6 states not yet in national opioid settlement

Six states have not fully signed onto a proposed $26 billion nationwide settlement with Johnson & Johnson and three drug distributors accused of fueling the nation's opioid crisis. But it's not clear if the deal will be extinguished by the holdouts, who say they may do better going to court.

Joseph F. Rice of Motley Rice LLP, along with members of the Plaintiffs' Executive Committee negotiating the settlement terms on behalf of 3,000 communities, said in July that if not enough states sign the deal, it could fail.

Elizabeth Cabraser

However, he and other committee members said in a statement Tuesday, that they were encouraged to see momentum building in favor of the proposed global settlement after 44 states opted in through their attorneys general.

Along with Rice, other plaintiff committee members such as Elizabeth J. Cabraser of Lieff Cabraser Heimann & Bernstein LLP in San Francisco; Peter Mougey of Levin Papantonio Rafferty in Florida; and Paul J. Geller of Robbins Geller Rudman & Dowd LLP in Florida, sent a statement to the Daily Journal on Tuesday, encouraging more jurisdictions to sign on.

Attorneys would receive $1.95 billion, or roughly 8% of the settlement, according to Rice.

"The overwhelming support for the deal among states moves us one step closer to finalizing the settlement," the statement read. "We hope the defendants consider this state participation rate sufficient to continue on for adoption by communities. The alternative is years of more litigation and the potential for additional bankruptcy filings. Intrastate allocation agreements have been reached in many states and others are actively pursuing resolution."

With the deadline to opt in passing this Saturday, Washington, Georgia, Alabama, West Virginia, New Mexico, and Oklahoma have yet to do so, and New Hampshire agreed to settle with the distributors but not the J&J agreement.

Washington state Attorney General Bob Ferguson is among the minority of top prosecutors actively rejecting the deal, saying he would rather hold the companies accountable in court. According to Ferguson, his state and its 320 cities and counties would have to share an average of $30 million per year for 18 years -- an amount he says is not sufficient to address the opioid crisis' devastation.

Joseph Rice

"The settlement is, to be blunt, not nearly good enough for Washington," Ferguson said. "It stretches woefully insufficient funds into small payments over nearly 20 years, to be shared among more than 300 Washington jurisdictions. We are looking forward to walking into a Washington state courtroom to hold these companies accountable for their conduct. Washington families devastated by the opioid epidemic deserve their day in court. We intend to give it to them."

Ferguson said that other jurisdictions -- such as Oklahoma, which won a $465 million verdict against Johnson & Johnson in 2019 -- have fared much better in trials. He said money from a court verdict must be paid immediately -- not over the course of decades, as proposed in the settlement.

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 an opioid crisis. Johnson & Johnson has not admitted any wrongdoing.

Georgia Attorney General Christopher M. Carr, while not actively rejecting the deal, has yet to sign on, saying he will continue to litigate against drug companies in court but will consider input from stakeholders.

"We have not rejected the deal, but we have not joined because at the present time joining the national settlement does not guarantee the best outcome for Georgia and its counties, cities and citizens," he said in a statement. "We remain active in representing Georgia throughout negotiations, and we're going to continue to get input from Georgia stakeholders."

Johnson & Johnson and the distributors have until next Wednesday, Sept. 4, to decide whether enough plaintiff states have opted in for the settlement to go through as is. However the size of the settlement is dependent on plaintiff participation and could be reduced, Rice said in July.

While a minority have been dubious, California Attorney General Rob Bonta and City Attorney Mike Feuer have praised the deal.

Asked at a press conference in July if he was satisfied with the settlement amount of $2.2 billion over 18 years expected to go to California, and the tens of millions expected to go to the City of Los Angeles, Feuer said it was better than what plaintiffs were offered a few years ago.

Paul Geller

The first government-filed lawsuit to go to trial against Johnson & Johnson and other opioid manufacturers wrapped up in Orange County last month. The plaintiff jurisdictions of Los Angeles, Orange, and Santa Clara counties, along with the city of Oakland, seek $50 billion in damages. Superior Court Judge Peter Wilson said he will issue his ruling in October.

The next phase of the proposed settlement will call on cities and counties to analyze if it will meet the unique needs of their communities, according to the plaintiff committee's statement.

"We recognize the valid questions about the settlement, and the challenge of achieving complete sign-on," the statement reads. "However, as the opioid epidemic continues to take hundreds of thousands of lives and drain billions from local economies, the time for local municipalities to align on the settlement is now so that relief comes as soon as possible to taxpayers and communities that were forced to and continue to bear the costs of the crisis."

More than 14,000 people died from overdoses involving prescription opioids nationwide in 2019, according to the Centers for Disease Control and Prevention. Between 1999 and 2019, nearly 247,000 people died in the U.S. from overdoses involving prescription opioids 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, the agency said.