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Drug companies seek dismissal of City of Chicago's opioid lawsuit; claim issues fall within FDA’s jurisdiction

By Bethany Krajelis | Aug 31, 2014

CHICAGO (Legal Newsline) - Competing drug makers have joined forces to ask a federal judge to toss a lawsuit the City of Chicago brought earlier this summer over accusations they deceptively marketed opioid painkillers.

In a 56-page memo filed late Friday, the defendant drug companies claim the primary jurisdiction doctrine warrants a dismissal or stay of the city’s complaint as it jumps the gun by trying to make Chicago’s federal court decide “scientific and policy matters that fall squarely within the province of, and are currently being addressed by, the” Food and Drug Administration (FDA).

The defendants also contend the suit needs to be tossed because it “is nothing if not broad,” “fails to allege any of the specific facts required to state a fraud-based claim” and “could serve as a textbook example of improper group pleading.”

On June 2, the City of Chicago sued Purdue Pharma LP, Purdue Pharma Inc., The Purdue Frederick Company Inc., Teva Pharmaceutical Industries Ltd., Cephalon Inc., Johnson & Johnson, Janssen Pharmaceuticals Inc., Endo Health Solutions Inc. and Actavis PLC.

Among other claims lodged in its 121-page complaint, the city alleges the defendants misled the public and doctors about the health risks of opioid pain medications like OxyContin and Percocet by engaging in false advertising, fraud and deceptive marketing through a conspiracy that supposedly boosted their profits and created an increase in addiction and health care costs.

The suit was brought in the Cook County Circuit Court, but was later to the U.S. District Court for the Northern District of Illinois by two of the defendants. It came on the heels of a similar lawsuit two California counties filed in late May against the same defendants.

Past and Pending Motions
The defendants’ joint motion to dismiss, set to be presented Thursday before U.S. District Judge Elaine E. Bucklo, is just the latest filing in the litigation that has already produced more than 100 docket entries since its June 11 removal, according to electronic records.

Since then, the city has asked for the case to be remanded back to state court and a few media outlets sought to intervene in an apparent attempt to gain access to documents the city had subpoenaed from the defendants in an investigation that occurred prior to the suit’s filing.

Both of those requests have been withdrawn, but some of the defendants recently filed motions for a protective order, asking the court to make the city deny a Freedom of Information Act (FOIA) request from a media outlet seeking documents produced under the investigative subpoena.

Records show the city has a Thursday deadline to respond to the motions seeking a protective order, the defendants have until Sept. 11 to reply and Bucklo will rule on the matter on Sept. 24.

Another motion pending before the court seeks to disqualify Cohen Milstein Sellers & Toll and one of its partners, Linda Singer, from representing the city in the litigation.

A briefing schedule has been set on this motion and a ruling is slated to come down on Oct. 3, according to court records. (More information on this motion can be found below under "Motion to Disqualify")

Motions to Dismiss
In their recently-filed memorandum supporting their joint motion to dismiss, the defendant drug companies argue the suit should be dismissed or stayed under the primary jurisdiction doctrine because the FDA is already looking into the issues at the crux of the city’s complaint.

“[E]gregiously, the City ignores that just last year, the FDA specifically addressed a petition seeking to curtail the use of opioids for the treatment of non-cancer pain based on the same safety and efficacy arguments that the City now advances in its Complaint and seeks to persuade the Court to adopt,” the defendants assert.

After thorough review of that petition, the memo states, “the FDA determined that the studies cited by the petitioner (and repeated by the City here) were not scientifically valid to establish the propositions for which they were offered” and as such, “ordered certain opioid manufacturers to conduct additional post-marketing studies to provide additional data on the issue.”

The FDA-ordered studies are set to be completed between 2015 and 2018, according to the defendants who stress that in the meantime, the federal agency “continues to permit the marketing of these medications due to their known health benefits.”

“Despite neglecting to mention this FDA decision in its 121-page Complaint, the City asks this Court to supplant its judgment for that of the FDA and decide these matter of public health before the expert agency completes its active study of those same issues,” the memo notes.

Until those studies are completed, the defendants contend the “scientific and policy issues raised in the Complaint remain pending before the FDA and squarely within its primary jurisdiction.”

If the court doesn’t dismiss or stay the city’s suit under the primary jurisdiction doctrine, the defendants assert the complaint should be tossed for failure to state a claim “based on numerous and glaring deficiencies.”

“The City’s Complaint is nothing if not broad,” the defendant drug makers argue. “Over the course of 121 pages and 376 paragraphs, the City sweepingly accuses Defendants of conducting a 20-year-long fraudulent scheme to promote opioids for what the City claims is a novel, unsafe, and ineffective use— namely, the long-term treatment of chronic non-cancer pain.”

While the city claims the defendants provided misleading information that led doctors to inappropriately prescribe the opioid drugs to patients in Chicago and caused it to not only have to pay for these prescriptions, but a widespread prescription drug problem, the defendants claim the city did not properly plead fraud, causation and injury in its suit.

The defendants also contend the city’s complaint improperly lumps them together as a group, a move that ignores relevant differences between the products they make, as well as their FDA approvals, warnings and a number of other things.

In addition to the joint motion to dismiss, some of the defendants filed separate motions to offer additional arguments as to why the claims against them should be tossed.

For instance, Cephalon and its parent entity, Teva, contend the city’s suit doesn’t contain any allegations with respect to Teva and the only ones against Cephalon relate to its alleged promotion of two drugs for off-label uses.

