All eyes are on the city of Huntington and Cabell County after a landmark trial, the first of its kind, started Monday in Charleston in a case the government filed against drug distributors they accuse of helping to fuel the drug epidemic.
The lawsuits, filed in March 2017, allege that AmerisourceBergen Drug Co., Cardinal Health Inc. and McKesson Corp. — dubbed the “Big Three” ahead of trial — hold some responsibility for the drug crisis after more than 80 million doses of opioid medication were sent to the area in an eight-year period.
The city and county are seeking damages and reimbursement for costs associated with past and future efforts to eliminate the hazard. They argue that the wholesalers failed to follow a duty under federal law to monitor, detect, investigate, refuse and report suspicious orders of prescription opiates in the county.
The civil trial is the first of its kind in a complex group that includes more than 2,000 plaintiffs with the same argument. Summit and Cuyahoga counties in Ohio settled for $215 million in 2019 on the eve of their trial against the same companies, but the rest of the cases were placed on hold because of the COVID-19 pandemic.
A similar fate was thought to be possible for the West Virginia lawsuits Sunday evening, but, with neither side backing down, the trial moved forward Monday at the Robert C. Byrd U.S. Courthouse in Charleston before Senior U.S. District Judge David Faber, who is the ultimate decider in the case.
Huntington Mayor Steve Williams, joined by attorney Charles “Rusty” Webb, said while leaving the courthouse he is excited to have questions answered and to finally have the city’s day in court.
“I’m just glad we are in the same room as the defendants and they have to answer our questions and, when they are answering, we are sitting right there,” he said. “Every citizen of Huntington is sitting in that room. Every citizen of Cabell County is sitting in that room, and it’s affecting every citizen of West Virginia.”
From 2006 to 2014, more than 1.1 billion prescription pain pills were supplied to West Virginia, with Cabell County receiving 81 million, about 7.4%. The amount of opioid pills saw a sharp decrease about a decade ago, making them harder to access and forcing users to turn to illegal drugs.
In his opening statement Monday, Cabell County attorney Paul Farrell Jr. said the companies had been reprimanded and fined millions of dollars by the U.S. Drug Enforcement Administration several times prior to 2012. They had made the promise of doing better but, at some point, Farrell said, switched to a defense that they had done nothing wrong and it was not their duty to report suspicious orders and control supply.
Bob Nicholas, AmerisourceBergen’s council, Cardinal Health attorney Enu Mainigi and Paul Schmidt for McKesson said while the opioid crisis has created devastating effects, they are not to blame.
The three said the reason opioid prescriptions increased is because doctors prescribed more, because research determined pain had been undertreated. Many West Virginians’ jobs require hard labor, and the state has an older population, which is why so many people from the state are in need of pain treatment, they said. Mainigi said the DEA increased its opioid quota every year from 1998 to 2013.
Mainigi said the pills dispensed in Cabell County weren’t an accurate representation of how many were in the county because people traveled in and out of it for appointments.
Mainigi said Cardinal Health’s case rests on two things: The standard-of-care changes caused more opioids to be dispensed, and the company did nothing to cause the change.
“It was not suspicious that Cardinal Health was getting more orders for opioids,” she said. “We are a mirror on what happened in health care. We reflect it. We don’t drive it.”
Nicholas said they followed the law to report suspicious orders to the DEA, but the regulator never followed up. The West Virginia Board of Pharmacy put their reports in a drawer and forgot about them, he said, and if the DEA suspects something is wrong at a pharmacy, they don’t hear about it.
“[The plaintiffs] are acting like reporting more would have stopped the crisis in their tracks, but that is not the case,” he said.
But Farrell pointed to a 1940s Supreme Court case in which the wholesaler went to the U.S. Supreme Court and raised a defense that their only job was to make sure the person they were selling to was registered to sell the drugs. The court shot down the notion and ruled against the wholesaler because it should have known the buyer was going to do something wrong with the drug and the company had a duty to report it, Farrell said.
Schmidt said the plaintiffs want to present it as if substance use disorder wouldn’t exist if opioids were not prescribed for smaller things but it’s more complicated than that.
Part of that depth includes the 1,100 opioid-related deaths and 7,000 overdoses that have occurred in Cabell County in the past decade. Attorney Anne McGinness Kearse, of Motley Rice LLC on behalf of the City of Huntington, said an estimated 8,000 people of its population of about 100,000 — about 8% — are suffering substance use disorder.
West Virginia was hardly on the map for opioid-related deaths in the late 1990s, but then oxy- and hydrocodone pill sales increased due to advertisement and education campaigns, Kearse said. Farrell swung an origami rocket back and forth during opening statements, comparing the crisis to a rocket taking off.
Huntington’s problem isn’t legally dispensed pills, it’s illegal drugs, Mainigi said. Its location and years of economic failure is what makes it an easy target for drug dealers.
As early as 2011, Huntington officials said the diversion of opioid pills from pharmacies was the biggest prevailing threat to the community.
