Case 1:20-cv-01744-CFC Document 42 Filed 04/23/21 Page 1 of 46 PageID #: 414
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`
`
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELAWARE
`
`
`
`
`C.A. No. 20-1744-CFC
`
`Plaintiff,
`
`v.
`
`
`_________________________________
`
`)
`UNITED STATES OF AMERICA,
`)
`)
`)
`)
`)
`)
` )
`
` WALMART INC. and
` WAL-MART STORES EAST, LP, )
`)
`)
`Defendants.
` )
`
`
`
`
`
`
` __________________________________)
`
`
`RESPONSE BRIEF OF THE UNITED STATES
`IN OPPOSITION TO
`DEFENDANTS’ MOTION TO DISMISS THE COMPLAINT
`
`

`

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`TABLE OF CONTENTS
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`
`Table of Authorities ..................................................................................................... iii
`Nature and Stage of Proceedings .................................................................................. 1
`Summary of Argument ................................................................................................. 1
`Statement of Facts ......................................................................................................... 4
`I.
`Pharmacy Conduct ........................................................................................... 4
`A. Walmart knowingly filled invalid prescriptions. ......................................... 4
`1. Prescriptions issued by known pill-mill prescribers .................................. 4
`2. Prescriptions with obvious red flags .......................................................... 6
`B. Walmart violated basic rules of professional pharmacy practice. ............... 7
`II. Distributor Conduct .......................................................................................... 8
`Argument ...................................................................................................................... 9
`I.
`The Complaint Plausibly Alleges That Walmart Violated § 1306.04(a). ........ 9
`A. The Complaint plausibly alleges that Walmart pharmacists knowingly
`filled invalid prescriptions. ................................................................................. 10
`B. Walmart’s request for a “collective knowledge” ruling is flawed. ............ 13
`II. The Complaint Plausibly Alleges § 1306.06 Violations, Which May Be
`Enforced Through Civil Penalties and Injunctive Relief. ...................................... 19
`A. The Complaint plausibly alleges § 1306.06 violations. ............................. 19
`B. Walmart faces civil penalties and injunctive relief for its § 1306.06
`violations. ........................................................................................................... 23
`III. The Complaint Plausibly Alleges § 1301.74(b) Violations, Which May Be
`Enforced Through Civil Penalties. ......................................................................... 28
`A. Section 1301.74(b) requires suspicious orders to be reported promptly, not
`at the distributor’s discretion. ............................................................................. 29
`B. Walmart is subject to civil penalties for violating § 1301.74(b)’s reporting
`requirement. ........................................................................................................ 31
`Conclusion .................................................................................................................. 37
`Word Count Certification ........................................................................................... 39
`ii
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`TABLE OF AUTHORITIES
`
`CASES
`
`Page(s)
`
`Abramski v. United States,
`134 S. Ct. 2259 (2014) ......................................................................................... 32
`Almendarez-Torres v. United States,
`523 U.S. 224 (1998) ............................................................................................. 36
`BBL, Inc. v. City of Angola,
`809 F.3d 317 (7th Cir. 2015) ................................................................................ 13
`Bruesewitz v. Wyeth LLC,
`562 U.S. 223 (2011) ............................................................................................. 22
`Cherokee Nation v. McKesson Corp.,
`2021 WL 1200093 (E.D. Okla. Mar. 29, 2021) ............................................... 12-13
`Esquivel-Quintana v. Sessions,
`137 S. Ct. 1562 (2017) ......................................................................................... 33
`Farmer v. Brennan,
`511 U.S. 825 (1994) ............................................................................................. 11
`Foglia v. Renal Ventures Mgmt.,
`754 F.3d 153 (3d Cir. 2014) ................................................................................. 10
`FTC v. Nudge, LLC,
`430 F. Supp. 3d 1230 (D. Utah. 2019) ................................................................. 13
`Global-Tech Appliances, Inc. v. SEB S.A.,
`563 U.S. 754 (2011) ............................................................................................. 18
`Gonzales v. Oregon,
`546 U.S. 243 (2006) ....................................................................................... 22, 26
`Grand Union Co. v. United States,
`696 F.2d 888 (11th Cir. 1983) .............................................................................. 16
`Hassan v. City of New York,
