Richard M. Heimann

“I am usually the guy they bring in to actually try the cases,” Richard M. Heimann told The National Law Journal in 2018, the year it named him a Litigation Trailblazer. “I’m sort of the jack-of-all-trades.” He has tried more than thirty civil jury cases over more than four decades, and the trials he counts first are the FPI/Agretech and Edsaco securities class actions, the bench trial that ended with Wells Fargo ordered to return about $203 million in overdraft fees, the jury trial against Toshiba in the liquid-crystal-display price-fixing litigation and, in 2022, the bench trial in which San Francisco held Walgreens liable for the city’s opioid epidemic. At Lieff Cabraser Heimann & Bernstein LLP, the firm that carries his name, he is a partner in the San Francisco office; he supervises the securities and financial-fraud practice and tries the firm’s cases, securities fraud, consumer protection, antitrust and personal injury, before juries and judges. The two shareholder derivative cases he led, for Wells Fargo’s stockholders and then Boeing’s, ended in settlements of $240 million and $237.5 million, each paid by the directors’ and officers’ insurers, the first the largest insurer-funded derivative settlement in history and the second the largest Caremark cash settlement ever approved in the Delaware Court of Chancery.

He took his business degree with honors from the University of Florida in 1969 and his law degree from Georgetown University Law Center in 1972, where he served on the Georgetown Law Journal in 1971 and 1972. An uncle was a lawyer, “not a very good lawyer, as it turned out, but I didn’t know that at the time,” and the idea of practicing law took hold in elementary school; he went to law school meaning to be a tax lawyer, “though I had no clue why,” and dropped the plan there because he wanted to be in a courtroom. He began as a deputy public defender in Philadelphia, then an assistant district attorney there, in the years when Frank Rizzo was mayor and Arlen Specter the district attorney. “Philadelphia was, in those days, a very difficult place,” he has said. It was not the guilty clients that stayed with him: “I didn’t mind defending people that I knew were guilty or thought were guilty,” but defending someone he was convinced was innocent “puts an awful lot of pressure on you.”

Pestering Ed Fitzsimmons

He left Philadelphia for San Francisco and private practice, with admissions in the District of Columbia in 1974 and California in 1975. The start in the Bay Area, in his telling, was pestering a solo practitioner in Oakland to whom he had been introduced, Ed Fitzsimmons, whose principal client was Central Bank, a bank that no longer exists and that “got sued all the time,” so that the work in the mid-1970s was mostly defending it. Around 1980 he left to form his own firm with another lawyer who had worked for Fitzsimmons. A large real estate fraud in the Napa Valley then put him alongside Robert Lieff and Elizabeth Cabraser, who had offices in the valley and had brought a class action over the scheme while Heimann represented his own clients in it, and that case, he has said, led him to team up with them. His early work at the firm centered on securities and financial fraud, limited-partnership, Ponzi and pyramid-scheme cases among them, and the firm later grew into the other fields he now tries. “I could not survive being at a defense firm and being a specialist,” he has said. Of the cases themselves: “everything's different,” and “We don't do cookie-cutter cases… you're recreating the wheel every time.”

August 1990, Honolulu

FPI/Agretech was a syndication of limited partnerships formed to grow and sell tropical plants in Hawaii. It collapsed in 1987 after several thousand investors had bought interests and lost, together, more than $50 million, and the securities class actions against FP Investments, its subsidiary Agretech, the company that was to cultivate the plants, and the accounting and law firms that had helped sell the interests were transferred under 28 U.S.C. § 1407 and consolidated as MDL 763 in the District of Hawaii before Chief Judge Manuel L. Real, who appointed Lieff Cabraser and the Honolulu firm of Jamie Chuck co-lead and co-liaison class counsel. Heimann was admitted in the District of Hawaii in 1985. In November 1988 the two firms divided the work, and under a March 1989 agreement they swapped: Chuck took the case against the attorney defendants and Lieff Cabraser the case against the accountants. Heimann tried the class’s case against the accounting firm Arthur Young to a jury and won the verdict in August 1990, $24 million, $10 million of it punitive damages, on a finding that Arthur Young had knowingly helped market and sell the worthless partnership offerings. The law firms Cades Schutte and Wyman Bautzer settled for nearly $12 million together, $5.7 million from the Cades defendants and $4.85 million from Wyman Bautzer, in negotiations supervised by Judge Tevrizian, and Judge Real said at a hearing in January 1991 that Chuck had not made much of a contribution to the Arthur Young matter at all; the Ninth Circuit later found that Lieff Cabraser had been far more involved than Chuck in settling with the attorney defendants as well. The Arthur Young appeal took four years. The appellate court upheld the compensatory award and sent the punitive damages back for retrial, and in 1994 the firm negotiated a $17 million settlement of the Arthur Young judgment with Ernst & Young, its successor; with the $15 million in partial settlements the court had approved along the way, the recovery came to $32 million. The court then awarded Lieff Cabraser the entire 35 percent fee on the Arthur Young fund, and when Chuck appealed, Heimann and Morris A. Ratner defended the award, which the Ninth Circuit affirmed on January 17, 1997 over a dissent by Judge Kozinski.

Dozens of Other Plaintiff Firms

He supervised the firm’s suits against the tobacco industry for Massachusetts, California and several other states, resolved in 1998 within the states’ $206 billion master settlement agreement. In 1998 the firm represented the attorneys general of Massachusetts, Illinois, Louisiana, Indiana, Rhode Island, Maine and New Hampshire and eighteen California cities and counties, San Francisco, Los Angeles and San Jose among them, against Philip Morris, R.J. Reynolds and the other cigarette manufacturers, seeking the public cost of treating smoking-related disease and changes in the marketing aimed at teenagers. Under the master settlement announced in November 1998 the firm’s clients received $42 billion, paid over twenty-five years, and the manufacturers accepted bans on billboards, transit advertising, cartoon characters and marketing to minors, limits on free samples and paid product placement, and limits on brand-name sponsorships. In the California litigation the firm had served document requests on R.J. Reynolds in 1997 for its Red Kamel marketing data, and the production included a mid-1990s plan to market to San Francisco’s gay and homeless communities under the label “Subculture Urban Marketing,” Project SCUM. “Just a few years ago, you’d see a dozen tobacco billboards en route to any airport,” Owen Clements, chief of special litigation in the San Francisco City Attorney’s office, said afterward. When California’s attorney general, Bill Lockyer, sued R.J. Reynolds in June 2002 for violating the agreement, Superior Court Judge Ronald Prager found that its advertising reached teenagers to the same degree as adult smokers, ordered changes and fined the company $20 million. Asked what the tobacco case taught him, Heimann answered with the importance of teamwork: “we worked with literally dozens of other plaintiff firms.”

Every Single Sentence in the Letter

Scorpion Technologies, a software company, had reported sales that did not exist. Between 1991 and 1993 Eric C. Brown, of Morgan Hill, California, falsified Scorpion’s books and records, preparing or directing fictitious purchase orders, invoices, payment records, confirmations and product-return documents and giving false information and documents to the company’s independent auditors; he later pleaded guilty to one count of conspiracy to file false reports with the Securities and Exchange Commission, was sentenced to probation, community service and $25.2 million in restitution, and on June 21, 2002 consented to a permanent injunction and a bar from serving as an officer or director of a public company. The class actions Lieff Cabraser led as lead counsel, In re Scorpion Technologies, Inc. Securities Litigation before Judge Susan Illston in San Francisco, alleged that Scorpion’s officers, accountants, underwriters and business affiliates had inflated its earnings with the fictitious sales. In 1996 the court held that the class had enough evidence against the accounting firm Grant Thornton to go to trial; Grant Thornton settled for $5.5 million, and Credit Suisse First Boston settled for $950,000 in 2000.

