Important Updates on Opioid Litigation
The last 48 hours have seen several major developments regarding both state and national litigation against manufacturers of opioids.
Tentative Settlement with Purdue
First, you have probably seen news reports about a tentative settlement agreement reached between a group of state attorneys general and Purdue Pharmaceuticals. Under the terms of the proposed agreement, control of Purdue would be given up by the Sackler family that owns the company. It would then go into bankruptcy and be converted into a public trust with future revenue from prescriptions going to the plaintiffs (states, cities and counties as well as some other parties). Additional damages would be paid by the Sackler family. The deal is reportedly worth $10 - 12 billion. Not all states support this proposed settlement and it remains to be seen whether it will be agreed to. Also, keep in mind that Purdue is only one of the defendants in the large national multi-district litigation that is in federal court in Ohio. There have been discussions that any settlements in this case would be "structured," meaning that funds would not simply be sent to the state and subject to appropriation by state legislatures. There would be portions of the settlement reserved for state and local governments to be spent on specified programs related to the opioid epidemic.
The second major development in the case, is that the federal judge in Ohio overseeing the case has certified the creation of a "negotiating class" which is proposed to include all state and local governments in the country. Counties who have filed suit themselves as well as those who have not filed suit are included in this class unless they opt out. You will be receiving something in the near future about this class and your options. If the class is able to negotiate a settlement going forward, it would take a super-majority (75%) of different groups within the class to approve any settlement agreement. You have until November 22nd to make a decision. I am attaching a memo from Attorney General Herbert Slatery regarding this class. I strongly suggest you read it. As he indicates, you do not have to hire outside counsel to opt-out or stay in the class. He suggests that local governments wait until closer to the deadline to see how the on-going negotiations are developing. I would recommend you discuss the matter with your county attorney and, if you are one of the counties that has separately filed suit, you should certainly discuss this issue with any outside counsel you have retained.
District Attorney Litigation under the Drug Dealers Liability Act
The third major development relates to litigation in our state courts. Several district attorneys across the state sued Purdue and other manufacturers under the Drug Dealers Liability Act (DDLA). Initially, at the trial court level, the defendants were successful in filing a motion to dismiss, claiming that the act was intended to apply to illicit drug dealers and did not apply to manufacturers of FDA approved prescription medication. They also challenged the standing of the district attorneys to file suit on behalf of local governments without being retained by the local governments to do so. The district attorneys appealed. The Court of Appeals in Knoxville earlier this week issued an opinion finding that the district attorneys did have standing to represent local governments under the DDLA and that the manufacturers were not automatically exempt from the act. The court did not rule on whether there was sufficient evidence to demonstrate liability, but they did find that it could be possible for a pharmaceutical company manufacturing FDA-approved medications to be liable under the law.
We will continue to keep you informed as we receive more information.