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Vermont cities and towns are deciding whether to join the broad-ranging national litigation against companies accused of fueling the opioid crisis. But as local officials weigh their options, the stakes of pursuing a complex legal settlement remain unclear.
Mark Latham, a Vermont Law School professor who’s been following the court proceedings, said the consolidated suit against the drug companies is the largest settlement negotiation since states sued major tobacco companies in the late 1990s. But this case may be even more complicated, since the presiding judge has used an unprecedented maneuver to allow nearly any municipality in the country to participate.
“The judge is trying to encourage other parties that may be contemplating litigation to get this all resolved in one fell swoop, and not have lingering cases for the next 20 or 30 years,” Latham said.
Municipalities will automatically be included in the settlement unless they opt out by Nov. 22. Vermont Attorney General TJ Donovan recommended to local officials last week that they stay in the suit, saying that it may be the easiest way to win settlement money that they could apply to combating the opioid crisis in their communities.
Latham said that based on the tobacco settlement, a potential settlement with the drug companies could be time-consuming and difficult to administer. “Ultimately, a lot of people will probably be somewhat disappointed in the final result,” he said. “But at the end of the day, I think what’s really crucial isn’t necessarily how much money any one particular state or municipality gets, but — is this going to be effective in helping to stop what has been just a crisis throughout the United States.”
**Podcast transcript**
This week: Vermont cities and towns are deciding whether to join the sweeping national litigation against companies accused of fueling the opioid crisis. But as Vermonters weigh their options alongside towns across the country, the stakes for local governments aren’t totally clear.
In September 2018, Vermont Attorney General TJ Donovan announced that the state was suing Purdue Pharma, the company that manufactures the prescription painkiller OxyContin.
TJ Donovan (Vermont Attorney General): The basis of our lawsuit is this. Purdue Pharma lied. They misrepresented. They fabricated. They deceived and they spread falsehoods. And they made billions off of it. And they created a path of destruction that the state of Vermont is still reeling from.
This was the first of three lawsuits against drug companies that Donovan’s office would go on to file. In March of this year, he announced that the state was going after Cardinal Health and McKesson, two distributors that sold tens of millions of opioid pills in Vermont. And in May, he said the state was suing eight members of the Sackler family, the billionaire owners of Purdue.
Donovan: They were engaged in this deception on a daily basis. They were active participants in this deception that has devastated and impacted thousands of Vermonters lives.
These three lawsuits are still ongoing. But while they’ve moved forward, a separate legal action against those same companies has been expanding into Vermont.
Generally, these lawsuits have a lot in common. They accuse the companies that manufactured and distributed opioid painkillers of flooding the country with pills.
Announcer [in 1998 Purdue Pharma promotional video]: Once you’ve found the right doctor, and have told him or her about your pain, don’t be afraid to take what they give you. Often, it will be an opioid medication.
Dr. Alan Spanos [in 1998 Purdue Pharma promotional video]: There’s no question that our best strongest pain medicines are the opioids. But these are the same drugs that have a reputation for causing addiction and other terrible things.
Announcer: Some patients may be afraid of taking opioids because they’re perceived as too strong or addictive. But that is far from actual fact.
Spanos: These drugs, which I repeat are our best, strongest pain medications should be used much more than loud for patients and pain.
The lawsuits say these misleading claims directly led to millions of Americans becoming addicted to opiates, and in Vermont alone, to dozens of people dying from overdoses every year.
Donovan: Vermont has suffered too long. Too many lives have been ruined. This epidemic that we talk about so much in this state started with a falsehood.
But there are key differences here too. The national litigation targets more companies than Vermont’s lawsuits do. Plus, that case is actually about 2,500 separate lawsuits that were consolidated in a federal court in Ohio. This is where things get more complicated.
Mark Latham is a professor at Vermont Law School. He teaches courses about personal injury and product liability law, and he’s been following the national opioid litigation. He said the most likely outcome of all this is that the parties resolve every claim at once, in what’s called a global settlement.