`804 F.3d 277 (3d Cir. 2015) ................................................................................. 12
`Heartland Pharmacy, Inc. v. Rosen,
`2021 WL 650350, (S.D. Fla. Feb. 1, 2021) ......................................................... 26
`In re Nat’l Prescription Opiate Litig.,
`2019 WL 3917575 (N.D. Ohio Aug. 19, 2019) ................................................... 30
`In re Nat’l Prescription Opiate Litig.,
`477 F. Supp. 3d 613 (N.D. Ohio 2020) ................................................................. 13
`
`
`
`iii
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`In re Nat’l Prescription Opiate Litig.,
`2020 WL 5642173 (N.D. Ohio Sept. 22, 2020) ........................................ 13, 17, 18
`Karon v. CNU Online Holdings, LLC,
`2019 WL 3202822 (N.D. Ill. July 16, 2019) ........................................................ 18
`Kedra v. Schroeter,
`876 F.3d 424 (3d Cir. 2017) ................................................................................. 12
`Kisor v. Wilkie,
`139 S. Ct. 2400 (2019) ......................................................................................... 30
`Kucana v. Holder,
`558 U.S. 233 (2010) ....................................................................................... 32, 33
`Lamie v. U.S. Tr.,
`540 U.S. 526 (2004) ............................................................................................. 22
`Martinez v. UPMC Susquehanna,
`986 F.3d 261 (3d Cir. 2021) ....................................................................... 9, 10, 18
`Masters Pharmaceuticals, Inc.,
`861 F.3d 206 (D.C. Cir. 2017) ............................................................................. 30
`Menaker v. Hofstra Univ.,
`935 F.3d 20 (2d Cir. 2019) ................................................................................... 16
`Metro-Goldwyn-Mayer Studios, Inc. v. Grokster, Ltd.,
`545 U.S. 913 (2005) ............................................................................................. 16
`Pension Ben. Guar. Corp. v. LTV Corp.,
`496 U.S. 633 (1990) ............................................................................................. 36
`Pharmacy Doctors Enters., Inc. v. DEA,
`789 F. App’x 724 (11th Cir. 2019) ...................................................................... 11
`Rimini St., Inc. v. Oracle USA, Inc.,
`139 S. Ct. 873 (2019) ........................................................................................... 22
`Schuchardt v. President of the U.S.,
`839 F.3d 336 (3d Cir. 2016) ................................................................................. 10
`Staub v. Proctor Hospital,
`562 U.S. 411 (2011) ............................................................................................. 15
`Sweda v. Univ. of Pa.,
`923 F.3d 320 (3d Cir. 2019) ........................................................................... 10, 12
`U.S. ex rel. Harrison v. Westinghouse Savannah River Co.,
`352 F.3d 908 (4th Cir. 2003) ................................................................................ 15
`United States v. Appalachian Reg’l Healthcare, Inc.,
`246 F. Supp. 3d 1184 (E.D. Ky. 2017) ................................................................ 13
`United States v. Bado,
`764 F. App’x 284 (3d Cir. 2019) ......................................................................... 20
`
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`iv
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`United States v. Bansal,
`663 F.3d 634 (3d Cir. 2011) ........................................................................... 23, 25
`United States v. Birbragher,
`603 F.3d 478 (8th Cir. 2010) .......................................................................... 20, 22
`United States v. Cap Quality Care, Inc.,
`486 F. Supp. 2d 47 (D. Me. 2007) ....................................................................... 26
`United States v. City Pharmacy, LLC,
`2016 WL 9045859 (N.D. W. Va. Dec. 19, 2016) ................................................ 15
`United States v. City Pharmacy, LLC,
`2017 WL 1405164 (N.D. W. Va. Apr. 19, 2017) ................................................ 25
`United States v. Davila,
`569 U.S. 597 (2013) ............................................................................................. 24
`United States v. Green Drugs,
`905 F.2d 694 (3d Cir. 1990) ........................................................................... 27, 31
`United States v. Hannigan,
`27 F.3d 890 (3d Cir. 1994) ................................................................................... 12
`United States v. Henry,
`727 F.2d 1373 (5th Cir. 1984) ............................................................................... 11
`United States v. Iriele,
`977 F.3d 1155 (11th Cir. 2020) ............................................................................ 26
`United States v. Khan,
`989 F.3d 806 (10th Cir. 2021) .............................................................................. 23
`United States v. Khorozian,
`333 F.3d 498 (3d Cir. 2003) ................................................................................. 18
`United States v. Lartey,
`716 F.2d 955 (2d Cir. 1983) ................................................................................. 34
`United States v. Lerner,
`1986 WL 8471 (N.D. Ill. July 30, 1986) ............................................................... 35
`United States v. Ludwikowski,
