Control of LA opioid case still unknown

A power struggle over opioid litigation in California is heating up, with Attorney General Xavier Becerra trying to strengthen his case against Purdue Pharma through an amended complaint that adds eight members of the company's founding family.

The move comes amid lingering questions over which team of attorneys will control the case, which is separate from the Ohio multi-district litigation but still includes two actions filed by Robins Kaplan LLP.

The attorney general sought to take over the Robins Kaplan's actions, filed on behalf of Kern County and the city of El Monte, but the judge who coordinated the cases declined to rule on the request because it didn't relate to coordination.

The decision by Orange County Superior Court William D. Claster leaves the control issue looming with Claster writing in his coordination order the state and possible opponents still are free to raise the issue "in the proper venues."

Under Claster's order, that's Los Angeles County Superior Court. The state attorney general originally filed there, and Claster determined coordinating it with Kern County and El Monte would be judicially efficient and convenient. Prescription Opioid Cases, JCCP 5029 (O.C. Super. Ct., filed May 9, 2019).

It's now with Los Angeles County Superior Court Judge William F. Highberger, who indicated in a status conference order he's aware of the control questions. The 10 issues he wants attorneys to address include "plaintiffs' leadership," with the judge asking attorneys, "Will this require some formal structure or will informal cooperation suffice?" People of the State of California v. Purdue Pharma LP., et al., 19STCV19045 (L.A. Super. Ct., filed June 3, 2019).

The state attorney general's office did not respond to interview requests Friday, and Robins Kaplan attorneys weren't available.

When he announced the initial complaint in June Becerra said more defendants could be added, and last week's filing makes good on that by naming as defendants eight members of the Sackler family. There is a growing debate over how Purdue's bankruptcy affects the family.

Company lawyers say the automatic stay on all Purdue litigation should apply to the Sacklers, too, and are seeking an injunction to allow that. Plaintiffs' attorneys are objecting, including in a filing Thursday in U.S. Bankruptcy Court in the Southern District of New York that called the wrongdoing alleged against the family "grave" and their claim for a stay "unjustified."

"Asking for a Section 105 injunction to protect a non-debtor from governmental actions on this scale is unprecedented," according to the opposition by Todd E. Phillips of Caplin & Drysdale in Washington D.C., counsel for the multi-state governmental entities group.

In California, the state attorney general argued the automatic stay isn't applicable "because this enforcement action is an exercise of the state's police and regulatory authority, which is categorically excepted from the automatic stay under 11 U.S.C § 362(b)(4)."

"Purdue's notice presents a gross oversimplification of the applicability of the automatic stay to this enforcement action," according to a Sept. 20 response by Bernard A. Eskandari, supervising deputy attorney general.

Either way, the stay wasn't applied to Richard Sackler, Purdue's ex-president and an original defendant in the state's June lawsuit.

The amended complaint, filed Wednesday, includes former board members Beverly Sackler, David Sackler, Theresa Sackler and former vice presidents Kathe Sackler, Jonathan Sackler, Mortimer D.A. Sackler and Ilene Sackler Lefcourt as well as family member Marianna Sackler.

Recently assigned to the case, Highberger scheduled a Nov. 18 status conference and ordered attorneys to submit by Nov. 12 whether they'll need a formal leadership structure. They're also to say whether there will be challenges to jurisdiction, if bellwether plaintiffs are needed, and which, if any, California cases will be subjected to add-on petitions.