PLEASE NOTE!

The below answers were drafted in 2019. This means that much of it may fairly be considered outdated. Please read at your own caution and consider referring to the brand-new, 2023 set of FAQs here.

THE OPIOID LITIGATION’S ORIGINS

What is the opioid litigation? →

Why are localities and tribal sovereign nations also suing opioid corporations, in addition to states? →

Are tribal opioid cases being treated fairly? →

THE OPIOID CRISIS’ ORIGINS

Is big pharma really to blame? Why are governments litigating their way through a public health crisis at all? →

What were some of the key FDA failures leading up to the opioid crisis? →

What were some of the key DEA failures leading up to the opioid crisis? →

(PRE-2021) GLOBAL SETTLEMENT FEARS

What is a global settlement, and why is it so hard to achieve? →

Is there anything preventing states from spending their opioid settlement funds as poorly as they spent their big tobacco settlement funds from the 90s? →

Please note: The deadline to file a claim in Purdue Pharma’s bankruptcy proceedings has passed (July 30, 2020). For Purdue-related inquiries, please call (844) 217-0912.

When you hear about opioid lawsuits, settlements, or judgments in the news, they likely pertain to one of these four main categories of legal happenings:

1. Civil lawsuits by local governments (city, county) and tribal sovereign nations against pharmaceutical opioid manufacturers, distributors, and retailers (the “MDL”).

Over 3,000 of these cases by plaintiff cities, counties, and tribal sovereign nations against dozens of “big pharma” opioid defendants are lassoed together in the opioid multi-district litigation (MDL): MDL 2804, In Re: National Prescription Opiate Litigation. MDLs are an alternative to class action used to procedurally streamline cases with similar questions of facts before trial. Though many cases brought by local governments or tribal sovereign nations exist outside of the MDL, the MDL contains the bulk of them.

2. Civil lawsuits by states’ attorneys general (AGs) against pharmaceutical opioid manufacturers, distributors, and retailers.

Here, plaintiffs are U.S. states. Each state’s case is spearheaded by its AG, who files in the state court system and uses, among other things, the state’s special status in the Constitution as a “sovereign entity” to sue opioid corporations for violations against the health and well-being of its residents. (For more on parens patriae lawsuits, please see “Is there anything preventing states from spending their opioid settlement funds as poorly as they misspent their big tobacco settlement funds from the 90s?”)

There is no single judge at the helm of all these state actions. But Judge Polster has actively encouraged collaboration between state AGs and localities to facilitate global settlement negotiations.

These cases exist in the federal court system. Updates regarding both companies can be found on the Global Settlement Tracker page here.

4. Civil enforcement actions and criminal prosecutions of opioid-related defendants.

These cases are brought by attorneys for state and federal governments. Defendants range from opioid corporations to individual doctors and “pill mills.” 

You might be wondering why so many different levels of government are suing opioid corporations at the same time.

Judge Polster thinks localities and tribal sovereign nations are suing alongside their containing state’s AGs because of “the legacy of the tobacco settlement, when most of the $200 billion that was paid by tobacco manufacturers did not go toward reducing smoking and treating lung cancer” and was used instead for “other state purposes.” 

Much has been written about the lessons we ought to learn from our big tobacco Master Settlement Agreement (MSA). One lesson governments are taking to heart, based on the intensity of their bickering about it, is that how settlement winnings are spent depends quite a bit upon which level of government controls its pursestrings. 

Big tobacco settlement administration retrospectives reveal that states have been spending just 2.7% of the MSA proceeds they receive each year on their originally intended causes (e.g., smoking treatment and prevention). “[N]o states are spending even the recommended minimum allocation for tobacco control proposed by the Centers for Disease Control and Prevention.” And very, very few cities and counties receive any of that $246 billion from big tobacco, “despite the fact that cities, counties, and other local units of government (who run hospitals, ambulances, and outreach services) incurred significant financial losses as a result of tobacco’s adverse health consequences.” In fact, states are able to allocate the majority of their MSA proceeds to expenses “counter-productive to tobacco control,” like the $41 million North Carolina used to support the economic development of tobacco farmers. 

