusal to fill suspicious orders of opioids. Defendants intentionally and/or unlawfully distributed
opioids without reporting, and without refusing to fill, suspicious orders or taking other measures
to maintain effective controls against diversion. Defendants intentionally and/or unlawfully
continued to ship and failed to halt suspicious orders of opioids. Such actions were inherently
dangerous.
164.

Defendants knew the prescription opioids have a high likelihood of being

diverted. It was foreseeable to Defendants that where Defendants distributed prescription opioids
without maintaining effective controls against diversion, including monitoring, reporting, and

47

 Case 3:17-cv-00508-JHM-CHL Document 1 Filed 08/21/17 Page 48 of 70 PageID #: 48

refusing shipment of suspicious orders, that the opioids would be diverted, and create an opioid
abuse nuisance in Louisville Metro Area.
165.

Defendants acted recklessly, negligently and/or carelessly, in breach of their

duties to maintain effective controls against diversion, thereby creating an unreasonable risk of
harm.
166.

Defendants acted with actual malice because Defendants acted with a conscious

disregard for the rights and safety of other persons, and said actions have a great probability of
causing substantial harm. Defendants acted willfully, and with such gross negligence as to
indicate a wanton disregard of the rights of others.
167.

As a direct and proximate result of Defendants’ conduct, which was a substantial

factor creating the harms alleged herein, Louisville Metro Area has suffered actual injury and
damages including, but not limited to, significant increased expenses for police, emergency,
ambulance services, health, prosecution, corrections and other services. While Plaintiff normally
has some expenses related to these services, the expenses have been significantly increased as a
direct and proximate result of Defendants’ conduct, which was a substantial contributing factor,
and thus constitute specific and special injuries. The increased expenditures have been a
necessary means to respond to issues created by unlawful opioid prescription drugs in Louisville
Metro Area, but much greater expenditures are needed to abate the serious problems caused by
the opioid epidemic.
168.

Plaintiff has sustained specific and special injuries because its damages include,

inter alia, health services and law enforcement expenditures, and include without limitation costs
sustained by first responders, costs sustained by the government medical examiners and crime
labs, Health and Human Services costs, costs sustained by the Plaintiff’s payments for health

48

 Case 3:17-cv-00508-JHM-CHL Document 1 Filed 08/21/17 Page 49 of 70 PageID #: 49

services, including inter alia hospital and ambulance operations, costs related to opioid addiction
treatment and overdose prevention, and payments by governmental payor programs, such as
employee health insurance. Thus, Plaintiff seeks recovery for its own harm.
169.

Plaintiff further seeks to abate in the future this nuisance created by the

Defendants’ unreasonable, unlawful, intentional, ongoing, continuing, and persistent interference
with a right common to the public. Such abatement is feasible here and can be accomplished by
providing financial resources to Plaintiff to combat the problems arising from unlawfully
diverted opioids.
170.

The public nuisance created by Defendants’ actions is substantial and

unreasonable – it has caused and continues to cause significant harm to the community, and the
harm inflicted outweighs any offsetting benefit. The staggering rates of prescription opioid abuse
and heroin use resulting from Defendants’ abdication of their gate-keeping duties has caused
harm to the entire community that includes, but is not limited to:
a. The high rates of use have led to unnecessary opioid abuse, addiction, overdose,
injuries, and deaths.
b. Nor have children escaped the opioid epidemic unscathed. Easy access to prescription
opioids has made opioids a recreational drug of choice among Kentucky teenagers.
Even infants have been born addicted to opioids due to prenatal exposure, causing
severe withdrawal symptoms and lasting developmental impacts.
c. Even those Louisville Metro Area residents who have never taken opioids have
suffered from the public nuisance arising from Defendants’ abdication of their gatekeeper duties. Many have endured both the emotional and financial costs of caring for
loved ones addicted to or injured by opioids, and the loss of companionship, wages,

49

 Case 3:17-cv-00508-JHM-CHL Document 1 Filed 08/21/17 Page 50 of 70 PageID #: 50

or other support from family members who have used, abused, become addicted to,
overdosed on, or been killed by opioids, further impacting the public right to health
and safety.
d. The opioid epidemic has increased health care costs.
e. Employers have lost the value of productive and healthy employees.
f. Defendants’ failure to maintain effective controls against diversion of dangerously
addictive prescription opioids for non-medical use and abuses has created an
abundance of drugs available for criminal use and fueled a new wave of addiction,
abuse, and injury.
g. Defendants’ dereliction of duties resulted in a diverted supply of narcotics to sell, and
the ensuing demand of addicts to buy them. Increased supply, due to Defendants’
conduct, led to more addiction, with many addicts turning from prescription opioids
to heroin. People addicted to opioids frequently require increasing levels of opioids,
and many turned to heroin as a foreseeable result.
h. The diversion of opioids into the secondary, criminal market and the increase in the
number of individuals who abuse or are addicted to opioids has increased the
demands on health care services and law enforcement in Louisville Metro Area.
i. The categories of damages sustained by Plaintiff include, among others, opioidrelated costs and burdens placed upon first responders, whose resources and expertise
are necessary to keep our community safe. The resources of inter alia emergency
responders, police, medical, and ambulance services have been drained, over and
above typical municipal community needs, as a result of the opioid epidemic in this
County.

