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Saturday, February 22, 2020

Opioid litigants to talk settlement at closed-door meeting in Cleveland

By Daniel Fisher | Jan 30, 2018


CLEVELAND (Legal Newsline) - Lawyers for more than 200 cities, counties and other entities suing the opioid industry will meet with their counterparts from the defense in a federal courtroom in Cleveland Wednesday to begin the process of hammering out a potential multibillion-dollar settlement.

The conference will be closed to the public. In an order last week and prior comments to both sides, U.S. District Judge Dan Aaron Polster has made it clear he wants the parties to negotiate an agreement instead of initiating the lengthy and expensive process of going to trial in hundreds of courtrooms scattered across the country.

Judge Polster said in his Jan. 24 order he wanted “to make clear that the entire conference – both morning and afternoon – is directed at settlement, with only invited attendees, and therefore is not open to the public.”

With a wide diversity of plaintiffs, from small towns in West Virginia to cities like Detroit, as well as labor-union health plans and hospital networks, it’s not at all clear how defendant companies can negotiate a global settlement that ends all the litigation against them. 

Also unknown is how much emphasis state attorneys general, the most powerful players in the litigation, will place on extracting money from the industry as opposed to obtaining injunctive relief such as strict controls on opioid distribution.

The states are suing in state courts outside of the federal multidistrict litigation and can choose whether to cooperate with Judge Polster. In another order last week, the judge said he welcomed state AGs to attend tomorrow’s conference but acknowledged he has no jurisdiction over them, their state cases or their investigations. The judge said his Jan. 31 conference “is the first of many opportunities they will have to provide input in the Court’s effort to resolve this matter.”

Most of the cities and counties are represented by private plaintiff lawyers including prominent national firms like Motley Rice, Lieff Cabraser, Seeger Weis and Weitz & Luxenberg, all frequent players in mass-tort MDLs. They have signed contingency-fee contracts with their government clients granting them 30% or more of any recovery, giving the private lawyers a strong incentive to favor monetary relief as opposed to changes in how the opioid industry does business.

That may conflict with Judge Polster’s plans. In surprisingly frank comments at a Jan. 9 hearing, the judge said “people aren’t interested in depositions, and discovery, and trials,” he said. “With all of these smart people here …I’m confident we can do something to dramatically reduce the number of opioids that are being disseminated, manufactured and distributed.”

The judge appointed three special masters - Francis McGovern, Cathy Yanni and David Cohen - to guide negotiations. A preliminary schedule for the meeting has the plaintiffs presenting their arguments from 9:25 to 10:40 a.m., after an initial discussion about confidentiality and other matters. They plan to present four experts:

Dr. Aaron Kesselheim, a Harvard Medical School professor who also teaches healthcare law and policy at Yale Law School. Kesselheim has testified before Congress on drug prices and studies the cost, availability and use of prescription drugs.

Dr. Anna Lembke, a Stanford psychiatrist and author of the 2016 book “Drug Dealer, M.D.” Lembke partially blames well-meaning doctors for the opioid crisis, but in this 2016 NPR interview she said it was exacerbated by pharmaceutical companies “in cahoots” with regulators and agencies like the Joint Commission, which supervises hospitals. Overprescribing pain medications “became a kind of groupthink where it looked like treating pain aggressively with opioids was something that was based on science, when in fact it was based on Big Pharma's influence of these major regulatory bodies,” Lembke said.

Dr. Andrew Kolodny, a researcher at the Heller School for Social Policy at Brandeis and former chief medical officer at Phoenix House, the non-profit addiction treatment agency. A group of pain management specialists and self-described patient advocates called for Kolodny’s firing last year, saying he is "one of the most polarizing and hated figures in medicine" because of his anti-opioid stance. He is executive director of Physicians for Responsible Opioid Prescribing, whose members were active in developing Centers for Disease Control guidelines that discouraged primary care physicians from prescribing opioids for chronic pain. He blamed the “opioid lobby” for opposing the tighter CDC guidelines.

Joseph Rannazzisi, former head of the Drug Enforcement Administration’s Office of Diversion Control who retired in 2015 after running into severe flack in Congress over his aggressive enforcement actions against opioid distributors like McKesson, Cardinal Health and Amerisource Bergen. Rannazzisi portrayed himself as a whistleblower in this 60 Minutes profile. Post-retirement he signed on as consultant to the lawyers suing the opioid industry.

Representatives of other plaintiff groups as well as state AGs, the DEA and insurers, will speak from 10:40-11 a.m. Defendants are scheduled to present from 11:15 a.m. to 12:30 p.m., with Mark Cheffo of Quinn Emmanuel representing the manufacturers and Lane Heard of Williams & Connolly representing distributors.

It’s highly unlikely the litigants will reach an agreement tomorrow but the meeting may give both sides a better indication of their negotiating strategies and how they interact with state and federal investigations. In theory, the MDL process is strictly designed to streamline pretrial procedures, after which the individual cases return to their original courts. 

In practice, the MDL becomes a central forum for the lead plaintiff attorneys to negotiate a settlement wrapping up all the litigation in one deal. Accomplishing that in this case will be a huge challenge, given the differing incentives of all the players.

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U.S. District Court for the Northern District of Ohio