`944 F.3d 123 (3d Cir. 2019) ................................................................................. 20
`United States v. Moore,
`423 U.S. 122 (1975) ........................................................................... 19, 21, 25, 27
`United States v. Polan,
`970 F.2d 1280 (3d Cir. 1992) ............................................................................... 10
`United States v. Rottschaefer,
`178 F. App’x 145 (3d Cir. 2006) ......................................................................... 20
`
`United States v. Ruan,
`966 F.3d 1101 (11th Cir. 2020) ............................................................................ 21
`
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`v
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`United States v. Shaker,
`827 F. App’x 204 (3d Cir. 2020) ......................................................................... 20
`United States v. Singh,
`54 F.3d 1182 (4th Cir. 1995) ................................................................................ 20
`United States v. Stidham,
`938 F. Supp. 808 (S.D. Ala. 1996) ....................................................................... 35
`United States v. Tobin,
`676 F.3d 1264 (11th Cir. 2012) ............................................................................ 24
`United States v. Tull-Abreu,
`921 F.3d 294 (1st Cir. 2019) ................................................................................ 34
`Yates v. United States,
`574 U.S. 528 (2015) ............................................................................................. 33
`STATUTES
`21 U.S.C. § 801 ........................................................................................................... 1
`21 U.S.C. § 802 ......................................................................................................... 24
`21 U.S.C. § 811 ......................................................................................................... 33
`21 U.S.C. § 821 ............................................................................................... 32-33, 34
`21 U.S.C. § 824 ......................................................................................................... 27
`21 U.S.C. § 828 ......................................................................................................... 35
`21 U.S.C. § 829 .................................................................................................. passim
`21 U.S.C. § 841 ................................................................................................... 33, 34
`21 U.S.C. § 842 .................................................................................................. passim
`21 U.S.C. § 843 .................................................................................................. passim
`21 U.S.C. § 871 ................................................................................................... 33, 34
`21 U.S.C. § 885 ......................................................................................................... 10
`United States Statutes at Large, Pub. L. No. 91-513, 84 Stat. 1236, 1262 (1970) ... 35
`
`REGULATIONS
`21 C.F.R. § 1301.12(b) ............................................................................................. 34
`21 C.F.R. § 1301.23 .................................................................................................. 34
`21 C.F.R. § 1301.24 .................................................................................................. 34
`21 C.F.R. § 1301.26 .................................................................................................. 34
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`21 C.F.R. § 1301.74(b) ..................................................................................... passim
`21 C.F.R. § 1306.01 .................................................................................................. 25
`21 C.F.R. § 1306.04(a). ...................................................................................... passim
`21 C.F.R. § 1306.06 ............................................................................................ passim
`21 C.F.R. § 1307.03 .................................................................................................. 34
`21 C.F.R. § 1307.11 .................................................................................................. 34
`21 C.F.R. § 1317.13 .................................................................................................. 34
`RULES
`Fed. R. Civ. P. 9(b) ................................................................................................... 10
`Fed. R. Civ. P. 12(b)(6) ............................................................................................ 13
`Fed. R. Civ. P. 56(a) ................................................................................................. 13
`
`OTHER AUTHORITIES
`
`164 Cong. Rec. S2657 (daily ed. May 15, 2018) ..................................................... 36
`
`164 Cong. Rec. S6159 (daily ed. Sept. 17, 2018) ..................................................... 36
`Farmacia Yani, 80 Fed. Reg. 29053 (2015) .............................................................. 20
`Implementation of the Ryan Haight Online Pharmacy Consumer Protection Act of
`2008, 74 Fed. Reg. 15596 (2009) .......................................................................... 35