50

 Case 3:17-cv-00508-JHM-CHL Document 1 Filed 08/21/17 Page 51 of 70 PageID #: 51

j. The significant unreasonable interference with the public rights caused by
Defendants’ conduct has taxed the human, medical, public health, law enforcement,
and financial resources of Plaintiff.
k. Defendants’ interference with the comfortable enjoyment of life in Louisville Metro
Area is unreasonable because there is little social utility to opioid diversion and
abuse, and any potential value is outweighed by the gravity of the harm inflicted by
Defendants’ actions.
COUNT II
RACKETEER INFLUENCED AND CORRUPT ORGANIZATIONS ACT (RICO)
18 U.S.C. §§ 1961, et seq.
171.

Plaintiff incorporates by reference all other paragraphs of this Complaint as if

fully set forth here, and further allege as follows.
172.

Each Defendant is associated with an enterprise which affects interstate

commerce for purposes which include the illegal distribution of opioids. As explained herein,
each Defendant Wholesale Distributor conducted or participated in the enterprise’s affairs
through commission of criminal offenses which constitute a pattern of racketeering activity.
173.

Defendant corporations are “persons” within the meaning of 18 U.S.C. § 1961(3)

which conducted the affairs of an enterprise through a pattern of racketeering activity, in
violation of 18 U.S.C. § 1962.
174.

Plaintiff was injured in its business or property as a result of each Defendant’s

wrongful conduct and is a “person” who can bring an action for violation of section 1962, as that
term is defined in 18 U.S.C. § 1961(3). “Any person injured in his business or property by reason
of a violation of section 1962 of this chapter may sue therefor in any appropriate United States
district court and shall recover threefold the damages he sustains and the cost of the suit,
including a reasonable attorney’s fee....” 18 U.S.C. § 1964.

51

 Case 3:17-cv-00508-JHM-CHL Document 1 Filed 08/21/17 Page 52 of 70 PageID #: 52

A. The Opioids Diversion Enterprise.
175.

Each Defendant formed an association-in-fact enterprise (“Opioids Diversion

Enterprise”), and participated in the affairs of this enterprise when distributing highly dangerous,
addictive opioid drugs in Louisville Metro Area. Each Defendant’s Opioids Diversion Enterprise
consists of (a) each Defendant, including its employees, co-Defendant subsidiaries, and agents;
and (b) each Defendant’s retail pharmacies which placed orders for vast quantities of opioids.
Indeed, the Defendants could not have diverted opioids without the participation of retail
pharmacies. The events described herein required retail pharmacies to place orders for these vast
quantities of opioids.
176.

Each Defendant and its respective pharmacy customers participated in the conduct

of the Opioids Diversion Enterprise, sharing the common purpose of profiting from the sale of
opioids, through a pattern of racketeering activity, which includes multiple violations of the
Kentucky Controlled Substances Act, constituting a felony, and multiple instances of federal
mail and wire fraud.
177.

Each Defendant’s Opioids Diversion Enterprise is an ongoing and continuing

business organization that created and maintained systematic links for a common purpose: to
profit from the sale of opioid prescription pills. Each Defendant conducted this enterprise
notwithstanding that its failure to abide by mandatory checks and balances constituted unlawful
diversion of a dangerous controlled substance.
178.

The system is structured such that wholesalers and pharmacies see greater profits

at higher volumes. As a result, these companies are financially discouraged from undertaking
efforts to combat opioid abuse. Wholesale Distributors acquire pharmaceuticals, including
opioids, from manufacturers at an established wholesale acquisition cost (“WAC”). Discounts
and rebates may be offered by the manufacturers based on, inter alia, market share and volume.

52

 Case 3:17-cv-00508-JHM-CHL Document 1 Filed 08/21/17 Page 53 of 70 PageID #: 53

Thus, the Defendant Wholesale Distributors are incentivized to order greater amounts so that
they can decrease the cost per pill. The Defendant Wholesale Distributors used the decreased
cost per pill to increase their market share (and thus, profits), by offering more competitive
prices, or they maintained their prices and pocketed the difference as additional profit. Either
way, increased sales volumes result in increased profits. At every turn, each Defendant
maximized its profits through discounts and rebates by ordering and selling more opioids.67
179.

As described above and expressly incorporated herein, the Defendant Wholesale

Distributors: (a) were placed on notice by the DEA, and were the subject of repeated DEA
enforcement actions; and (b) misrepresented their compliance with their legal obligations to
maintain a closed system.
180.

Each Defendant’s Opioid Diversion Enterprise has caused opioids to be abused

throughout Louisville Metro Area, with an ongoing cascade of human suffering and death that
continues to consume the resources of Plaintiff’s health and human services, health care, and law
enforcement systems.
181.

Each Defendant and its respective retail pharmacy customers were willing

participants in the Opioids Diversion Enterprise, had a common purpose and interest in the
object of the scheme, and functioned within a structure designed to effectuate the Enterprise’s
purpose.
B. Conduct of the Opioids Diversion Enterprise
182.

