HUNTINGTON — Local attorneys and officials were in agreement that an $18 billion universal settlement with drug firms accused of fueling the national drug epidemic was not enough, an attorney at the helm of about 2,000 lawsuits filed nationally said Saturday.
Plaintiff attorneys, including Huntington-based attorney Paul Farrell Jr., state attorneys general and representatives from the “Big Three” drug distribution companies — AmerisourceBergen, McKesson and Cardinal Health — met Friday for one last attempt at reaching a global settlement before the first trial in the opioid lawsuits starts in Cleveland on Monday, Oct. 21, but were unsuccessful.
In turning down the proposed settlement, Cabell County and the city of Huntington — which are slated to be the second opioid trial — will now begin evidence exchange with the drug firms as they await a trial date to be set.
The offer had been for an $18 billion universal settlement to be paid over an 18-year period to settle about 2,000 lawsuits. The allocation for West Virginia would amount to about $8.9 million per year.
Of the $8.9 million received by the state yearly, 15 percent would go to attorneys general and counties each, with the remaining 70 percent going into a recovery fund. That breaks down to about $6.2 million for the recovery fund and $1.3 million each for the attorney general and county funds, amounting to about $130,000 yearly for Cabell County.
However, due to past settlements by the West Virginia Attorney General’s Office, defendants are arguing that West Virginia should not receive funds for the recovery and attorney general funds, leaving the state receiving just $1.3 million to split among the counties.
Although Cabell County and Huntington were two of the hardest-hit areas for the opioid epidemic, the proposed settlement was population-based, not based on how much an area had been affected.
Many other factors came into play for the parties declining the settlement, Farrell said, such as attorneys general only getting paid the full amount after the first year if they are able to get counties and cities to release their claims in the opioid lawsuits. Their share would diminish over time if they don’t.
Farrell called it a “carrot and the stick settlement,” with the carrot being the $18 billion and the stick being the threat of compensation diminishing if the counties and cities don’t dismiss their cases.
“I stood up in front of God and all his witnesses and told the federal judge that this settlement looks more like stick than carrot for the state of West Virginia, and on behalf of Cabell County, we chose the stick,” he said. “‘Please give us our trial date. We will take our chances.’”
Attorneys general from four states — Tennessee, North Carolina, Pennsylvania and Texas — represented to the court that all the state attorneys general had met in Denver and a vast majority agreed with the allocation model, Farrell said.
The Big Three argued since the West Virginia Attorney General’s Office had already settled several drug cases, the state and counties were not eligible for those two 15 percent allotments.
According to Farrell, West Virginia Attorney General Patrick Morrisey told the judge he did not agree with the other attorneys general in the settlement proposal and also disagreed that West Virginia had given up its claims to a portion of the universal settlement by settling in separate cases.
Farrell said he also “respectfully declined” the proposal in court Friday.
In statements made on Twitter on Friday, Morrisey said “If a global opioid settlement is reached, payment for each litigant should reflect the severity of the opioid problem faced by impacted entities. Payments based almost entirely on raw population — having NOTHING to do with severity — are morally bankrupt & should be a non-starter.”
Morrisey also said elected officials should pledge all settlement money go to remedy harms created by the epidemic.
Attorney Rusty Webb, who was hired by Huntington in the case, also showed displeasure with the settlement amount in a Facebook post Friday.
Rumors on Friday said the four attorneys general walked out of settlement talks and that talks broke down because of attorney fees, but Farrell said that was untrue.
Huntington and Cabell County were among the first of what has grown into 2,000 lawsuits nationwide filed against several drug manufacturers, distributors, pharmacies and pharmacy benefit managers they say breached their duty to monitor, detect, investigate, refuse and report suspicious orders of prescription opiates coming into the states over the past several years — a duty the lawsuits claim companies have under the Controlled Substances Act of 1970.
It seeks costs to help get people facing drug dependency issues into recovery, as well as recovering costs spent by the governments on responding to the opioid epidemic via first responder responses and an uptick in court cases, among other things.
U.S. Drug Enforcement Administration data released after a year-long battle with HD Media, which owns the Charleston Gazette-Mail, The Herald-Dispatch and other local newspapers, and The Washington Post showed from 2006 to the end of 2016, West Virginia received 853.5 million prescription pain pills. Of those, 65 million — or about 96 per person per year — were distributed in Cabell County, with millions more going to surrounding counties.
The Huntington and Cabell County lawsuits argue a combination of intense marketing, national pharmacies failing to report suspicious activity, and middlemen controlling pricing between drug companies and pharmacies all contributed to the drug epidemic in the area.
The complaint alleges at one point, Cabell County received 32 times more dollars in opioid marketing than the national average, about $1,000 per person, which resulted in the medical community abandoning caution of opioids by incentivizing doctors.
With the settlement being turned down and the first trial set to begin in Cleveland this week, Farrell said he plans to start discovery exchange by Monday.
Farrell and his co-lead attorneys, Paul J. Hanly Jr., of Simmons Hanly Conroy, and Joe Rice, of Motley Rice LLC, said the defendants not currently on trial in Ohio are required to respond to requests for evidentiary documents within 90 days. Those currently in trial have 120 days.
“Until now, the multidistrict litigation process stopped all other litigating communities in federal court from moving forward with their individual cases, including in West Virginia,” the men said.
“Communities nationwide are relying on both trials going forward to bring disclosure and better understanding of how the opioid crisis was created, fueled and protected by the opioid industry.”