`JM Pharmacy Group, Inc., 80 Fed. Reg. 28667 (2015) ........................................... 12
`Masters Pharmaceuticals, Inc., 80 Fed. Reg. 55418 (2015) ..................................... 30
`Regulations Implementing the Comprehensive Drug Abuse Prevention and Control
`Act of 1970, 36 Fed. Reg. 7776 (1971) ................................................................ 33
`Restatement (Second) of Agency § 275 cmt. b (1958) ...................................... 14, 16
`Restatement (Second) of Torts § 8A (1965) ............................................................... 17
`Restatement (Third) of Agency § 5.03 cmt. d(7) (2006) ..................................... 16, 17
`Southwood Pharmaceuticals, Inc., 72 Fed. Reg. 36487 (2007) ............................... 30
`
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`NATURE AND STAGE OF PROCEEDINGS
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`The United States filed a Complaint alleging that Walmart violated the
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`Controlled Substances Act (“CSA”), 21 U.S.C. §§ 801 et seq. D.I. 1 (“Compl.”).
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`Walmart moved to dismiss. D.I. 27 (“Br.”).
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`SUMMARY OF ARGUMENT
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`Congress enacted the CSA to protect our nation from the scourge of drug
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`abuse. To further that goal, the CSA and its regulations have long imposed strict
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`rules on the handling of controlled substances. Walmart, as both a pharmacy and a
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`distributor, systematically violated those rules while the opioid crisis raged,
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`contributing to drug abuse nationwide.
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`The rules Walmart violated are basic and longstanding. They reflect the
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`interwoven legal responsibilities imposed on those authorized to handle controlled
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`substances. Prescribers must adhere to their professional obligations when issuing
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`controlled-substance prescriptions and may issue them only for legitimate medical
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`purposes. 21 C.F.R. § 1306.04(a). To guard against unscrupulous prescribers,
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`pharmacies may not knowingly fill invalid prescriptions, id., and their pharmacists
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`must also adhere to their own professional obligations, id. § 1306.06. And to protect
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`against problematic pharmacies, distributors must monitor orders and report
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`suspicious ones to the Drug Enforcement Administration (“DEA”). Id. § 1301.74(b).
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`To keep all regulated parties accountable, the CSA provides remedies, including civil
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`1
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`penalties and injunctive relief. 21 U.S.C. §§ 842(c), 843(f).
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`As the Complaint details, Walmart violated the rules for pharmacies and
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`distributors, despite warnings from its employees that Walmart could face
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`enforcement if its conduct did not change. Its pharmacists—whom Walmart
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`subjected to extraordinary time pressures, understaffing, and impractical
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`restrictions—filled thousands of prescriptions they knew were invalid. Walmart’s
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`compliance managers—who oversaw dispensing conduct—knew but withheld
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`critical information from pharmacists, causing them to fill invalid prescriptions. And
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`Walmart’s distribution employees failed for years to fix known compliance problems
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`with the company’s reporting obligations.
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`1.
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`Claim One. Walmart violated 21 C.F.R. § 1306.04(a) because its
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`pharmacists knowingly filled thousands of invalid controlled-substance prescriptions.
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`Walmart’s motion ignores the Complaint’s allegations that Walmart pharmacists and
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`compliance managers knew those prescriptions were invalid. Walmart’s motion to
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`dismiss part of this claim on the ground that it is purportedly based on a “collective
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`knowledge” theory is procedurally improper and factually and legally baseless.
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`2.