To accomplish the common purpose of profiting from the sale of opioid

prescription pills, each Defendant’s Opioids Diversion Enterprise periodically and systematically
misrepresented – either affirmatively or through half-truths and omissions – to the general
67

“Follow the Pill: Understanding the U.S. Commercial Pharmaceutical Supply Chain,” The
Kaiser Family Foundation, March 2005.

53

 Case 3:17-cv-00508-JHM-CHL Document 1 Filed 08/21/17 Page 54 of 70 PageID #: 54

public, Plaintiff, Kentucky consumers, the Kentucky Board of Pharmacy, and the Kentucky
Cabinet for Health and Family Services, that it was fulfilling the requirements of its Kentucky
wholesale distributor license when, in fact, the duty to maintain effective controls to prevent
diversion for non-medical purposes was being ignored in pursuit of ever increasing profits.
183.

The persons engaged in each Defendant’s Opioids Diversion Enterprise are

systematically linked through contractual relationships, financial ties, and continuing
coordination of activities. Typically, this communication occurred, and continues to occur,
through the use of the wires and mail in which each Defendant and its respective retail pharmacy
customers communicate to facilitate the prescription opioid orders.
184.

Each Defendant’s Opioids Diversion Enterprise functions as a continuing unit for

the purposes of profiting from the sale of opioid prescription drugs.
185.

At all relevant times, the retail pharmacy customers were aware of Defendants’

conduct, were knowing and willing participants in that conduct, and reaped benefits from that
conduct.
186.

The sheer volume of prescription opioids flooding out of the doors of the

Defendant Wholesale Distributors and into communities across the country, including Louisville
Metro Area, shocks the conscience and required each Defendant Wholesale Distributor to take
appropriate action, such as investigating and reporting the orders as suspicious. Given their
place in the supply chain, the Defendant Wholesale Distributors are uniquely situated to identify
suspicious transactions. However, determined to increase their revenues, each of the Defendant
Wholesale Distributors willfully ignored obvious warning signs concerning suspicious orders. It
would be virtually impossible for all of the orders to be legitimate, as there was no medical-need
correlation justifying the skyrocketing orders for these addictive drugs.

54

 Case 3:17-cv-00508-JHM-CHL Document 1 Filed 08/21/17 Page 55 of 70 PageID #: 55

187.

For all times relevant to this Complaint, each Defendant exerted control over its

Opioids Diversion Enterprise and participated in the operation and management of the affairs of
the Opioids Diversion Enterprise, directly or indirectly, in the following ways:
a. Defendants obtained a license from the Kentucky Board of Pharmacy and the
Kentucky Cabinet for Health and Family Services but, contrary to the requirements of
Kentucky law, including federal laws incorporated into Kentucky law, Defendants
failed to take necessary action to maintain effective controls against diversion of
dangerously addictive prescription opioids, and in dereliction of non-delegable duties,
sold opioid pills to their retail pharmacy customers notwithstanding that the increase
and quantum of addictive drug orders raised serious red flags regarding the drugs’
unlawful, non-medical use;
b. Defendants misrepresented their compliance with their legal obligations, making false
assurances that their distribution complied with the law, including without limitation
the requirements of a Kentucky distributor license, when, in truth, Defendants sold all
the opioids they could, for profit, and in violation of their legal duties to guard against
diversion of prescription opioids for illicit purposes;
c. Defendants refused to heed the DEA’s warnings and continued to sell opioids and fill
suspicious orders which were likely to be diverted;
d. Defendants refused to abide by the terms of DEA enforcement actions and
settlements, continuing to sell opioids to fill suspicious orders;
e. Defendants did not monitor, detect, investigate, refuse to fill, and report suspicious
orders to the DEA as required under the terms of their licenses and applicable law;

55

 Case 3:17-cv-00508-JHM-CHL Document 1 Filed 08/21/17 Page 56 of 70 PageID #: 56

f. Defendants intentionally and/or unlawfully sold the opioids unlawfully, purely for
profit and without regard to the opioid plague, notwithstanding Defendants’
knowledge that substantial foreseeable harm would occur; and,
g. Defendants only succeeded in these opioid sales by using wire and mail to
communicate with the retail pharmacies.
188.

The retail pharmacies participated in each Defendant’s Opioid Diversion

Enterprise by employing mail and wire to send orders of opioids to Defendants and to buy
opioids from Defendants. The retail pharmacies also participated in each Defendant’s Opioid
Diversion Enterprise by engaging with Defendants in violation of the Kentucky Controlled
Substances Act and Kentucky law as described herein.
189.

The scheme devised and implemented by each Defendant, as well as other

members of each Defendant’s Opioids Diversion Enterprise, amounted to a common course of
conduct intended to profit from Opioid sales.
C. Pattern of Racketeering Activity
190.

Each Defendant conducted and participated in the conduct of the affairs of each

Defendant’s Opioids Marketing Enterprise through a pattern of racketeering activity, which
violates 18 U.S.C. § 1962(c).
191.

Regardless of any licenses or registrations held by Defendants to distribute

dangerous and harmful drugs, their conduct was neither “lawful” nor “authorized.” Defendants
engaged in a fraudulent and unlawful course of conduct constituting a pattern of racketeering
activity.
192.