As a result, we know that “it is simply untrue that states generously pass along to cities the resources earned from plaintiff’s-side litigation.” So, localities file suit in this crisis because officials at every level of government, and not just state AGs, “want[] to make sure that whatever deal is struck gets the money to where they want it to go.” 

Local governments, the comparative runts of the government litter, began suing pharmaceutical opioid corporations in 2014, before state AGs began filing their opioid suits. But certain state AGs have been lionizing their elevated, Constitutional statuses as sovereign entities to argue “that they are better positioned to strike large settlements with drug companies” in order to bolster their entitlement to direct receipt of funds. To them, the localities involved in the federal MDL “advance claims that belong to the State in an effort to commandeer moneys that rightfully should be distributed across the state” — presumably by the states and states alone.

There’s an inherent sense of hierarchical messiness to state and local opioid lawsuits proceeding in tandem. The obsessive-compulsive among us might imagine the field of government plaintiffs as a table littered with disassembled Matryoshka dolls, with localities — otherwise nested Babushkas — rejecting the coverture of their containing states. (A discussion of opioid suits filed by federally recognized Native American tribes, sovereign entities who shouldn’t have been included in the MDL at all, is so saucy that it deserves its own article.)  

But justice would entitle localities to have their say in the opioid litigation. Because “West Virginia Uses OxyContin Settlement Money to Build Gym” isn’t a fictional, futuristic headline from the Onion, but a real one from 2012.

A desire to blame opioid manufacturers, distributors, and retailers for our opioid crisis drives much of the dragnet of its associated civil litigation — both in the Judge Polster-led multi-district litigation (“MDL”) in federal court, where plaintiffs are city, county, and tribal governments; and in state attorneys general (AG)-led suits in state courts, where plaintiffs are states. 

According to those government plaintiffs, “big pharma” aggressively oversupplied a despairing America with 100 billion pain pills chemically engineered to mimic the highs and lows of recreational heroin use, generated black market demand for illicit opioids, and ultimately “caused” 400,000 Americans to perish from opioid overdoses. To them, corporate opioid manufacturers, distributors, and retailers ought to be held accountable for vitiating their contract with society at large to maintain the careful, détente-like balance between the pursuit of healthcare profits and upholding the public’s health.

Government officials hound on opioid corporations’ “moral, if not legal obligation” to abate the costs of our crisis. Should it mean anything, though, that these companies owe their fiduciary duties not to us, but to their shareholders?

We snack on our fantasies of disgorging billions from opioid manufacturers, distributors, and retailers, partly because our karmic sense of balance entails that they deserve it. But we also do it to stave off the devastating fictionality of recompense and legal wholeness when people are losing loved ones rather than property. What would make a mother — grieving a son deceased to his opioid use disorder, a condition enabled by the capitalistic gluttony of an industry that prefers profit over the public’s health — whole? 

And what would recompense a nation left to sue corporations to abate a crisis exacerbated by the failures of their federal regulators? Observing capitalism wreak havoc on the health and wellbeing of everyday Americans — and the FDA and DEA bow to the wishes of the pharmaceutical lobby — feels disturbingly like watching ethical coastlines disappear. And to fully acknowledge this dystopia forces us to accept that the extraction of hefty settlements via litigation may be one of the few tools we have left to arraign wayward industries entirely incentivized to hijack both their regulators and legislators as their common business practice. In a society inured over decades to “accept[ its] multiparty health system with a significant profit motive,” massive civil settlements, according to Yale law professor Abbe Gluck, may be “the only way to get relief in anyone’s lifetime. [They’re] just more practical.” 

We take to strong stances about retribution in this crisis because the instinct to blame somebody for this crisis is strong. It’s easier to hate corporations for their capitalistic offenses than to confront our disappointment at the federal government’s devastating failures of defense.

But what we risk by focusing our blame on big pharma and writing off the desire for governmental accountability as folly is a candid discussion of the contextual failures that allowed this crisis to occur.