The claim against Edsaco Ltd., which the class alleged had helped Scorpion set up the sham European companies that served as the buyers, went to trial before a federal jury in San Francisco, Heimann trying the case over about a month. The document he built the trial around was a letter signed by Edsaco that tried to explain away an accounting problem, and which Scorpion’s own people had written. “Every single sentence in the letter is a lie, one after the other,” he has said of it. In April 2002 the jury returned a verdict of $170.7 million against Edsaco, $165 million of it in punitive damages, one of the largest verdicts in the United States that year. On June 14, 2002 Judge Susan Illston described the recovery for the class as “excellent.” Counsel for the plaintiffs, she said, “did a very good job in a very tough situation of achieving an excellent recovery for the class here.” “You were opposed by extremely capable lawyers.” “It was an uphill battle.” There had been complicated questions, and then “the tricky issue of actually collecting anything in the end,” and the recovery achieved for the class “in this second trial is remarkable, almost a hundred percent.”

A Hundred and Four Percent

When McKesson acquired HBOC & Company in 1999, a large accounting fraud at HBOC came with it, and misstatements about HBOC’s finances before and after the acquisition had inflated the price of McKesson HBOC securities. Two mutual funds sponsored by Merrill Lynch had lost about $135 million. Rather than wait on the federal class action, Heimann filed their own suit in California state court. “They had taken a hit of over $100 million,” he has said. “Our case was filed in state court, the class case was in federal court here in Northern California.” In 2004 the California Court of Appeal held, in McKesson HBOC, Inc. v. Superior Court, 115 Cal. App. 4th 1229, that the defendants had waived the attorney-client and work-product privileges over an audit committee report and interview memoranda by handing them to the United States Attorney and the SEC. The funds settled for $145 million, nearly 104 percent of their damages and roughly $115 million to $120 million more than they would have received from the federal class settlement. “We settled for literally more than our clients’ actual damages, 100-plus %,” he has said. The firm’s direct actions for institutional investors have run on the same logic: in the AOL Time Warner litigation, among his representative cases, its clients recovered fifty times what they would have received in the class case, and in Qwest thirteen times.

$118 Million, Then $53 Million

Broadcom’s directors and officers were alleged to have manipulated the dates of stock-option grants from 1998 to 2003 so that the grants appeared to have been made when the stock was low, letting the recipients exercise below the fair market value on the real grant dates. Shareholders filed derivative suits between March and August 2006, Murphy v. McGregor on May 25, Jin v. Broadcom, removed from the Orange County Superior Court on June 23, and Shei v. McGregor on July 17; the federal cases were consolidated on August 16, 2006 in the Central District of California, again before Judge Manuel L. Real, and by order of October 16, 2006 the court appointed Lieff Cabraser lead counsel in the consolidated derivative action, Heimann as lead counsel for the federal derivative plaintiffs, L A Murphy, Gordon Postlmayr, Alfred Ronconi and Yen Shei. The amended complaint of November 3, 2006 pleaded claims under Sections 10(b), 14(a) and 20(a) of the Exchange Act, breach of fiduciary duty and insider trading; the two state cases were stayed in January 2007, and Broadcom formed a special litigation committee in May 2007. By then the company had advanced about $175 million to current and former officers for their lawyers and experts.

In December 2009 the court approved a partial settlement, signed in August 2009, under which Broadcom’s directors-and-officers insurers paid the company $118 million under its 2005 and 2006 policies, $43 million of it already recovered under reservations of rights and $75 million on final approval, with ten defendants released, David A. Dull, George L. Farinsky, Aurelio E. Fernandez, Bruce E. Kiddoo, John E. Major, Scott A. McGregor, Scott J. Poteracki, Alan E. Ross, Robert E. Switz and Werner F. Wolfen, and the claims against three former executives, William J. Ruehle, Henry T. Nicholas III and Henry Samueli, carried forward outside the release, expressly reserved until the criminal trials of Nicholas and Ruehle. Broadcom had $200 million of coverage, $100 million of it excess Side A, and the Side A carriers put in $40 million; the company paid plaintiffs’ counsel about $12 million. The three excluded defendants filed notices of appeal in January 2010, and in March 2011 they settled: Nicholas paid Broadcom $27 million, Broadcom cancelled Samueli’s unexercised options, valued at $24 million, and Samueli gave $2 million to the Broadcom Foundation, cash and cancelled options worth $53 million between them, and Ruehle dismissed with prejudice his own action against the company seeking more than $26 million, releasing it; Broadcom agreed to pay plaintiffs’ counsel $25 million. In May 2011 the court approved the second settlement. The two settlements brought Broadcom about $197 million in value, the third-largest derivative recovery in the option-backdating cases.

Highest to Lowest

Wells Fargo posted its California customers’ debit-card transactions from the highest amount to the lowest, so that a balance ran out sooner and more transactions drew overdraft fees. Veronica Gutierrez paid $143 in overdraft fees on a $49 overdraft; Erin Walker paid $506 for exceeding her balance by $120; both had read the bank’s marketing and assumed their purchases would post in the order they made them. The bank had switched to high-to-low posting in 2001 over the objection of an executive, Ken Zimmerman, who was overruled, and it ran the sequencing through a system called HOGAN; its California overdraft earnings from 2005 through 2007 came to $1.4 billion, second only to its spread income, and 4 percent of its customers paid 40 percent of its overdraft and returned-item revenue. Gutierrez’s class action for customers charged those fees between November 15, 2004 and June 30, 2008 was tried to the bench before Judge William Alsup for two weeks beginning in April and ending in May 2010, Heimann trying the case, after two and a half years of litigation, with Jordan Elias, Roger N. Heller, Michael W. Sobol and Alison M. Stocking of the firm and Jae K. Kim and Richard D. McCune of McCune & Wright.

In August 2010, in a ninety-page opinion, Judge Alsup held that the practice violated California law, ordered about $203 million in restitution, $202,994,035.46, and enjoined the sequencing, with the bank to stop posting high to low by November 30 and to reverse the fees the policy had produced. He found that “the bank’s dominant, indeed sole, motive was to maximize the number of overdrafts,” that high-to-low posting was “a bookkeeping device to turn what would ordinarily be one overdraft into as many as ten overdrafts,” and that “These neat tricks generated colossal sums per year in additional overdraft fees.” The bank’s own name for the fee plan was “Balance Sheet Engineering.” “The supposed net benefit of high-to-low resequencing is utterly speculative,” he wrote. “Its bone-crushing multiplication of additional overdraft penalties, however, is categorically assured.” The bank’s claim that the practice helped customers he called “entirely fatuous,” and of its disclosures: “The bank went to considerable effort to hide these manipulations while constructing a facade of phony disclosure.” It was the fourth-largest judgment in California in 2010 and the largest in a class action. Heimann’s reading of it reached past the one bank. “I don’t think there’s anything unique about Wells Fargo,” he said the week of the ruling, and “most states have consumer protection statutes of one kind or another”; Bobby Gilbert of the Alters Law Firm, with thirty-two overdraft cases against other banks consolidated in Miami, said the California discovery would carry over to them. Richele Messick, a spokeswoman for the bank, said it was “disappointed” and would appeal.

It appealed in September 2010. On December 26, 2012 the Ninth Circuit held that the posting order itself was a matter federal banking law left to the bank, so that the unfair-prong claim under California’s Unfair Competition Law was preempted, but it affirmed the finding that the bank had misled its customers about the order and sent the case back, and on May 14, 2013 Judge Alsup reinstated the full award on the fraudulent prong, with post-judgment interest running from the original judgment of October 25, 2010, and permanently enjoined the bank, from July 15, 2013, from false or misleading statements about posting order. “Wells Fargo attempted at trial to dissect the scheme into parts and thereby reduce liability for its wrongdoing,” he wrote; the misrepresentations were “intertwined with the other elements of the scheme,” and “the appropriate form of restitution is to restore the unexpected charges to Wells Fargo’s customers.” The Ninth Circuit affirmed the judgment on October 29, 2014, after argument on October 8 before Judges Thomas, McKeown and W. Fletcher, holding that “Gutierrez did not waive her claim to restitution” and that “relief under the UCL is available without individualized proof of deception, reliance and injury,” and on April 4, 2016 the Supreme Court declined to review it. “For seven years, Wells Fargo has sought to defend its misrepresentations,” Sobol said that day. Of the class members Heimann has said: “they were just so tickled that the bad guy got stuck in the end.”

