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Opioid distributors agree to let federal judge rule on two W.Va. cases rather than jury

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By Chris Dickerson | Mar 4, 2020

Opioids

CHARLESTON – The defendant drug distribution companies have agreed to allow a judge decide the federal opioid cases filed against them by the Cabell County and the City of Huntington.

In a motion filed March 4, attorneys for AmerisourceBergen Drug Corporation, Cardinal Health Inc. and McKesson Corporation say they still have a right to a jury trial. But, they agree to let U.S. District Judge David Faber rule on the case with stipulations.

“After further consideration, however, defendants now consent to waive their right to a jury trial and accept plaintiffs’ proposal that plaintiffs’ punitive damage claims be dismissed with prejudice and that the remaining claims be tried by the court,” the motion states. “Defendants’ consent in this regard does not alter the time that will be required for discovery, motions practice and other matters that must be completed before trial.”


Farrell

The remaining claims are public nuisance and civil conspiracy

At a Jan. 27 hearing, attorneys for the drug companies asked for 18 months to prepare for trial. Faber said he wasn’t included to give the companies “anything close” to that.

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 is overseeing the national opioid litigation.

“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 a 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.

Then, Cabell County and Huntington filed motions to dismiss all other claims other than common law public nuisance, civil conspiracy and punitive damages against the three remaining defendants. Then, Polster sent the two cases back to West Virginia.

Last week, parties in both state and federal opioid lawsuits met in Charleston to work toward a settlement. Originally ordered for the cases being heard by the state’s Mass Litigation Panel, the talks were the first time discussions took place regarding both the state and federal lawsuits.

According to reports, a $1.25 billion settlement was proposed. That money would go to the plaintiffs in the cases. Attorney fees would be awarded afterward.

One of the judges overseeing the state portion of the cases chastised attorneys for speaking to the media about the proposed settlement and about the negotiations.

"Any written statement or discussion regarding mediation is confidential; shall not be used in the present litigation or in any other litigation (whether presently pending or filed in the future); and shall not be construed as or constitute an admission," Lead Resolution Judge Joanna Tabit wrote in a March 2 order. "Breach of this provision shall subject the violator to sanctions.

"This court admonishes all parties and counsel who participate in mediation conducted by the resolution judges, that the mediation process is confidential. The court orders that, henceforth, there shall be no communication with anyone outside of the mediation process, including the news media, regarding any written statement or discussion concerning mediation, including settlement demands, offers or positions of any party."

Last month, West Virginia Attorney General Patrick Morrisey said a proposed $22 billion settlement from the drug companies for the state’s opioid epidemic is not enough.

“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 Feb. 21. “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.”

Earlier in February, Morrisey and AGs from 20 other states had 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.

Last 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.

Farrell also told The Record in January that he and his parties 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. All they’re trying to do is stay the execution of the death warrant.”

Farrell also said Morrisey 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.

U.S. District Court for the Southern District of West Virginia case number 3:17-cv-01362 and 3:17-cv-01665

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