The pattern of racketeering activity alleged herein and each Defendant’s Opioids

Diversion Enterprise are separate and distinct from each other. Likewise, each Defendant is
distinct from its respective Opioids Diversion Enterprise.

56

 Case 3:17-cv-00508-JHM-CHL Document 1 Filed 08/21/17 Page 57 of 70 PageID #: 57

193.

The pattern of racketeering activity alleged herein is continuing as of the date of

this Complaint and, upon information and belief, will continue into the future unless enjoined by
this Court.
194.

Many of the precise dates of the Defendants’ criminal actions at issue here have

been hidden and cannot be alleged without access to Defendants’ books and records. Indeed,
Defendants’ misrepresentations to the public, the Kentucky Board of Pharmacy, the Kentucky
Cabinet for Health and Family Services, and the DEA, depended on secrecy.
195.

Each instance of racketeering activity alleged herein was related, had similar

purposes, involved the same or similar participants and methods of commission, and had similar
results affecting similar victims, including Louisville Metro Area and its citizens.

Each

Defendant crafted its scheme to ensure its own profits remained high, without regard to the effect
such behavior had on Louisville Metro Area and its citizens. In designing and implementing their
respective schemes, at all times each Defendant was cognizant of the fact that those in the
distribution chain and Kentucky Board of Pharmacy, the Kentucky Cabinet for Health and
Family Services, and the DEA, inter alia, rely on the integrity of the wholesale distributors to
maintain a closed system and to protect against the non-medical uses of these dangerously
addictive opioid drugs.
196.

Each Defendant knowingly engaged in, attempted to engage in, conspired to

engage in, or solicited another person to engage in racketeering activity, including the
distribution of dangerous and harmful drugs to persons, including minors, in violation of the
Kentucky Controlled Substances Act and related Kentucky laws, at retail pharmacies, hospitals,
and other health care facilities throughout Louisville Metro Area.

57

 Case 3:17-cv-00508-JHM-CHL Document 1 Filed 08/21/17 Page 58 of 70 PageID #: 58

197.

Each Defendant’s actions were in violation of Chapter 218A of the Kentucky

Revised Statutes, and more specifically: § 218A.1404, which forbids unlawful distribution of
controlled substances; § 218A.1404, which forbids the trafficking of controlled substances; and,
KY. REV. STAT. ANN. § 506.040; KY. REV. STAT. ANN. § 218A.1402, which forbid criminal drug
conspiracies; and KY. REV. STAT. ANN. § 218A.1405, which forbids receipt of income from
trafficking and utilizing that income to operate a commercial enterprise.
198.

Defendants violated Section 218A.1404 of the Kentucky Controlled Substances

Act, which provides that, “No person shall dispense, prescribe, distribute, or administer any
controlled substance except as authorized by law.” KY. REV. STAT. ANN. § 218A.1404
199.

Defendants violated § 218A.1404 of the Kentucky Controlled Substances Act,

which provides that, “No person shall traffic in any controlled substance except as authorized by
law”.

KY. REV. STAT. ANN. § 218A.1404(1). See KY. REV. STAT. ANN. §218A.010(55)

(“’Traffic,’ . . . means to . . . distribute, dispense, sell, transfer, or possess with intent to . . .
distribute, dispense, or sell a controlled substance”).
200.

Defendants violated Kentucky Revised Statute Section 506.040 and Section

218A.1402 of the Kentucky Controlled Substances Act, which provides that a person commits
criminal drug conspiracy when, with the intent that a crime be committed, it agrees with another
to the commission of that offense. KY. REV. STAT. ANN. § 506.040; KY. REV. STAT. ANN. §
218A.1402.
201.

Defendants also violated § 218A.1405 of the Kentucky Controlled Substances

Act by “knowingly receiv[ing] any income derived directly or indirectly from trafficking in a
controlled substance” and then using that income “establish or operate. . . [a] commercial
enterprise.” KY. REV. STAT. ANN. § 218A.1405.

58

 Case 3:17-cv-00508-JHM-CHL Document 1 Filed 08/21/17 Page 59 of 70 PageID #: 59

202.

Defendants do not qualify for the “authorized by law” exceptions to the Kentucky

Controlled Substance Act violations because Defendants did not comply with the mandatory
terms of the licenses issued to them by the Kentucky Board of Pharmacy, the Kentucky Cabinet
for Health and Family Services, or with federal requirements incorporated by reference, as
further detailed in this Complaint.
203.

Defendants’ violations of the Kentucky Controlled Substances Act qualify as

felonies carrying a prison term in excess of one year, and therefore the violations constitute
racketeering activity under 18 U.S.C. § 1961(1)(A).
204.

