## Facts

- San Francisco and the State of California (through the San Francisco City Attorney) sued numerous opioid-related entities in federal court as part of nationwide opioid MDL proceedings.
- By the time the court issued findings after a bench trial, Walgreens Co. was the only remaining defendant; other remaining defendants settled.
- Walgreens was the largest retail pharmacy chain in San Francisco during the relevant period and, between 2006 and 2020, distributed and dispensed over 100 million prescription opioid pills in the city.
- Until 2014, Walgreens operated as a distributor to its San Francisco pharmacies and was required to identify, halt, and report suspicious opioid orders; the court found Walgreens lacked an effective suspicious-order monitoring system and shipped thousands of suspicious orders without investigation.
- In 2012, the DEA shut down one of Walgreens’ controlled-substance distribution centers after finding monitoring failures posed an imminent threat to public health and safety; Walgreens later stopped distributing opioids.
- As a dispenser, Walgreens pharmacies were required to ensure prescriptions were medically legitimate and to resolve recognized “red flags” before dispensing; the court found Walgreens’ practices and systems did not reliably ensure red flags were resolved and did not reasonably prevent diversion.
- San Francisco presented evidence of severe public harms associated with the opioid epidemic, including increasing overdose deaths, widespread addiction, strain on hospitals and public services, impacts on public spaces, and connections to crime and homelessness.

## Issues

1. Whether Walgreens knowingly engaged in unreasonable conduct in its opioid distribution and dispensing practices, in breach of its regulatory obligations, that constituted an unreasonable interference with a public right under California public nuisance law.
2. Whether Walgreens’ conduct was a substantial factor, proven by a preponderance of the evidence, in contributing to or perpetuating the opioid epidemic in San Francisco.

## Decision

- Following a bench trial, the court found Walgreens liable for public nuisance under California law.
- The court concluded San Francisco proved Walgreens knowingly engaged in unreasonable conduct, including systemic failures to monitor suspicious orders and to resolve dispensing red flags.
- The court found Walgreens’ conduct was a substantial factor contributing to the opioid epidemic in San Francisco.
- The opinion resolved liability as to Walgreens and contemplated that remedies (including abatement) would be addressed in subsequent proceedings.

## Legal Principles

- To establish California public nuisance in this context, the plaintiff must prove by a preponderance of the evidence that the defendant knowingly engaged in unreasonable conduct that was a substantial factor in causing or contributing to an unreasonable interference with a public right.
- A defendant need not be the sole or predominant cause of a nuisance; substantial-factor causation can be shown by materially contributing to the harmful condition.
- Statutory and regulatory duties governing controlled substances (including obligations to detect suspicious orders and to ensure prescriptions are medically legitimate by resolving red flags) may inform whether conduct is unreasonable and knowing for public nuisance purposes.

## Conclusion

The court held Walgreens liable for public nuisance because its distribution and dispensing practices—marked by systemic failures to detect suspicious orders and to resolve prescription red flags—were knowing and unreasonable and substantially contributed to San Francisco’s opioid epidemic and resulting public harms.


City & County of San Francisco v. Purdue Pharma L.P., 620 F. Supp. 3d 936 (N.D. Cal. 2022)