It’s been a few years since we talked about the conundrum facing pharmacies if they suspect prescriptions are medically unnecessary or improper. Back in 2015, two cases were decided within days of each other that allowed claims to go forward suggesting that a pharmacy could be potentially liable for both filling suspect prescriptions (see here) and for not filling suspect prescriptions (see here). Hence “damned if you do (question a prescription) and damned if you don’t.” We obviously have issues with both decisions as our prior posts explain. We don’t like the creation of new, ill-defined duties and we don’t like anything that creeps around in learned intermediary territory. But this is also a state-by-state issue and we have found other states not willing to make the leap to find that pharmacies have a duty to monitor patients or warn about excessive prescriptions. See Hernandez v. Walgreen Company, 2015 Ill. App. LEXIS 986 (Ill. App. Ct. Dec. 28, 2015). So, there is no bright line regarding what a pharmacy should do and it certainly seems at a minimum that pharmacies in different states are going to have to follow different rules – interesting when you consider the vast majority of prescriptions are filled by large national chains.

While the overarching question remains unanswered, a recent Seventh Circuit decision took a closer look at the substance of a “damned if you don’t” case that made it all the way to trial and found that most of it shouldn’t have survived summary judgment.

In Mimms v. CVS Pharmacy, Inc., — F.3d —, 2018 WL 2126720, *1 (7th Cir. May 9, 2018), plaintiff was a pain management physician who prescribed, among other things, opioids. On several occasions, CVS pharmacy employees informed customers that they would not fill Dr. Mimms’s prescriptions leading Dr. Mimms to sue CVS for alleged defamation. Id.   By the time the case went to trial it was based on four statements allegedly made by CVS employees:

  • “CVS doesn’t fill Dr. Mimms’[s] prescriptions or prescriptions for any other pill mills.”
  • “Dr. Mimms went to jail.”
  • “Dr. Mimms has been … or will be arrested.”
  • “Dr. Mimms is under DEA investigation.”

Id. Defendant moved for summary judgement on all four statements which was denied. Id. Defendant moved for judgment as a matter of law as to the first three statements at the conclusion of plaintiff’s case at trial. That too was denied and a verdict was entered in favor of plaintiff. Id.

Under Indiana law, to prove defamation, plaintiff had to establish that the speakers acted with actual malice. That is that they either knew their statements were false or had serious doubt as to their truth. Id. The district court found that plaintiff had met its burden regarding knowledge of falsity by showing that “CVS’s corporate office had concluded an investigation of Mimms and had not stopped stores from filling his patients’ prescriptions.” Id. In other words, the court imputed the knowledge of the principal to its agent which it is not permitted to do. Id. at *2 (citing New York Times v. Sullivan, 376 U.S. 254, 287 (1964)). Plaintiff had to prove that the employees themselves knew their statements were false or had serious doubts about their truth, which he did not do. Plaintiff pointed to emails from corporate officers to store supervisors asking supervisors to remind employees that company policy is not to make derogatory statements when refusing to fill prescriptions. Id. But there was no evidence that the email was sent to any of the speakers and more importantly it contained no information that would have informed speakers about the truth or falsity of their statements. So, plaintiff had no evidence from which a reasonable juror could conclude that the first three statements were made with actual malice. The court granted judgement as a matter of law as to those statements.

There was, however, some evidence that created a genuine dispute as to whether the speaker of the fourth statement – plaintiff was under DEA investigation – doubted its veracity. Id. So, while that statement would have survived summary judgment, the court found that CVS is entitled to a new trial based on erroneous trial rulings. At trial CVS was not allowed to offer evidence that Dr. Mimms’s former clinic had been subpoenaed for records of his prescriptions. That evidence CVS argued went to whether the statement was in fact true – a complete defense to defamation. Id. at *3. Even though Mimms had left the clinic at the time the subpoena was issued, “the fact that the DEA was seeking records for Mimms’s patients shortly after he left the practice supports CVS’s claim that Mimms was under investigation.” Id. CVS was also prohibited from introducing a transcript from a criminal trial in which a Health and Human Services agent testified that he investigated Mimms with a DEA agent. The Seventh Circuit found that the unduly prejudicial portions of the transcript could be redacted. It also concluded that the district court unnecessarily relieved plaintiff of his stipulation not to assert a hearsay objection to the transcript at trial. CVS relied on that agreement in deciding not to seek live testimony of the agent. Id. Finally, CVS was prohibited from offering evidence that Mimms’s professional reputation was already tarnished. While prejudicial, of course, the state of plaintiff’s reputation in a defamation action is critical to the issue of damages. Not allowing the evidence was an abuse of discretion. Add it all up and CVS is entitled to a new trial – one that feels like it should be drastically different than the first one.