By Jerri-Lynn Scofield, who has worked as a securities lawyer and a derivatives trader. She now spends much of her time in Asia and is currently working on a book about textile artisans.
The Washington Post ran a long feature yesterday, As the opioid epidemic rages, the fight against addiction moves to an Ohio courtroom, discussing the role of ongoing litigation in assigning blame and assessing damages for the opioid crisis.
Multiple lawsuits seek to hold pharma companies and other defendants accountable for the costs and consequences of the opioid epidemic. Unsurprisingly, given the scale of the crisis, there are numerous deep-pocketed targets. These lawsuits have been filed by the Department of Justice (DoJ); state attorneys general; and plaintiffs’ attorneys on behalf of cities, counties, local municipalities and Indian tribes. In this post, I’ll focus on this third category.
Contrary to a bizarre claim in the Post piece that claims multi-district litigation (MDL) actions are rare, it’s not out of the ordinary for lawsuits that involve multiple plaintiffs, located in many jurisdictions that consider common issues, to be consolidated in one federal lawsuit, before one judge. The MDL procedure is intended to increase efficiency, lower costs, and forestall multiple lawsuits throughout the country from resulting in numerous contradictory outcomes.
In the opioid action, more than 400 lawsuits have been consolidated into an MDL before federal district court judge Dan Polster who sits in the northern district of Ohio.
Those readers with long memories will recall that plaintiffs’ attorneys and state attorney generals played key roles in achieving the 1998 Master Settlement Agreement, under which the big five tobacco companies agreed to restrictions on sales and marketing of cigarettes, and sizeable payouts to states for smoking-related health care costs.
Judge Polster has pressed the parties to concentrate on achieving a rapid settlement of these claims, rather than engaging in interminable litigation. As the New York Times reported in March, in Can This Judge Solve the Opioid Crisis?:
During the first hearing in the case, in early January, the judge informed lawyers that he intended to dispense with legal norms like discovery and would not preside over years of “unraveling complicated conspiracy theories.” Then he ordered them to prepare for settlement discussions immediately.
Not a settlement that would be “just moving money around,” he added, but one that would provide meaningful solutions to a national crisis — by the end of this year.
“I did a little math,” he said, alluding to the rising number of overdoses. “About 150 Americans are going to die today, just today, while we’re meeting.”
Polster believes that once necessary preliminary fact gathering and theory formulation has occurred, as litigation proceeds, it yields diminishing returns, and thus, the parties should move to resolve their dispute as quickly as possible. According to The New York Times:
He would not address specific issues in the opioid litigation. But he opened a window into his thinking, generally, about why he prefers rapid settlement rather than trying cases. He believes that when parties have gotten this far down the road in a lawsuit, they already have at least 80 percent of the information they need to negotiate; the longer litigation continues, he said he has found, the more entrenched each side can become.
This emphasis has been controversial. Given the multiple parties and difficult issues involved, many have concluded that Polster’s insistence that the MDL be settled before the close of 2018 is completely unrealistic.
Cost and Scope of Opioid Crisis
Yesterday’s Washington Post article focuses on the human and economic costs of the opioid epidemic and is less astute on the current legal maneuvering:
The crisis also is affecting the national economy, something that could drive a settlement well past record-breaking territory. The White House Council of Economic Advisers estimates that the economic cost of the opioid crisis was $504 billion just in 2015, or 2.8 percent of that year’s gross domestic product. Altarum, a nonprofit organization that studies health care, estimates the opioid crisis cost the country more than $1 trillion from 2001 to 2017.
Attorneys argue that some municipalities have spent tens of millions of dollars trying to fight opioid-related concerns. Health-care costs for municipal employees have skyrocketed. Jails are packed. Counties have purchased thousands of doses of a drug used to reverse overdoses, and first responders are working overtime, often reviving the same people over and over again.
Mark Chalos, a lawyer who represents communities in Tennessee and some unions, said the toll is tremendous, “a preventable catastrophe . . . made entirely by an industry that operates in plain view.”
And, guess what? This crisis didn’t start on Trump’s watch. The Washington Post makes clear that the federal government was monitoring the mushrooming crisis during the last decade:
The judge also put a protective order on what lawyers say is likely the linchpin of the case: information from a database kept by the Drug Enforcement Administration that monitors the flow of prescription painkillers from manufacturer to distribution point.
After initially resisting, the DEA said it would disclose some of the data, including identifying the manufacturers and distributors that sold 95 percent of the opioids in each state from 2006 to 2014. Lawyers say the full set of data could provide a road map for the crisis, perhaps showing a correlation between where the drugs flooded and where people died. Congress also is keen on obtaining the database. [Jerri-Lynn here: I bet they are.] Polster thus far has sealed any data released to the parties.
The data is confidential, but some information that has been released and analyzed is staggering: In two instances, millions of pills were shipped to pharmacies in tiny West Virginia towns.
Not that Trump performance has been that much better. See this press release from last week that lists the pathetic steps the DoJ under Attorney General Jeff Sessions is taking to address the crisis: DoJ press release dated 2nd April.
DoJ Seeks to Join Settlement Talks
Although not a party to any of the MDL lawsuits before Judge Polster, the DoJ on 2nd April filed a motion seeking to involve itself in settlement negotiations, as summarized in this Wall Street Journal account, Justice Department Asks to Join Opioid Settlement Talks:
In its Monday filing, the Justice Department asked Judge Polster to let the government join settlement talks and serve as a “friend of the court” to provide data and information relevant to resolving the case.
Attorney General Jeff Sessions added in a statement that, “We are determined to see that justice is done in this case and that ultimately we end this nation’s unprecedented drug crisis.”
While the federal government won’t technically be a plaintiff, the move is aimed in part at securing some portion of any eventual settlement for the federal treasury, the Justice Department said.
The motion says DOJ’s involvement in settlement talks is one avenue for the government “to seek reimbursement for its direct and indirect costs of providing medical care to opioid users” and notes that the government’s “substantial financial stake” in combating the opioid epidemic “has implications for the proper allocation of any monetary settlement.”
The New York Times account I’ve quoted above reported that Judge Polster has solicited the input of state attorneys general– even though they are not parties to the MDL litigation. That clearly is a sensible position, as defendants are unlikely to agree to any settlement that excludes state lawsuits and so state attorneys general will certainly have to be involved in any ultimate resolution..
Likewise,judge Polster will also likely be open to allowing DoJ participation– even though the form in which this is currently taking suggests that the DoJ may be more interested in fence sitting, rather than moving toward a comprehensive resolution, according to the Wall Street Journal:
The federal government has joined other so-called multidistrict litigation cases, including the 2016 case against Volkswagen over its diesel-engine emissions and tobacco litigation in the 1990s. But typically, the government has filed its own lawsuit, rather than asked to participate as a friend of the court, said Elizabeth Burch, a law professor at the University of Georgia who studies multidistrict litigation.
Paul Hanly, a New York lawyer with Simmons Hanly Conroy LLC who is one of the lead plaintiffs’ counsel in the case, called the Justice Department’s move “fence sitting” and said it is “neither unexpected nor unwanted.”
It seems to me that’s really the crux of the problem. Most of those who could help stem the opioid crisis are more interested in fence sitting, hoping the problem is will simply go away, rather than focusing on what must be done, now. Judge Polster seems to grasp the urgency of the situation and understand that absent action, more victims will die