Plaintiffs urge all states to agree to $26B opioid deal, California case nears end

Drug companies accused of fueling the state's opioid crisis in a $50 billion bench trial in Orange County called their last witness Wednesday as a plaintiffs' committee urged attorneys general nationwide to sign onto a $26 billion global settlement.

At a virtual press conference Wednesday, Joseph F. Rice of Motley Rice LLP, who as a member of the Plaintiffs' Executive Committee is negotiating the settlement terms on behalf of 3,000 communities, outlined the structure of the settlement and urged state prosecutors to sign on.

"Attorneys general will have 30 days to decide whether to participate and give notice to the defendants. ... If they agree, then the defendants will have 14 days instead of 30 to accept that and determine if we are at critical mass," Rice said. "If we don't get the critical mass of the states, we're done; this deal fails."

The deal involves three major pharmaceutical distributors, McKesson Corp., Cardinal Health Inc. and AmerisourceBergen Corp., which would pay $21 billion -- and Johnson & Johnson would pay an additional $5 billion -- over the next 18 years to settle thousands of government filed lawsuits claiming the companies helped spread the nation's opioid crisis. Johnson & Johnson has not admitted any wrongdoing. Attorneys would receive $1.95 billion, or roughly 7.5% of the total settlement, according to Rice.

Litigation involving other defendants who are not a party to the deal would continue.

However, those figures are contingent on a 100% participation rate by the states and the municipalities. Failure to get all the states and a significant number of litigating subdivisions and non-litigating subdivisions will "materially decrease" the settlement payout, Rice said. County and city governments in the participating states will have up to 150 days to join the settlement.

California stands to receive a maximum of almost $2.34 billion if all the state's cities and counties sign on, according to a statement released by Attorney General Rob Bonta.

"Nothing can undo the devastating loss of life caused by the opioid epidemic, or stop the grief it has caused for its victims and their families, but this proposed settlement represents one step in the process of healing our communities," Bonta said in a statement Wednesday.

The settlement terms also include injunctive relief requiring that a clearinghouse be created through which the three distributors would be required to account not only for their own shipments, but the shipments of the other distributors, in order to detect, stop, and report suspicious orders, according to a plaintiffs' committee statement. In addition, Johnson & Johnson and all its subsidiaries must agree to a 10-year prohibition on the manufacture, sale, and distribution of their opioid painkiller products.

More than 14,000 people died from overdoses involving prescription opioids nationwide in 2019. Between 1999 and 2019, nearly 247,000 people died in the U.S. from overdoses involving prescription opioid painkillers and the total economic burden of prescription opioid misuse in the nation is $78.5 billion a year, including the costs of health care, lost productivity, addiction treatment and criminal justice involvement, according to the Centers for Disease Control.

West Virginia Attorney General Patrick Morrisey, whose state is involved in an opioid jury trial, said Tuesday he will likely pass on the settlement, according to the state's Metro News outlet.

When asked how the settlement would affect ongoing opioid trials such as the one in Orange County in which Johnson & Johnson is one of four defendants, Rice said litigation will continue for now and the settlement wouldn't affect other defendants who are not a party to the settlement.

"That case will continue because there's no way of knowing whether these settlements are going to be made final prior to what will be the judgment in that case," Rice said. "It may get resolved by one or more defendants, but it will continue as long as a defendant is remaining in the case. That's true of all the litigation. Nothing in the settlement stops any litigation."

While the settlement discussions continued Wednesday, all four defense teams in Orange County, representing Janssen Pharmaceuticals, Teva Pharmaceuticals, Endo Pharmaceuticals, and Allergan PLC, said they would not call any further live witnesses. The announcement came after defense attorney John Hueston of Hueston Hennigan LLP examined economist and Columbia University professor Justin McCrary, who said Endo's sales calls to doctors didn't cause a rise in opioid abuse and overdose deaths in any of the plaintiff jurisdictions of Los Angeles, Orange, Santa Clara, and the city of Oakland.

Before McCrary stepped down Wednesday, the plaintiffs' attorney, Michael Pendell of Motley Rice, was able to confirm that McCrary had been paid $850 an hour for his work on the case, and had worked over 100 hours.

"Safe to say, you were paid more than a million dollars?" Pendell asked.

"No, I don't think that is accurate," McCrary replied.

After Judge Peter Wilson dismissed McCrary, the state said it wanted to call a few rebuttal witnesses. Wilson said he wanted the parties to submit final briefs and would schedule final arguments at a hearing next week. People v. Purdue Pharma et al., 14-00725287 (Orange Super. Ct, filed May 21, 2014).