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CVS Sued for Wanting You to Reimburse Its Donations

By Vaidehi Mehta, Esq. | Last updated on

Last month, you may have donated to the cause of fighting diabetes. November is "National Diabetes Month," the rallying cry for a number of seemingly noble charity campaigns purporting to prevent and ameliorate the serious condition.

Drug stores and pharmacies are in a prime position to spread the word about such campaigns, so naturally, you likely recall visiting being asked to donate to medical causes like diabetes at your latest pharmacy visit. CVS, the country's second-largest pharmacy chain after Walgreens, partnered with the American Diabetes Association (ADA) to purportedly "give customers an opportunity to support the ADA to increase health equity and build a future without diabetes."

Countless Americans gave their money to this seemingly noble cause; now, it seems that this charity campaign may not be as honorable as we assumed.

CVS Already Made the Donation

During the month of November 2021, at each of its nearly 10,000 pharmacies across the country, CVS ran a campaign asking customers upon checking out if they wished to make an additional donation to the ADA. Customers were presented with a message on the checkout screen in which they could select a pre-set amount to donate or tap a box to indicate that they did not wish to donate. (Donation requests happen like this at other retail stores across the country as well.)

The message did not give many details about the nature of the donation, but it did represent that CVS was collecting donations on behalf of and forwarding them along to the ADA. In other words, CVS customers were clearly led to believe that if they opted to add an additional donation to their purchase, it would go to charity and further the cause of fighting diabetes.

Unbeknownst to customers and the public, however, was that CVS already had a legally binding obligation to the ADA to donate $10 million in the 2021-23 period. That's according to a lawsuit filed in federal court this year. Instead of serving as merely the virtual collection basket, as it had represented itself, CVS used its position as an intermediary for donating customers to serve its own interests. CVS used some part of customer donations to the ADA to reimburse itself for the debt it already owed to the ADA.

In other words: CVS was pilfering from the virtual offering plate it was allegedly running. Each of these customers' donations may have been a trifling amount in isolation, but collectively, they comprise a potentially enormous windfall to CVS.

Class-Action Lawsuit Filed

Kevin McCabe was one of the countless customers who found himself in the spirit of giving and chose to "donate to the ADA" during one of his pharmacy runs near his Staten Island, New York, home. Now, McCabe is seeking to be the named plaintiff in a class-action lawsuit filed against the company in U.S. District Court for the Eastern District of New York. The lawsuit was filed in May 2022 but went viral this week.

In filing the class-action complaint, McCabe's lawyers stressed to the federal trial court judge that there are plaintiffs scattered across all 50 states and D.C. State laws determine how much money can be recovered in damages for suits like this, but together, the plaintiffs allege $5 million in damages from the drugstore — half the amount that CVS allegedly owes the ADA.

The suit claims that CVS engaged in common-law fraud under state law, meaning that the determination of guilt would potentially be different in each location, depending on the state in which the CVS store was located. The suit also claims that the store chain violated various state consumer protection laws.

CVS filed for dismissal in November, arguing that it "has no debt to the ADA." Instead, the company agreed to make up the difference to get to $10 million if it falls short of raising that amount from customers.

If the drugstore giant goes to trial, evidence could show that the company has been engaged in countless instances of soliciting donations from customers under the pretense of supporting its purportedly honorable charitable campaigns over the years.

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