Four Companies Settle Just Before Bellwether Opioids Trial Was to Begin Today in Ohio
By Jerri-Lynn Scofield, who has worked as a securities lawyer and a derivatives trader. She is currently writing a book about textile artisans.
Four companies settled opioids claims with two Ohio counties just before a bellwether federal opioids trial was due to begin today in Ohio.
This multidistrict litigation (MDL), the largest and most complex civil case in US history, pits a myriad of plaintiffs against defendants arrayed throughout the opioids supply chain.
Today’s trial brought by two Ohio counties, was slated to be the first courtroom action of the MDL. By allowing the Ohio trial to proceed, the parties would have seen how their arguments play out in court and what value this jury – and by extension, other juries – place on plaintiffs’ claims. Information previously not yet made public would have been presented – including documents and witness testimony – providing grist for other actions.
Distributors AmerisourceBergen, Cardinal Health, and McKesson, and manufacturer Teva Pharmaceutical, agreed to pay $260 million to settle this action, joining Allergen, Endo, Insys Therapeutics, Johnson & Johnson, and Mallinckrodt, who had already entered into settlements with the counties. These pertain to this trial only, and they are still on the hook for damages in other pending litigation; opioids lawsuits are far from over.
The Wall Street Journal noted in Four Drug Companies Reach Last-Minute Settlement in Opioid Litigation:
McKesson, Cardinal and AmerisourceBergen collectively controlled 95% of the U.S. drug distribution market in 2018, according to Drug Channels Institute, which provides research on the drug-supply chain.
As the Wall Street Journal reports in Opioid-Addiction Litigation Heads to Complex Trial (published prior to agreement of the settlement):
Widespread use of legal and illegal opioids has ravaged many communities in America, killing at least 400,000 people in the U.S. since 1999. That sobering reality has led virtually every state and more than 2,500 cities, counties, Native American tribes, hospitals and others to file opioid-crisis lawsuits seeking to blame drugmakers and distributors for fueling the problem. The majority of the lawsuits have been consolidated in federal court in Cleveland in front of [federal district court judge Dan] Polster. State attorneys general, meanwhile, have largely pursued cases in their own state courts.
Monday’s trial will test the claims of Ohio’s Cuyahoga and Summit counties, which were selected by Judge Polster to serve as a test case to help guide the rest of the lawsuits centralized in front of him.
One major target of the lawsuits, Purdue Pharma, was also excluded from participating, as it filed for bankruptcy in September (see Purdue Files for Bankruptcy, Agrees to Settle Some Pending Opioids Litigation: Sacklers on Hook for Billions?).
The judge overseeing the Ohio case, Dan Polster, urged the parties on Monday to continue to work toward a broader deal.
“I did not encourage a settlement of this case only,” Polster said in court.
Polster said he would work out a new trial date for the remaining defendant, pharmacy chain operator Walgreens Boots Alliance.
Press For Settlement
Judge Polster had pushed hard for the parties to agree a comprehensive settlement (For further background and context, see my earlier account, Opioid Lawsuits: DoJ Seeks to Participate in Settlement Talks.) As Reuters reports in Reckoning with U.S. opioid crisis as $8 billion Ohio trial kicks off:
On Friday, U.S. Judge Dan Polster in Cleveland summoned executives from the big three distributors and Teva to court to hammer out a global deal that would have averted the trial. Polster also invited states, which have sued but do not have cases before him, to participate in settlement talks.
Polster oversees more than 2,300 of the roughly 2,600 U.S. opioid lawsuits.
After nearly 11 hours, during which Polster shuttled between plaintiffs and defendants, the talks ended without a deal.
The breakdown marked a setback for Polster, who has aggressively pushed for a settlement that “could do something meaningful to abate this crisis.”
Pharmacy chains and drug distributors unsuccessfully tried to remove the outspoken judge from the case, saying he was biased and had pressed too hard for a costly settlement.
Previous talks foundered over what the value of the comprehensive settlement should be. According to the WSJ:
Lawyers say settlement discussions have hit a snag over how much money companies are willing to pay and how it would be distributed among state, city and county governments. The lawyers were attempting to negotiate a comprehensive settlement valued as high as $48 billion that would call off the trial and resolve thousands of opioid lawsuits.
According to Reuters:
Attorney Paul Hanly told reporters on Friday that local governments he represents were “not on the same page” as the state attorneys general involved in the talks.
Pennsylvania Attorney General Josh Shapiro said it was “profoundly disappointing” that local governments would not go along with a settlement he valued at $48 billion, including $22 billion in cash and $26 billion in products and services.
Yet those attempting to address the crisis find the proposed settlement amount inadequate to the task at hand, as The Guardian reports in ‘$50bn is pocket change’: opioid makers on trial in Ohio after talks collapse:
“We need hundreds of billions of dollars to deal with this crisis,” said Emily Walden, chair of the Fed Up coalition of families hit by the epidemic and doctors who have spoken out against the wide prescribing of opioids. “The settlement talks are not holding these companies accountable for what they’ve done. $50bn is pocket change to them.”
Separately, state attorney generals have brought their own claims – and these activities have in part conflicted with the MDL. The United States Court of Appeals for the Sixth Circuit rejected a last-minute attempt by the state of Ohio to enjoin the Oct. 21 trial to protect the state’s sovereign power to bring claims on behalf of Ohio residents, according to Reuters, 6th Circuit refuses to halt opioids bellwether trial, denying Ohio AG’s mandamus bid.
Thus far, only one state claim proceeded to trial, resulting in a $572 million judgement against J & J by judge Thad Balkman (see Judge Issues $572 Million Verdict Against J & J in Oklahoma Opioids Trial: Settlements to Follow?).
Role of Lawsuits
These lawsuits seeking monetary damages are only part of the efforts to address the opioids crisis – and an imperfect part at that. Aggressive action by both state AGs as well as plaintiffs’ attorneys, who function both as an early warning and a backstop when federal and state legal prosectors fail, has attempted to hold those who’ve pushed opioids accountable for the massive resulting public health crisis. According to the WSJ:
The local lawsuits have been driven by a legion of contingency-fee plaintiffs’ lawyers who have collectively taken on every major consumer-protection case from tobacco to asbestos to auto recalls to deadly medical devices. Even with their collective wisdom, they say this case is the most complex they have ever tackled.
Alas, their efforts to achieve redress have been constrained by the effect of a couple of decades of “legal reform” efforts, both statutory and judicial. Some Democratic Senators – including a certain junior Senator from Illinois – joined their Republic colleagues in supporting George W. Bush’s Class Action Fairness Act of 2005. Moreover, judicial decisions to limit plaintiffs’ ability to hold corporate defendants accountable have been supported not only by Republican judicial appointees, but also by many candidates Democrats proposed for the bench. As I’ve written before, when it comes time to nominate prospective jurists, many Democrats consider her/his likely stances towards abortion rights and voting rights, and don’t focus on where s/he is expected to rule on issues of corporate accountability(see Roundup Roundup: Judge Slashes Punitive Damages Award in Glyphosate Lawsuit). The result: rulings to make class actions more difficult to pursue, to limit punitive damages, and to uphold mandatory arbitration, to mention just a smattering of topics.
Yet monetary damages alone are in themselves inadequate to ensure that those who created this crisis are punished – and to deter future such activities. Over to the Guardian:
Walden said she wants to see the trial lead to the prosecution of executives responsible for marketing and other strategies that boosted opioid sales.
“It’s pretty clear what happened and what they’ve done,” she said. “We need some accountability and it needs to lead to criminal charges. They’re getting away with murder. They’re buying their way out. They think that’s the way of doing business.”