In addition, each Defendant knowingly engaged in, attempted to engage in,

conspired to engage in, or solicited another person to engage in racketeering activity, including
thousands of separate instances of use of the United States Mail or interstate wire facilities in
furtherance of each Defendant’s unlawful Opioids Diversion Enterprise. Each of these fraudulent
mailings and interstate wire transmissions constitutes racketeering activity and collectively, these
violations constitute a pattern of racketeering activity. Each Defendant specifically intended to
obtain money by means of false pretenses, representations, and promises, and used the mail and
interstate wires for the purpose of executing this scheme; specifically, each Defendant
communicated with its respective retail pharmacy customers via wire and used the mail to
receive orders and sell drugs unlawfully. Any violation of the mail or wire fraud statutes is
defined as “racketeering activity.” 18 U.S.C. § 1961(1)(B).
D. Damages
205.

Defendants’ violations of law and their pattern of racketeering activity have

directly and proximately caused, and/or have been a substantial factor causing, the Plaintiff to be
injured in its business or property because Plaintiff has paid for costs associated with the opioid
epidemic, as described in this Complaint.

59

 Case 3:17-cv-00508-JHM-CHL Document 1 Filed 08/21/17 Page 60 of 70 PageID #: 60

206.

The Plaintiff’s injuries proximately caused by Defendants’ racketeering activities.

But for Defendants’ conduct, the Plaintiff would not have paid inter alia the health services and
law enforcement services expenditures required by the plague of drug-addicted residents.
207.

The Plaintiff’s injuries were directly caused by Defendants’ racketeering

activities.
208.

The Plaintiff was most directly harmed, and there is no other Plaintiff better

situated to seek a remedy for the economic harms at issue here.
COUNT III
NEGLIGENCE
KENTUCKY COMMON LAW
209.

Plaintiff incorporates by reference all other paragraphs of this Complaint as if

fully set forth here, and further allege as follows.
210.

Each Defendant had an obligation to exercise due care in distributing highly

dangerous opioid drugs in Louisville Metro Area.
211.

To recover on a common law negligence claim in Kentucky, there must be a duty

on the defendant’s part, a breach of that duty, and consequent injury.
212.

Kentucky law has adopted a “universal duty of care” which requires every person

to exercise ordinary care in his activities to prevent foreseeable injury. See T & M Jewelry, Inc.
v. Hicks ex rel. Hicks, 189 S.W.3d 526 (Ky. 2006). If a course of action creates a foreseeable risk
of injury, the individual engaged in that course of action has a duty to protect others from such
injury. Each Defendant owed a duty to the Plaintiff, and to the public in Louisville Metro Area,
because the injury was foreseeable, and in fact foreseen, by the Defendants.
213.

Each Defendant owed a duty to the Plaintiff because the injury was likely. Each

Defendant was required to guard against the injury as a requirement for the licenses each
Defendant maintains, and the burden of guarding against the injury was voluntarily assumed and

60

 Case 3:17-cv-00508-JHM-CHL Document 1 Filed 08/21/17 Page 61 of 70 PageID #: 61

not unduly onerous. The burden of guarding against the injury is properly placed upon each
Defendant, and indeed, federal and state licensing and registration requirements required that
each Defendant guard against the diversion of dangerously addictive opioids for illicit purposes.
214.

Reasonably prudent wholesale drug distributors would have anticipated that the

scourge of opioid addiction would wreak havoc on communities. As explained above, the system
whereby wholesale distributors are the gatekeepers between manufacturers and pharmacies exists
for the purpose of controlling dangerous substances such as opioids. Defendants were repeatedly
warned by law enforcement. The escalating amounts of addictive drugs flowing through
Defendants’ businesses, and the sheer volume of these prescription opioids, further alerted
Defendants that addiction was fueling increased consumption and that legitimate medical
purposes were not being served.
215.

As described above in language expressly incorporated herein, Defendants

breached their duties to exercise due care in the business of wholesale distribution of dangerous
opioids, which are Schedule II Controlled Substances, by filling highly suspicious orders time
and time again. Because the very purpose of these duties was to prevent the resulting harm –
diversion of highly addictive drugs for non-medical purposes – the causal connection between
Defendants’ breach of duties and the ensuing harm was entirely foreseeable.
216.

In addition, Defendants’ violations of public safety laws are prima facie evidence

of negligence. Each Defendant had a duty under, inter alia, these laws to maintain effective
controls against diversion of prescription opioids and to guard against, prevent, and report
suspicious orders of opioids. Defendants’ violations of the law constitute negligence per se.
Defendants breached mandatory, non-delegable legal duties and did not act reasonably under the
circumstances.

61

 Case 3:17-cv-00508-JHM-CHL Document 1 Filed 08/21/17 Page 62 of 70 PageID #: 62

217.

As described above in language expressly incorporated herein, Defendants’

breach of duty caused, bears a causal connection with, was and is a substantial factor
contributing to, and/or proximately resulted in, harm and damages alleged herein.
218.

As described above in language expressly incorporated herein, Defendants

breached their duties to maintain effective controls against diversion of dangerously addictive
opioids, including violating public safety statutes and regulations requiring that as wholesale
drug distributors, Defendants could only distribute these dangerous drugs under a closed system
– a system Defendants were responsible for guarding.
219.

As described above in language expressly incorporated herein, Defendants’

breach of statutory and regulatory duties caused, bears a causal connection with, is and was a
substantial factor contributing to, and/or proximately resulted in, harm and damages alleged
herein.
220.