Latham: The whole idea of a global settlement is just to try to put all this litigation, all the claims for all the parties, and put it behind them and reach some type of resolution.
What’s unusual about this case is that the presiding judge in Ohio, Dan Polster, has opened it up beyond the local governments that were already included. He’s now ruled that nearly any municipality in the U.S. can become part of the group working to negotiate a settlement.
Mark said this strategy is meant to benefit everyone – the towns that are fighting the opioid crisis, and the companies that are getting hammered with lawsuits.
Latham: I think what the judge wants to do, as well as all the parties, particularly the defendants, is they would like to see what they can hammer out before the judge in the Northern District of Ohio. Some truly global settlement, so that all these cases, or at least a vast majority of them, are put behind them. I think that’s why the judge is trying to encourage other parties that may be contemplating litigation to get this all resolved in one fell swoop and not have lingering cases for the next, you know, 20, 30 years.
That’s left Vermont towns with a sort of confusing menu of options.
One is that they can join the national litigation by hiring lawyers and filing their own lawsuit. That’s what happened last month in Bennington.
Hurd: Well, it really began sometime ago…
This is Stu Hurd, Bennington’s Town Manager. He said about a year ago, local activists pushed town officials to connect with two private law firms that were working with towns and cities in other states to fight these drug companies. He said the town felt like they had nothing to lose.
Hurd: We were a little concerned about what happens if we join the suit and we are suddenly inundated with discovery from some of these multibillion dollar businesses. But [the law firm’s] position was, that’s a ways off, and we’ll be with you all the way. They are absorbing all of the costs associated with the lawsuit and recover funds only if we do.
Stuart said he knows the state is already suing some of these same companies. But if Bennington files its own suit, the town will get more leeway to use settlement money however it wants.
Hurd: The reason we’re in this — I mean, the AG’s office is working hard to get a settlement, and he has promised to push that money back to the communities. Because if you don’t direct this money directly towards the treatment of addiction and recovery, I think this battle is going to continue to be difficult to win.
So you take that premise and you put it at the local level, we’re saying to ourselves, well, we will get probably a cut of what the state gets. But if we’re in it on our own, whatever we get, other than what we pay out to the attorneys, is ours. We get to determine how to use it. We get to determine how it best suits the needs of our community. And we don’t have to ask the Legislature for permission or for direction of how to use it — because more than likely the Legislature will, even if they follow the AG’s lead, they’ll most likely put guidelines on its use.
What’s changed more recently is that now any municipality in Vermont can join the national litigation without hiring outside attorneys. Last week, the Attorney General sent a letter to local leaders saying this was probably the easiest way for them to get a piece of a potential settlement.
David Allaire: Actually just Monday night, the board, in consultation with myself, have decided that we are going to take the recommendation of the AG, and we are looking to opt in to the bigger lawsuit.
This is Rutland City Mayor David Allaire. He said the city didn’t have the time or energy to enlist an outside law firm – so they’re opting to join the national suit.
Allaire: We didn’t feel at this point we had the ability, financial-wise and manpower-wise, and time and energy to go a private route. We felt as though, with the facts that were presented to us, that this was would be the most beneficial to achieving some of the desired results — which of course is to see if there’s any way to address the negative effects that the opioid epidemic have had in our local communities. We’re convinced this is, at least at this point right now, this is the best way to go.
Here’s how this actually works. Last month, towns and cities around Vermont got paperwork in the mail from the federal court in Ohio. Some of them had no idea this was coming, or what it was. The packet included a form that would let towns opt out. But basically, if they do nothing, they’ll be included in the national suit. The court has already used data about the opioid crisis to determine how a potential settlement would be divvied up.
Allaire: There is a formula that’s being put together. I believe there is actually something out there right now, which would track your community in all the communities and monetize what that amount might be.
But the potential dollar amount of a settlement is still up in the air. I talked to officials in Kirby, a Northeast Kingdom town of less than five hundred people, who said they’re opting out. It just seemed like any payout there would be insignificant.