Toshiba Alone

In In re TFT-LCD (Flat Panel) Antitrust Litigation, MDL 1827 in the Northern District of California, filed April 20, 2007 and assigned to Judge Susan Y. Illston, the direct purchasers alleged that the world’s panel makers had conspired for about eight years, beginning with a meeting on a golf course in 1998, to fix the prices of thin-film-transistor liquid-crystal-display panels; the Justice Department opened its own investigation in late 2006. In March 2010 the court certified two nationwide classes of direct purchasers, of the panels and of the laptops, monitors and televisions built around them, for purchases from January 1, 1999 through December 31, 2006, with Lieff Cabraser as co-lead counsel. Ten manufacturers settled with the classes for a combined $430 million; Toshiba did not. Heimann, with Bruce L. Simon of Pearson, Simon & Warshaw, was co-lead trial counsel when the case against Toshiba was tried to a jury in the spring of 2012, against Christopher M. Curran, John H. Chung, Martin M. Toto and Kristen J. McAhren of White & Case, who maintained that the evidence against Toshiba was insufficient and that there were no recoverable damages. The jury deliberated less than a week, and on July 3, 2012 it found that Toshiba and its subsidiaries had participated in the conspiracy to fix the panels’ prices and awarded $87 million in damages, which the antitrust laws trebled to $261 million. “We are very pleased the jury found in favor of the plaintiffs and found that Toshiba violated the law,” Heimann said that morning, adding that the verdict came “particularly in light of the government’s decision not to criminally prosecute Toshiba for its misconduct.” “The jury rejected Toshiba’s claim that it had done nothing wrong,” Simon said. Toshiba then settled, and the classes’ settlements in the litigation exceeded $470 million. For the litigation California Lawyer named Heimann a California Lawyer of the Year for 2013.

Seven Mediation Sessions

From at least January 1, 2011, Wells Fargo employees chasing cross-selling targets opened millions of deposit and credit-card accounts without their customers’ knowledge or authorization. After the bank disclosed it, shareholders sued the bank’s directors and senior officers derivatively in the Northern District of California for failing to oversee the sales practices, alleging that the board and senior management had known of the practice or consciously disregarded it. The consolidated amended complaint was filed on February 24, 2017; the court appointed the Fire and Police Pension Association of Colorado and the City of Birmingham Retirement and Relief System co-lead plaintiffs and Lieff Cabraser and Saxena White co-lead counsel, and Heimann led the firm’s work. Wells Fargo moved on March 17, 2017 to dismiss for failure to plead that a demand on the board would have been futile, and the court largely denied the motion in May 2017; the individual defendants’ motions to dismiss for failure to state a claim were denied in large part on October 4, 2017, the second time the court had let the case go forward. Fact discovery was set to close on January 25, 2019, and the defendants were preparing for more than forty depositions.

Three mediation sessions failed. Negotiations resumed in September 2018 with four more day-long sessions before Judge Daniel Weinstein, retired, and Jed Melnick, the last of them on December 4. “Most of my time these days is devoted to the Wells Fargo derivative case over the phony account creation scandal,” Heimann said in an interview published on December 2, 2018, a hard case “primarily because of the high hurdle that Delaware law creates in its corporate-friendly jurisprudence.” “Trial is set for next year if we are unable to settle.” On December 12, 2018 the parties accepted the mediators’ proposal. The individual defendants’ insurers, covering twenty current and former executives and directors including the chief executive, Tim Sloan, and his predecessor, John Stumpf, paid Wells Fargo $240 million, the largest insurer-funded cash payment in any shareholder derivative settlement, ahead of the $139 million News Corp settlement of 2013; the bank had settled a securities class action over the same accounts for $480 million the previous May. During the litigation the board had clawed back $122.5 million from the individual defendants through forfeited stock grants, reduced compensation and returned incentive pay, and in the settlement Wells Fargo agreed and acknowledged that the facts alleged in the action were a significant factor in those clawbacks and in the governance changes it made while the case was pending: changes to board and business-unit oversight, internal controls and reporting, leadership structure and risk-management reporting, with amended charters and bylaws, new positions and more reporting from the business units to the board. The parties valued the clawbacks at $60 million and the reforms at $20 million, $80 million in all, for a settlement worth $320 million to the bank.

Judge Jon S. Tigar granted preliminary approval in a fourteen-page order on May 14, 2019, finding no obvious deficiencies; notice ran in four national outlets on May 20, and no shareholder objected to the settlement itself, though four objections came in on the fee. He held the final approval hearing on August 1, 2019 and gave final approval on April 7, 2020, finding the settlement fair, reasonable and adequate: “The Court agrees that this represents an excellent result for the shareholders.” He rejected the objectors’ argument that co-lead counsel had virtually won the case by the time it was filed and had done too much work too late: “No smart lawyer stops working on a case simply because it looks like it might settle,” and “it should surprise no one that much work was performed after the motion to dismiss was denied.” He set the fee at 22 percent of the $240 million fund, $52.8 million, and awarded each co-lead plaintiff $25,000 for more than four hundred hours of work on the case.

Five Minutes for Eight Watch Items

Lion Air Flight 610, a Boeing 737 MAX, went into the Java Sea after takeoff from Jakarta on October 29, 2018, killing all 189 aboard; Ethiopian Airlines Flight 302, another 737 MAX, crashed on March 10, 2019, killing all 157. Boeing’s stockholders sued its directors in the Delaware Court of Chancery, claiming that the board had let a safety-engineering culture become a financial-engineering culture and had failed to oversee the airplane’s design and development, and the court appointed New York State Comptroller Thomas P. DiNapoli, as trustee of the New York State Common Retirement Fund, and the Fire and Police Pension Association of Colorado co-lead plaintiffs, with Lieff Cabraser as co-lead counsel; Heimann appeared for them with Katherine Lubin Benson, alongside Steven E. Fineman, Nicholas Diamand, Sean Petterson, Rhea Ghosh and Kartik S. Madiraju of the firm’s New York office and Joel Friedlander, Jeffrey M. Gorris and Christopher M. Foulds of Friedlander & Gorris in Wilmington. The second amended complaint was filed on January 26, 2021. The claim ran under Caremark, the Delaware rule that directors answer for oversight failures only on a showing of bad faith, either because they “utterly failed to implement any reporting or information system or controls” or because they “consciously failed to monitor or oversee” the company’s operations, and the stockholders’ counsel argued that after Marchand “there’s an affirmative obligation to create a reporting system of the type described in Marchand.”

On September 7, 2021 Vice Chancellor Morgan T. Zurn denied the directors’ motion to dismiss the oversight claim. She found that “Boeing did not implement or prioritize safety oversight at the highest level of the corporate pyramid” and that “Airplane safety was not a regular set agenda item or topic at Board meetings.” None of the board’s committees had been tasked with airplane safety and every committee charter was silent on it, and without a board-level reporting channel, safety issues and whistleblower complaints had no path to the directors. After Lion Air, the briefing the board received did not explain that Boeing knew the MCAS flight-control software was vulnerable and susceptible to failure; the board decided to delay any investigation of its own until the regulators finished theirs, and at a meeting in December 2018 it allocated five minutes in total to eight “Watch Items,” while one stated objective in its materials was to “Position the Boeing Board of Directors as an independent body that has exercised appropriate oversight.” The first crash, she wrote, was “a red flag about MCAS that the Board should have heeded but instead ignored”; the board “treated the crash as an ‘anomaly,’ a public relations problem, and a litigation risk,” its “primary focus relating to the 737 MAX and Lion Air Crash was on restoring profitability and efficiency,” and the board “publicly lied about if and how it monitored the 737 MAX’s safety.” Where safety is mission critical the directors carry a rigorous oversight obligation, and she found Marchand “dispositive in view of Plaintiffs’ remarkably similar factual allegations.” Boeing’s board had created its Aerospace Safety Committee on August 26, 2019, after both crashes.