“However, off-label prescribing is entirely lawful,” Cephalon and Teva assert in their motion to dismiss, which also makes other arguments including one over jurisdiction.

Actavis asserts it should be dismissed because Chicago’s federal court does not have jurisdiction over it, “an Irish corporation with no jurisdictional contacts in Illinois,” and Endo, in its own motion, claims the suit “is fatally lacking in allegations of facts sufficient to establish the claims asserted against [it].”

Motion to Disqualify
On Aug. 21, Purdue Pharma and two of its affiliates filed a motion to disqualify Cohen Milstein and Linda Singer from representing the city, claiming Singer’s participation in the case violates the Rules of Professional Conduct and creates an appearance of impropriety based on her previous position as the attorney general for Washington D.C.

The City of Chicago hired Cohen Milstein -- a plaintiffs’ class action law firm with 80 attorneys and offices in Washington D.C., New York, Philadelphia, Chicago, Denver and Palm Beach Gardens, Fla. — to serve as special assistant corporation counsel on a contingency-fee basis in the matter.

Singer served as D.C.’s attorney general from Jan. 2, 2007 until Jan. 5, 2008. The Harvard graduate resigned in December 2007 and went into private practice, first with Zuckerman Spaeder LLP and then with Cohen Milstein in 2009.

Prior to her stint as attorney general, Singer was the executive director of the Appleseed Foundation. A 2007 Washington Post article notes that Singer “had been considered an unorthodox selection because she had not practiced law while at Appleseed and did not have a D.C. Bar license. She got a license shortly after being named attorney general.”

During her time as attorney general, the Purdue defendants assert Singer’s office investigated allegations that their marketing of OxyContin violated consumer protection laws and served on a steering committee made up of 27 jurisdictions looking into their sales and marketing practices.

The Purdue defendants, in May 2007, settled with 27 attorneys general, including Singer and the attorneys general of Illinois and California, where they are now facing lawsuits. They claim the settlement required them to pay a $19.5 million lump sum and “imposed compliance provisions governing the future marketing of OxyContin.”

On April 8, 2013, the Purdue defendants’ recent filing states Singer and Cohen Milstein “entered into a retention agreement to represent the City of Chicago ‘in an investigation and litigation of potential claims regarding fraudulent marketing of opioid drugs.’ The agreement provided that Ms. Singer and Cohen Milstein would be retained on a contingency fee basis.”

In their memo in support of their motion to disqualify, the Purdue defendants assert the law recognizes that there is a need for there to be ethical constraints on who former governmental lawyers can represent in order for the public to have confidence in the government, as well as to preserve the integrity of the court system and bar.

“Those responding to government inquiries should not be left to ‘wonder whether the agency attorney investigating his case will one day turn out to represent the plaintiff’ in a lawsuit concerning the same issues,” the memo states. “That is the situation in which the Purdue Defendants now find themselves.”

They contend Singer’s participation in D.C.’s investigation into its marketing practices and her involvement in the 2007 settlement require the court to disqualify her and her firm from representing the City of Chicago.

In addition, the Purdue defendants assert the firm's disqualification is also necessary to prevent the appearance of impropriety before going on to say the circumstances surrounding firm’s representation of the city raises “meaningful concerns.”

“A reasonable person who is a resident of either D.C. or Illinois would understand there is no shortage of skilled attorneys in Chicago and is left to question whether Ms. Singer’s prior experience pursuing the same subject matter against the Purdue Defendants motivated the choice of her as counsel, initially to subpoena and later to sue those same Purdue Defendants,” their memo asserts.

Legal Newsline previously submitted a FOIA request to the city, asking if it had solicited bids for the contract to represent it in the litigation and to disclose the hourly fees submitted by the firm. The city cited trade secrets in refusing to provide this information.

In response to further questioning by Legal Newsline, John Holden, director of public affairs in the City of Chicago Department of Law, said in an email, “The city chooses law firms that will provide the greatest service and value to taxpayers. We believe Cohen Milstein is uniquely qualified to assist the City of Chicago in combating the opioid industry’s misleading marketing practices and its downplaying of the risk of addiction for these drugs.”

According to a retainer agreement provided by the City, Cohen Milstein will be paid: “22% of net recovery if the matter is resolved pre-complaint, 26% of the net recovery if the matter is resolved after a motion to dismiss but before summary judgment and 30% of the net recovery if the matter is resolved after summary judgment.”

Attorneys of Record
Records show the city is being represented by Singer and Eric Harrington of Cohen Milstein, as well as Fiona A. Burke, Michael J. Dolesh and Mary Eileen Cuniff Wells with the city's Law Department.

The defendant companies are being represented by a number of attorneys.

Their recently-filed joint motion to dismiss was submitted by Los Angeles attorneys Charles C. Lifland and Carolyn J. Kubota of O’Melveny & Myers; and Chicago attorneys R. Ryan Stoll and Patrick Joseph Fitzgerald of Skadden Arps Slate Meagher & Flom; Tinos Diamantatos of Morgan Lewis & Bockius; and Peter Vincent Baugher and Kristen Elizabeth Hudson of Schopf & Weiss.

Chicago attorneys Jason Michael Bradford, Jeffrey D. Colman and Michael A. Scodro of Jenner & Block recently entered their appearance to represent Singer and Cohen Milstein.

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