Below is a year-by-year breakdown of the specific decisions illustrating the corporate opioid industry’s slow, creeping capture of its regulators. The horizontal axis chronicles the years of our crisis, while the vertical axis charts annual overdose deaths involving opioids:

Each of the decisions above might be explained away as mere symptoms of an industry destined for problems from the beginning. Healthcare is “‘big business’” in the States, “with many professionals, organizations, health systems, insurers, and product and service suppliers” accustomed to “significant profits.” And the federal government agrees: the Federal Trade Commission (FTC) and the Department of Justice (DOJ) go as far to say that competition in the industry is “ruthless” and creates “cognitive dissonance” for those “who prefer to focus on the necessity for trust and the importance of compassion in the delivery of health care services” — a statement that prompts the rest of us to question what the “care” in “healthcare” could possibly mean otherwise.  

The opioid crisis is a cataclysmically devastating crash of myriad factors, some of which are certainly the creation of private industry alone. But as cash-strapped jurisdictions sue opioid companies for exacerbating our demand for a drug they were happy to oversupply, and as the litigatory posturing of plaintiffs in our opioid litigation verges on policy theater, where opposing settlement expresses that one is, according to one plaintiffs’ attorney and former DEA enforcer, “hard on white collar crime,” let us not forget those united federal agency failures — the FDA’s and DEA’s in particular — that allowed our epidemic to occur.

Former FDA commissioner David Kessler states that when OxyContin was initially approved for short-term use, the agency’s approval processes lacked “[t]he rigorous kind of scientific evidence that the agency should be relying on,” and that there still, as of today, exist “no studies on the safety or efficacy of opioid for long-term use.” Whether the FDA’s approval processes account for the likelihood of addiction at all is “unclear,” as evidenced by its initial failure to “identify … significant addictive risks and associated sequelae” prior to OxyContin’s release into the market.

What is very clear, however, is that “[a]t the time that OxyContin was first marketed, there were no industry or federal guidelines for the promotion of prescription drugs.” This is in spite of the fact that opioid drug marketing is known to be so “significantly associated” with opioid overdose mortality that it runs directly “counter [to] … national efforts to reduce the number of opioids prescribed.” Drug manufacturers consider a drug’s label to be its “single most important document,” as its language determines “whether somebody can make $10 million or a billion dollars” from it. So, when the FDA approved OxyContin’s revised, 2001 label for “around-the-clock” pain relief — with zero new science but with heavy pressure from pharma — it was, as Dr. Kessler put it, a veritable “marketing tsunami” for opioid manufacturers, and certain death to swaths of a nation craving analgesic relief.

With this “blank check” to “push opioids to tens of millions of new pain patients nationwide,” opioid makers “cashed in for billions and billions of dollars.” And this regulatory gap-exploiting genius was enabled in part by the corporate mercenaries who jumped between government and industry positions with ease. “[N]ews stories have documented how FDA employees who worked on opioid regulation accepted high-paying jobs with Purdue,” and “[t]he two medical officers who originally approved Oxycontin, Curtis Wright and Douglas Kramer,” actually “went to work for the opioid maker … not long after leaving the FDA.” But the practice extends beyond the reach of on particular company, as a “large number of key FDA regulators who went through the revolving door to jobs with drug manufacturers” — a practice that, while “suspicious,” remains legal.

Also legal under FDA regulations at the time were the more dubious marketing attempts made by the more philandering opioid manufacturers. Former employees of Insys, makers of “powerful fentanyl spray” Subsys, testified to the “habit of hiring attractive women as representatives to boost [drug] sales.” One of the women hired under this model “once gave a lap dance at a Chicago nightclub to a doctor Insys was pushing to write more prescriptions,” while other reps were shown motivational “rap video[s]” of “employees danc[ing] and rapp[ing] around a person dressed as a giant bottle of the fentanyl spray.”

The lethal dose of fentanyl remains, as ever, the size of four grains of salt.

