The Current State of the Opioid Litigation

Henry Hagen

The Opioid Epidemic is one of the most serious crises in modern American history.[1] Opioid overdose deaths increased five-fold from 1999 to 2016, and now account for over 10% of accidental deaths in the United States.[2] In 2017 alone, opioid overdoses accounted for 47,600 deaths—close to the death toll of the entire Vietnam War.[3] Individual plaintiffs, state governments, and local governments have all been active in litigation efforts to recoup the costs of the opioid epidemic.[4] However, the litigation efforts that have encountered the most success and seem most likely to gain traction moving forward are those initiated by government entities, such as cities, counties, and American Indian Tribes.[5] The litigation is focused on “deep pockets,” including pharmaceutical manufacturers, opioid distributors, and even pharmacy retailers such CVS.[6] In December 2017, over 2,000 government entity lawsuits were consolidated under Multidistrict Litigation (“MDL”) 2804, In re: National Prescription Opiate Litigation.[7] MDL is a consolidation device established by 28 U.S.C. § 1407, which permits the Joint Panel on Multidistrict Litigation (“JPML”) to transfer civil actions pending in different districts involving common questions of fact to any one district for consolidated pretrial proceedings.[8] In the words of the judge overseeing the opioid MDL, Judge Aaron Polster, MDL 2804 represents one of the “most complex and important group of cases ever filed.”[9]

Although plaintiffs have pursued many theories of liability throughout the course of MDL 2804, two have emerged as particularly plausible, and are common threads throughout MDL 2804: first, a public nuisance theory, and second, civil claims under the Racketeer Influenced and Corrupt Organizations (“RICO”) Act, 18 U.S.C. § 1961.[10] Plaintiffs’ public nuisance claims allege that defendant manufacturers’ misleading marketing of opioids and distributors’ failure to prevent diversion of opioids created a public nuisance by interfering with “the public health, safety, peace and comfort of . . .  residents.”[11] Plaintiffs’ RICO claims allege, broadly, that defendants violated RICO because they “formed an association-in-fact enterprise and engaged in a scheme to unlawfully increase their profits and sales” by making “repeated and systematic misrepresentations about the safety and efficacy of opioids for treating long-term chronic pain.”[12]

The factual allegations behind those claims are of course case specific, but generally Plaintiffs allege that manufacturers worked to “build confidence in long-term opioid use by overstating its benefits and downplaying its risks, and thereby expand the chronic pain market.”[13] Plaintiffs have also focused on Defendants’ use of “unbranded” marketing to circumvent applicable regulations and consumer protection laws.[14] Plaintiffs allege that Defendant sponsored medical boards and foundations “in order to promote the liberal prescribing of opioids for chronic pain.”[15] Plaintiffs argue that such use of key opinion leaders “KOLs” was particularly damaging because the information regarding opioid use disseminated by such KOLs had the appearance of impartiality and was therefore “outside of FDA oversight.”[16] Plaintiffs have also alleged that distributors failed to “monitor, detect, investigate, refuse and report suspicious orders of prescription opiates.”[17] These allegations largely center on requirements of the Controlled Substances Act (“CSA”) which require distributors of controlled substances to “design and operate a system to disclose to the registrant suspicious orders of controlled substances.”[18] Plaintiffs argue that distributors systematically failed to design and use effective systems as required by the CSA.[19]

To test these theories of liability, the MDL court selected County of Summit v. Purdue Pharma L.P. as one of three “Track One” cases for early trial “to inform the court” regarding “a central cross-section of the evidence, the parties, and the claims.”[20] The Summit trial, set to be the first of the MDL cases to go to trial since its inception in December 2017, was initially scheduled for trial in March 2019, but eventually pushed to October 21, 2019.[21] The MDL court was particularly focused on Summit as a bellwether case, and pruned the case down to just the public nuisance and RICO claims against each of the major types of defendants present in the litigation: three distributors, a manufacture, and a pharmacy.[22] In a stunning blow to Summit’s function as a bellwether, all but the pharmacy defendants settled hours before opening statements were scheduled to begin.[23] While the $260 million settlement reached by Summit county will no doubt provide crucial resources to the county in its fight against the opioid epidemic, resetting the timeline of the litigation may have slowed the progress of the MDL substantially.[24]

