Seventh Circuit Mulls $1M Award in CVS Defamation Case

CHICAGO (CN) – Considering whether to uphold a $1 million jury award, the Seventh Circuit heard Friday from an Indianapolis attorney who claims CVS pharmacists acted with actual malice when they told his patients he was under investigation for running a pill mill.

Dr. Anthony Mimms convinced a jury this year that CVS pharmacists defamed him by refusing to fill his patients’ prescriptions on repeated occasions at multiple pharmacies.

As a reason for their refusal, pharmacists and pharmacy techs told Mimms’ patients that he had been arrested, that he was under investigation by the Drug Enforcement Agency, or that his license had been revoked.

According to Mimms, CVS corporate employees knew that he was not under DEA investigation, and that he had only been named by a person questioned by the DEA who was later found to lack credibility.

Further, he said, CVS has a policy that explicitly told its pharmacists under no circumstances to make disparaging comments about a prescriber, such as that the prescriber is under DEA investigation, operating a pill mill, or about to lose their license – exactly the statements the pharmacists made about Mimms.

A jury found in Mimms’ favor and awarded him $1 million for damage to his reputation.

On appeal, CVS attorney Alice Morical with Hoover Hull Turner told the Seventh Circuit on Friday morning that “Mimms needed to show actual malice” on the part of the pharmacists who said the defamatory statements, but he failed to do so.

Instead, Morical said he “imputed knowledge of a corporate representative to four speakers in Indiana.”

She argued that the imputation of knowledge of Mimms’ innocence, known at CVS corporate offices, to lower level pharmacists was an error.

The verdict would expand Indiana law to criminalize an instance where “someone makes a statement and someone else in the company knows it is not true,” Morical argued.

But Mimms’ attorney, Bryan Babb with Bose McKinney & Evans, urged the Chicago-based appeals court to recognize that “there is no direct evidence, this is a difficult case.”

Babb said Mimms’ situation has important ramifications for whether a public figure – such as a federal judge – could pursue a defamation claim against a person who later denied making the statements at all, as happened with several pharmacists Mimms accused.

“Do we really want a public policy where the person can just deny making the statements and that’s the end of it?” Babb asked.

He said the pharmacists undoubtedly held ill will against Mimms, as many of his patients repeatedly came in too early to refill their prescriptions, and this ill will motivated the pharmacists to willfully and maliciously violate CVS’s non-disparagement policy.

“These folks were trained on the policy,” Babb said. “They knew when they said these things that they were false.”

He argued that the CVS policy expressly prohibiting its employees from accusing prescribers of being under investigation or running a pill mill is valid circumstantial evidence that the speaker must have spoken with malice if they intentionally violated that policy.

Without allowing this kind of circumstantial evidence, “if someone denies making a statement, how can you possibly get to their subjective state of mind?” Babb asked.

U.S. Circuit Judges Michael Kanne and Illana Rovner sat on the panel, joined by U.S. District Judge Thomas Durkin, sitting by designation from the Northern District of Illinois.

The court is expected to rule on the matter within three months.

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