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Wednesday, April 1, 2020

Morrisey, other AGs reject $18 billion settlement with big three opioid distributors

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By Chris Dickerson | Feb 17, 2020

Morrisey

CHARLESTON – West Virginia Attorney General Patrick Morrisey and AGs from 20 other states rejected an $18 billion settlement offer from the three leading opioid distributors.

The letter, which was first reported by The Wall Street Journal, was sent Feb. 14 to McKesson Corp., AmerisourceBergen and Cardinal Health.

The companies reportedly have been working on a settlement to end the national opioid litigation since October. They have offered to pay $18 billion over 18 years. The states that signed the rejection letter want more money or to be paid more quickly.


Farrell

Morrisey spokesman Curtis Johnson said the AG’s office declined to comment about the letter, but Morrisey tweeted about it last week before news of the letter broke.

“The proposed national settlement from the wholesalers is totally inadequate and needs to be redone,” he tweeted. “National settlements to address the drug epidemic should—in large part—focus on where the harm is occurring.

Settlements shouldn’t be pure money grabs by the states; monies should be targeted to those who need it the most and spent on abatement. West Virginia will fight for a just result.”

Earlier this month, Huntington attorney Paul Farrell – one of the leading plaintiffs attorney in the national opioid litigation – referenced the settlement offer in an interview with The West Virginia Record.

“The Big Three distributors have made a settlement offer of $18 billion over 18 years,” Farrell said. “Texas, California, Florida and New York want the bulk of the money. The settlement would provide $24 million to West Virginia over 18 years. I’ve said no. I’ve said you don’t have the power over the West Virginia counties to make us walk away.”

Farrell, who recently started his own firm to focus on the opioid litigation, also said Morrisey agreed with him on that.

Last month during a status hearing, Farrell and other attorneys representing Cabell County and the City of Huntington asked for a bench trial against the three drug distributors. The defendant companies – sometimes called The Big Three – want U.S. District Judge David Faber to conduct a jury trial.

The drug distributors also asked for 18 months to prepare for trial, but Faber indicated he likely won’t give them “anything close” to that much time.

Farrell also said he and his parties have offered to dismiss punitive damages if the defendants stipulated to a bench trial.

“We talked informally about it before the hearing,” Farrell said. “And I offered it during the hearing as well. I guess they think I’m bluffing or that I’m not competent enough to go to trial.

“So, what I’m about to show them is that West Virginia has some of the finest lawyers in the country. Al they’re trying to do is stay the execution of the death warrant.”

If claims of punitive damages are dismissed, Faber can conduct a bench trial as a court of equity. If punitive damages are part of the case, it would require a jury trial.

“My question is whether the national defense lawyers (for the drug companies) got consent from general counsel, which would have received consent from their boards of directors before they made their moves in this case,” Farrell said. “I would expect you’ll see some future shareholder lawsuits popping up for such poor decisions.”

Farrell also said West Virginia Attorney General is on their side in this matter. Farrell said four Attorneys General – Ken Paxton from Texas, Josh Shapiro from Pennsylvania, Josh Stein from North Carolina and Herbert Slatery III from Tennessee – are trying to drive the settlement.

“Their position is that Patrick Morrisey released West Virginia’s claims for $40 million,” Farrell said, referring to a previous settlement with those companies. “What we basically have is these other AGs being bullies and attempting to take this money and distribute it based on population rather than impact.

During that Jan. 27 status hearing, Faber said he plans to set a trial date after another hearing scheduled for March 1.

Faber is handling the cases after the U.S. Judicial Panel on Multi-District Litigation agreed with Cleveland-based U.S. District Judge Dan Polster about sending the cases back to West Virginia for trial. Polster, who is overseeing the national opioid litigation, submitted his request on Jan. 6.

“The court continues to believe that strategic remand of certain cases is the best way to advance resolution of various aspects of the Opiate MDL,” Polster wrote in his Jan. 6 request, adding that he “will remain as the ‘hub’ of the MDL litigation and also the locus for global settlement, while the selected transferor courts will act as ‘spokes,’ supporting this global effort.

“The hub-and-spoke model suggested above is designed to accelerate and facilitate resolution of the Opiate MDL in whole or in substantial part. The MDL court is proceeding with its self-designated tasks with this model in mind. If the JPML concludes the court’s strategy is inappropriate or the particular suggestions of remand are not well-taken, the court will need to modify this model.”

In December, Polster granted a motion by the plaintiffs in these cases to split their claims against AmerisourceBergen, Cardinal Health and McKesson from the others.

  The next step was Cabell County and Huntington to file motions to dismiss all other claims other than common law public nuisance, civil conspiracy and punitive damages against the three remaining defendants. That happened, and Polster granted those motions.

Then, the following step was for Polster to ask to send the cases back to West Virginia. That’s what he did in his Jan. 6 request.

In November, Polster started the process to release some of the Multi District Litigation cases originally transferred to him in the Northern District of Ohio to be heard in their respective districts. He indicated the Cabell-Huntington cases are headed that way.

On Nov. 19, Polster suggested remands of three cases – San Francisco vs. Purdue Pharma et al., Chicago vs. Purdue Pharma et al., and Cherokee Nation vs. McKesson et al. In that filing, Polster also said he “will probably submit additional suggestions of remand at the appropriate time.”

That list included City of Huntington and Cabell County, which the court designated as “Track Two” cases almost a year ago. Those cases would focus on the distributor defendants and pharmacy defendants.

Charleston attorney Rusty Webb, who is one of the lawyers representing Huntington in its case, said Polster is dividing up these bellwether cases strategically so they can be tried relatively at the same time focusing on different defendants and different causes of action.

“What the judge appears to be doing now is strategically remanding cases, but also limiting the defendants that he recommends each of those plaintiffs will go to trial against,” Webb told The Record. “He wants each track to sue a defendant to determine liability instead of everybody suing everybody for everything. That could mean a better chance for a universal settlement after these first cases are heard.”

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