It was foreseeable that the breach of duty described herein would result in the

damages alleged herein.
221.

Defendants acted with actual malice, willfully, and with such gross negligence as

to indicate a wanton disregard of the rights of others. Punitive damages are necessary to deter
similar conduct in the future.
COUNT IV
NEGLIGENCE PER SE
KENTUCKY REVISED STATUTES § 446.070
222.

Plaintiff incorporates by reference all other paragraphs of this Complaint as if

fully set forth here, and further allege as follows.
223.

The Kentucky General Assembly has declared that “[t]he regulation of controlled

substances in this Commonwealth is important and necessary for the preservation of public

62

 Case 3:17-cv-00508-JHM-CHL Document 1 Filed 08/21/17 Page 63 of 70 PageID #: 63

safety and public health.” KY. REV. STAT. ANN. § 218A.005(1). Further, the Kentucky has
declared that “effective control and regulation” of all “persons who are required to obtain a
license, certificate, or permit from the Board of Pharmacy, whether located in or outside the
Commonwealth, that distribute, manufacture, or sell drugs within the Commonwealth” is
necessary in order to “promote, preserve, and protect public health, safety, and welfare.” KY.
REV. STAT. ANN. § 315.005. Kentucky Board of Pharmacy regulations state that “[a] wholesale
distributor shall not . . . operate in a manner that endangers the public health.” 201 KY. ADMIN.
REG. 2:105 §7.
224.

Accordingly, Kentucky’s minimum requirements for wholesale drug distribution

mandate that “all sales and distributions shall be in accordance with . . . the federal controlled
substances laws . . . .” KY. REV. STAT. ANN. § 218A.170. As wholesale drug distributors, each
Defendant was required under Kentucky law to first be licensed by the Kentucky Cabinet for
Health and Family Services. KY. REV. STAT. ANN. § 218A.150. To receive and maintain this
license, each of the Defendant Wholesale Distributors assumed a duty to comply with “all
applicable federal and state laws and regulations relating to controlled substances.” KY. REV.
STAT. ANN. § 218A.160(1)(a). Kentucky Board of Pharmacy licensure requirements mandate
that a wholesale distributor “continue[] to demonstrate acceptable operational procedures,
including . . . compl[iance] with all DEA regulations.” 201 KY. ADMIN. REG. 2:105 §2(4)(d).
225.

The federal laws and requirements which Kentucky incorporates into its own laws

require Defendants to act as gatekeepers guarding against the diversion of the highly addictive,
dangerous opioid drugs. See Kentucky laws incorporating federal requirements (KY. REV. STAT.
ANN. § 218A.170(4); KY. REV. STAT. ANN. § 218A.160(1)(a); 902 KY. ADMIN. REGS.
55:010(h)(2)(b); 201 KY. ADMIN. REG. 2:105 §2(4)(d)).

63

 Case 3:17-cv-00508-JHM-CHL Document 1 Filed 08/21/17 Page 64 of 70 PageID #: 64

226.

The federal mandates incorporated into Kentucky law require that Distributors of

Schedule II drugs, including opioids, must maintain “effective control against diversion of
particular controlled substances into other than legitimate medical, scientific, and industrial
channels.” 21 U.S.C. § 823(b)(1). These federal regulations impose a non-delegable duty upon
wholesale drug distributors to “design and operate a system to disclose to the registrant
suspicious orders of controlled substances. The registrant [distributor] shall inform the Field
Division Office of the Administration in his area of suspicious orders when discovered by the
registrant. Suspicious orders include orders of unusual size, orders deviating substantially from a
normal pattern, and orders of unusual frequency.” 21 C.F.R. § 1301.74(b).
227.

In addition to reporting all suspicious orders, distributors must also stop shipment

on any order which is flagged as suspicious and only ship orders which were flagged as
potentially suspicious if, after conducting due diligence, the distributor can determine that the
order is not likely to be diverted into illegal channels. See Southwood Pharm., Inc., 72 Fed. Reg.
36,487, 36,501 (Drug Enf’t Admin. July 3, 2007); Masters Pharm., Inc. v. Drug Enf’t Admin.,
861 F.3d 206 (D.C. Cir. 2017). Regardless, all flagged orders must be reported. Id.
228.

Each Defendant was further required to register with the DEA, pursuant to the

federal Controlled Substance Act, as incorporated into Kentucky law. See 21 U.S.C. § 823(b),
(e); 28 C.F.R. § 0.100. Each of the Defendant Wholesale Distributors is a “registrant” as a
wholesale distributor in the chain of distribution of Schedule II controlled substances with a duty
to comply with all security requirements imposed under that statutory scheme.
229.

Each Defendant’s actions were in violation of Chapter 218A of the Kentucky

Revised Statutes, as set out above, and also including § 218A.1404, which forbids unlawful
distribution of controlled substances; § 218A.1404, which forbids the trafficking of controlled

64

 Case 3:17-cv-00508-JHM-CHL Document 1 Filed 08/21/17 Page 65 of 70 PageID #: 65

substances; and, KY. REV. STAT. ANN. §§ 506.040 and 218A.1402, which forbid criminal drug
conspiracies; and KY. REV. STAT. ANN. § 218A.1405, which forbids receipt of income from
trafficking and utilizing that income to operate a commercial enterprise.
230.