The dilatory timeline and underwhelming conclusion of Summit is perhaps emblematic of the opioid litigation as a whole. Judge Polster famously said at the outset of MDL 2804 that his “objective [was] to do something meaningful to abate [the opioid] crisis and to do it in 2018.”[25] More than two years later, no case from MDL 2804 has seen trial.[26] Following the Summit settlement, the MDL court recognized that the existing MDL management plan simply was not appropriate for the scale and complexity of the litigation at hand, stating that “[w]hat the Court has learned is that, if it proceeds with the bellwether trial process as it has so far, it will simply take too long to reach each category of plaintiff and defendant, much less each individual plaintiff and defendant. Meanwhile, the Opioid Crisis shows no sign of ending.”[27]

This led the court to adopt its current approach, which is to strategically remand a number of cases concurrently to their home districts to provide a more comprehensive cross section of the litigation and produce more data which could be used to help resolve MDL 2804, and to advance through those cases more quickly through the use of “parallel processing” while continuing to hear the remaining Track One cases in Ohio.[28] Currently, Judge Polster has scheduled trial for another Track One case, County of Cuyahoga v. Purdue Pharma L.P. on October 12, 2020.[29]Under the new approach, Judge Polster will “remain as the ‘hub’ of the MDL litigation and also the locus for global settlement, while the selected transferor courts will act as ‘spokes’ supporting this global effort.”[30] Typically a court would not remand a case from MDL until all pretrial proceedings have been completed, but the MDL court believes that “the global discovery, pretrial rulings, and other litigation matters over which [Judge Polster] has already presided provide a good base upon which the transferor courts can build.”[31]

The three cases suggested for remand are City of Chicago v. Purdue Pharma L.P., which focuses on manufacturer defendants, Cherokee Nation v. McKesson Corp, an American Indian Tribe case brought against distributors, and City and County of San Francisco, Cal. v. Purdue Pharma L.P., which is brought against manufacturer, distributor, and pharmacy defendants.[32] Additionally, the MDL court will itself preside over the next Track One case, County of Cuyahoga v. Purdue Pharma L.P., which, like Summit, features RICO and public nuisance claims.[33] The JPML found remand of those cases appropriate on February 5, 2020.[34] Though these cases feature theories of liability and factual allegations unique to the cases and their jurisdictions, the theories of liability are a common thread through the majority of these cases, and their success or failure at trial will be hugely impactful on the likelihood and value of any future settlement.[35]

Although the likelihood of settlement seems high in MDL 2804, the uncertain strength of plaintiff’s legal arguments, as well as the ability to pay of the opioid defendants, raise concerns about the sufficiency of a potential settlement. Although the theories of liability pursued by plaintiffs have shown some early success in driving settlements as discussed in this post, no plaintiff has yet won on any theory of liability under MDL 2804.  Most notably, the success of the public nuisance theory seems to largely track the public nuisance statutes of the relevant jurisdiction, and plaintiffs may reach inconsistent results in varying jurisdictions. For instance, thus far, the public nuisance theory has proven to be promising in states with statutes that define public nuisance broadly, such as Oklahoma and Ohio, but have yet to show success in states with narrower interpretations, such as West Virginia.[36] It remains to be seen whether plaintiffs in cases remanded back as bellwether trials will find widespread success on a public nuisance theory. The other major theory of liability discussed in this post, for civil damages surrounding RICO violations, is highly fact intensive, and plaintiffs have alleged facts which, while sufficient to withstand summary judgement, are not clearly compelling enough to generate a favorable result at trial.[37]  Ultimately, MDL 2804 seems destined for settlement not on the strength of legal claims alone, but on the seriousness of the opioid epidemic and the practical constraints facing the defendants. Upcoming bellwether cases will serve as important guideposts to the contours of any settlement, but are not likely to lead to hugely significant legal developments beyond that signaling function.

