The Core Legal Strategy Against Opioid Companies May Be Faltering

Two recent rulings rejected the “public nuisance” argument being used in thousands of cases against the industry, with more trials and settlement talks underway.

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In 2014, as overdoses and deaths from prescription opioids were catapulting, gutting the budgets of local governments that were struggling to contain the damage, lawyers began working up a novel legal strategy to hold the pharmaceutical industry responsible.

That approach, which in the ensuing years became the foundation for more than 3,000 lawsuits, was soundly rejected this month by a California trial judge and, on Tuesday, the Oklahoma Supreme Court, two states where the first opioid trials have concluded.

Both decisions found no merit to the plaintiffs’ core argument that, under state law, the companies created a “public nuisance” by overplaying the benefits of their opioid products and downplaying risks. Together the rulings bring into sharp relief a question that has dogged these cases for years: Was this strategy, which critics say requires an unprecedented, expansive reading of public nuisance laws, the best way forward?

The rulings could well be ominous indicators for upcoming trials. Jury trials are underway in New York and Ohio. A federal judge’s decision is pending in West Virginia. More trials are on the runway.

Meanwhile, settlement talks have been proceeding haltingly. Adam Zimmerman, a law professor who teaches mass litigation at Loyola Law School in Los Angeles, cautioned that the California and Oklahoma rulings have landed early in the overall march of cases but said, “If this keeps up across the other jurisdictions, it could really shift the ground in ongoing settlement talks.”

The opinions could prod cities and counties, many of which have been equivocal about settlement deals brokered by states, to capitulate, he said. They could also fuel the resolve of pharmacy chains, like Walmart, Walgreens and CVS, the cluster of defendants most resistant to talks, to fight even harder.

Broadly speaking, public nuisance laws, which date to the 12th century in England, bar actions that interfere with rights commonly enjoyed by the public. Just about every state has a public nuisance law; the opioid cases unfolding in federal court apply each state’s statute. In recent years, state nuisance laws have been employed, with mixed results, against manufacturers of guns, paint and vaping devices and have been an increasingly common cudgel against environmental hazards and in climate change litigation.

In the opioid cases, thousands of state and local governments and tribes are arguing that companies in the pharmaceutical supply chain — manufacturers, distributors and retail pharmacies — created a “public nuisance” by impeding the public’s health.

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Judge Peter Wilson of Orange County Superior Court in California, in a video conference during a bench trial of opioid manufacturers in April.Credit…Orange County Superior Court, via Reuters

In pragmatic terms, the approach appears both bold and sensible. According to Mr. Zimmerman, many state public nuisance laws do not include a statute of limitations, which would restrict the time available to take legal action. The amount of money that can be recovered can be far greater than that exacted in a more conventional tort claim. And in some states, one defendant can be held liable not only for the damages it created but for those of other defendants as well.

The remedy in a public nuisance lawsuit is called abatement: A defendant found liable has to take corrective action and must usually pay substantially to prevent future harm. A polluter must clean up a river, for instance. Indeed, the Oklahoma attorney general’s office worked up a voluminous allocation proposal that sought to have opioid manufacturers pay for years of addiction treatment and education programs.

What is turning out to be difficult, however, is establishing an incontrovertible link between a “public nuisance” and the discrete actions of so many types of companies that provide a federally approved medication prescribed by doctors and which are supposed to be monitored by state and federal agencies.

Paul Geller, a plaintiffs’ lawyer in the opioid litigation who represents local governments including the cities of San Francisco and Fort Lauderdale, as well as the state of Maryland, saw the rulings as a signal to municipalities to sign on to a $26 billion settlement offer from three distributors as well as Johnson & Johnson. He called the Oklahoma and California decisions “a stark reminder that there is no such thing as a slam-dunk case — trials involve a degree of risk, and appeals are unpredictable.”

Both opinions addressed cases brought against opioid manufacturers, notably Johnson & Johnson, and concluded that public nuisance is an insufficient legal weapon. The Nov. 1 ruling was by Judge Peter Wilson of Orange County Superior Court, who presided in a bench trial in a lawsuit filed by the counties of Santa Clara, Los Angeles and Orange and the city of Oakland.

Tuesday’s decision by the Oklahoma Supreme Court, the state’s top appeals court, written by Associate Justice James Winchester, overturned a 2019 ruling by the judge in a bench trial in a suit brought by the state attorney general. That judge had found Johnson & Johnson responsible for $465 million.

Though the California and Oklahoma judges cited their own state statutes and cases, both opinions said that if public nuisance law were stretched to cover a legal product made by a manufacturer that then passed through numerous hands and had both healthy and dangerous effects, there would be no limit on the application of the law. The California ruling also said local governments needed to have drawn a much more taut line connecting the actions of the opioid manufacturers with overdoses and deaths.

Despite the gloominess of the results for hundreds of millions of families devastated by the continuing drug epidemic, the opioid litigation, into which has already been poured billions in legal costs and fees and more than seven years of effort nationwide, is a lumbering behemoth that has come too far to be stopped and yet still has far to go.

Significant mileposts have been reached.

Hundreds of millions of dollars have been agreed upon in settlements with counties in Ohio and New York, and with New York State and Oklahoma. Billions are on the table from the three distributors as well as Johnson & Johnson, with numerous states and local governments having already signed on. Many states have struck agreements for how to disburse the funds for the strict purposes of treating wounds created by the epidemic.

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According to federal data, the opioid crisis has claimed more than 500,000 lives, and the problem has only continued to swell during the pandemic.Credit…Keith Srakocic/Associated Press

The distributors have agreed in principle to put in place far tighter monitoring programs to catch and halt suspicious opioid orders.

Negotiations with Purdue Pharma, the company often portrayed as having set off the opioid crisis with its aggressive marketing of the highly addictive painkiller OxyContin, will not be affected by this month’s rulings. The company has been pursuing a national settlement with states and localities as part of a restructuring plan overseen by a federal bankruptcy judge. In 2019, Purdue, along with its owners, members of the Sackler family, who were not named in the lawsuit, settled with Oklahoma for $250 million. Other opioid manufacturers that have been sued are also moving through bankruptcy proceedings, settling claims.

In the meantime, federal trials spun out from an initial compilation of cases before a federal judge in Cleveland, who ruled that the public nuisance claims could proceed, are lining up.

The outcome of each trial could be affected by any number of factors, including the specifics of a state’s public nuisance statutes, the evidence a judge permits to be heard, the degree to which each company contributed to that locality’s harms, and whether the verdict is reached by a judge or jury.

And of course appeals, which will almost be inevitable, could further upend the results.

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