The directors settled on November 5, 2021, in a stipulation filed late on a Friday, admitting no wrongdoing. The settlement Vice Chancellor Zurn approved on February 23, 2022, with final judgment entered March 22, 2022, paid Boeing $237.5 million from its insurers, less up to $29.7 million in fees and expenses for the stockholders’ lawyers, and wrote safety into the company’s governance: at least three directors with aviation, engineering or product-safety oversight expertise and an additional director elected with that background within a year; the separation of the chief executive and the board chair codified in the bylaws; the Chief Aerospace Safety Officer and the Chief Compliance Officer reporting to the board’s Aerospace Safety Committee; public disclosure of the company’s safety-enhancement programs; and, for five years, an ombudsperson to whom Boeing’s employees can bring their safety concerns, reporting to the Chief Aerospace Safety Officer and reviewing concerns raised about the FAA’s delegation program at the company, under which Boeing employees do certification work for the agency. Individual stockholders received no payment. The co-lead plaintiffs called it the largest monetary recovery in a Delaware suit over directors’ failure to guard against the risk of harm; it is the largest Caremark cash settlement in the Court of Chancery and the second-largest insurer-funded derivative settlement in history, behind Wells Fargo. The directors, DiNapoli said, “failed in their fiduciary responsibility to monitor safety and protect the company, its shareholders and its customers from unsafe business practices and admitted illegal conduct,” and the reforms, he hoped, “will help safeguard Boeing and the flying public against future tragedy and begin to restore the company’s reputation.” Boeing said the settlement “builds on those actions with additional oversight and governance reforms that will further advance safety and quality in the work that we do.”

Red Flag Prescriptions

San Francisco sued the opioid industry in 2018, City and County of San Francisco v. Purdue Pharma L.P., naming Purdue, Johnson & Johnson, Endo, McKesson, Cardinal Health and AmerisourceBergen among the defendants, and by the spring of 2022 the case was the fourth bellwether in the federal opioid litigation of more than 3,000 cities, towns and counties and the first to go to trial against pharmacy defendants. Heimann was co-lead counsel for the city and co-lead trial counsel, with Elizabeth J. Cabraser and Paulina do Amaral of the firm and Aelish Baig of Robbins Geller on the trial team. The bench trial before Judge Charles R. Breyer began on April 25, 2022 against Allergan, Teva, Teva’s Anda unit and Walgreens, with the court opening the proceedings online to the public. The city alleged that Allergan and Teva had misrepresented the dangers of their pills, that all of the defendants had failed to identify, divert and report suspicious orders, and that Walgreens had dispensed opioids without the due diligence the law required, and it sought abatement of a public nuisance, an injunction and civil penalties; opioid-related conditions by then accounted for a quarter of emergency-room visits at the city’s largest public hospital. The companies answered that they had sold medications prescribed by doctors. Allergan and Teva settled for $54 million, Endo for $10 million, CVS for about $11 million, Walmart for $6 million, and Johnson & Johnson, McKesson, Cardinal Health and AmerisourceBergen for $45 million together, and Walgreens was left as the one defendant for decision.

The trial ran from April 25 to June 27, 2022, with closing argument on July 12 and 13, and by its close Walgreens was the one defendant left. The plaintiff was the People of the State of California, acting through the San Francisco City Attorney, and at trial it brought a single public nuisance claim. To carry its burden it had to prove that it was “more likely than not that Walgreens knowingly engaged in unreasonable conduct that was a substantial factor in contributing to the opioid epidemic in San Francisco.” Judge Breyer took 112 pages to answer, and he began with the city: “The opioid epidemic has plagued San Francisco for over twenty years. The number of individuals who die annually from opioid overdoses continues to climb. Thousands of city residents, from all walks of life, struggle with addiction. Widespread opioid use has strained the city’s hospitals. It has forced streets, parks, and public spaces to close. It has exacerbated crime and homelessness. Every year, San Francisco devotes significant resources to a multiprong fight against the opioid epidemic. That fight includes this case.” “Walgreens is the largest retail pharmacy chain in San Francisco.” From 2001 to 2020 the company ran between 7,000 and 10,000 stores nationally with more than 200,000 employees, about 26,000 of them pharmacists; in its peak growth in the 2000s it aimed to open one new store a day, with the goal of a store within five minutes of about three quarters of the American population, and in San Francisco it had as many as 75 stores, about 60 in an average year, between 2006 and 2020. In those years its San Francisco pharmacies received 58.7 percent of the prescription opioid pills sold to the city’s chain and retail pharmacies, filled 2,478,103 opioid prescriptions, from 77,260 in 2006 to a peak of 239,767 in 2011, and dispensed 155,763,131 pills, about sixty to a prescription.

The city’s witnesses on the epidemic were its own doctors and department heads. Dr. Lembke testified on the science of addiction, and Keyes’s estimate put opioid addiction in 2019, the last year with data, at 40,958 residents of a population of about 865,000; that year about 1,939 people in San Francisco overdosed on opioids, an average of 5.3 a day. Dr. Colwell, Chief of Emergency Medicine at Zuckerberg San Francisco General Hospital, ZSFG, testified that “approximately two-thirds of the patients who present to the [emergency department] with an opioid-related medical condition report that their addiction started with pills.” The Fire Department, for which Sandy Tong, its Assistant Deputy Chief of Emergency Services since 2017, testified, administered more than 7,600 doses of naloxone to opioid overdoses between July 2018 and March 2022. Public Works, whose Interim Director, Carla Short, testified, collects about 95,000 used syringes a year. Recreation and Parks collected 10,360 syringes from Golden Gate Park in 2019, had closed the restrooms at Margaret Hayward Playground because of needles and sifted the sand of the children’s play area at Dolores Park, and Follin, testifying for the department, said that “[f]inding needles in the park is so common that it is not notable, it is just a routine occurrence, like changing out the toilet paper in the restrooms.” Library staff had found needles inside books, and a visitor had died of an overdose in a library bathroom; Michael Lambert, the City Librarian, testified: “I have to decide if we can keep these restrooms open . . . or risk someone dying from an opioid overdose in them.” Judge Breyer added what he could see himself: “Even right outside this courthouse, people suffering from severe opioid addiction buy, sell, and use opioids in plain sight.”

The first of the city’s two theories concerned Walgreens as a distributor. Federal regulation, 21 C.F.R. § 1301.74(b), requires every registered distributor to design and operate a system that discloses suspicious orders of controlled substances and to report them, and in 2006 and 2007 Joe Rannazzisi, Deputy Assistant Administrator of the DEA’s Office of Diversion Control, had written to every registrant, Walgreens included, the December 2007 letter warning that a monthly report of completed orders did not meet the statutory requirement. Until 2014 Walgreens shipped opioids to its own pharmacies from three distribution centers, in Perrysburg, Ohio, Jupiter, Florida, and Woodland, California, and it distributed controlled substances to no one else. Woodland, the primary center for San Francisco, served about 2,500 stores in 25 states, and from 2006 to 2014 Walgreens distributed 102.4 million dosage units of opioids to its San Francisco pharmacies, using Cardinal Health, AmerisourceBergen and McKesson to fill the rest of their orders. Before 2012 the Woodland suspicious-order report multiplied a store’s average monthly order by a “DEA factor”: “For example, if the average monthly order for a store is six and the DEA factor is three, then a monthly order that exceeds 18 is flagged as suspicious.” “There was no evidence presented at trial about how Walgreens developed the DEA factor that it used to identify suspicious orders.” The orders on the report shipped anyway, without any investigation, the court found. Joe Ferry, who managed controlled-substance distribution at Woodland, testified that suspicious-order monitoring belonged to corporate, not to his team. John Coman, Woodland’s General Manager, the “buck stops here” manager in the court’s phrase, testified that he knew of no employee at the center who used the report to reduce a pharmacy’s controlled-substance orders, and asked whether Walgreens had allocated to him, as manager, the resources necessary to identify, monitor and perform due diligence on suspicious orders, he answered, “No.” Tasha Polster, the head of Walgreens’ Pharmaceutical Integrity Team, testified that the distribution centers were responsible for the job. Judge Breyer did not believe her: “Polster provided no specifics as to the basis of her understanding that distribution centers were responsible for maintaining systems that identified and halted suspicious orders, and her answers were vague and evasive.” Of Ferry and Coman: “Given their direct involvement in the process and their straightforward answers, the Court credits their testimony over Polster’s.”