When the opioid crisis began, the DEA was required to consider only “certain factors” when setting opioid production limits, like “past sales and estimated demand.” The 2018 Opioid Quota Reform Act eventually required the agency to consider “the impact of such opioid production on diversion, abuse rates, or overdose deaths,” but not before the DEA permitted 100 billion opioid pain pills to saturate the country from 2006 to 2014, a period in which “more than 130,000 Americans died from prescription opioids.”

The DEA did go after specific opioid distributors shipping suspicious orders, only to have them flout and re-flout warnings. McKesson repeatedly ignored enforcement efforts between their $13.2 million settlement 2008 to their $150 million settlement with the Justice Department in 2017 — the latter of which was considered a win by the DEA attorneys who negotiated it, but a failure by the DEA investigators who pushed for a $1 billion fine and criminal charges after building the case for years. A $150 million fine is merely “$50 million more than the compensation last year for McKesson board chairman and chief executive John H. Hammergren, the nation’s third-highest-paid chief executive.” Which makes the thrice-flouted warnings of another pharma company, Cardinal Health — whose $34 million in 2008 penalty was quickly followed up by another DEA settlement in 2012, and a $44 million penalty in 2016 — entirely unsurprising.

Unsurprising also are the revolving door-related problems that plague the DEA, which work to strengthen pharma’s regulatory and legislative capture. (“If you want to understand how we were doing our investigations,” says Joseph T. Rannazzisi, the DEA’s former head of diversion, “the best way to do it is to take our people who are doing the investigations and put them in place in your company.”) As the crisis progressed, and as “pharma spent hundreds of millions lobbying Congress,” over fifty DEA and DOJ officials were poached by opioid corporations and the law firms that defend them. The “crowning achievement” of these efforts occurred “in April 2016, at the height of the deadliest drug epidemic in U.S. history,” when “Congress effectively stripped the Drug Enforcement Administration of its most potent weapon against large drug companies suspected of spilling prescription narcotics onto the nation’s streets.”

According to Rannazzisi, for opioid companies “to get Congress to pass a bill to protect their interests in the height of an opioid epidemic” illustrates “just … how much influence they have.”

Depending on the way you look at it, there are two “types” of global opioid settlement offers: those from companies still in business and actively defending opioid cases, and those in bankruptcy, like Purdue. This answer only discusses the former, but my Global Settlement Tracker page provides updates on both categories.

A global settlement is a legal settlement offer that’d (ideally) resolve all of the opioid litigation — by all three types of government plaintiffs (state, local, tribal sovereigns) against all three types of opioid defendants (manufacturers, distributors, and retailers). Judge Polster, the federal judge at the helm of the opioid multi-district litigation containing all local and tribal sovereign suits, is open about the fact that reaching one is his goal with the MDL.

But a global settlement offer in the style of that big tobacco Master Settlement Agreement (MSA) of the nineties has not yet been reached. The current offer on the table requires participating states to convince their political subdivisions (cities and counties) to surrender their own opioid cases and assent to the deal as well in order for the deal to go through.

In litigation speak, this type of intra-plaintiff bullying is called a “cramdown.” Local governments, the comparative runts of the government litter, began suing opioid corporations in 2014, before state AGs began filing their opioid suits. They spent millions on the litigation before state AGs got into the opioid litigation mix, but certain states’ AGs lionize their elevated, Constitutional statuses as sovereign entities to argue “that they are better positioned to strike large settlements with drug companies” in order to bolster their entitlement to direct receipt of funds. To them, the localities involved in the federal MDL “advance claims that belong to the State in an effort to commandeer moneys that rightfully should be distributed across the state” — presumably by the states and states alone. 

The road to spending hell is lined with tempting conflicts of interest even for the most pious of sovereign consciences. 

I once asked a settlement administration attorney if there was anything actually preventing state AGs from misappropriating opioid settlement funds as they did their big tobacco monies. I will never forget his response:  

“Settlement terms are only binding on the conscience of the sovereign.” 

