$26 Billion settlement reached with "Big Three" opioid distributors, J&J to resolve national claims

A preliminary $26 billion settlement was announced today with Johnson & Johnson and the nation’s “Big Three” opioid distributors AmerisourceBergen, Cardinal Health, and McKesson. The settlement, if accepted by a majority of state attorneys general and then communities nationwide, secures critical funding that is essential to curb the crisis, along with significant injunctive relief, which includes conduct changes the companies agree to enact.

Motley Rice LLC co-founder Joe Rice led negotiations for the subdivisions in settlements as co-lead counsel and a member of the Plaintiffs’ Executive Committee for the consolidated multidistrict litigation that includes more than 3,000 litigating municipalities across the country. Other members of the negotiating committee include: Paul Geller of Robbins Geller, Peter Mougey of Levin Papantonio, Elizabeth Cabraser of Lieff Cabraser, and Chris Seeger and Jennifer Scullion of Seeger Weiss. Jayne Conroy of Simmons Hanly Conroy and Paul T. Farrell Jr. of Farrell & Fuller Law LLC are co-lead counsel along with Rice for the Plaintiffs’ Executive Committee.

If approved, some communities may begin receiving payments as soon as first quarter 2022. AmerisourceBergen, Cardinal Health and McKesson have agreed to pay the full settlement amount over the course of 18 years, while payments from J&J will be allocated over a span of seven years. The settlement terms include restrictions on what the funds can be used for, with the vast majority of the funds being earmarked to abate and remediate known effects of the opioid crisis.

“Now, as recently confirmed by new data from the CDC, we have an opioid crisis compounded by a global pandemic, so timing is critical to get assistance to our communities. It’s always been our belief that any solution to a crisis of this magnitude would require the communities, states and opioid companies alike to come together. These opioid companies are willing to come together to be part of the solution and provide necessary recourse on a national scale so that communities across the country can receive the resources they desperately need,” said Joe Rice, co-lead counsel for the Plaintiffs. “It is initially up to the states if they will accept this agreement and the defendants if they reach their goal of state acceptance. Then if the settlement is poised to move forward, it will be up to the subdivisions to determine if it is acceptable. Additionally, if the settlement is accepted and implemented, the companies also agree to significantly change their business operations regarding how narcotics are handled, tracked and analyzed. The injunctive relief terms are significant in preventing a future similar crisis.”

Plaintiffs in the MDL have alleged the opioid distributors created a public nuisance by ignoring red flags and failing their duty to report suspicious orders that flooded communities nationwide with highly addictive opioid drugs. Plaintiffs have also alleged the overflow of opioids furthered the crisis by diversion, or sustaining an illicit black market that was foreseeable to the companies.

Below are key deadlines and the process for the settlements to be accepted and implemented.

  • States have 30 days to decide if they will participate in the settlements. The distributors and J&J each then have up to 14 days to independently decide whether, in their view, there is enough “critical mass” to proceed to the next phase.
  • If “critical mass” is met, then local subdivisions in each settling state have 120 days to decide if they will participate in the settlements. The 120-day deadline is the “Initial Participation Date.” The settling states will then have up to nine days to decide whether or not to move ahead. Once the settling states make their decisions, the distributors and J&J each then have 21 days to again decide whether there is enough “critical mass” to proceed with the settlements. This is the “Reference Date” (30 days total after the “Initial Participation Date”).
  • The Effective Date for each settlement is 60 days after the Reference Date. During that time, each settling state will be seeking entry of a consent judgment to implement releases and injunctive relief. No settlement funds will be disbursed to a settling state unless a consent judgment has been entered.
  • Maximum recovery can only be accomplished if there is full participation both by those subdivisions that have filed lawsuits and by each state’s non-litigating subdivisions as well.

While the settlement resolves national claims against AmerisourceBergen, Cardinal Health, McKesson and J&J, litigation continues against several other opioid industry defendants, including pharmacies.

The settlement also does not resolve litigation filed by West Virginia subdivisions against the “Big Three” distributors. Currently, The City of Huntington (represented by Motley Rice lawyers Anne McGinness Kearse, Linda Singer, David Ackerman, Donald Migliori, Temitope Leyimu, Annie Kouba, and Moniqúe Alycia Christenson as trial counsel, with Charles “Rusty” Webb of Webb Law Centre PLLC) and Cabell County, represented by Paul Farrell of Farrell & Fuller Law, Anthony J. Majestro of Powell & Majestro P.L.L.C., and Michael Woelfel of Woelfel & Woelfel LLP., are in a federal bellwether trial against opioid distributors AmerisourceBergen, Cardinal Health, and McKesson. U.S. District Judge David A. Faber is presiding over the bench trial.

Additionally, the firm represents four California subdivisions in the ongoing state bench trial, People of the State of California v. Purdue Pharma, et al., against several opioid manufacturers before Judge Peter J. Wilson of Orange County Superior Court. Plaintiffs in that case include Santa Clara and Orange counties, the nation’s first government entities to bring a lawsuit against opioid manufacturers in the current wave of opioid litigation. Motley Rice lawyers Fidelma Fitzpatrick, Frederick Baker, Michael Pendell, Kristen Hermiz, Cindi Solomon and Jessica Colombo are trial counsel for the Plaintiffs.

Motley Rice attorneys represent dozens of governmental entities, including states, cities, towns, counties and townships in ongoing investigations and litigations filed in both the federal MDL as well as state courts that allege deceptive marketing and/or the overdistribution of opioids.

Motley Rice attorneys also led negotiations for the $260 million settlement that was reached on the eve of trial in 2019 to resolve the MDL’s first track of claims filed by two Ohio subdivisions, Summit County, a Motley Rice client, and Cuyahoga County. Opioid manufacturers and distributors Teva, Cardinal Health, AmerisourceBergen and McKesson were defendants in the case.

Read Motley Rice co-founder Joe Rice’s blog post about this settlement agreement.

Learn more by visiting the opioid settlement website.

Learn more about the National Prescription Opiate MDL.

Learn more about Motley Rice’s opioid litigation work.

About Motley Rice

Motley Rice LLC is one of the nation’s largest plaintiffs’ litigation firms. With a tradition of representing those whose rights have been violated, Motley Rice attorneys gained recognition for their pioneering asbestos lawsuits, their work with the State Attorneys General in the landmark litigation against Big Tobacco, and their representation of 9/11 families in the ongoing lawsuit against terrorist financiers. The firm continues to handle complex litigation in numerous areas, including securities fraud; antitrust; consumer protection; mesothelioma; environmental contamination; prescription and over-the-counter drugs; other medical devices; human rights; aviation disasters; and wrongful death. Motley Rice is headquartered in Mt. Pleasant, S.C., and has additional offices in Connecticut; Washington, D.C.; New Jersey; New York; Pennsylvania; Missouri; Rhode Island; and West Virginia. For more information, contact Motley Rice attorney Joseph F. Rice (DC, SC) at 1.800.768.4026 or visit www.motleyrice.com. Motley Rice LLC, a South Carolina Limited Liability Company, is engaged in the New Jersey practice of law through Motley Rice New Jersey LLC. Esther Berezofsky is the attorney responsible for New Jersey practice. Connect with us on Facebook, LinkedIn, Instagram and Twitter.