State drops 2 opioid defendants, judge mulls total dismissal

A $50 billion opioid suit hangs in the balance after the state dismissed two drug companies as defendants this week and others asked an Orange County judge to toss claims alleging deceptive marketing of prescription opioids caused an opioid epidemic.

After the people rested their case earlier this month, the pharmaceutical companies immediately filed motions for judgment as a matter of law, hoping to snuff the false advertising, unfair competition, and public nuisance claims brought by the plaintiff counties of Los Angeles, Orange and Santa Clara, along with the city of Oakland.

Despite filing 1,000-page opposition motions last week, urging Judge Peter Wilson to reject defense arguments they said misstate public nuisance law, the counties dismissed two drug companies Monday; Actavis Pharma and Watson Laboratories.

However, one of the three remaining defendants, Janssen Pharmaceuticals Inc. says Wilson should drop the public nuisance claim because the people failed to prove it promoted opioids with "knowledge of the public health hazard [such promotions] would create."

Representing the people Tuesday, Connecticut attorney Michael Pendell of Motley Rice LLC said Janssen was directly aware of reports of prescription opioid addiction as early as 2000. Even if the Food and Drug Administration hadn't sent Janssen warning letters regarding its marketing of certain opioid products in the early 2000s, the company would still be liable under a public nuisance claim, he said.

Knowledge of the prescription opioid crisis is sufficient to prove liability, Pendell argued, and tying the crisis to a specific product is unnecessary.

"An opioid is an opioid is an opioid," Pendell said. "By the early 2000s, the existence of a prescription opioid crisis was well known .... With that knowledge, they [Janssen] didn't review what they were doing ... but went full speed ahead."

Janssen's attorney, Michael Yoder of O'Melveny & Myers LLP, argued lawful promotion of an FDA-approved product which is known to have risks of misuse is not enough to prove liability, and if it were, every industry would be found liable.

Along with other questions, Wilson asked the people Monday whether their public nuisance claim could survive independently from their false advertising claim.

"Hypothetically, even if they, within FDA guidelines and following FDA regulations and directions for FDA use, elect to sell its product in a market known to have downstream consequences, is that enough to establish liability if they sell enough in that market?" Wilson asked plaintiffs' attorney Frederick Baker of Motley Rice on Monday. "If you know it could be harmful, you shouldn't sell it?

Responding, Baker said it was how the drug companies aggressively marketed opioids, downplayed their risk of addiction and overstated their benefits that contributed to the public nuisance.

"Those would be examples of misleading marketing," Wilson said. "Is entirely truthful marketing nevertheless actionable because they know the risk is out there?"

Wilson could rule this week. Only if he denies defendants' motions to dismiss, will the trial continue.

The outcome of the case will likely affect thousands of settlements in lawsuits filed nationwide by states and municipalities that claim Purdue Pharma and other opioid producers fueled a crisis by marketing the drugs as safe and effective pain treatments while downplaying the risk of addiction.

The remaining drug companies in the Orange County case -- Teva Pharmaceuticals, Endo Pharmaceuticals Inc., Allergan PLC and Janssen -- are accused of helping to create an opioid crisis in the state from 1997 to 2017 by deceptively marketing prescription opioids as rarely addicting. Purdue, also named as a defendant, is sitting out the trial, pending the completion of a bankruptcy case in New York.

In addition to civil penalties, the people seek $50 billion to abate the opioid crisis in the plaintiff counties and city, according to attorneys involved in the suit. People v. Purdue Pharma et al., 14-00725287 (Orange Super. Ct., filed May 21, 2014).