Walgreens had known for years. In 2006 a DEA audit of the Perrysburg center had found the system insufficient and the DEA factor inadequate; in 2008 the company’s own Internal Audit team found the deficiencies unresolved and present at every distribution center, and wrote that “Walgreens is filling orders that have been deemed suspicious without performing any research to ascertain the legitimacy of the order, which could lead to non-compliance with DEA regulation Section 1301.74.” The January 2008 audit of Woodland found numerous suspicious orders shipped without investigation; management set a June 2008 deadline to fix it and missed it, and a follow-up audit in fiscal 2011 found Woodland still had no system to stop a suspicious order. Coman was asked, “And here we are three years later, and they are still concerned about Walgreens not having a monitoring process in place; correct, sir?” “Correct.” He had met DEA agents during their audit and, knowing the deficiencies, had not told them that the company had identified them or that they had persisted for years. Between 2009 and 2012 Walgreens rolled out a Controlled Substances Reporting system with ceiling limits on what a pharmacy could order, about whose setting Polster could speak only in generalities. “In fiscal years 2014 and 2015, Walgreens approved over 95% of the requests for orders that exceeded ceiling limits,” and a pharmacy could place a “PDQ” order, company shorthand for “pretty darn quick,” which did not count against its ceiling at all. The new system was expected to generate thousands of orders of interest a week, each requiring review before shipment, and the compliance team that would review them had ten people. In 2010 Coughlin, writing to members of the corporate compliance team about suspicious controlled-drug orders, asked: “Who from your group has been reviewing the data collected for the past twenty-five years?” Nothing in the record answered him.

Jupiter was the center the DEA shut down. Kristine Lucas, its Controlled Substances Manager when the agents arrived, testified that from 2010 the Walgreens pharmacies it supplied ordered more and more: “I’d send this store 30 bottles a week. And then, it went to 90 bottles a week, and then 300 bottles a week, and then 600 bottles a week, and it just kept progressing more and more and more.” To hold it all the staff took the shelves out of the secure cage and stacked boxes of opioids floor to ceiling, and when the cage could no longer hold them they stacked pallets outside it and loaded a “box truck with no shelves . . . that you could stack floor to ceiling.” Pharmacists called wanting more bottles days after the last shipment. When she asked them whether they were doing due diligence on the prescriptions, “I was told that was not their job. They have a script, they will fill it.” A query run at the center put it in numbers: “I ran a query to see how many bottles we have sent to store #3836 and we have shipped them 3271 bottles between 12/1/10 and 1/10/11. I don’t know how they can even house this many bottle[s] to be honest.” No one addressed her concerns, and she called the situation “a ticking time bomb.” On September 13, 2012 the DEA ordered Walgreens to suspend all distribution of controlled substances from Jupiter at once, for failing to monitor suspicious orders and to house controlled substances securely; about twenty agents “came in and shut down the operation,” had the unshipped orders returned to the cage, changed its combinations and set up their workspaces in the building. “Controlled substances shipments from the Jupiter distribution center never resumed.” In 2014 Walgreens stopped distributing controlled substances to its pharmacies altogether and moved to outside distributors.

The second theory, and the one on which liability finally rested, concerned the pharmacies. Under 21 C.F.R. § 1306.04(a) a pharmacist who fills a controlled-substance prescription carries a corresponding responsibility to determine that it was written for a legitimate medical purpose, and the pharmacy answers for the pharmacist; in that scheme, Judge Breyer wrote, pharmacies act as the “last line of defense” against diversion by giving their pharmacists the training and resources to dispense only legitimate prescriptions. A red flag is a warning sign that requires further inquiry, and a prescription whose red flag is not resolved cannot be dispensed; due diligence means identifying the flag, obtaining information, evaluating it and documenting what was done. Walgreens assigned “two and a half” pharmacists to each San Francisco pharmacy, its stores open from eight in the morning to nine at night, one pharmacist opening and the other arriving midday to cover lunch and close. “While Walgreens pharmacies have 1-2 pharmacists and 2-4 pharmacy technicians working on a regular day, the ZSFG pharmacy has seven pharmacists and ten pharmacy technicians working on a regular day.” Swati Patel, the hospital’s Director of Pharmacy, testified for the city. Every prescription that arrived at a Walgreens pharmacy was assigned a promised time by which it was to be ready, generally set by the company’s computer, and “A pharmacist’s ability to meet promised time is a factor relevant to the pharmacist’s year-end review and bonus”; only from 2013 did Walgreens exclude controlled substances from the bonus calculation. Its Good Faith Dispensing Policy came into evidence in four versions: a single page in 1998, two pages in 2006, under which a prescriber’s confirmation let the pharmacist process the prescription as normal, two pages in 2011 with more questionable circumstances, one of them a prescriber’s handwriting being too legible, and seven pages in 2012, which told pharmacists that “[e]ven if the prescriber verifies that the prescription is valid, it is the pharmacist’s responsibility to confirm that the elements of good faith dispensing are satisfied prior to dispensing.”

The DEA had been at Walgreens’ pharmacies before the city was. In September 2009 it issued an order to show cause against a Walgreens pharmacy in San Diego, resolved by a 2011 memorandum of agreement that applied to every Walgreens retail pharmacy; in 2012 it issued show-cause orders against Florida pharmacies for ignoring readily identifiable red flags, and in the 2013 memorandum of agreement that resolved them Walgreens acknowledged that “certain Walgreens retail pharmacies did on some occasions dispense certain controlled substances in a manner not fully consistent with its compliance obligations under the CSA,” agreed to take controlled substances out of the dispensing volumes behind pharmacists’ bonuses and agreed to create a Pharmaceutical Integrity Team. Polster was appointed to head it. Of the 349-page agreement she had read thirteen pages; asked whether she understood that the next 336 pages walked through the numerous problems at Walgreens in significant detail, she testified, “I haven’t read this entire document,” and asked, “[y]ou didn’t read over 90% of this document, correct,” she answered, “Correct.” The team’s Target Drug list required a due-diligence checklist before dispensing oxycodone, methadone and hydromorphone. It left out hydrocodone, which “was the number one prescribed, dispensed, and abused drug in the United States” when the list was written and which, from January 2006 to June 2020, accounted for 49.1 percent of the opioid prescriptions Walgreens dispensed in San Francisco; Polster testified that adding it “would have increased the number of paper forms that the pharmacist had to fill out,” money was a consideration too, and when the DEA moved hydrocodone to Schedule II soon after, Walgreens still did not add it. The checklist itself was paper until 2019, filed by prescription number rather than patient name, so that finding one meant a search by hand: “Instead, completed Target Drug checklists were stored in literal file cabinets at each pharmacy.” Polster had asked for an electronic version from 2012 and submitted the request in her budget “year after year,” and Walgreens’ President denied it each time; in November 2019, when it was finally approved, she wrote, “I have been wanting to do this from day one and Kermit wouldn’t let me so this is a huge win for my team and the field.” Judge Breyer found that at least part of the reason it took six years was that spending more on compliance was not a priority for the company.