Clearly, MDL 2804 will not resolve the opioid epidemic, and will not identify any one party clearly deserving blame for the crisis. But that may be beside the point. As Judge Polster said at the first meeting of counsel in MDL 2804, “I don’t think anyone in the country is interested in a whole lot of finger-pointing at this point, and I'm not either. People aren't interested in depositions, and discovery, and trials. People aren't interested in figuring out the answer to interesting legal questions like preemption and learned intermediary, or unravelling complicated conspiracy theories”[38] Much more importantly, “[perhaps] we can do something to dramatically reduce the number of opioids that are being disseminated, manufactured, and distributed.”[39] MDL 2804 is likely to be a critically important chapter of the opioid epidemic, but meaningful abatement of the crisis will require executive and legislative action, and a willingness to look beyond the conduct of MDL 2804 defendants towards actual solutions.

 

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[1] Patrick McCormick, MD, A Time-Release History of the Opioid Epidemic, Anesthesia & Analgesia Volume 128 - Issue 2 (February 2019).
href="applewebdata://051DAF80-7A9C-43A7-A5AE-3341A1885E95#_ftnref2" name="_ftn2">[2] Id.
[3] Drug Overdose Deaths, Ctrs. for Disease Control and Prevention, https://www.cdc.gov/drugoverdose/data/statedeaths.html (last accessed Jan. 17, 2020)
[4] Edgar Aliferov, The Role of Direct-Injury Government-Entity Lawsuits in the Opioid Litigation, 87 Fordham L. Rev. 1141, 1160 (2018).
[5] Id. at 1161; Elizabeth Weeks & Paula Sanford, Financial Impact of the Opioid Crisis on Local Government: Quantifying Costs for Litigation and Policymaking, 67 Kan. L. Rev. 1061, 1070 (2019).
[6] Gluck, A.R., Hall, A., & Curfman, G., Civil Litigation and the Opioid Epidemic: The Role of Courts in a National Health Crisis, 46 J.L. Med. & Ethics 351, 355 (2018).
[7]Order In re Nat’l Prescription Opiate Litig., MDL No. 2804, Document #1, (JPML Dec. 12, 2017), Opinion and Order In re Nat’l Prescription Opiate Litig., MDL No. 2804, Document #2676 (N.D. Ohio Sep. 26, 2019).
[8] 28 U.S. Code § 1407 (a), (c).
[9] Opinion and Order In re Nat’l Prescription Opiate Litig., MDL No. 2804, Document #2676 (N.D. Ohio Sep. 26, 2019).
[10] See Orders In re Nat’l Prescription Opiate Litig., MDL No. 2804, Document #2580 (N.D. Ohio Sep. 10, 2019); Document #2578 (N.D. Ohio Sep. 9, 2019) (denying defendants motions for summary judgement on public nuisance and RICO claims).
[11] Complaint at 141, City and County of San Francisco, Cal. v. Purdue Pharma L.P. (N.D. California Dec. 18, 2018).
[12] Third Amended Complaint, In re Nat’l Prescription Opioid Litig., MDL#2804 Document #: 1466, at 249–50 (N.D. Ohio Mar. 21, 2019).
[13] Third Amended Complaint, City of Chicago vs. Purdue Pharma et al, (N.D. Illinois Aug. 26, 2015) Case: 1:14-cv-04361 Document # 478.
[14] City and County of San Francisco, Cal. v. Purdue Pharma L.P. (N.D. Cal. Dec. 18, 2018)., City of Chicago v. Purdue Pharma L.P. et al., (N.D. Ill. 2016), Cherokee Nation v. McKesson Corp. et al. 327 F. Supp. 3d 1064 (N.D. Ohio 2018).
