Rite Aid weighs legal counterpunch

Drug Store News, August 20, 1990 by Susan Ball

Rite Aid weighs legal counterpunch

SHIREMANSTOWN, Pa. - Now that a judge in Cleveland has thrown out the bribery case against Rite Aid and its president, Martin Grass, Rite Aid is considering expanding the defamation suit filed last year against Ohio Board of Pharmacy member Melvin Wilczynski to include others involved in the case.

The civil suit against Wilcynski, who had been a consultant to Peoples Drug's Lane division, was originally filed in May 1989 and had been stayed pending the outcome of the bribery trial. The stay has now been lifted by Judge Alvin I. Krenzler of U.S. District Court for the Northern District of Ohio, in Cleveland.

One of the attorneys representing Rite Aid and Grass, George J. Moscarino of the Cleveland law firm of Jones, Day, Reavis & Pogue, said, "We have a lot of discovery to do, which we were prohibited from doing" for the approximate year the stay order was in effect.

"We will now have to determine whether to add people to the suit, initiate other suits, or both, or neither," Moscarino told Drug Store News.

"This [bribery] case was rotten from its inception and had no merit whatsoever," he said. "We don't want to proceed like that; we will proceed with deliberation."

The bribery trial, which began July 2, ended July 16, after the prosecution rested its case and before defense testimony was to begin, when Judge Lillian J. Greene of Cuyahoga County Common Pleas Court granted a defense motion for a judgment of acquittal. Judge Greene ruled that the evidence presented was circumstantial and insufficient to show "purpose to corrupt, or to improperly influence a public official in the discharge of his duties."

From the state's own witnesses, she said, "reasonable theory of innocence has been supplied, for example, Mr. Wilczynski talking about the terms of a buyout. . . of his contract, himself suggesting terms with regard to. . . keeping a car, [and] his mother's insurance."

In trial testimony that contradicted previous statements he had made to investigators, Wilcynzski said he had been the one to initiate talks with Rite Aid concerning his consulting contract with Peoples' Lane division when he called James Krahulec, Rite Aid vp-government/trade relations, on March 3, 1989, the day after Rite Aid bought the Lane stores.

Wilcynzski also admitted under cross-examination that while employed by Lane, he had "double-dipped" - submitted expense reports to both Lane and the State of Ohio for attendance at pharmacy board meetings and been reimbursed by both. He also testified that he did not report the money he received from the state to the Internal Revenue Service.

Rite Aid and Grass were accused of offering Wilcynzski a $33,249.93 check and four years of health insurance coverage to resign from the pharmacy board so that someone more favorable to Rite Aid could be appointed. The drug chain and its president steadfastly denied the allegations, maintaining that the payment was a legitimate buyout of Wilcynzski's consulting contract with Lane and that the bribery charges stemmed from a longstanding vendetta against the company on the part of pharmacy board staff members.

Rite Aid contended that before Grass was arrested April 27, 1989, the company had complained to state authorities that regulations regarding access to pharmacies were being applied "unevenly and unfairly" by Ohio board staff members against Rite Aid pharmacists.