What a pharmacist could record in the dispensing system, IntercomPlus, was a Patient Comment field of 320 characters. In April 2013, when pharmacists said they were “running out of room,” the Pharmaceutical Integrity Team told them to “delete older comments or refusals.” Carmen Catizone, the city’s pharmacy expert, explained the consequence: “As a pharmacist, I’m filling prescriptions. Even in the same store, I may not know that the pharmacist who worked three days before me refused to dispense a prescription because I don’t have an electronic record of that prescription. It’s paper.” Walgreens told pharmacists to keep comments critical of prescribers out of the system, and one notice read: “[P]lease note the comment of ‘Candy Doc’ has been removed from all prescriber profiles.” “Walgreens pharmacies operated in information silos,” Judge Breyer wrote. “This need not have been so.” In 2014 the team built an internal portal of prescribers’ patterns and opened it to field leadership but not to the pharmacists at the counter, out of a concern that the data would “cloud” their decisions about “whether or not to fill or not to fill a prescription.” Walmart and Rite Aid prohibited filling prescriptions from prescribers they found suspicious; Walgreens’ policy was not to “block a prescriber that had an active DEA and state license,” regardless “of [the] prescriber’s prescribing history,” and it blocked one only when a DEA raid had shut the office down. It piloted blocking and did not adopt it. For one doctor whose prescriptions three other chains blocked outright, with 4,134 opioid prescriptions filled at Walgreens in the previous ninety days and a ranking in the “100th percentile for oxycodone, 99th percentile for hydrocodone, and 98th percentile for buprenorphine,” Eric Stahmann, a manager on the team, directed case-by-case evaluation and told the Regional Healthcare Director to “advise the pharmacy staff to refrain from entering any slanderous comments in the prescriber’s IC+ profile and stick with generic comments such as ‘verify GFD.’”

The pharmacists testified to what that meant at the counter, and the court found that they worked under constant time pressure, inadequate staffing, a lack of training, insufficient resources and misaligned incentives. Victor Lo was a pharmacist at the Walgreens in the Bayview from 2010 to 2021, a store so busy that pharmacists worked “morning to evening non-stop.” He “operated under tremendous pressure to fill prescriptions and fill them quickly,” in an environment that kept him “from devoting the time needed for thorough due diligence, which put our patients in danger.” “Everything was about numbers, always.” He warned that “we were at risk of ‘killing’ a patient,” and the answer that came back on staffing was that “All you have to do is, you know, average another 25 or 50 prescriptions a day. You’ll reach a new tier and you’ll get more hours.” Asked whether he believed he had filled prescriptions he probably should not have, he testified, “I know that I did.” Rebecca Gayle was a staff pharmacist at six stores in the Mission from October 2012 to January 2016. She “constantly felt like there was a pressure to fill, fill, fill and that was what the company cared about most, was the message that I got.” She “skipped virtually all of [her] breaks for years” and “also I would routinely work off the clock,” and she began telling friends and family who used Walgreens, “please, please double-check your medicines.” It was “well known” among “our pharmacy managers that corners were being cut because everyone was cutting them to survive.” When she refused a prescription, “patients would likely attempt to walk down the street along Mission Street and try it at each subsequent store along Mission Street and then I assume that if everyone denied it along Mission Street they would probably continue until they found a pharmacy that might fill it for them.” She kept a sticky note in the pharmacy listing the prescribers whose patterns worried her. Jeremy Gerspacher started at Walgreens in 2014 out of pharmacy school as a floater across San Francisco, the only pharmacist on duty at least three quarters of his shifts; he filled one prescription and realized afterward, “I shouldn’t have done that . . . the red flags were there, it just wasn’t engrained in me at the time,” and that “soon after filling [the prescription at a San Francisco pharmacy], it was being sold in the parking lot.” Judge Breyer heard pharmacists from elsewhere in California as evidence that the problem was the company’s, not the city’s. Christy Mathews Porter, who worked at Walgreens stores in Redding, testified that pharmacists are “strapped for time all the time. You work in flight or fight mode. It’s constant stress.” Robert Yagar, more than two decades at Walgreens pharmacies in Southern California, described the pace as “trying to squeeze 7 gallons of water into a 5-gallon bucket,” kept his own list of suspect prescribers on a piece of paper, and testified that management had told pharmacies not to categorically block the prescriptions of Lisa Tseng, a doctor later arrested, charged and sent to prison for grossly excessive opioid prescriptions that caused multiple fatal overdoses. Golnaz Kamali worked at Walgreens stores in Southern California from 2011 to 2015; complaints when she refused suspicious prescriptions did not surprise her, because “[t]hat’s what happens when you tell drugs addicts no.” Walgreens fired her on September 24, 2015, two weeks after she filed an internal complaint that its pharmacies were filling illegitimate prescriptions, and settled her wrongful-termination suit for $437,500. Mark Wagner, Walgreens’ President of Operations and Community Management, had written in 2013: “I am concerned with the pharmacy manager comments regarding lack of hours. I heard this loud and clear in San Francisco this past week.” The message to the pharmacies was that good-faith dispensing “concerns [don’t] relieve you from trying to attain the numbers that have been set for you.” “Pharmacists understood this message all too clearly.” Before 2012 Walgreens had no controlled-substance training for its pharmacists at all; Polster herself had written that the company needed “periodic training of all Walgreens retail employees for dispensing controlled substances” and that “No such training exists today.” The module that arrived in September 2012 allotted ten minutes to controlled-substance dispensing, twenty to the Prescription Savings Club and forty to gift-card training and policy.

The proof of what the pharmacies had dispensed came from Walgreens’ own data. Catizone, a licensed pharmacist who had spent thirty-five years developing pharmacy regulation for the national association of pharmacy boards, identified fourteen red flags commonly used to spot prescriptions at risk of diversion, among them a patient or prescriber more than twenty-five miles from the pharmacy, overlapping prescriptions from two or more prescribers or pharmacies, the cocktail of an opioid with a benzodiazepine, and with a muscle relaxer the “holy trinity,” high daily doses, early refills and cash payment; the court found them consistent with Walgreens’ own Good Faith Policy. Dr. Craig McCann applied them to the dispensing data and counted 1,428,393 red-flag prescriptions. Walgreens’ expert Robert Brunner showed an overcount of 437,786, McCann’s rebuttal showed that 260,700 of those hit separate flags, and the net overcount of 177,086 Judge Breyer called immaterial: “But Brunner overcounted the overcounting.” The adjusted total of Walgreens opioid prescriptions in San Francisco hitting a red flag between 2006 and 2020 was 1,251,307, half of all of them, an average of 83,420 a year holding 5,005,200 pills. Walgreens’ pharmacy expert Kathleen Besinque called the twenty-five-mile threshold arbitrary even after being shown that the DEA and Walgreens had themselves used twenty-five and thirty miles. “Besinque’s unwillingness to confront evidence that directly undermined her opinions casts serious doubts on her credibility.” “In fact, over 1,200,000 opioid prescriptions dispensed at San Francisco Walgreens between 2006 and 2020 hit on one of Catizone’s red flags, and Besinque identified only two that she claimed did not present an actual red flag.” Walgreens pointed to city-employed doctors whose own prescriptions tripped the flags; Dr. Claire Horton testified that she worked in a high-risk setting with high-risk patients and would expect a pharmacist to do due diligence on her prescriptions: “I have reconsidered my prescriptions based on discussions with pharmacists in the past.” Judge Breyer began the documentation with a guiding principle of pharmacy: “if you didn’t document it, it didn’t happen.” During discovery a magistrate judge had ordered Walgreens to produce 5,000 prescriptions with their due-diligence materials; it produced the materials for 2,265, because it could not reasonably locate the rest. Elizabeth Park, the city’s pharmacy expert, reviewed the documentation for those 2,265 prescriptions, each with at least one red flag, dispensed by twelve San Francisco Walgreens pharmacies from 2010 to 2019, and found “evidence of an appropriate effort to resolve red flags in fewer than 5% of cases.” The Annotation Text field was blank for 89 percent of them and the Patient Comments field for 86 percent, and of the 319 prescriptions with a patient comment, “266 (83%) included nothing more than an email address.” Besinque reviewed the Annotation Text field for fifty of the same prescriptions herself; forty-four were blank. “In addition, the evidence established that Walgreens’ due diligence practices from 2003 to 2012 meant only one thing: contact the prescriber.” Polster herself had written: “The game has changed; we can no longer rely on the ‘I spoke to the prescriber and he said it was okay’ . . . We are going down a different path now and we have to make sure that we are prepared.” Before the December 2014 audit of the checklist she wrote to her managers, “put your seat belts on . . . I hope that the results are not as bad as I am thinking they will be.” The results were “unfavorable”: 1,432 of 2,407 stores “correctly had a completed TD GFD Checklist attached to the filled TD prescription hard copies,” a “59.5% compliance rate,” and 1,160 of the stores had kept no refused prescriptions at all. At the twelve San Francisco pharmacies, from 2013 to 2020, 82,507 target-drug prescriptions were dispensed and checklists existed for 32,566: “In other words, for 60.53% of prescriptions over an eight-year period, there was no record that due diligence had been performed through the Target Drug checklist.”

