In the most substantial ruling to come out of the litigation over opioids, a federal judge in Ohio has allowed most of the claims to go forward against the manufacturers, distributors and retailers of the prescription painkillers over what he called “a man-made plague.”
U.S. District Judge Dan Polster, in Cleveland, adopted most of a magistrate judge’s Oct. 5 report and recommendation. He upheld claims brought under the Racketeer Influenced and Corrupt Organizations Act, but parted with U.S. Magistrate Judge David Ruiz on the only part of his report that sided with defendants — common-law public nuisance — in allowing those claims to go forward.
“It is accurate to describe the opioid epidemic as a man-made plague, 20 years in the making,” he wrote Wednesday in an order. “Plaintiffs have made very serious accusations, alleging that each of the defendant manufacturers, distributors and pharmacies bear part of the responsibility for this plague because of their action and inaction in manufacturing and distributing prescription opioids. Plaintiffs allege that defendants have contributed to the addiction of millions of Americans to these prescription opioids and to the foreseeable result that many of those addicted would turn to street drugs. While these allegations do not fit neatly into the legal theories chosen by plaintiffs, they fit nevertheless.”
The ruling sends “a strong message about the future of the litigation” and a “major step forward” for the more than 1,500 cities, counties, states and other entities with lawsuits in the multidistrict litigation, said the co-lead plaintiffs attorneys Paul Farrell of Greene, Ketchum, Farrell, Bailey & Tweel in Huntington, West Virginia; Paul Hanly of Simmons Hanly Conroy in New York; and Joseph Rice of Motley Rice in Mount Pleasant, South Carolina.
“This is among the largest and most complex civil litigation in U.S. history, and it’s moving at an historic rate,” they wrote. “In 2019, we expect opioid manufacturers, distributors and pharmacies will finally be held accountable for the public crisis they wrought when they fraudulently marketed and over-distributed addictive and dangerous opioids.”
Janssen Pharmaceuticals, a unit of New Jersey-based Johnson & Johnson, said in a statement: “We will continue to defend ourselves in this litigation. Our actions in the marketing and promotion of these medicines were appropriate and responsible. The labels for our prescription opioid pain medicines provide information about their risks and benefits, and the allegations made against our company are baseless and unsubstantiated.”
John Parker, a spokesman for the Healthcare Distribution Alliance, which has spoken for the distributor defendants, declined to comment.
Lawyers and representatives for the other defendants did not respond to requests for comment.
Polster’s order came in a set of bellwether cases brought by the cities of Akron and Cleveland, and two Ohio counties. Defendants have pending motions to dismiss in several other bellwether lawsuits, including those by various cities and counties in Illinois, Florida, Michigan and West Virginia, as well as the state of Alabama. Native American tribes and hospitals also face motions to dismiss consolidated complaints.
In his 103-page report, Ruiz, the magistrate judge, had found that the case was not “a fishing expedition” and that the defendants, in their dismissal motions, demanded an “untenable level of specificity.” Defendants objected, calling the report a “boundless expansion of tort doctrine” that “kicks the can down the road.”
But Polster’s order mirrored Ruiz’s conclusions in refusing to dismiss the RICO claims. Defendants had insisted that those claims were derivative of the personal injuries of addicts and, therefore, not “business or property.” They also argued that the plaintiffs lacked standing, citing a 2003 ruling by the U.S. Court of Appeals for the Sixth Circuit called Perry v. American Tobacco, which held that several insurance plan subscribers suing tobacco companies for increased premiums weren’t directly injured.
But Polster found that the costs in Perry were “passed on,” while the plaintiffs in the opioid case had economic injuries that were the “direct result of defendants’ creation of an illicit opioid market within their communities,” such as health care and law enforcement expenditures and lost tax revenue.
“Here, plaintiffs’ alleged damages are not speculative, but concrete and ascertainable,” he wrote. “In this case, the scope and magnitude of the opioid crisis — the illicit drug market and attendant human suffering — allegedly created by defendants have forced plaintiffs to go far beyond what a governmental entity might ordinarily be expected to pay to enforce the laws or promote the general welfare. Plaintiffs have been forced to expend vast sums of money far exceeding their budgets to attempt to combat the opioid epidemic.”
He also refused to dismiss claims for negligence, civil conspiracy, unjust enrichment and fraudulent concealment.
In his report, Ruiz had concluded that the Ohio Product Liability Act superseded common-law public nuisance claims, which he dismissed, but not statutory public nuisance and negligence claims. That portion of his report prompted an objection from the plaintiffs attorneys.
Polster disagreed with Ruiz on that point, allowing both public nuisance claims to go forward.
In addition to Janssen, the manufacturing defendants included Connecticut’s Purdue Pharma; Arizona’s Insys Therapeutics; Noramco, based in Delaware; Endo Pharmaceuticals and Allergan, both based in Ireland; Teva Pharmaceutical Industries, in Israel; and Mallinckrodt, in the U.K.
The distributors were California-based McKesson Corp.; AmerisourceBergen Corp. in Pennsylvania; and Cardinal Health in Ohio. And the retailers were CVS, Walgreen Co., Walmart Inc. and Rite Aid.