State attorneys general in dispute with cities, counties over opioid negotiations

State attorneys general and lawyers for local governments are split over a proposal for roughly 25,000 cities and counties to collectively negotiate the settlement of lawsuits stemming from the opioid crisis.

State plaintiffs, including California Attorney General Xavier Becerra, argued a "negotiation class promotes more uncertainty, more litigation, and less potential for resolution," in one of two letters submitted to the court.

Attorneys general from 25 other states urged the Ohio federal judge overseeing the lawsuits to wait to make a decision at a hearing Tuesday while pointing out that the arrangement would undermine their settlement efforts.

"Given plaintiffs' novel and untested approach, this settlement process is likely to generate numerous objections and appeals, causing additional delay to a resolution of this nationwide health crisis," the attorneys general wrote.

U.S. District Judge Dan Polster of the Northern District of Ohio asked for additional briefing on the issue.

Roughly 40 municipalities, including the cities and counties of San Francisco and Los Angeles, have agreed to the first-of-its-kind proposal that seeks to allow lead plaintiffs' attorneys to broker and accept a settlement offer to parties that choose to participate in the "negotiation class."

A super majority of local governments would be required to approve the settlement.

"The attorneysgGeneral write in an attempt to preserve their ability to protect [their] interests, including speaking on behalf of proposed class members, governmental entities from their own states, who could be harmed by certification," they wrote.

Lead plaintiffs' attorney Paul J. Hanly, who represents dozens of local governments in five states, called it a "new use of the class action mechanism." In re: National Prescription Opiate Litigation, 17-MD2804 (N.D. Ohio, filed Dec. 12, 2017).

Drug distributors and pharmacies argued the proposal is "fatally flawed, both legally and practically."

The drugmaker defendants, including Purdue Pharma LP, did not take a side.

"The company is committed to working with all parties toward a resolution that helps bring needed solutions to communities and states to address this public health crisis," said Purdue Pharma spokesperson Robert Josephson in a statement.

Loyola School of Law Professor Adam Zimmerman said Polster sounded receptive to the proposed negotiation class at the Tuesday hearing.

"[The judge] really seemed interested and engaged by the idea," he said. "It solves problems and affords more people the opportunity to be heard early, which he has always been behind."

While they did not expressly ask for Polster to deny class certification, the state attorneys general argued the proposal likely does not satisfy class certification or due process standards.

The states' top prosecutors warned that the framework would give the local governments "functional veto power" in court filings.

It remains uncertain whether a settlement from the local municipalities would preclude the state plaintiffs from "pursuing what may be overlapping funds for an overlapping problem," Zimmerman said. He added that case law varies across states.

"If the court were to grant the unprecedented 'negotiation class' certification motion in the manner currently set out the only way to avoid this fundamental threat to state sovereignty would be to exclude all local governmental entities from receiving any benefit under a settlement negotiated by a state," the state attorneys general wrote.

Polster will consider the matter at a future hearing.