Walgreens’ principal witnesses did not survive the documents. Polster testified that it had never been company policy for pharmacists to defer to prescribers; the words of the policies contradicted her, and the court gave the testimony no weight. Confronted with her own statements, she said they were “not all I said” and “were my personal speaker notes.” “The Court finds this testimony to be nothing more than a bald denial and assigns it no weight.” She had not worked as a pharmacist since 2003, and of her account of the pharmacies: “The testimony is no more than say-so.” Shown the documents, she answered, again and again, “That’s what it says.” Her repeated refusal to engage with the unfavorable documents, Judge Breyer found, cast doubt on her credibility as a whole. Ronda Lowe, a pharmacy supervisor and district manager who oversaw San Francisco stores from 1993 to 2019, testified that her stores complied; the court found her unpersuasive. Her store walks covered more than forty tasks, one of them whether the pharmacy was following the Good Faith Policy, alongside whether store leaders were sharing the store’s Delight targets and scores. “I did do audits when I was at the store. I looked over the shoulders of the pharmacists as they were filling prescriptions.” In April 2019 one of her pharmacies refused every prescription from Dr. Guido Gores, in October 2020 another stopped filling them, and Walgreens learned that Gores was under DEA investigation; Lowe alerted none of her other pharmacies, which went on to dispense 86,904 opioid pills on his prescriptions. “Lowe conceded that if she had sent out an email directing pharmacies not to fill his prescriptions, the 86,904 opioid pills would not have been dispensed.” “Clearly no email was ever sent.” The prescribers made the pattern concrete. From 2006 to 2020 Walgreens pharmacies in the Bay Area filled 161,696 opioid prescriptions for thirty-one suspicious and high-volume prescribers, every one of whom faced discipline for prescribing and several of whom lost their licenses; their prescriptions came to more than 6 million opioid pills in San Francisco, more than 20 million across the Bay Area, and 7.8 percent of the opioid morphine milligram equivalents Walgreens dispensed in the city. “Data available to Walgreens showed that Gores was the second highest opioid prescriber in San Francisco and that he was in the ninety-ninth percentile of opioid prescribers nationwide.” He surrendered his license in February 2021 for gross negligence in overprescribing, having prescribed one patient more than 500 milligrams of oxycodone a day for more than two years without an examination; nearly 10,000 of his opioid prescriptions were filled at Walgreens, about 82 percent with a red flag, and after two pharmacies refused him in 2019, almost every other Walgreens kept filling until the license was gone. Andrew Giovannini’s annual opioid prescriptions rose thirteenfold, from 306 in 2006 to 3,960 in 2010, and Walgreens’ San Francisco pharmacies filled nearly 9,000 of them in those years, about 94 percent with a red flag, before he surrendered his license in May 2012; Gayle still remembered, “even now [] six years later,” three patients who carpooled from Oakland to her pharmacy with Giovannini prescriptions “very, very similar, if not the same,” each for the holy trinity, each paid in cash. Collin Leong surrendered his license in 2014 after criminal charges that he wrote opioid prescriptions for homeless people who handed the pills to a co-conspirator for sale on the street; Walgreens pharmacies in or near San Francisco filled almost 2,200 of his prescriptions, almost 79 percent flagged. John Pierce surrendered his in December 2019; Walgreens pharmacies in or near the city dispensed more than 10,000 of his prescriptions, three quarters flagged, and kept filling them for months after his license was suspended.

On August 10, 2022 Judge Breyer found Walgreens liable, the first bench-trial decision for a plaintiff in the national opioid litigation and the first finding of liability against Walgreens. On evidence covering 2006 to 2020, he found that Walgreens “dispensed hundreds of thousands of red flag opioid prescriptions without performing adequate due diligence,” that “Tens of thousands of these prescriptions were written by doctors with suspect prescribing patterns,” that the company “did not provide its pharmacists with sufficient time, staffing, or resources” and that “Pharmacists experienced constant pressure to fill prescriptions as quickly as possible,” and that its conduct “substantially contributed to the opioid epidemic in San Francisco.”

To prevail the city had to prove, by a preponderance of the evidence and under People v. ConAgra Grocery Products Co., the lead-paint decision of 2017, that Walgreens knew its unreasonable conduct caused a substantial interference with a right common to the public. Judge Breyer held that it had proved two forms of unreasonable conduct, dispensing in violation of 21 C.F.R. § 1306.04(a) and failing to maintain suspicious-order monitoring in violation of § 1301.74, and rested liability on the first: “Even though Walgreens engaged in two forms of unreasonable conduct, the Court’s finding of liability rests on Walgreens’ violation of 21 C.F.R. § 1306.04(a). This is because of the direct link from dispensing to diversion.” The suspicious orders the distribution centers failed to catch went to Walgreens pharmacies and nowhere else. “The diversion happened at Walgreens pharmacies.” “The CSA and its implementing regulations strike a bargain with registrants. In exchange for the privilege of dispensing powerful controlled substances, pharmacies are required to take reasonable steps to prevent those substances from being diverted and harming the public.” “Walgreens failed to fulfill this duty.” “There is no social utility in violating a federal regulation designed to protect the public from harm.” “The Pharmaceutical Integrity Team’s efforts were inadequate window dressing,” and “Walgreens’ ‘fill, fill, fill’ culture prevented pharmacists from consistently resolving red flags before dispensing prescriptions.” On knowledge the standard was whether the company must have known, and he found it met by the regulatory scheme itself, the DEA’s letters and enforcement actions, and the words of Walgreens’ own executives, who in a 2012 internal presentation had called prescription pain-drug abuse the new hot topic in the news: “Viewed as a whole, the evidence presented at trial established that Walgreens ‘must have known’ that violating its regulatory obligations to prevent diversion of opioids would substantially contribute to the opioid epidemic in San Francisco.” On causation the test was whether Walgreens’ conduct was a substantial factor, and circumstantial evidence sufficed, as the California courts had held in the Modesto dry-cleaning-solvent case and in ConAgra. “Indeed, in light of the overwhelming evidence presented at trial, it is difficult to take seriously the argument that the failure to identify specific illegitimate prescriptions is fatal to Plaintiff’s case.” “Based on the evidence presented at trial, it is unimaginable that many of the red flag prescriptions were not diverted. The aggregate evidence that Plaintiff presented at trial was not only adequate to establish Walgreens’ culpability—it was devastating.” The two opioid trials decided before his, the Orange County trial of the manufacturers in November 2021 and the West Virginia trial of the distributors in City of Huntington v. AmerisourceBergen on July 4, 2022, had both gone to the defendants, and he distinguished them: neither had a pharmacy in it. “The causal link that Plaintiff had to prove here is much shorter.” Nuisance law reached the dispensing, he held, because “Walgreens’ conduct in dispensing opioids—not the opioids themselves—is the fundamental cause of the harm here.” “The evidence presented at trial makes clear that Walgreens, the dominant retail pharmacy chain in San Francisco, which had a history of failing to comply with federal regulations, filled a significant volume of illegitimate opioid prescriptions. In so doing, Walgreens contributed directly to opioid diversion and made the opioid epidemic in San Francisco worse than it otherwise would have been.” He denied Walgreens’ motion for judgment on partial findings and closed on the city: “The effects of the opioid epidemic on San Francisco have been catastrophic. The city has fought hard and continues to do so, but the opioid epidemic, which Walgreens helped fuel, continues to substantially interfere with public rights in San Francisco.” “This ruling holds only that Walgreens is liable for substantially contributing to the public nuisance in San Francisco. A subsequent trial will determine the extent to which Walgreens must abate the public nuisance that it helped to create.”

