The opioid crisis in the United States is not a new development; sadly, it has been around for years, as has D&O litigation relating to the crisis. Indeed, more than five years ago, I published a post in which I noted the outbreak at the time of a number of opioid-related securities suits. Now, in the latest of these opioid-related securities suits to be filed, and in the wake of the U.S. Department of Justice’s filings of a complaint in intervention in an opioid-related False Claims action against the company, a securities class action lawsuit has now been filed against the pharmacy company, Rite Aid Corporation. The March 20, 2023, Rite Aid complaint can be found here.

The Lawsuit

On March 20, 2023, a plaintiff shareholder filed a securities class action lawsuit in the Northern District of Ohio against Rite Aid and certain of its directors and officers. The complaint purports to be filed on behalf of a class of investors who purchased Rite Aid securities between April 26, 2018 and March 13, 2023. The complaint alleges that the defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder.

The complaint consists largely of block quotations from the company’s various SEC filings during the class period, with respect to the company’s retail pharmacy operations. The complaint alleges that these various quoted statements were materially false and/or misleading because they misrepresented or failed to disclose that “(1) Until at least June 2019, Rite Aid filled at least hundreds of thousands of unlawful prescriptions for controlled substances that lacked a legitimate medical purpose, including for potentially lethal opioids such as oxycodone and fentanyl; (2) Rite-Aid pharmacists filled these prescriptions despite clear ‘red flags’ that indicated that the prescriptions were unlawful; (3) Rite Aid ignored evidence that its stores were dispensing unlawful prescriptions, and intentionally deleted internal notes about suspicious prescribers written by concerned pharmacists; (4) by knowingly filling unlawful prescriptions for controlled substances, Rite Aid violated the Controlled Substances Act and, where Rite Aid sought reimbursement from federal healthcare programs, also violated the False Claims Act; (5) as a result, it was at risk of prosecution by federal authorities such as the United States Department of Justice and (6) as a result, Defendants’ statements about its business, operations, and prospects, were materially false and misleading and/or lacked a reasonable basis at all times.”

In support of these allegations, the complaint quotes at length from the Department of Justice’s March 13, 2023, press release (here), in which the agency announced that it had filed a complaint in intervention in the Northern District of Ohio in a whistleblower lawsuit brought under the False Claims Act. The complaint, which can be found here, alleges a litany of alleged misconduct relating to opioid prescriptions at Rite Aid pharmacies between May 2014 and June 2019. The DOJ’s allegations as summarized in the press release are largely mirrored in the securities class action lawsuit complaint (as set out in the preceding paragraph).


As I noted at the outset, opioid-related securities class action lawsuits have been around for years. Not all of the lawsuits that have been filed have been successful. For example, as noted here, an opioid-related securities suit that had been filed against Endo International was dismissed in August 2022. To be sure, an earlier opioid-related lawsuit filed against Endo International was more successful; it resulted in a $82.5 million settlement (as discussed here). The earlier lawsuit related to disclosures relating to one of the company’s products, whereas the later suit – the one that was dismissed – related to the company’s disclosures about the opioid-related liability litigation.

The settlement of the earlier Endo securities suit notwithstanding, the most significant opioid-related D&O claims have not been securities class action lawsuits; rather, the most significant opioid-related D&O claims have been derivative suits. As I have noted on this site, there have been very significant settlements in opioid-related derivative lawsuits. For example, as discussed here, the opioid related derivative suit filed against the board of McKesson settled for $175 million, one of the largest derivative settlements ever. Similarly, as discussed here, the opioid-related derivative suit pending against Cardinal Health settled for $124 million.

There have in fact been earlier D&O lawsuits filed against retail pharmacy operations, like Rite Aid. For example, as discussed here, in January 2021, a plaintiff shareholder filed an opioid-related securities suit against Wal-Mart, pertaining to the retail giant’s pharmaceutical operations. Interestingly, the Wal-Mart lawsuit, like the one just filed against Rite Aid, came shortly after the U.S. Department of Justice had filed a complaint against the company. The similarity between the two lawsuits may be more than coincidental. The two lawsuits were both filed by the same law firm, The Rosen Law Firm. (The Rosen Law Firm was also the firm that filed each of the first-filed complaints in the new litigation filed last week against SVB, Signature Bank, and Credit Suisse).

All of that said, it is noteworthy that this lawsuit represents yet another D&O claim arising out of the opioid crisis and that it is arising at this late date. While the real action on the opioid crisis is elsewhere, this lawsuit, like the other D&O claims that have preceded it, is a reminder that the ongoing opioid crisis does represent a D&O risk for companies whose operations became associated with opioids. This new lawsuit is also a reminder that though the opioid crisis is now many years old, the potential D&O risk associated with the crisis continues.

As I noted at the time when the Wal-Mart lawsuit was filed: “It does seem to me that the accountability process associated with the opioid crisis is continuing to spread outward, from the manufacturers, to the distributers, and now to the dispensing pharmacists – and in that regard, it seems as if the process has let to Walmart simply because of its size. Looked at from a distance, it does appear as if opioids have as their own special quality a sort of reverse-Midas touch, in which everything they touch turns to dross (and if this were not a family-oriented publication I would use a stronger word that ‘dross’). The baleful effect of opioids seems to spell the ruination of everything and everyone who becomes involved with the drugs.”