The reference to sovereignty here is legally deliberate, not merely poetic. Sovereignty is what affords states the ability to sue using parens patriae standing, which is as paternalistic as your rusty Latin makes it sound. It’s the right to sue that allowed states to go after big tobacco in the nineties, and allows them to sue pharmaceutical opioid manufacturers, distributors, and retailers today, to recover against corporate defendants for harm inflicted to their “quasi-sovereign interest” in the health and well-being of their “residents in general.”

Federal, state, and tribal governments are constitutionally recognized sovereign entities. This special designation in our American system of government allows federal and state governments to function, at least conceptually speaking, as co-equals. (The respect for tribal sovereignty is an entirely different story.)

Cities and counties — “unlike states — are not formal ‘sovereigns,’” and “[f]ederal courts have consistently held that cities may not sue as parens patriae.” It matters not that localities are also suing to protect the health and well-being of their residents as states are, or “assert nearly identical claims” to those of states. It also doesn’t matter whether localities “bear the brunt of the damage related to a national, hot-button topic,” as they often do during public health crises. As mere “political subdivisions” of the state, cities and counties “have to tough it out like ordinary plaintiffs” to establish federal standing the old-fashioned (Lujan) way. And their “inability to sue as parens patriae makes it difficult … to bring a straightforward public-interest suit based on a harm that has been visited on [their] residents.” For if cities and counties can’t pigeonhole their lawsuits into a legal fiction — “namely, that the harm being inflicted on citizens is injuring the city as a body corporate” — they must “forego a lawsuit entirely.”

This sovereignty-based distinction between states’ and local governments’ rights to sue in this opioid litigation is the exact type of thing that seems too academic to matter until it isn’t. Because here, it’s precisely what allows the law to assume that states’ reasons for seeking abatement funds will also guide the intent of their legislatures as they decide how to spend it.

As we know from big tobacco, though, there’s a strong chance that executives’ and legislatures’ priorities will diverge. States continue to receive and misspend their annually distributed proceeds from the $246 billion big tobacco Master Settlement Agreement (MSA), which omitted express terms requiring the money to be spent on public health-related causes. But even if it hadn’t, the terms alone couldn’t have commandeered the individual states to spend settlement funds a particular way. A state’s executive branch — via its AG — may recover funds, but appropriations “are almost always made by a … legislature.”

It is this inter-branch punt that makes “subsequent funding allocations for public health initiatives … difficult to implement, both politically and procedurally,” as the power to gatekeep settlement monies is central to a legislature’s own sense of sovereign power. Case in point: the $572 million opioid crisis-related judgement Oklahoma’s AG won against Johnson & Johnson last year, which was later reduced to $465 million due to a judicial “math error.” With big tobacco’s failures in mind, the court issued a plan that “set forth specific allocation” of the resources that’d earmark roughly $200 million to create the National Center for Addiction Studies and Treatment at Oklahoma State University. The Oklahoma state legislature responded by “quickly pass[ing] a unanimous bill reasserting its appropriations jurisdiction over attorney general settlements,” requiring future settlements to be deposited into the state treasury. An Oklahoma state judge called for mediation between the various state leaders. Though the meeting resulted in a deal that’d funnel settlement winnings into an “opioid lawsuit settlement fund” that “shall only be for the abatement of the nuisance related to the opioid crisis,” the state legislature retained its power to make “specific appropriations” — a tug-of-war that aptly illustrates the schism that occurs when a sovereign state procures a settlement in its executive capacity while lacking the political will in its legislature to ensure that it’s spent on the very interests it aims to vindicate.

Thus, the sovereignty-based considerations supplying parens patriae standing rights to states at the recovery stage ought not also force us to assume that states’ sovereign consciences are also good at the appropriations stage. Insofar as parens patriae standing doctrine encourages us to conflate our faith in a sovereign’s deservedness of settlement money with our state legislature’s ability to spend it well, the doctrine upholds a system that allows states to spend opioid settlement funds in violation of both the letter and spirit of their enabling agreements, provided that their legislatures’ political priorities allow for it. Most importantly: it also fails to do any favors for those on the ground.

