CHARLESTON — West Virginia Attorney General Patrick Morrisey says a proposed $22 billion settlement from drug companies for the state’s opioid epidemic is not enough.
On the Feb. 24 edition of MetroNews’ “Talkline” radio program, Morrisey explained his opposition to a proposed agreement. He said he is looking at two key criteria.
“What’s the appropriate penalty for all of the incredible harm they have opposed on the state,” he told host Hoppy Kercheval. “Second, we look at how you actually use the dollars to abate the very drug epidemic that we’re fighting.”
On Feb. 21, Morrisey announced his opposition to the proposed global opioid settlement that involves McKesson Corp., AmerisourceBergen, Cardinal Health and Johnson & Johnson. Some AGs are in favor of the settlement.
“Today, on behalf of the citizens of West Virginia, I formally rejected the most recent global settlement offer proposed by the national drug wholesalers, and Johnson & Johnson, for their role in helping to fuel the opioid epidemic,” Morrisey said. “While I am grateful to my fellow attorneys general for their efforts to bring about a negotiated national settlement, I am obligated to oppose the current proposal on two main grounds and urge my colleagues to reject it as well.”
Morrisey said those two main grounds are that the proposed national settlement amount “is way too low” and that West Virginia isn’t treated fairly in the proposed allocation formula.
“West Virginia and many of the hardest hit states are being very badly treated by the allocation formula,” Morrisey said. “Under this proposed formula, smaller states and hard-hit states lose.
“When addressing a national public health crisis, a global settlement shouldn’t be about a pure money grab for the states. Monies should be targeted to those who need it most and spent on abatement. …
“Many experts agree that primarily relying on a population-based metric to handle how abatement monies are spent across the country is not a wise way to fix the drug problem. We can do much better.”
As for the amount of the proposed settlement, Morrisey said the drug companies simply should pay more.
“The proposed national settlement amount of $18 billion for the wholesalers and $4 billion for Johnson & Johnson is way too low,” Morrisey said. “When you factor in the present day value of the settlement and the time value of money, it’s clear that this wholesalers’ proposal will be worth many billions less than the $18 billion figure frequently cited and far less than the damages imposed upon society by defendants’ egregious conduct. Based upon independent reviews of company finances, defendants can and should pay more.
“West Virginia and her counties and cities will continue to litigate and ensure that our state, counties and cities obtain significant additional monies for abatement and other purposes. We have led the way nationally in litigating these cases and have specifically protected future claims for West Virginia counties, cities and abatement for our citizens.
Morrisey says he still is willing to listen to settlement proposals.
“I remain open to any proposal which treats West Virginians fairly, but this isn’t it,” he said. “This Mountaineer will keep fighting.”
On “Talkline,” Morrisey elaborated.
“West Virginia was the hardest-hit state in the nation,” he told Kercheval. “I’m holding out to say the funds need to be used for abatement and focus on the severely hit states at a minimum of a lot more than what they currently are.”
Morrisey also wants a trial based in West Virginia.
Earlier this month, Morrisey and AGs from 20 other states rejected an $18 billion settlement offer from 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.
Morrisey spokesman Curtis Johnson said the AG’s office declined to comment about the letter, but Morrisey tweeted about it 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.”