May 10, 2018 / 8:46 PM / 10 months ago

CVS wins appeal of opioid prescriber’s $1 million defamation verdict

(Reuters) - You may not realize it, but your local pharmacy clerk is actually a soldier in the war on prescription opioid abuse. As CVS explained in a brief to the 7th U.S. Circuit Court of Appeals, federal law requires pharmacy workers to refuse to fill illegitimate prescriptions for controlled substances.

They’re trained to look for warning signs not just about patients – demands for early refills can be a giveaway – but also about doctors. Pharmacy workers at individual CVS stores, according to the brief, have the authority to reject prescriptions written by doctors they have reason to mistrust, like those who frequently prescribe controlled substances for their patients.

Those same CVS workers are also trained not to disparage doctors whose prescriptions they refuse to fill. CVS policies, according to a 7th Circuit brief by lawyers for an Indiana physician named Anthony Mimms, prohibit pharmacy employees from telling patients that doctors are, for instance, under criminal investigation or investigation by CVS officials, on the verge of losing their licenses or operating so-called pill mills.

Mimms, a pain management specialist who was one of Indiana’s most frequent opioid prescribers between 2013 and 2015, claimed he was defamed by employees at four different CVS stores. Despite CVS’s policy of not disparaging physicians whose prescriptions are rejected, Mimms alleged, CVS pharmacy employees told patients that he was “under investigation by the DEA,” that he “went to jail,” that he was going to be arrested and that his practice was a pill mill.

In 2016, a federal jury in Indianapolis found CVS defamed Mimms in those statements to patients whose prescriptions went unfilled. Jurors awarded him a total of $1.025 million. U.S. District Judge Tanya Walton Pratt of Indianapolis entered final judgment for Mimms in 2017.

On Wednesday, the 7th Circuit vacated the jury verdict (2018 WL 2126720). 7th Circuit Judges Michael Kanne and Ilana Rovner and U.S. District Judge Thomas Durkin of Chicago, sitting by designation, granted CVS judgment as a matter of law on three of the supposedly defamatory statements by CVS employees.

CVS’s lawyers at Hoover Hull Turner and Foley & Lardner did not move for judgment as a matter of law on Mimms’ claim that he was defamed by a CVS worker who said he was under DEA investigation so the 7th Circuit left that claim alive. But the appeals court held CVS is entitled to a new trial and that the pharmacy chain can introduce evidence Judge Pratt excluded from the 2016 trial. CVS contends that evidence – DEA subpoenas served on Mimms’ former employer and testimony from a federal agent in a criminal trial against a onetime Mimms patient – shows the truth of its employee’s statement.

All defamation suits are a calculated risk: Plaintiffs amplify the statements that supposedly caused them harm and expose the unsavory details of their lives to discovery by the other side’s lawyers. Mimms was no exception. CVS argued his professional reputation was so tattered that he could not claim to have been harmed by the statements of its pharmacy workers. Judge Pratt ruled that much of CVS’s evidence could not be introduced because it was unduly prejudicial to Mimms.

The 7th Circuit reversed her, ruling that CVS is entitled to tell jurors about “a complaint filed by the Indiana Attorney General for prescribing an opiate to an alcoholic patient, three sexual harassment complaints and the fact that Mimms was barred from practicing at a hospital and investigated by his employer for a relationship he had with a nurse.”

More significantly, for everyone except Mimms, the 7th Circuit rejected his lawyers’ theory that individual CVS employees knew their statements about the doctor were false because higher-up corporate executives had investigated Mimms and decided not to bar his prescriptions from being filled across the company. Mimms’ lawyers contended that under Indiana law, they had to show only that the CVS employees acted with reckless disregard for the truth, not with actual malice. At oral argument before the 7th Circuit, Mimms counsel Bryan Babb of Bose McKinney & Evans highlighted an email from corporate officers to store supervisors, reminding employees not to make derogatory statements about doctors whose prescriptions were rejected. The corporate exoneration of Mimms and the CVS anti-disparagement policy, he said, showed reckless disregard by the employees who allegedly defamed Mimms.

The 7th Circuit said Mimms was wrong on the law. Indiana precedent, in 2007’s Kelley v. Tanoos (865 N.E.2d 593), requires a showing of actual malice to prove defamation in cases involving professional misconduct, the 7th Circuit said. So Mimms had to prove, according to the 7th Circuit, that the individual CVS employees who disparaged him actually knew their statements were false. Mimms could not impute the corporation’s knowledge to those four CVS workers in Indiana. And he introduced no evidence of actual malice on three of his four claims.

Over-prescription of controlled drugs is not a problem that will be solved at pharmacy counters, regardless of whether drugstore employees can speak ill of doctors. They shouldn’t spread gossip about prescribers, as CVS’s own policies dictate. But I’m sure mistakes sometimes happen when you’re dealing with angry patients who want to know why you’re not giving them the pills they’ve been prescribed. The 7th Circuit ruling means those mistakes, at least in Indiana, aren’t actionable.

Mimms lawyer Babb said in an email that he has just wrapped up a trial and hasn’t yet had a chance to digest the 7th Circuit opinion. CVS counsel Alice Morical of Hoover Hull referred my request for comment to CVS, which said in an email that it was pleased with the appellate decision.

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