The Consequences of the Shifting Landscape in Opioid-Related Litigation
| Footnotes for this article are available at the end of this page. |
The end of 2021 was marked by several significant developments in the wave of litigation that has resulted from the opioid crisis of the last several years. These developments, however, are sufficiently inconsistent that it is difficult to predict where opioid-related lawsuits will land in 2022. On the one hand, pharmaceutical companies and others have entered into meaningful, large-scale settlements; on the other hand, the same companies and others have resisted efforts to hold them accountable through litigation. Furthermore, in the four instances where trials have concluded, the results have been materially different.
On November 23, 2021, a federal jury in Ohio found three retail pharmacy chains – CVS, Walgreens, and Walmart – liable for contributing to the opioid crisis.1
On December 16, 2021, the Massachusetts Attorney General announced that it had reached a settlement with Collegium Pharmaceutical, Inc., as the result of its investigation of the company’s deceptive marketing of its opioid product.2 While the settlement was relatively minimal ($185,000), it is notable that the company also agreed that it would not resume its speaker programs (which it had ended in 2018), and would end in-person marketing to healthcare providers, effective December 1, 2021. Following the Massachusetts announcement, on December 28, 2021, Collegium announced that it had reached a $2.75 million agreement resolving claims that had been brought by 27 U.S. cities, counties, and subdivisions.3
Also, on December 16, 2021, a federal district judge in New York overturned Purdue Pharma’s $4.5 billion settlement that shielded members of the Sackler family from liability.4 Purdue had filed for bankruptcy in September 2019, as the company was faced with 3000 opioid-related lawsuits. As part of the company’s restructuring plan, the bankruptcy judge had agreed to shield the Sacklers – who had not filed for bankruptcy protection, themselves – from the litigation. The district court found, however, that the Bankruptcy Code “does not authorize” such nonconsensual third-party releases.5
On December 30, 2021, a trial that began in late June with more than twenty defendants, including pharmaceutical companies, distributors, and pharmacy chains, ended with a jury verdict on December 30, 2021, finding the American division of Teva Pharmaceuticals and a few of its subsidiaries liable for contributing to the opioid crisis in the state.6 The New York State case, which was the first to focus on the entire opioid supply chain, was only the second opioid lawsuit to end with a jury verdict. Between June and the end of December, however, the other defendants reached substantial settlements with the state, including an agreement by Johnson & Johnson in June to pay $230 million;7 agreements in July by McKesson, Cardinal Health, and Amerisource Bergen to pay more than $1 billion;8 further agreements in July by Walgreens, CVS, Rite Aid, and Walmart to pay $26 million;9 and, as the trial neared its end, an agreement in early December by Allergan to pay $230 million.10
Jurors in the case were asked to determine the responsibility of all of the defendants, including those who had settled, as well as the responsibility respectively of the two counties – Nassau and Suffolk – and the state itself. Notably, the jury did not hold any of the companies that had reached settlements, or the counties, liable, assigning 90% of the blame to Teva and its subsidiaries, and 10% to New York State on the ground that the state is required to maintain safeguards for monitoring excessive pill orders.11
Even as the verdicts and settlements have mounted, however, there have also been checks on the efforts to hold companies accountable for the opioid crisis. In November 2021, back-to-back decisions by state courts in California and Oklahoma gave defendant pharmaceutical companies potentially significant victories.
On November 1, 2021, in California, a Superior Court judge issued a tentative ruling that three counties and the City of Oakland had failed to prove that the pharmaceutical companies engaged in deceptive marketing to increase sales of opioids and created a public nuisance.
In 2019, following a bench trial, an Oklahoma state court judge found that Johnson & Johnson had created “a public nuisance” through its marketing of prescription pain pills, and the company was eventually ordered to pay the state $465 million.12 On November 9, 2021, in a 5-1 decision, the Oklahoma Supreme Court ruled that the state’s public nuisance law could not be stretched so far. In language with implications for the broad range of opioid lawsuits based on public nuisance statutes, the Court noted that it had “allowed public nuisance claims to address discrete, localized problems, not policy problems,” and added, “J&J had no control of its products through the multiple levels of distribution, including after it sold the opioids to distributors and wholesalers, which were then disbursed to pharmacies, hospitals, and physicians’ offices, and then prescribed by doctors to patients.”13
It is noteworthy that, of the four cases that have gone to trial, two (California and Oklahoma) have been bench trials, while the other two (Ohio and New York) were jury trials. While both juries found for the plaintiffs, the two bench trials produced notably different results. However, both the California state court judge and the Oklahoma Supreme Court Justices focused on whether opioid manufacturers and distributors could or should be held responsible for the opioid crisis. In Oklahoma, the court concluded that the state’s public nuisance statute could not be the basis for the claim. In California, the judge found that plaintiffs had not proved that the companies were responsible, and, thus, their actions constituted a public nuisance.
Both decisions raise questions for the many cases in state and federal courts nationwide that are based on public nuisance claims. The California decision presumably will be appealed, while the Oklahoma decision will be scrutinized for minimum or maximum effect depending on the party’s viewpoint.
In the meantime, however, the settlements continue. On January 5, 2022, also as part of the nationwide $26 billion settlement, Johnson & Johnson, McKesson, Amerisource Bergen, and Cardinal Health agreed to pay $385 million to settle opioid-related claims in Colorado and Nevada.14
[5] https://www.nytimes.com/2021/12/16/health/purdue-pharma-opioid-settlement.html
[8] https://www.nytimes.com/2021/07/20/nyregion/new-york-opioid-settlements.html The combined $1 billion settlement was part of a national settlement of $26 billion.
[11] https://www.nytimes.com/2021/12/30/nyregion/teva-opioid-trial-verdict.html
[12] https://www.pharmaceutical-technology.com/news/oklahoma-overturns-ruling-jj-opioid/
[13] https://www.theguardian.com/us-news/2021/nov/09/oklahoma-supreme-court-johnson-and-johnson-opioids; https://www.theguardian.com/us-news/ng-interactive/2019/aug/26/johnson-johnson-opioid-ruling-explained-the-key-points
[14] https://www.pharmaceuticalprocessingworld.com/johnson-johnson-reaches-opioid-settlement-with-nevada/
- Sara M. Lord
Partner
