McGraw suit leads to investigation by class action firm

PITTSBURGH – A Pittsburgh law firm has started an investigation into possible breaches of fiduciary duties following a lawsuit filed in West Virginia regarding AmerisourceBergen Drug Corporation's violations in that state.

The Law Office of Alfred G. Yates Jr. PC has commenced an investigation into AmerisourceBergen, alleging certain officers and directors of the company breached its fiduciary duties.

On June 26, 2012, then-West Virginia Attorney General Darrell McGraw instituted proceedings against Amerisource for its alleged failure to provide effective controls and procedures to guard against the diversion of controlled substances that are known to have a high likelihood for abuse. The lawsuit was filed in Boone Circuit Court.

The lawsuit was removed to federal court on July 26, 2012, where it stayed until it was remanded back to state court on March 27, 2013.

McGraw, and now-Attorney General Patrick Morrisey claim Amerisource, Miami-Luken Inc., J.M. Smith Corporation, the Harvard Drug Group, Anda Inc., Associated Pharmacies Inc., Auburn Pharmaceutical Company, H.D. Smith Wholesale Drug Company, Keysource Medical Inc., Masters Pharmaceuticals, Quest Pharmaceuticals, Richie Pharmacal Co. and Top RX Inc. have substantially contributed to and substantially, illicitly and tortiously benefitted financially from the prescription drug abuse problem in West Virginia.

The defendants distribute various prescription drugs that are closely identified with the prescription drug problem in West Virginia and were on notice of the growing epidemic from the abuse of the prescription drugs, according to the suit.

The Attorney General's Office claims the defendants are major distributors of controlled substances and have supplied the prescriptions to drugstores, which then dispense controlled substances based upon bogus prescriptions from physicians who are prescribing controlled substances for illegitimate medical purposes.

"Throughout their acts and omissions, these defendants have inserted themselves as an integral part of the pill mill process," the complaint states.

The defendants have violated the West Virginia Uniform Controlled Substances Act and the West Virginia Consume Credit and Protection Act and have been unjustly enriched at the cost of the state of West Virginia.

The Attorney General's Office is represented by private attorneys James M. Cagle of Cagle & Jackson; Rudolph L. DiTrapano of DiTrapano, Barrett & DiPiero.

In August, Boone Circuit Judge William S. Thompson ordered that the parties undergo mediation in the matter.

An Oct. 21 trial date has been continued. Mediation will be undertaken, and it will be followed by a status/scheduling conference.

The investigation by Yates and his law office focuses on whether AmerisourceBergen's officers and directors breached their fiduciary duties owed to the company and its shareholders in connection with the practices that led to the suit by the West Virginia's attorney general.