The Second Circuit Court of Appeals recently ruled on a significant case involving the opioid crisis in New York. In the case of County of Westchester v. Express Scripts, Inc., No. 24-1639, the court decided that lawsuits filed by various New York counties against pharmacy benefit managers (PBMs) could not be returned to state court. This ruling affects numerous municipalities that have accused these companies of contributing to the opioid epidemic.
The decision is crucial because it allows the lawsuits to proceed in federal court, where the defendants can present federal defenses. This ruling may have broader implications for similar cases across the country, as it clarifies the legal grounds for federal jurisdiction in cases involving federal contractors.
Background
The plaintiffs in this case are multiple counties and municipalities across New York, including Westchester County, Tioga County, and Monroe County, among others. They filed lawsuits against Express Scripts and OptumRx, two prominent pharmacy benefit managers, claiming that these companies played a significant role in the opioid crisis that has devastated many communities.
The lawsuits were initially filed in state courts between 2017 and 2020. The counties argued that the PBMs were responsible for the local impacts of the opioid epidemic, which has led to increased healthcare costs and public safety issues. The defendants, however, removed the cases to federal court, citing the federal officer removal statute, which allows cases involving federal officers or their agents to be heard in federal court.
After the defendants removed the cases, the plaintiffs amended their complaints to disclaim any federal aspects of their claims. They argued that this should prevent the cases from being heard in federal court. However, the district courts initially agreed and remanded the cases back to state court. This led to the current appeals.
The Ruling
The Second Circuit Court, in a decision issued on September 2, 2026, reversed the lower court's remand orders. The court found that the disclaimers provided by the plaintiffs were ineffective in preventing removal to federal court. The judges emphasized that the claims against the PBMs targeted conduct that was indivisible and implicated both federal and non-federal clients.
The court ruled, "We conclude that the disclaimers here are ineffective in preventing removal because the claims target indivisible conduct allegedly performed by Defendants on behalf of their federal and non-federal clients and implicate similarly indivisible harms."
The ruling noted that the defendants had satisfied the requirements for removal under the federal officer removal statute, which allows for cases to be heard in federal court when defendants can show they acted under the direction of federal officers and have a colorable federal defense. The court stated, "To be clear, our holding does not address whether these PBMs, alleged to have contributed to the opioid crisis in New York alongside other actors in the supply chain, are ultimately liable for such conduct under New York law."
Impact
The Second Circuit's ruling has significant implications for the ongoing opioid crisis litigation. By allowing these cases to proceed in federal court, the decision could set a precedent for similar lawsuits against pharmacy benefit managers and other entities involved in the opioid supply chain. It underscores the complexity of these cases, particularly regarding the interplay between federal and state jurisdictions.
This ruling may also influence how other courts handle similar cases across the country, particularly as more municipalities seek to hold pharmaceutical companies accountable for their roles in the opioid epidemic. The decision clarifies that disclaimers aimed at avoiding federal jurisdiction may not be sufficient if the conduct in question is intertwined with federal operations.
What's Next
The case will now return to federal court for further proceedings. The defendants may present their federal defenses, which could include arguments related to their roles as federal contractors. It remains to be seen how this case will unfold in the federal court system and whether it will lead to a trial or settlement.