Kentucky Revised Statutes § 446.070, “Penalty no bar to civil recovery,” provides

for the right to recover damages sustained by a violation of any Kentucky statute or public safety
regulation, stating: “A person injured by the violation of any statute may recover from the
offender such damages as he sustained by reason of the violation, although a penalty or forfeiture
is imposed for such violation.” “Person” is broadly construed to include “bodies-politic and
corporate, societies, communities, the public generally, individuals, partnerships, joint stock
companies, and limited liability companies.” KY. REV. STAT. ANN. § 446.010(33).
231.

Section 446.070 creates a private right of action in a person damaged by another

person's violation of any statute even where the statute is penal in nature and provides no civil
remedy, if the person damaged is within the class of persons the statute intended to be protected.
Section 446.070 also extends to Kentucky administrative regulations where adopted pursuant to
an enabling statute and where such regulations concern public safety.
232.

Louisville Metro is within the class of persons intended to be protected by the

public safety statutes and regulations concerning wholesale distribution of controlled substances.
233.

Defendants’ violations of these public safety laws are prima facie evidence of

negligence and a violation of Section 446.070. Each Defendant had a duty under, inter alia, these
laws to maintain effective controls against diversion of prescription opioids and to guard against,
prevent, and report suspicious orders of opioids. Defendants’ violations of the law constitute
negligence per se. Defendants breached mandatory, non-delegable legal duties and did not act
reasonably under the circumstances.

65

 Case 3:17-cv-00508-JHM-CHL Document 1 Filed 08/21/17 Page 66 of 70 PageID #: 66

234.

As described above in language expressly incorporated herein, Defendants

breached their duties to maintain effective controls against diversion of dangerously addictive
opioids, including violating public safety statutes and regulations requiring that as wholesale
drug distributors, Defendants could only distribute these dangerous drugs under a closed system
– a system Defendants were responsible for guarding.
235.

As described above in language expressly incorporated herein, Defendants’

breach of statutory and regulatory duties caused, bears a causal connection with, is and was a
substantial factor contributing to, and/or proximately resulted in, harm and damages to Plaintiff.
236.

The injuries and damages sustained are those which the Kentucky statutes and

public safety regulations were designed to prevent.
237.

Defendants’ violations of the Kentucky statutes and public safety regulations cited

herein were and are a substantial factor in the injuries and damages sustained.
238.

It was foreseeable that Defendants’ breach of statutory and regulatory duties

described herein would result in the damages sustained.
V. CONCLUSION
239.

Defendant Wholesale Distributors had a duty to abide by safety laws and maintain

effective controls against diversion of controlled substances under both Kentucky and federal
law, including a duty to monitor, detect, report, and refuse to fill suspicious orders of
prescription opioids. Plaintiffs alleges that the Defendant Wholesale Distributors unlawfully,
negligently, and intentionally breached their duties under federal and Kentucky law, and that
such breaches are a proximate cause of the opioid epidemic plaguing Louisville Metro.
Defendants actions were and are a substantial contributing factor to the harms alleged herein.
The unlawful, intentional, and negligent conduct by the Defendant Wholesale Distributors has

66

 Case 3:17-cv-00508-JHM-CHL Document 1 Filed 08/21/17 Page 67 of 70 PageID #: 67

created a hazard to public health and safety in Louisville Metro Area and constitutes a public
nuisance under Kentucky law.
VI. AD DAMNUM
WHEREFORE, Plaintiff, Louisville/Jefferson County Metro Government, hereby
respectfully request trial by jury and that this Court adjudge and decree that Defendants are liable
for creating a public nuisance, enter judgment for the Plaintiff and against Defendants, award the
relief requested in each prayer for relief above, and:
1. Enter Judgment in favor of the Plaintiff in a final order against each of the
Defendants;
2. Enjoin the Defendants and their employees, officers, directors, agents, successors,
assignees, merged or acquired predecessors, parent or controlling entities,
subsidiaries, and all other persons acting in concert or participation with them, from
engaging in unlawful sales of prescription opioid pills and ordering temporary,
preliminary or permanent injunction;
3. Allocate monetary damages attributable to each Defendant for each Count pled
above;
4. Order that Defendants compensate the Plaintiff for its past and future damages and
costs to abate the ongoing public nuisance caused by the opioid epidemic;
5. Impose an award of actual and triple the actual damages the Plaintiff sustained as a
result of each Defendant’s violation of the Racketeer Influenced and Corrupt
Organizations Act, and any allowable civil penalty;
6. Order that each Defendant pay restitution;
7. Order that each Defendant disgorge profits;
8. Order that each Defendant is liable for civil penalties under Kentucky law;