Kearse said studies have shown three out of four West Virginians who have died of an overdose had sought treatment weeks before, but it was unavailable. She said the first step to deal with having a substance use disorder is to admit you have a problem, and that’s what Huntington did.
“It was no longer us against them, it was about us,” she said. “We had to approach it differently.”
Mainigi said a study the plaintiffs referenced said 80% of people who used heroin had previously used opioid pills, but it does not mean those pills were used legally. Only 3.6% of people who use the pills legally become addicted, she said.
Schmidt said his reference says three out of four people who abuse the drug take it from someone to whom the drugs were legally prescribed.
Farrell asked why the companies attempted to control the media while simultaneously referring to opioid abusers as pillbillies and calling the opioid crisis an “Oxy Spill.” He pointed to a “Crisis Playbook,” which features specific scenario examples and mentioned local journalists by name.
Attorneys have previously spoken about the possibility of an abatement plan, also known as a “Resiliency Plan,” created by doctors, health professionals and politicians in the area. It calls for a trust being created, the board of which would decide where the money should go.
The plan to fix the opioid epidemic is $2.6 billion. Nicholas said the plan for abatement is a “wish list” and generic.
West Virginia tax collection in April topped estimates by a fraction of a percent, a notable accomplishment, considering the deadline for filing state income taxes was pushed back from April 15 to May 17.
April’s general revenue collection of $539.76 million topped estimates by $1.89 million, even as the income tax filing delay caused personal income tax collection of $241 million to fall $81.19 million short of projections.
An upturn in consumer sales tax collection — fueled by $1,400 federal stimulus checks that went out to most West Virginians in March — helped make up some of the slack, with $126.08 million of sales tax collection topping estimates by $22.28 million.
Corporate net taxes also far exceeded estimates, with $63.34 million of collection exceeding estimates by $40.84 million.
Severance tax collection, which has underperformed in recent years as coal production and natural gas prices have waned, topped expectations in April, with $29.06 million of collection exceeding estimates by $14.16 million.
Tobacco tax collection also exceeded estimates for the month, by $3.8 million, at $16.1 million, benefiting from an increase in March sales likely driven by a proposal from Gov. Jim Justice to increase the state cigarette tax from $1.20 to $2.25 a pack.
With two months remaining in the 2020-21 budget year, year-to-date revenue collection of $4.00 billion put the state in the black by $237.31 million. However, part of that surplus is the result of lowering revenue projections from fiscal 2019-20 by $126.58 million, from $3.89 billion in 2019-20 to $3.76 billion for the current budget year.
A Clendenin man on Monday was convicted of all charges stemming from a February 2020 killing and subsequent crime spree.
A Kanawha Circuit Court jury found Joshua Andrew Drennen, 28, guilty of all eight charges, including the slaying of Barbara Steele, 77, of Charleston. Drennen killed Steele inside of her home in the 600 block of Georgia Street on Feb. 12, 2020.
The jury will now decide whether to recommend mercy for Drennen in sentencing. After deliberating for about an hour Monday afternoon, Kanawha Circuit Judge Jennifer Bailey ordered jurors to return at 9 a.m. Tuesday to continue their work.
Drennen’s attorney, John Sullivan, asked the jury to grant mercy to his client. During the week-long trial, the defense portrayed Drennen as a man suffering from mental illness, which resulted in the crimes he committed. Drennen faces life in prison with no chance of parole, if the jury does not recommend mercy.
The jury convicted Drennen on charges of murder, petit larceny, first-degree robbery, malicious wounding, assault during the commission of a felony, possession of a stolen vehicle, attempted first-degree robbery and malicious assault of a law enforcement officer.
After killing Steele, Drennen carjacked and attacked a woman near Walgreens on Charleston’s West Side. He then tried to carjack a man at the Exxon/One Stop gas station at Lee Street West and Tennessee Avenue. The man pulled a gun on Drennen, forcing him to run toward Bigley Avenue.
Charleston Police Officer Terrence “Austin” Casto confronted Drennen on Bigley Avenue in front of the Go-Mart. As soon as Casto exited his vehicle, Drennen struck him multiple times in the head with an antique iron.
After being knocked to the ground, Casto fired his service weapon at Drennen, striking him twice. Both were taken to an area hospital, and Casto was released shortly after. Footage from Casto’s bodycam was shown to jurors during trial.
Gov. Jim Justice has signed into law bills designed to help the coal, oil and gas industries while letting a solar-friendly bill become law without his signature.
Justice on Wednesday signed into law Senate Bill 542, which requires coal-fired power plants owned by public electric utilities to keep at least 30 days of coal supply under contract for the lifespan of those plants. The bill requires public electric utilities to give notice to the West Virginia Office of Homeland Security and Emergency Management, the state Public Service Commission and the Legislature’s Joint Committee on Government and Finance before announcing the retirement or proposed shutdown of an electricity-generating unit.