For TJ Donovan, the attorney general, he said at this point municipalities should do whatever they think is best.
Donovan: I think it’s important that the cities and towns who’ve been on the forefront of this crisis have a role to play if there’s a potential recovery, and to get some money back to the cities and towns.
Earlier this year, the attorney general was not in favor of broadening the national litigation to these cities and towns. In July, he signed onto a letter saying that the maneuver could interfere with the state’s cases against drug companies.
Are those still concerns that you have about this whole legal structure?
Donovan: No, no. I think as this has progressed, we have a framework in place which would address some of those concerns about potential damages or recoveries, and where would the money flow to. Specifically, for me, it’s about Medicaid dollars. Those are state dollars. At the time, back in July, we didn’t have a framework in place, which was really a point of contention. And we’ve been able to develop a framework over time that would address those issues and alleviate those concerns about that touchpoint.
But Donovan said there is still overlap between this national case and the state cases – if it moves toward a true global settlement.
The multi district litigation that now has this negotiation class attached to it, that is completely separate from your office’s three lawsuits — against Purdue Pharma, against the Sacklers, against Cardinal and McKesson, correct?
Donovan: Yes, but. The ongoing negotiations would be if there is a settlement, a global resolution that would satisfy all claims, including those in the MDL.
And in your office’s other three lawsuits?
Donovan: Exactly. So the goal here would be a global resolution.
Mark Latham, the Vermont Law School professor, said there are a lot of unknowns with how exactly a global settlement would work. He said the last time a case this big was settled — back in the late 90s, when the major tobacco companies settled with 46 states — was a difficult negotiation.
Latham: To me, the big takeaway is, it takes a long time to put together one of these types of settlements. I think lesson number two is it’s going to involve a lot of money. Lesson three is you’ve got to have somebody who’s highly regarded, who’s got experience in administering something like this. And I think another lesson is that ultimately, a lot of people will probably be somewhat disappointed in the final result. But at the end of the day, I think what’s really crucial isn’t necessarily how much money any one particular state or municipality gets, but — is this going to be effective in helping to stop what has been just a crisis throughout the United States.
Donovan said the same thing: this complicated legal process may be the only way to reach the goal here — to hold drug companies accountable for their role in the crisis.
Donovan: You have to look at the business chain here. Manufacturers produced these drugs. They marketed them. Distributors distributed them into states. And pharmacies sold them. And when you look at it that way, you are going to look at different points of responsibility, and therefore culpability. That’s the way I look at it. And because this was a business chain, if you will, in the sense that people produced it, people marketed it, people sold it, people distributed it, people sold it to consumers.
Hurd: I mean, when you hear stuff like that, you start to think about — this is one huge, almost mafia-like organization that all worked together to push out the opioids into the communities. And initially, with all of this background data that was false.
Stuart Hurd, from Bennington, put it like this.
One has to stop, or minimize, the production and use of these powerful painkillers. There are some folks who probably need heavy doses of some of these painkillers. They’re incredibly effective. I’ve had knee surgery and back surgery, and they do reduce the pain and discomfort. But I only took them for a day or two. And you when you leave the hospital, you’re given a prescription for 30 days of something like oxycodone or Oxycontin. You know, if you take it for 30 days, and go back for more, more than likely you’re heading down the road to addiction.
That’s how addictive these things are. So in the long run, we’d love to see some of the monies that go to developing these things go from these manufacturers into treatment and recovery for addicts. I don’t think anybody really wants to be addicted to opioids or, in the end, to heroin.
Nobody wants to live that way.
There was one other key development this week in the opioid litigation – this time, in the state of Vermont’s cases against Purdue PHarma and the Sackler family. Back in September, Purdue filed for bankruptcy, which pushed all the cases against them to a federal bankruptcy court in White Plains, New York. According to the Associated Press, the judge in that court on Wednesday delayed further litigation in those cases until April of next year.
The attorney general declined to discuss specifics on the bankruptcy court proceedings.
Donovan: That’s all I will say about that right now. There’s more, many more chapters to be written in this in this negotiation.