Investor Suit Seeks AmerisourceBergen Records Related to Opioid Crisis
The lawsuit comes as AmericsourceBergen and other opioid distributors face increasing scrutiny for their role in the opioid crisis.
April 19, 2019 at 04:06 PM
3 minute read
An investor in AmerisourceBergen Corp. is taking aim at the directors of the Pennsylvania-based drug wholesaler with a books-and-records suit in Delaware seeking to investigate potential wrongdoing associated with the opioid crisis.
The Chancery Court lawsuit, filed Thursday, said there was a “credible basis” to believe that AmerisourceBergen's brass breached their fiduciary duties and helped to fuel an epidemic of addiction by failing to properly control distribution and report suspicious sales of the drugs.
According to the complaint, the firm's directors and officers meanwhile profited from their alleged noncompliance with state and federal laws, directly benefiting from the company's performance, which was driven by elicit opioid sales.
“These actions have resulted in burdensome, ongoing, and costly investigations and litigations, which are a direct result of ABC's officers' and directors' collective failures to run the company in compliance with controlled substance laws and regulations,” attorneys for plaintiff Evelyn Harris said in the 40-page filing.
The lawsuit comes as AmericsourceBergen and other opioid distributors face increasing scrutiny for their role in the opioid crisis, which according to reports claimed more than 33,000 lives in 2015 alone.
In Delaware, a judge in February denied AmerisourceBergen's bid to escape a civil lawsuit from the state attorney general's office alleging that it had shipped mass amounts of opioids to the state, knowing that the sheer volume of pills meant that not all of them could be used for legitimate medical purposes.
AmerisourceBergen, one of the nation's largest wholesale distributors, was also named as a defendant in about 150 lawsuit that have been consolidated into multidistrict litigation in the U.S. District Court for the Northern District of Ohio. A “bellwether” case in that litigation has survived a motion to dismiss and is set to be tried in October.
Harris' complaint alleged that the company's directors “deliberately looked the other way” when it came to the “astounding numbers of opioids through the Company's legally-deficient controlled substance distribution network.”
Despite attempts by shareholders to improve the firm's governance structure, board members and executives chose to ignore “red flags” within its compliance systems, leading to the investigations and lawsuits.
Harris and her attorneys said that AmerisourceBergen had resisted repeated demands to supply corporate documents for the purpose of investigating potential breaches of fiduciary duty, corporate waste and mismanagement.
But while the books-and-records suit appears to pave the way for an eventual Caremark claim against the company's board, Harris said her ends were not limited to filing a derivative suit. She also hoped to determine whether AmerisourceBergen's current director were fit to continue serving on the board, as well as to assess any further action worth taking.
AmerisourceBergen's press shop did not respond Friday afternoon to a call seeking comment on the suit.
Harris is represented by Javier Bleichmar and Thayne Stoddard of Bleichmar Fonti & Auld in new York and Peter E. Borkon of the firm's Oakland, California, office; Edward Miller of Lifshitz & Miller in Garden City, New York, and John Kehoe of the Kehoe Law Firm in Philadelphia. Robert J. Kriner Jr., Scott M. Tucker and Tiffany J. Cramer of Chimicles Schwartz Kriner & Donaldson-Smith in Wilmington are acting as Delaware counsel in the case.
An online docket-tracking service did not list representation for AmerisourceBergen on Friday.
The case, captioned Harris v. AmerisourceBergen, has been assigned to Vice Chancellor Sam Glasscock III.
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