McKesson 2012 Annual Report Download - page 97

McKESSON CORPORATION
FINANCIAL NOTES (Continued)
93
On January 5, 2012, the Company and the plaintiffs in the Michigan Counties Action filed a stipulated order of
dismissal with prejudice, which the court entered on January 12, 2012, and which became effective upon the court
granting final approval of the settlement in the Douglas County, Kansas Action on April 19, 2012.
State Medicaid AWP Cases
Beginning in September 2010, a series of suits were filed by individual states in jurisdictions other than the
United States District Court for the District of Massachusetts based on essentially the same factual allegations as
alleged in In re McKesson Governmental Entities Average Wholesale Price Litigation. A description of the actions
pending during fiscal year 2012 is as follows:
The Kansas Action
On September 13, 2010, an action was filed in the Kansas state court of Wyandotte County by the State of
Kansas against the Company and FDB asserting claims under Kansas’s Restraint of Trade Act, Kansas’s Consumer
Protection Act, and Kansas’s false claims statute, and for civil conspiracy, fraud, unjust enrichment, and breach of
contract, and seeking damages, treble damages, civil penalties, as well as injunctive relief, interest, disgorgement of
profits, attorneys’ fees and costs of suit, all in unspecified amounts, State of Kansas ex rel. Steve Six v. McKesson
Corporation, et al., (No. 10CV1491). On February 24, 2011, the court denied the Company’s motion to dismiss the
State’s complaint and set trial for August 7, 2012. On February 15, 2012, the court granted the Company’s motion
for a continuance and reset trial for May 28, 2013. Discovery is ongoing.
The Mississippi Action
On October 8, 2010, an action was filed in the Mississippi state court of Hinds County by the State of
Mississippi against the Company as the sole defendant asserting claims under RICO, Mississippi’s Medicaid Fraud
Control Act, Mississippi’s Consumer Protection Act, and for civil conspiracy, tortious interference with contract,
unjust enrichment, and fraud, and seeking damages, treble damages, civil penalties, restitution, as well as injunctive
relief, interest, attorneys’ fees and costs of suit, all in unspecified amounts, State of Mississippi v. McKesson
Corporation, et al., (No. 251-10-862CIV). On November 9, 2010, the Company filed a Notice of Removal to the
United States District Court, for the Southern District of Mississippi. On January 27, 2011, the case was remanded
back to Mississippi state court after the State dismissed its RICO claim. On February 15, 2011, the Company filed a
motion to transfer the Mississippi Action from the Circuit Court of Hinds County to the Chancery Court of Hinds
County, or in the alternative, to dismiss the State’s claim under Mississippi’s Consumer Protection Act for lack of
subject matter jurisdiction. On July 1, 2011, the court denied the Company’s motion to transfer or, in the alternative,
to dismiss. On July 22, 2011, the Company filed a petition with the Supreme Court of Mississippi seeking
permission to appeal the trial court’s July 1, 2011 order. On December 15, 2011, the Supreme Court of Mississippi
denied the Company’s petition but ordered the trial court to dismiss the State’s claim under Mississippi’s Consumer
Protection Act. On July 26, 2011, a second amended complaint was filed that formally abandoned the previously
alleged RICO claims and added claims on behalf of the Mississippi state employee health plan. On August 25, 2011,
the Company filed a motion to dismiss the State’s claim under Mississippi’s Medicaid Fraud Control Act, which the
court denied on March 12, 2012. On March 9, 2012, the Company filed a motion to extend the scheduling deadlines
set by the court, including the trial date. On April 6, 2012, the parties filed a stipulated scheduling order requesting
the court to continue the previously set trial date of November 26, 2012, to a date after March 1, 2013. The court
has not yet ruled on this request. Discovery is ongoing.
The Alaska Action
On October 12, 2010, an action was filed in Alaska state court by the State of Alaska against the Company and
FDB asserting claims under Alaska’s unfair and deceptive trade practices statute, and for fraud and civil conspiracy,
and seeking damages, treble damages, punitive damages, civil penalties, disgorgement of profits, as well as
declaratory relief, interest, attorneys’ fees and costs of suit, all in unspecified amounts, State of Alaska v. McKesson
Corporation, et al., (No. 3AN-10-11348-CI). On May 24, 2011, the court denied the Company’s motion to dismiss
the State’s complaint. Discovery is ongoing, and trial is set for February 4, 2013.