Fourth Circuit sends McGraw's drug-pricing case to W.Va.

By John O'Brien | May 23, 2011


RICHMOND, Va. (Legal Newsline) - A federal appeals court has ruled that West Virginia Attorney General Darrell McGraw's lawsuit against prescription drug retailers is not a class action and should be heard in state court.

Six drug stores -- including CVS, Wal-Mart and Target -- disagreed with McGraw, who says he is representing the interests of the state in his parens patriae capacity. They claimed he is representing consumers affected by their alleged pricing policies in a class action, and as such the lawsuit should be heard in federal court.

A three-judge panel of the U.S. Court of Appeals for the Fourth Circuit agreed with McGraw, though one of the judges dissented.

"This action was not brought under Federal Rule of Civil Procedure 23, nor under West Virginia's corresponding rule ..." says the decision, filed Friday.

"Rather it was brought under a West Virginia statute regulating the practice of pharmacy and the West Virginia Consumer Credit Protection Act, neither of which includes provisions providing for a typical class action, such as provisions addressing the adequacy of representation, numerosity, commonality and typicality requirements."

McGraw hired two Charleston law firms to sue the drug stores, which he alleges did not pass savings on generic drugs onto consumers.

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