States’ parens patriae suits, unlike class actions (their “procedural sibling”), are not required to obey the Federal Rules of Civil Procedure, which allows them to “evade virtually all of the class action hurdles … erected by Congress and the Supreme Court.” Chief among these hurdles for our purposes is something called Rule 23(a), which requires representatives in class actions to “fairly and adequately protect the interests of the class,” and courts to “assiduously inspect class action counsel.”

Judges do “sh[y] away from questioning the adequacy” of parens patriae representation by state AGs, likely because the “public quality” of most parens patriae suits works to relax their otherwise ever-present concerns about representative fidelity. The doctrine’s historical, sovereignty-based origins do have the effect of imbuing state AGs with “somewhat of a façade of constitutional adequacy,” while state AGs’ “responsibility to the public interest,” plus the “absence of a contingency fee arrangement,” together suggest that they are “less likely than private lawyers to have incentives that substantially diverge from the class they purport to represent.”

This halo effect can be a useful thing. Parens patriae standing doctrine is, after all, a type of procedural privilege that empowers states to “win recoveries through parens patriae that individual citizens often could not win on their own,” provided that those individual harms become “widespread enough to implicate the state’s interest in the welfare of its citizens.” The doctrine is what helped states circumvent big tobacco’s and big pharma’s defenses against individual lawsuits — that each smoker, prescription drug user, or intermediary was aware of the risks of use — and demand recompense from an industry too rich to be disincentivized by individual lawsuits. And the big tobacco MSA — the product of 46 separate parens patriae actions against an industry powerful enough to flout federal and state laws — can thus accurately be described as “one of the most successful uses of the civil judicial system to right a wrong that wasn’t being addressed in the congressional process.”

But parens patriae doctrine also “has maximum force where the individual harms may otherwise go unredressed” by Congress, which results in uses “parasitic on the interests of individual citizens’” under the guise of the “common good.” And these parasitically derived monies do have the tendency to create “interesting, unintended consequence[s].” The MSA’s 25-year terms naturally conditioned proceeds “on the continuing economic health of the cigarette makers” and their cigarette sales. By installing itself into state budgets as a predictable source of income for the next quarter century, the MSA “align[ed] the economic interests of the states with the economic interests of the tobacco companies.” So when Philip Morris lost a class action suit in Illinois, the judge ordered it to post a $12 billion bond. The company balked, stating it’d be driven into bankruptcy if made to pay the full amount. Officials from 33 states submitted an amicus brief asking the Illinois judge to reduce the bond. And the bond was halved — a decision “cheered by states awaiting their share of Philip Morris’s $2.6 billion payment.” 

Make no mistake: opioid manufacturers in particular view the “[l]arge,” “unmet need[s]” of the “vulnerable, underserved and stigmatized patient population suffering from substance abuse, dependence[,] and addiction” as an “attractive market,” one where its overdose reversal drugs may function as a “complementary” product and “strategic fit” to prescription opioids on the market today. Purdue has “long considered” becoming a public trust, and has pondered “whether it might make money treating addiction” since 2014. The Democratic and Republican Attorneys General Associations both received hundreds of thousands of dollars from opioid companies as recently as 2019. Given that parens patriae doctrine explicitly prevents states from using it to sue in a “proprietary capacity,” at what point will the state’s litigatory capitalization of harm — via their reallegation of individuals’ harms as their own — render the sovereign’s conscience bad?

The battle over how to spend global settlement winnings has already begun, and whether abatement actually occurs on the ground will depend both on the political integrity of state legislatures and the ability of local and state executives to recognize a bad deal when they see it.

The power to prevent our spending nightmares from reoccurring exists squarely in our willingness to recognize the forces that wish for, and benefit from, us reliving them again. So as the costs of this crisis and its litigation propagandize speedy settlement, pay close attention to the governments who fall prey to the allure of ill-considered settlement offers, like those that condition settlement money on continued sales.