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`Claim Two. Walmart violated 21 C.F.R. § 1306.06 because its
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`pharmacists often failed to adhere to their “usual course of … professional practice”
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`when filling controlled-substance prescriptions. The pharmacists flouted basic
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`professional rules, including by filling prescriptions without resolving obvious red
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`2
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`
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`flags of drug abuse. Walmart’s arguments that this misconduct did not violate
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`§ 1306.06 contravene well-established law.
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`Neither is there any merit to Walmart’s argument that its misconduct, which
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`violated the CSA’s limited authorization for dispensing controlled substances, should
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`not subject it to civil penalties or injunctive relief.
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`3.
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`Claim Three. Walmart violated 21 C.F.R. § 1301.74(b) by failing to
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`report numerous suspicious orders placed by its pharmacies. Walmart was required
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`to report to DEA each time Walmart received an order showing characteristics that
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`made it “suspicious” under § 1301.74(b).
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`During the relevant period, the CSA imposed civil penalties on registrants who
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`failed to comply with regulatory reporting requirements, including violations of
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`§ 1301.74(b).
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`* * *
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`Walmart, seeking to evade consequences for its unlawful conduct, makes
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`arguments that are inconsistent with the statute, regulations, and case law. If
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`accepted, Walmart’s arguments would render pharmacists rubber stamps.
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`Pharmacies could fill invalid prescriptions while knowingly concealing information
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`from pharmacists and letting their pharmacists flout basic professional obligations.
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`Distributors who failed to report suspicious orders would remain unaccountable. The
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`Court should reject Walmart’s arguments in favor of a common-sense reading of the
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`3
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`CSA and its regulations that furthers their purpose of preventing drug abuse.
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`STATEMENT OF FACTS
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`I.
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`PHARMACY CONDUCT
`A. Walmart knowingly filled invalid prescriptions.
`Walmart filled numerous prescriptions that its employees knew, in one or more
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`ways, were invalid. Compl. Part II.
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`Prescriptions issued by known pill-mill prescribers
`1.
`Walmart filled invalid prescriptions issued by “pill-mill” prescribers—
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`practitioners who routinely issued controlled-substance prescriptions outside the
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`usual course of professional practice or without a legitimate medical purpose. Many
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`such prescribers ultimately faced criminal or administrative sanctions for their
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`egregious conduct. See Compl. Part II.B.
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`It was recognized at certain Walmart pharmacies that invalid prescriptions
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`were being issued by particular pill-mill prescribers. E.g., id. ¶¶ 181-83, 187-88,
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`206, 210-11, 216, 221, 235, 247, 253-55, 258, 300, 335. Pharmacists reported to
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`compliance managers their shared concerns about those prescribers, e.g., id. ¶¶ 113,
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`207, 216, 234-37, 261, 294-96, 304, 342-44, and sometimes highlighted that other
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`pharmacy chains had stopped filling any prescriptions from the prescribers, e.g., id.
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`¶¶ 190, 204-06, 231-35, 273, 280, 317, 324-29, 352-54.
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`Despite this knowledge, pharmacists at some of those same pharmacies
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`continued to fill prescriptions issued by the known pill-mill prescribers. E.g., id.
`4
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`¶¶ 190, 216-19, 234-39, 244, 272, 290, 296-97, 320-21. This conduct resulted from
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`Walmart policies that turned filling prescriptions into a rushed “battle of seconds”;
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`reduced pharmacy staffing so low that pharmacists complained it was a “safety
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`issue”; and imposed a process for refusing to fill prescriptions so cumbersome that
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`pharmacists could not handle the volume of individuals with prescriptions issued by
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`pill-mill prescribers. Id. ¶¶ 20, 115-122, 152, 166-75.
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`Walmart’s compliance managers in the Health and Wellness Division, which
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`oversaw pharmacists from Walmart’s Home Office in Arkansas, id. ¶ 113, 123, also
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`knew Walmart pharmacists were filling the pill-mill prescribers’ invalid
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`prescriptions. These managers—who frequently communicated with pharmacists
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`and imposed restrictions on them—learned of those prescribers in various ways. Id.