SB 542, which passed through the Legislature with support from the West Virginia Coal Association and the United Mine Workers union, is a gutted version of the original bill that would have made further-reaching reforms to keep West Virginia’s dwindling fleet of coal plants operating as long as possible. Those reforms included requiring in-state power producers to maintain 2019 coal consumption levels and file compliance plans every three years with the long-dormant state Public Energy Authority specifying their fuel supply and how 2019 coal consumption levels would be maintained.
The original version of the bill required a 90-day supply, but the required supply was shortened to come closer to what representatives from Appalachian Power, FirstEnergy and Dominion Energy previously told the Senate Energy, Industry and Mining Committee they currently keep under contract.
Justice also signed into law Senate Bill 718, which makes changes to the state’s coal severance tax rebate program approved in 2019 designed to encourage economic development in the coal industry.
SB 718 expands the base period for coal severance tax rebate calculation. It institutes a base period consisting of the five previous years for calculating rebates. The current base period is either tax year 2018 or the second year of a two-year period for an eligible rebate recipient who produced coal for only two years before investing in new machinery and equipment.
The 2019 law provided for tax rebate opportunities for coal companies that made a qualifying capital investment demonstrated by buying new equipment, real property and reporting an increase in employees.
SB 718 requires that there be an increase in coal production and the number of full-time employees across all the taxpayer’s mines in order to qualify for the tax rebate. It also expands rebate eligibility to investments in repairing and refurbishing coal equipment. The previous legislation allowed for rebates only for investments in new equipment.
Senate Finance Committee counsel noted at the committee meeting from which the bill originated in March that the legislation came at the request of the Governor’s Office, after several months of negotiations with industry representatives.
Also becoming law at the stroke of Justice’s pen was House Bill 2581. HB 2581 changes the methodology for valuing producing oil and natural gas wells, allowing the state Tax Department limited latitude to propose rules for approval by a legislative rule-making committee.
The new law directs the Tax Department to propose emergency rules by July 1 on valuation of properties producing oil, natural gas and or natural gas liquids. It does this while providing for a tax on net profit by defining net proceeds for oil and natural gas as actual gross receipts based on sales volume minus royalties and operating costs for expenses, including lease-operating, lifting, compression, processing and transportation.
The Senate Judiciary Committee had removed that methodology from the bill, but the full Senate restored it.
Some House and Senate members had voiced concern about a Tax Department estimate of the original bill that county school boards and commissions would absorb a loss of $9 million in property tax revenue during the first full year of effect. An impetus for the bill was a 2019 West Virginia Supreme Court ruling in which the court held, in part, that the Tax Department improperly imposed a cap on gas well operating expense deductions.
Becoming law without Justice’s signature was legislation to encourage retail-customer investment in solar energy by exempting solar power purchase agreements from the Public Service Commission’s jurisdiction. House Bill 3310 specifies that solar energy facilities located on and designed to meet only the electrical needs of the premises of a retail electric customer do not constitute a public service, nor is the output subject to a power purchase agreement with the retail electric customer.
Under a power purchase agreement, a developer arranges designing, permitting, financing and installing a solar energy system on a customer’s property at little or no cost. The customer buys the system’s electric output from the solar services provider for a predetermined period at a fixed rate, usually lower than the local utility’s retail rate, while the solar services provider gains tax credits and income from electricity sales.
The bill’s exemption of power purchase agreements from Public Service Commission jurisdiction would be conditional. One condition would be that the aggregate of all power purchase agreements and net metering arrangements for any utility not exceed a cap of 3% of the utility’s aggregate customer peak demand in the state during the previous year.
That cap already exists for net metering, a billing mechanism that credits customers who generate their own electricity from solar power for returning the electricity they don’t use back into the grid.
Another condition sets individual customer onsite generator limits so that solar energy facilities meet only the electrical needs of the retail electric customer’s premises, not to exceed 25 kilowatts for residential customers, 500 kilowatts for commercial customers and 2,000 kilowatts for industrial customers.
The bill has no tax credit provisions and does not provide any state subsidies.
Justice also signed into law a bill to create a cost savings program to reduce energy usage in state government buildings. House Bill 2667 aims to reduce energy usage in all state buildings by 25% below 2018 levels by 2030.
The bill also requires annual reports to the Legislature on building energy performance compared to similar buildings in similar climates. Under the bill, the West Virginia Office of Energy is slated to audit at least 20% of energy-metering devices at state buildings each year so that all devices are audited by the end of 2026.
The legislation directs the state to establish a program for measuring and benchmarking the energy efficiency of all state buildings by July 1. The bill also requires the government to compile and submit energy-usage data for all state buildings to a U.S. Environmental Protection Agency-operated benchmarking tool by Oct. 1 and again each subsequent year.
Energy benchmarking refers to measuring a building’s energy use and comparing it to the energy use of similar buildings.
The net benefit to the state from the bill would be a 9-to-1 return on investment, according to a West Virginia Department of Commerce estimate projecting a five-year project cost of $300,000.