67

 Case 3:17-cv-00508-JHM-CHL Document 1 Filed 08/21/17 Page 68 of 70 PageID #: 68

9. Allocate monetary damages attributable to each Defendant to compensate the Plaintiff
for the expenses and costs that it bears as a result of the public nuisance, including
without limitation (A) costs for providing medical care, additional therapeutic, and
prescription drug purchases, and other treatments/services for patients suffering from
opioid-related addiction or disease, including overdoses and deaths; (B) costs for
providing treatment, counseling, rehabilitation services; (C) costs for providing
treatment of infants born with opioid-related medical conditions; (D) costs associated
with law enforcement and public safety relating to the opioid epidemic, including
without limitation first responders and ambulance services; and (E) any other
expenses or damages caused by the Defendants’ diversion of opioids;
10. Order Defendants to fund an “abatement fund” for the purposes of abating the opioid
nuisance and otherwise abate the public nuisance;
11. Award judgment against the Defendants requiring Defendants to pay punitive and
exemplary damages;
12. Grant the Plaintiff:
a. Court costs, including reasonable attorney fees;
b. Pre-judgment and post-judgment interest, and,
c. All other relief as provided by law and/or as the Court deems appropriate and just.
Plaintiff asserts claims herein in excess of the minimum jurisdictional requirements of
this Court.

68

 Case 3:17-cv-00508-JHM-CHL Document 1 Filed 08/21/17 Page 69 of 70 PageID #: 69

PLAINTIFF DEMANDS A TRIAL BY JURY.

Date: August 21, 2017
/s/ Michael J. O’Connell
Michael J. O’Connell, Jefferson County Attorney
Matthew J. Golden, Civil Division Director
Jefferson County Attorney
Jefferson Hall of Justice
600 West Jefferson Street
Louisville, KY 40202
Tel.: (502) 574-6336
Mike.OConnell@louisvilleky.gov
Matt.Golden@louisvilleky.gov
James M. “Mike” Papantonio (Pro Hac Vice pending)
Peter J. Mougey (Pro Hac Vice pending)
Page A. Poerschke (Pro Hac Vice pending)
Laura S. Dunning (Pro Hac Vice pending)
Archie C. Lamb, Jr. (Pro Hac Vice pending)
Jeffrey Gaddy (Pro Hac Vice pending)
Neil E. “Ned” McWilliams, Jr. (Pro Hac Vice
pending)
Levin, Papantonio, Thomas, Mitchell,
Rafferty & Proctor, P.A.
316 S. Baylen Street, Suite 600
Pensacola, FL 32502-5996
Tel.: 850-435-7068
Fax: 850-436-6068
mpapantonio@levinlaw.com
pmougey@levinlaw.com
ppoerschke@levinlaw.com
ldunning@levinlaw.com
alamb@levinlaw.com
jgaddy@levinlaw.com
nmcwilliams@levinlaw.com

69

Paul T. Farrell, Jr. (Motion to Admit pending)
Greene, Ketchum, Farrell, Bailey &
Tweel, LLP
419 - 11th Street (25701)/ P.O. Box 2389
Huntington, West Virginia 25724-2389
Tel.: 800-479-0053 or 304-525-9115
Fax: 304-529-3284
paul@greeneketchum.com
Russell W. Budd (Pro Hac Vice pending)
J. Burton LeBlanc, (Pro Hac Vice pending)
Laura J. Baughman (Pro Hac Vice pending)
S. Ann Saucer (Pro Hac Vice pending)
Baron & Budd, P.C.
3102 Oak Lawn Avenue, Suite 1100
Dallas, TX 75219
Tel.: 214-521-3605
Fax: 214-520-1181
rbudd@baronbudd.com
bleblanc@baronbudd.com
lbaughman@baronbudd.com
asaucer@baronbudd.com

 Case 3:17-cv-00508-JHM-CHL Document 1 Filed 08/21/17 Page 70 of 70 PageID #: 70

James C. Peterson (Pro Hac Vice pending)
R. Edison Hill (Pro Hac Vice pending)
Hill, Peterson, Carper,
Bee & Deitzler, PLLC
NorthGate Business Park
500 Tracy Way
Charleston, WV 25311
Tel.: 304-345-5667
Fax: 304-345-1519
jcpeterson@hpcdb.com
rehill@hpcbd.com

Roland K. Tellis (Pro Hac Vice pending)
Mark P. Pifko (Pro Hac Vice pending)
Baron & Budd, P.C.
15910 Ventura Boulevard, Suite 1600
Los Angeles, CA 91436
Tel.: 818-839-2333
Fax: 818-986-9698
rtellis@baronbudd.com
mpifko@baronbudd.com

Michael J. Fuller, Jr., (Pro Hac Vice pending)
Amy Quezon, (Motion to Admit pending)
McHugh Fuller Law Group, PLLC
97 Elias Whiddon Rd.
Hattiesburg, MS 39402
Tel.: 601-261-2220
Fax: 601-261-2481
mike@mchughfuller.com
amy@mchughfuller.com

Gilliard B. Johnson III
Michael Bowling
Bowling & Johnson, PLLC
1217 East Cumberland Ave.
P.O. Box 130
Middlesboro, KY 40965
Tel: 859-469-6330
gjohnson@bowlingandjohnsonlaw.com
mikebowlinglaw@gmail.com
Mark Gray
Gray & White Law
713 East Market Street #200
Louisville, KY 40202
Tel: 502-210-8942
mgray@grayandwhitelaw.com

70