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`¶¶ 124-34, 167-74.
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`Pharmacists warned the compliance managers about specific pill-mill
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`prescribers. E.g., id. ¶ 272 (cautioning that a prescriber needed to be “looked into
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`before the DEA comes knocking on our door”). Pharmacists repeatedly requested
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`authority to refuse to fill all prescriptions from known pill-mill prescribers, but the
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`compliance managers rejected those requests—even when told that doing so would
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`lead pharmacists to fill invalid prescriptions. E.g., id. ¶¶ 166-174 (“Please help us.”),
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`216-19, 233-39 (“our concerns are falling on deaf ears”), 272-73, 296, 324.
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`Compliance managers also learned about such prescribers systematically,
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`5
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`
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`through a national dispensing compliance program Walmart adopted in 2011 to
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`resolve a DEA investigation into filling invalid prescriptions. Id. ¶¶ 135-40. Under
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`that program, when Walmart pharmacists refused to fill a prescription, they informed
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`compliance managers, who reviewed and compiled that information into
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`spreadsheets. Id. ¶¶ 139-47, 178.
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`Compliance managers discussed the need to share that information about pill-
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`mill prescribers broadly with Walmart pharmacists to prevent individuals from
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`“simply mov[ing] to another location”—i.e. pharmacy shopping—where
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`unsuspecting pharmacists might fill these invalid prescriptions. Id. ¶¶ 154, 174, 178,
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`325. The managers nonetheless decided not to inform pharmacists about the pill-mill
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`prescribers. Id. ¶¶ 149-59, 236-37, 325. Those managers also chose, for years, not
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`to centrally “block” fills of prescriptions issued by known pill-mill prescribers. Id.
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`¶¶ 173-75, 317. As a direct and inevitable result of the compliance managers’
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`conduct, Walmart pharmacists continued to fill invalid prescriptions from these
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`prescribers. Id. Part II.B.
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`Prescriptions with obvious red flags
`2.
`Walmart pharmacists also frequently filled prescriptions with such obvious
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`“red flags”—implausible dosages, drug combinations, and timing—that those
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`pharmacists knew the prescriptions were presumptively invalid. Id. Part II.C. In
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`some cases, other Walmart pharmacists already had refused to fill these
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`6
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`
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`prescriptions. Id. Part II.D. Many prescriptions showed multiple red flags. Id.
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`¶¶ 366, 382-83, 388-89, 392-93, 395, 402-03, 408, 415.
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`These red-flag prescriptions were almost certainly invalid in every instance,
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`and pharmacists were trained to recognize them as such. E.g., id. ¶¶ 357, 360, 384,
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`423. The dosages and combinations were known to be dangerous and commonly
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`abused. Id. ¶¶ 382, 385, 392, 401-05, 417. Some were for extraordinary dosages, or
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`for quantities that would have an individual taking almost 100 pills daily. E.g., id. ¶¶
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`373, 412-14.
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`Walmart’s own policies acknowledged that such prescriptions raised red flags
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`and required justifications to fill them. E.g., id. ¶¶ 131-34, 363, 423-24. Yet
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`Walmart pharmacists repeatedly filled such prescriptions without resolving their
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`glaring red flags. Id. ¶¶ 357, 359, 360-426.
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`B. Walmart violated basic rules of professional pharmacy practice.
`Walmart pharmacists often failed to adhere to basic professional obligations
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`when filling controlled-substance prescriptions.
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`It is recognized in the pharmacy profession that pharmacists presented with
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`controlled-substance prescriptions must follow essential procedural steps: they must
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`identify any red flags associated with the prescription, determine if those red flags
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`can be resolved, and document any successful resolution. Id. ¶¶ 79-88. Walmart’s
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`own policies required the same. Id. ¶¶ 125-34. But Walmart pharmacists—facing
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`7
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`
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`the pressures described above—frequently filled prescriptions without fulfilling these
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`essential professional obligations. See id. Part II.B; e.g., id. ¶¶ 122, 152, 173-77,
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`320-21, 357.