“This public nuisance liability trial decision is an important milestone in the national opioids litigation, which proceeds against Walgreens and other major pharmacies,” Heimann said. “We are pleased and proud that San Francisco has contributed so significantly to addressing the crisis that confronts cities and counties across the country.” In September he told Law360: “It’s one of the key trials to have proceeded to verdict in the opioid litigation”; San Francisco’s “was selected as one of the key cases to serve as a bellwether” and was “the first case that went to trial against pharmacy defendants.” “The defendants were hopeful that the judge would see it differently, but that didn’t happen.” In November he said of the trial: “This was one of those rare cases where basically everything that we did, in terms of both the direct testimony that we put on and the cross-examination, went just as well as we could have hoped.” The next stage was to have been the amount Walgreens must pay to abate the nuisance. On May 17, 2023 Walgreens agreed to pay the city $229,610,000 over fourteen years, most of it in the first eight, for treatment and other work against the epidemic; City Attorney David Chiu, who had opened the trial by saying “It’s time for these companies to pay for the crisis they created,” announced it with Heimann, Baig, Jayne Conroy and Peter Mougey as the city’s outside counsel, and Cabraser called it a turning point in all opioids litigation. The Daily Journal gave the San Francisco opioids team, Lieff Cabraser among the recipients, its California Lawyer Attorneys of the Year award for 2023, and The Recorder had already named Heimann a finalist for its 2022 California Attorney of the Year for the opioid litigation.

Seven Hundred Grants

In 2025 the work turned to the federal government. On June 4, 2025 Lieff Cabraser, with Farella Braun + Martel and the Berkeley law professors Erwin Chemerinsky and Claudia Polsky, filed Thakur v. Trump in the Northern District of California, a pro bono class action for University of California researchers whose federal grants the administration had terminated: Neeta Thakur, Ken Alex, Nell Green Nylen, Robert Hirst, Christine Philliou, Jedda Foreman, Eli Berman and Susan Handy, suing for similarly situated researchers against the President, the Department of Government Efficiency and the agencies that had cut the grants, the National Science Foundation, the National Endowment for the Humanities, the Environmental Protection Agency, the National Institutes of Health and the Departments of Defense, Transportation and Energy among them, under the Administrative Procedure Act and the First and Fifth Amendments. Heimann is on the team with Elizabeth Cabraser, Kevin Budner and Annie Wanless. On June 23, 2025 Judge Rita F. Lin granted a class-wide preliminary injunction and provisionally certified a Form Termination Class and a DEI Termination Class; on August 12 she extended it to the indefinite suspension of UCLA researchers’ grants; on August 21 the Ninth Circuit denied the government a stay; on September 22 she entered a second injunction covering the Departments of Defense and Transportation and the National Institutes of Health. On May 26, 2026 a Ninth Circuit panel of Judges Richard A. Paez, Morgan B. Christen and Roopali H. Desai held that the researchers had standing, “A loss of funding constitutes a cognizable economic injury,” and affirmed the injunction for the DEI Termination Class on the First Amendment, finding the researchers likely to show that their grants had been chosen because they expressed, or were presumed to express, viewpoints the administration disfavored: “even in the provision of subsidies, the Government may not aim at the suppression of dangerous ideas.” The government petitioned for certiorari on August 18, 2026, and on September 1 the National Science Foundation, the National Endowment for the Humanities, the National Institutes of Health and the Departments of Defense and Transportation stipulated that they would not re-terminate the covered grants while the Supreme Court proceedings are pending; a class-wide settlement with the Environmental Protection Agency was headed for preliminary approval in late September, and the litigation has restored more than 700 research grants worth nearly $1 billion throughout the University of California system. In May 2026 the Daily Journal gave the team its California Lawyer Attorneys of the Year award.

Jack-of-All-Trades

The securities actions in which he has served or serves as lead counsel for institutional and individual investors include Petrobras, Navient, Wells Fargo, Merck, Bank of America, the Schwab residential-mortgage-backed-securities cases, LIBOR, Merrill Lynch, IndyMac, Broadcom, Tyco, Qwest, America Online, Peregrine, McKesson, Network Associates, Informix/Illustra, FPI/Agretech, California Micro Devices and Scorpion I and II. In Lord Abbett Affiliated Fund v. Navient Corporation, in the District of Delaware, he and Bruce W. Leppla represented the Lord Abbett funds as lead plaintiffs over the student-loan servicer’s statements about loan quality, forbearance and loan-loss provisions for a class period from April 17, 2014 to December 28, 2015 that took in two debt offerings, and on January 29, 2019 Judge Maryellen Noreika denied the motion to dismiss the Exchange Act claims based on the loan statements. His work has also reached the foreign-exchange litigation against BNY Mellon and State Street over the pricing of custodial clients’ currency trades, in which the firm was co-lead class counsel against BNY Mellon and the class recovered $335 million of a $504 million global resolution that Judge Lewis A. Kaplan approved on September 24, 2015, and $300 million from State Street. His representative cases also include the High-Tech Workers class action, in which the firm, as co-lead class counsel, recovered $435 million for about 64,000 technical, creative and research employees of Adobe, Apple, Google, Intel, Intuit, Lucasfilm and Pixar, companies that had agreed not to recruit one another’s people and so held down their pay.

He is admitted in California, the District of Columbia and New York, before the Supreme Court of the United States since 1980, and in the First, Second, Ninth, Eleventh and D.C. Circuits and the federal district courts of California, Colorado and Hawaii; he took part in California Lawyer’s securities-law roundtables in 2007, 2008, 2009, 2010 and 2013 and wrote in December 1999 on forum selection, jurisdiction and choice of law in class actions. In 2015 Law360 named him a Trial Ace in its first review of the country’s trial lawyers, one of fifty and the only one at a firm that represents plaintiffs alone; The National Law Journal named him a Litigation Trailblazer in 2018, 2020 and 2022, the last a list of twenty-eight lawyers; Law360 named him and Elizabeth Cabraser Product Liability MVPs of the Year for 2022 for the Walgreens trial; the American Antitrust Institute’s 2017 award for outstanding antitrust litigation in private practice went to Lieff Cabraser and its co-counsel for In re Cipro Cases I & II, the pharmaceutical price-fixing case whose settlements reached $399 million over seventeen years, an honor he counts among his own; the Consumer Attorneys of California made him a finalist for Consumer Attorney of the Year in 2011; and he has received the California Lawyer Attorneys of the Year award four times, in 2011, 2013, 2023 and 2026. In April 2025 The Recorder named him one of four recipients of its California Legal Awards Lifetime Achievement honor, for the settlements and court victories he has secured for plaintiffs in securities, tort, antitrust and other matters since 1972.

Asked in 2018 whether he still enjoyed trial work, he answered: “Yeah, I do. It’s hard work, particularly when you’re getting ready for trial.” “The lawyers we have are risk-takers,” he said of the firm. “It would never have suited me to simply get paid an hourly wage.” Of being the one they bring in to try the cases: “I’ll keep doing that for the foreseeable future.”