What OxyContin-maker’s settlement with Oklahoma may signal about thousands of lawsuits being heard in Ohio

This Tuesday, May 8, 2007 file photo shows the Purdue Pharma logo at their offices in Stamford, Connecticut.
This Tuesday, May 8, 2007 file photo shows the Purdue Pharma logo at their offices in Stamford, Connecticut.
 
CLEVELAND, Ohio — The decision by one of the U.S.’s largest painkiller manufacturers to pay the state of Oklahoma $270 million to settle an opioid lawsuit has no legal bearing on lawsuits filed by the state of Ohio or those from across the country being heard in federal court in Cleveland.

However, it does signal that Purdue Pharma, which has been mired in bad press as the number of deaths attributed to opioid dependency skyrocketed in recent years, is willing to negotiate. It also sets a benchmark as negotiation and litigation continues for thousands of cases that seek to hold drug distributors and manufacturers responsible for the nation’s opioid epidemic.

Attorneys and experts involved and observing the litigation, one of the largest in the nation’s history, spent Tuesday deliberating about what the settlement means for the future of the lawsuits, especially as Purdue Pharma continues to deliberate on whether it should file for bankruptcy.

The settlement “signals there’s blood in the water now,” University of Georgia law professor Elizabeth Chamblee Burch said. She said Tuesday’s news may lead to a “feeding frenzy” as cities, counties and states try to ensure they can still get money from Purdue Pharma.

“Now the concern is, if somebody is threatening bankruptcy, if you are the last one to settle, there may be nothing left,” Burch said.< The settlement
The settlement between Purdue Pharma and Oklahoma was announced Tuesday. The company will pay close to $200 million in startup costs and continued support for an entity that will study addiction and treatment at Oklahoma State University. It will also pay $12.5 million toward combatting addiction in cities and counties throughout the state, and $60 million to go toward the state’s litigation fees.

Of the settlement, $75 million will come from the Sacklers, the family that owns Purdue Pharma.

The company’s decision to settle came after the Oklahoma Supreme Court rejected requests to delay a trial set for May. The state’s trial against other drug makers, including Johnson & Johnson and Teva Pharmaceuticals, is still on the schedule.

It is the first settlement to come from a wave of lawsuits filed over the epidemic, which has ravaged communities rich and poor, big and small, across the country. Cuyahoga County, as well as the entire state of Ohio, is no exception. The county saw at least 560 drug overdose deaths in 2018, according to Medical Examiner Thomas Gilson’s office.

U.S. District Judge Dan Polster – who oversees more than 1,600 lawsuits filed against drug companies by cities, counties, states and governments from his Cleveland courtroom – has pushed for a settlement to resolve all the cases both before him and in state courts.

Polster has been unable to broker such an agreement. The first trial for the federal courts will involve claims made by Cuyahoga and Summit counties and is scheduled to begin in October.
All eyes on Oklahoma
Lawyers and politicians involved in the federal litigation and in other cases in state courts closely watched the developments that led to Tuesday’s announcement.

Ohio Attorney General Dave Yost, whose office is pursuing a lawsuit against Purdue Pharma and other drug makers in state court, said the settlement has no direct impact on Ohio, “but it is encouraging to see a drug maker accept some degree of responsibility for the mess that they’ve made.”

Attorneys and experts also pointed out that the settlement only affects the state of Oklahoma.< “From our standpoint, it has no bearing on our cases,” said Hunter Shkolnik, an attorney representing several Oklahoma counties. Potential bankruptcy
Still, attorneys and academics gave differing viewpoints on what Tuesday’s settlement meant and how it comported with reports that Purdue Pharma was considering filing for bankruptcy protection ahead of a potential onslaught of potential judgments it faces from litigation nationwide.

Burch, who studies large sets of lawsuits known as multidistrict litigation and has closely followed the opioid cases, said the question now becomes “whether the states will be able to settle on the cheap now as opposed to little or nothing later.”

Yost, who said his office was “not close” to reaching a settlement with Purdue Pharma, wondered whether Purdue Pharma truly intended to file for bankruptcy in the near future if it just agreed to pay more than a quarter of a billion dollars.

However, the potential decision has colored all aspects of the cases and Oklahoma’s settlement.

Oklahoma Attorney General Mike Hunter said at a news conference that his office undertook “extensive efforts” to ensure the settlement was not affected by any bankruptcy filing.

Yost also said talks of bankruptcy also affected Ohio’s litigation strategy.

He said he is considering filing an amended lawsuit that includes would include theories under state law to recover money from members of the Sackler family. Any bankruptcy filing from Purdue Pharma would not protect the Sackler family in the same way, Yost said.

Other parties suing Purdue Pharma, most notably the state of Massachusetts, have detailed what they said was a leading role Sackler family members played in the marketing of OxyContin and downplaying risks associated with the powerful painkiller.

The Washington Post reported that three museums in Britain and the U.S. recently turned down donations from the Sacklers.

The attorney general declined to say whether his office uncovered new information about the Sacklers’ involvement. He said the family “has taken billions of dollars out of Ohio and out of Purdue Pharma over the years.”

An optimistic sign
Tuesday’s settlement was met with optimism from attorneys representing plaintiffs in the federal litigation, which includes the lion’s share of the lawsuits against drug companies.

The group of attorneys leading the litigation issued a laudatory statement that said the settlement “is another reflection of the extraordinary importance and strength of the claims against Purdue Pharma.”

Paul Hanly, one of those lead attorneys, said in an interview that $270 million was “a good number for their state.”

Hanly that settlement such as the one Oklahoma and Purdue Pharma announced Tuesday are often “omens” of more settlements to come.

“If history is a guide, there’s a possibility that Purdue and other defendants will settle additional cases,” he said.
 
 
Eric Heisig, The Cleveland Plain Dealer, March 26, 2019
What OxyContin-maker’s settlement with Oklahoma may signal about thousands of lawsuits being heard in Ohio