As Courts See Local Flood of Opioid Lawsuits, Litigation Strategies Can Vary By State

There’s no doubt that there are many state and local governments currently bringing lawsuits against drug manufacturers and distributors in hopes of seeking damages related to the opioid abuse epidemic. There are so many that it’s sometimes hard to track—the newest group of local governments, including 30 counties in California and communities in southwestern Virginia and Wyoming, filed suits last week.

But new research from Washington, D.C.-based government affairs firm FiscalNote shows that the rush to file legal complaints against the pharmaceutical industry has been so great that it’s comparable to the sweeping legal effort against the tobacco industry during the 1990s.

That so many city and county governments are rushing to the courthouse distinguishes the opioid effort from the last big drive to recover money from companies responsible for a public health crisis—the tobacco case, whose 1998 settlement has funneled about $150 billion to state coffers. States were bearing the costs of tobacco illnesses through their public health programs, and were thus the logical recipients of the funds—even if they didn’t end up spending the remissions for health purposes.

In the opioid case, it is local police, health and other workers who are dealing with a crisis that has devastated whole communities,, and local governments want reimbursement from the opioid industry for prevention, treatment and law enforcement costs.

The FiscalNote research reported that as of the end of February, nearly 500 counties and 300 cities and towns had either officially filed or publicly discussed filing opioid-related lawsuits against opioid manufacturers and distributors.

“By aggregating all of this information in one place, we're able to get a clearer picture of how these suits have truly become a national phenomenon unlike anything we've seen since tobacco litigation,” said Zach Schloss, who compiled the data. “The fact that a small county in Wisconsin might have the same concerns and take the same legal action as New York City highlights both the devastating magnitude and universality of the opioid epidemic.”

As a point of comparison, Schloss said that state legislatures enacted 249 bills to deal with aspects of the opioid crisis from the beginning of 2016 to the end of February of this year. So his research paper is titled “Local Response to Opioid Crisis More Combative Than Preventative.”

In Federal Court

Schloss’s data shows that cities and counties are suing even if they are not among those hardest hit by the epidemic. But plenty of the complaining jurisdictions are those suffering the most.

The Washington Post recently told the story of Vinton County, Ohio, a hard-hit rural area southeast of Columbus where the epidemic has “affected nearly every aspect of life….

“Teachers buy shoes for students whose addicted parents send them to school in footwear held together with tape. Overdose deaths have surged. The jail is bursting at the seams. The expenses related to caring for the children of drug abusers and locking up drug offenders here eat up about 25 percent of the Ohio county’s $4 million annual budget, a hole that it can’t plug.”

Summit County, centered in Akron, is also party to the suit, and it has spent nearly $200 million over the past 10 years dealing with the addiction crisis, an official there told the Post.

The two Ohio counties are among the hundreds of municipalities suing the companies that manufactured and distributed the powerful painkillers and doctors and pharmacies that prescribed and sold them. Purdue Pharma, inventor of Oxycontin, Janssen Pharmaceuticals, distributors AmerisourceBergen, McKesson and Cardinal Health, and pharmacy benefit managers like Express Scripts, are among the defendants.

The suits filed in federal district courts around the country have been consolidated for purposes of discovery and qualification of witnesses, and assigned to Judge Dan Aaron Polster of the Northern District of Ohio. He is described as a no-nonsense judge who is urging lawyers to reach a resolution quickly in the so-called multidistrict litigation (MDL) he is overseeing, noting that the scourge is killing some 150 people each day.

Notably, the Justice Department last month asked to participate in the settlement discussions as a friend of the court. Attorney General Jeff Sessions has said the federal government would itself seek reimbursement of the substantial costs it has incurred. Those expenses are mounting: Congress included an extra $4 billion in the omnibus spending law it approved in late March to address the crisis in 2018 and 2019.

Polster has also invited representatives of state attorneys general to sit in. About 10 of them, including Mike DeWine of Ohio, have filed lawsuits in their home state courts. And though they are not party to the federal MDL proceedings, their views are important since defendants likely will want any settlement to cover state lawsuits as well.

The Arkansas Juggernaut

Municipalities in many states often look to their municipal leagues or county associations for guidance on joining in litigation. That has been the case in Georgia and in Arkansas, for example, with differing postures struck in the two states. The Georgia Municipal League has taken a cautious approach, while in Arkansas city and county associations have led a full-out charge to take on the opioid defendants in the state court system.

In Arkansas, leaders at the state and municipal level are determined to enlist every city and county in a drive to hold the opioid industry for what they say is a statewide crisis. Statistics tell part of the story. Overdose deaths in the state have risen from 5.1 per 100,000 residents in 2000 to 13.4 in 2016. Drug overdoses accounted for 1,067 deaths in a two year span ending in 2015, with half or more attributed to opioids, according to the plaintiffs’ complaint filed in Crittenden County Circuit Court on March 15.

In 2016, the rate continued to increase, with at least 335 deaths attributed to opioid overdoses. “Arkansas has been particularly susceptible to the rapid expansion of opioid availability,” according to the complaint. “ There are now more opioid prescriptions in Arkansas than people. In fact, it has the second highest opioid prescription rate in the country, with doctors writing 114.6 opioid prescriptions for every 100 persons.” The crisis afflicts every part of the state.

