37 State AGs Object to Fee Structure in Opioid MDL

A group of 37 state attorneys general filed a motion objecting to a fee payment plan for private lawyers working in the national opioid litigation. U.S. District Judge Dan A. Polster is overseeing 2,725 lawsuits in MDL 2804, IN RE: National Prescription Opiate Litigation.

The payment plan submitted on January 28 by the Plaintiff’s Executive Committee proposes a “common benefit fund” to award attorney fees and litigation costs, with funding from the cities private lawyers represent, but also the sates – over which the court lacks jurisdiction.

The AGs said that the Plaintiff’s Committee plan to establish a common benefit fund “goes well beyond what is necessary to ensure fair compensation for private counsel. The proposed order violates state sovereignty, including by purporting to apply to some aspects of State Attorney General settlements and to other state court actions over which this Court lacks jurisdiction.
Their objection came in a letter and motion on February 24 to Judge Polster, whose court is in Cleveland.

The proposed plan “would require local governments to pay more in attorneys’ fees rather than simply reallocate fees among attorneys with cases in the MDL, as common benefit fees are typically intended to do.”

“Moreover, if entered, the proposed order will disrupt – perhaps irreparably so – the substantial progress that has been made to negotiate a large national settlement with several defendants.”
The settlement negotiations are produced no results. More than 20 state attorneys general on February 14 rejected an $18 billion settlement offer from three major drug wholesalers meant to end litigation against their role in the opioid crisis.

The states are seeking between $22 billion and $32 billion.
The distributors — McKesson Corp., AmerisourceBergen Corp., and Cardinal Health Inc. — had reportedly been discussing the settlement since October, and had offered to pay $18 billion over 18 years.

Head of negotiation class dies

In related news, the architect of the Opioid MDL “negotiation class” died on February 24. Francis McGovern, age 75, died from a fall at his home.

Under the negotiation class concept, attorneys for the class would try to reach nationwide settlements with individual drug companies. Any settlement would be put to a vote and require approval by 75% of voting governments by number, by population and by the allocation of settlement funds.

No replacement for McGovern has been named.

Seeking a fair common benefit fund

Nearly every state and more than 2,727 cities, tribes and municipalities have filed suits against opioid manufacturers, distributors, and pharmacies over their roles in the opioid epidemic.
The distributors – McKesson, AmerisourceBergen, and Cardinal Health — have so far paid hundreds of millions of dollars in settlements and fines for failing to monitor suspicious orders of opioids. In October, they reached a $215 million settlement in Ohio just an hour before a landmark trial was set to begin.

Every day, 128 people in the US die after overdosing on opioids. The misuse of prescription pain relievers, heroin, and synthetic opioids like fentanyl—is a national. The Centers for Disease Control and Prevention estimates that the total “economic burden” of prescription opioid misuse alone in the United States is $78.5 billion a year, including the costs of healthcare, lost productivity, addiction treatment, and criminal justice involvement.

The letter from the 37 AGs said the attorneys general were ready to find a “reasonable and equitable way” for everyone who devoted time and resources to the litigation to be “fairly compensated.”

But it must be “done in a way that is fair to all parties, does not risk disrupting a nationwide settlement, and does not divert vital resources from going to address the opioid crisis effectively,” the attorneys general added.

Paul T. Farrell Jr., Paul J. Hanly Jr. and Joe Rice — the co-leads of the plaintiffs’ executive committee — said in a joint statement that the concerns of the attorneys general stemmed from a “lack of understanding on how common benefit fees are paid.”

The letter was signed by the attorneys general of North Carolina, Alaska, Arkansas, Colorado, Idaho, Indiana, Kansas, Maine, Michigan, Mississippi, Nevada, New Jersey, New York, Oklahoma, Pennsylvania, Vermont, Wisconsin, Texas, Arizona, California, Hawaii, Illinois, Iowa, Louisiana, Maryland, Minnesota, Missouri, Nebraska, New Hampshire, New Mexico, North Dakota, Oregon, Tennessee, Virginia, the District of Columbia, Guam and the Northern Mariana Islands.

The second bellwether case in the MDL is set for October 2002. Cuyahoga and Summit counties from Ohio are next in line for their day in court.

The trial is tentatively set for October 7, 2020, to begin jury selection with opening statements beginning October 13, 2020.

Meanwhile, Ex-Insys CEO Michael Babich was sentenced to 30 months in prison in the Insys opioid fraud case.

Babich was accused of arranging bribes for doctors to prescribe more prescription opioid drugs.

Many of the opioid drugmaker defendants involved in the opioid multi-district litigation have sued doctors across Ohio claiming that physicians are the true culprits in the nation’s opioid crisis.

Major chains such as CVS, Walgreen CO., Walmart, Rite Aid, and others claim that opioid prescribers, aka physicians, bear the burden of responsibility for the opioid epidemic although the physicians are not set to defend themselves in trial this coming October against Summit and Cuyahoga counties.

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