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`II. DISTRIBUTOR CONDUCT
`Walmart, as a distributor, was required to report any suspicious order of
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`controlled substances. Walmart knew which characteristics made a
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`controlled-substance order “suspicious” under 21 C.F.R. § 1301.74(b), and its
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`policies recognized that it was required to monitor its own pharmacies’ orders for
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`such characteristics. E.g., id. ¶¶ 519.
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`Walmart received information showing orders with those characteristics. Id.
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`¶¶ 478-526, 546-53, 569-78, 588-90. It flagged some as having those characteristics,
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`yet chose not to report or investigate them. Id. ¶¶ 517, 538-83, 610-25. The
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`company knew its order-monitoring system would not identify other suspicious
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`orders and failed to report those as well. E.g., id. ¶¶ 569-609.
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`Walmart’s employees knew it needed to address its “non-compliance with …
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`1301.74(b)” to “avoid DEA enforcement.” Id. ¶¶ 506-17. But Walmart failed to
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`correct its non-compliance. Id. ¶¶ 519-686. As a result, it almost never reported any
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`suspicious orders to DEA. Id. ¶¶ 681-96.
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`8
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`

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`Case 1:20-cv-01744-CFC Document 42 Filed 04/23/21 Page 16 of 46 PageID #: 429
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`
`
`ARGUMENT
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`I. THE COMPLAINT PLAUSIBLY ALLEGES THAT WALMART
`VIOLATED § 1306.04(a)
`Claim One asserts that Walmart violated 21 C.F.R. § 1306.04(a), which
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`provides that a prescription, to be valid, must be “issued for a legitimate medical
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`purpose” by a prescriber “acting in the usual course of his professional practice.”
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`Section 1306.04(a) prohibits a “person”—which includes a corporation, see
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`§ 1300.01(b)—from “knowingly” filling an invalid prescription.
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`Walmart argues that the Complaint does not plead facts plausibly showing that
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`its pharmacists knew any prescriptions were invalid. Br. 13-17. Walmart also
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`argues that it cannot be liable for filling prescriptions issued by pill-mill prescribers
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`because such liability would necessarily rely on a “collective knowledge” approach
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`to scienter. Br. 6-13.
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`Both arguments fail. The Complaint alleges extensive facts showing that
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`Walmart pharmacists knowingly filled invalid prescriptions, including those issued
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`by prescribers they knew were pill-mills. The Complaint also does not rely on a
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`“collective knowledge” theory; rather, it alleges that compliance managers knew
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`about and played a role in unlawful dispensing.
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`At this stage, the Complaint need only allege enough facts to “raise a
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`reasonable expectation” that “discovery will reveal evidence” supporting the
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`government’s claims. Martinez v. UPMC Susquehanna, 986 F.3d 261, 266 (3d Cir.
`
`
`
`9
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`

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`Case 1:20-cv-01744-CFC Document 42 Filed 04/23/21 Page 17 of 46 PageID #: 430
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`
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`2021) (citations omitted). Facts alleged must be construed in the light most
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`favorable to the plaintiff. See Sweda v. Univ. of Pa., 923 F.3d 320, 326 (3d Cir.
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`2019), cert. denied, 140 S. Ct. 2565 (2020). The Complaint need not include
`
`“specific facts” beyond those necessary to state a claim, Schuchardt v. President of
`
`the U.S., 839 F.3d 336, 347-48 (3d Cir. 2016), and need not plead details of
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`particular violations, cf. Foglia v. Renal Ventures Mgmt., 754 F.3d 153, 156-57 (3d
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`Cir. 2014) (even under Rule 9(b), a plaintiff need not identify particular false
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`claims). Nor must it “preempt … possible explanations” of a defendant’s conduct.
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`Martinez, 986 F.3d at 267.
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`Moreover, Congress eased the government’s pleading burden in CSA cases. A
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`civil CSA complaint need not allege how a defendant’s conduct failed to fit within a
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`statutory “exemption or exception” authorizing th