[15] Complaint at 25, City and County of San Francisco, Cal. v. Purdue Pharma L.P. (N.D. Cal. Dec. 18, 2018).
[16] Third Amended Complaint, City of Chicago vs. Purdue Pharma et al, Case: 1:14-cv-04361 Document # 478, at 48.
[17] Order In re Nat’l Prescription Opiate Litig., MDL No. 2804, Document #1, (JPML Dec. 12, 2017).
[18] 21 C.F.R. §1301.74 (b).
[19] Complaint at 135, City and County of San Francisco, Cal. v. Purdue Pharma L.P. (N.D. Cal. Dec. 18, 2018), Complaint at 21, Cherokee Nation v. McKesson Corp. et al. 327 F. Supp. 3d 1064 (N.D. Ohio 2018).
[20] Track One included three cases: (1) County of Summitv. Purdue Pharma L.P., Case No. 18-OP-45090 (N.D. Ohio); (2) County of Cuyahoga v. Purdue Pharma L.P., Case No. 17-OP-45004 (N.D. Ohio); and (3) City of Cleveland v. AmerisourceBergen Drug Corp., Case No. 18-OP-45132 (N.D. Ohio). Suggestion of Remand, In re Nat’l Prescription Opiate Litig., MDL No. 2804, Document #2941, at 4 (N.D. Ohio Nov. 19, 2019).
[21] Order, In re Nat’l Prescription Opiate Litig., MDL No. 2804, Document #2940 (N.D. Ohio Nov. 19, 2019). Eric Heising, Opioid Trials for Cleveland, Cuyahoga County, Summit County pushed back to September 2019, Cleveland.com (last updated Jan. 30, 2019), https://www.cleveland.com/court justice/2018/08/opioid_trials_for_cleveland_cu.html.
[22] Suggestion of Remand, In re Nat’l Prescription Opiate Litig., MDL No. 2804, Document #2941, at 4 (N.D. Ohio Nov. 19, 2019).
[23] Id.
[24] Jan Hoffman, $260 Million Opioid Settlement Reached at Last Minute With Big Drug Companies, N.Y. Times (Oct. 21, 2019), https://www.nytimes.com/2019/10/21/health/opioid-settlement.html.
[25] Transcript of Proceedings In re Nat’l Prescription Opiate Litig., MDL No. 2804, Document # 58.
[26] Suggestion of Remand, In re Nat’l Prescription Opiate Litig., MDL No. 2804, Document # 2941 (N.D. Ohio Nov. 19, 2019).
[27] Suggestion of Remand, In re Nat’l Prescription Opiate Litig., MDL No. 2804, Document #2941 (N.D. Ohio Nov. 19, 2019).
[28] Id. at 4.
[29] Order, In re Nat’l Prescription Opiate Litig., MDL No. 2804, Document #2940 (N.D. Ohio Nov. 19, 2019).
[30] Id. at 7.
[31] Id.
[32] Id.
[33] Order, In re Nat’l Prescription Opiate Litig., MDL No. 2804, Document #2940 (N.D. Ohio Nov. 19, 2019), Suggestion of Remand, In re Nat’l Prescription Opiate Litig., MDL No. 2804, Document #2941 (N.D. Ohio Nov. 19, 2019).
[34] Order, In re Nat’l Prescription Opiate Litig., MDL No. 2804, Document #7033 (JPML, Feb 5, 2020).
[35] City and County of San Francisco, Cal. v. Purdue Pharma L.P. (N.D. Cal. Dec. 18, 2018)., City of Chicago v. Purdue Pharma L.P. et al., (N.D. Ill. 2016)., Cherokee Nation v. McKesson Corp. et al. 327 F. Supp. 3d 1064 (N.D. Ohio 2018).
[36] The Top Product Liability Cases of 2019, Law 360, https://www.law360.com/articles/1226078/the-top-product-liability-cases-of-2019 (last accessed January 14, 2020).
[37] Opinion and Order Regarding Defendants’ Summary Judgement Motions on RICO and OCPA In re Nat’l Prescription Opioid Litig., MDL No. 2804 Document # 2580 (N.D. Ohio September 10, 2019) at 6.
[38] Transcript of Proceedings In re Nat’l Prescription Opiate Litig., MDL No. 2804, Document # 58.
[39] Id.