The litigation strategy in Arkansas has been driven by the Arkansas Municipal League and the Association of Arkansas Counties, in league with Birmingham, Alabama-based Cory Watson Attorneys and other in-state law firms. In an interview with Route Fifty, Mark Hayes, general counsel of the league, Collin Jorgensen, litigation attorney for the counties association, and Jerome Tapley, a principal at the Cory Watson firm explained how the drive to sue began and quickly achieved a lot of momentum.

Members attending an Association of Arkansas Counties meeting last summer were briefed on the severity of the addiction problem in their state, and decided to set up a task force to deal with it. In October, county judges and sheriffs on the task force convened to hear from Kirk Lane, the newly appointed Arkansas Drug Director, and from lawyers whose firms were willing to organize suits against the industry on a contingency fee basis. The elected judges, who are the top executives in their counties, then passed a resolution favoring litigation.

The counties association chose a team of law firms, and Jorgensen spent weeks traveling to visit the judges of all 75 Arkansas counties to sell them on joining together to retain the team and adopt a common legal approach. Thus the complaint filed in March lists all of the counties as plaintiffs. Also listed are the states’ 15 largest cities, which were recruited one by one in visits to officials by Mark Hayes. Many others among the state’s 500 cities and towns are expected to file similar, if not identical, lawsuits against the industry.

What a Settlement Would Fund

Hayes, Jorgensen and Tapley characterized their state’s approach as “unique” in the nation, by virtue of the unanimity of local governments and their decision to keep the suit close to home by filing in state, not federal, court. Among other advantages, they said, this approach will allow development of a carefully crafted set of programs tailored to the state’s needs, and attendant costs estimates, to present to the court.

An outline of the programs the plaintiffs deem necessary is found in the suit’s “Prayer for Relief” at the end of the long complaint. It includes the following:

• Measures to “prevent opioid use, injury and death” through purchase of naxalone kits for users, first responders and others, along with training on their use.
• Measures to “treat, cure, and prevent opioid misuse and addiction” through creation of mental health and treatment clinics, public education, and programs to permit more use of insurance funding.
• Measures to “reduce the supply of dangerous opioids” by a variety of steps, including the hiring and training of more police personnel, lab personnel, and people to staff the Arkansas Prescription Monitoring Program.
• Measures “to reduce crime and involuntary commitments associated with opioid addiction” through creation of drug and mental health courts, crisis stabilization units, prisoner re-entry and other programs.

Hayes and Jurgenson said their associations would work closely with state officials to build out this menu of initiatives, and to develop a budget to fund it.

What would it all cost? Between $1 billion and $3 billion, Tapley estimated. The lawyers, who are not charging their city and county clients for their services, would be reimbursed at a rate of 21 percent of funds recouped in an industry settlement. Some of the initial costs of the counties’ legal efforts are being covered by a risk management pool they have funded to cover legal liabilities they might incur.

Action in Other States

In more populous Georgia, the opioid epidemic is not at critical levels in all areas of the states. Partly for that reason, the Georgia Municipal Association has not actively advocated a litigation strategy, instead recommending that its members evaluate that option on an individual basis.

A Feb. 15 posting by the GMA’s general counsel notes that while some cities have sued, others

“have declined to sue because they cannot isolate the impact of opioids from other substances, including alcohol and illegal drugs, and have determined that any claim for money damages would be speculative.”

Responding to an inquiry from Route Fifty, Susan Moore, the GMA attorney assigned to the opioid issue, said in a May 8 e-mail: “City officials in Georgia are quite divided on this litigation and their cities have been impacted to varying degrees by this crisis. I simply want to make sure that those that choose to participate do so thoughtfully and engage the city attorney to carefully review any agreement with a law firm to ensure the city understands the scope and limits of the representation as well as any cost, fees, or other expenses the city may have to pay.”

In a few other states, municipal associations have been urging joint action to file litigation. That is the case, for example, in Wisconsin, where the Wisconsin Counties Association has recruited more than 65 of the state’s counties to join forces behind a selected legal team that has filed a complaint in federal court. In Iowa, the State Association of Counties passed a resolution late last year urging all Iowa counties to get behind a similar effort, and in January forty-six of them joined a federal opioid lawsuit  in the Northern District of Ohio, which became part of the Multidistrict Litigation now before Judge Polster.

For all the flood of litigation, there is no assurance that the lawyers can prove culpability on the part of manufacturers and distributors, nor achieve a settlement on a par with the huge tobacco deal. Decades of legal maneuvering preceded the tobacco industry’s decision to reach a settlement in the late 1990s.

Players in the opioid industry have acknowledged the problem of prescription abuses and, as in this example from Purdue Pharma, have said they want to be “part of the solution” to the opioid crisis. But only a tiny handful of industry executives have said their companies should have behaved differently, and all of them argue that the addiction crisis has many causes that absolve them of any direct culpability.

Litigation is a slow strategy, and it may be years before the suits are resolved to anyone’s satisfaction.