N.Y. judge's ruling could be painful for opioid-makers sued over addiction crisis

By Dan Fisher | Jun 20, 2018

In an ominous sign for the opioid industry, a New York judge refused to dismiss any of the claims by eight counties against Purdue Pharma, Johnson & Johnson and other prescription opioid manufacturers, saying the plaintiffs had adequately pled violations of everything from consumer protection statutes to the common law of public nuisance.

NEW YORK (Legal Newsline) - In an ominous sign for the opioid industry, a New York judge refused to dismiss any of the claims by eight counties against Purdue Pharma, Johnson & Johnson and other prescription opioid manufacturers, saying the plaintiffs had adequately pled violations of everything from consumer protection statutes to the common law of public nuisance.

In a 36-page order, Judge Jerry Garguilo said the counties had standing to sue over costs associated with opioid addiction and presented credible allegations the industry had deployed “assiduously crafted, multi-pronged marketing strategies that targeted the general public” to downplay the risk of addiction.

The judge rejected the manufacturers’ main arguments, that state law is preempted by Food and Drug Agency regulations, and that they shouldn’t be forced to pay damages over actions by prescribing physicians, pharmacists and illegal drug diverters. Manufacturers have similar arguments pending in motions to dismiss before the judge in Ohio overseeing hundreds of lawsuits combined in a federal multidistrict litigation (MDL) proceeding.

The judge did dismiss Actavis parent Allergan Plc because the plaintiffs failed to establish the Irish company completely controlled Actavis for purposes of determining personal jurisdiction. And in modest concession to the defendant companies, the judge said the statute of limitations likely applies to most of their claims, meaning the plaintiffs can only recover damages extending back three years or so from when they filed suit.

Other than that, Judge Garguilo’s order reads like a strong affirmation of the plaintiffs’ litigation strategy against the opioid manufacturers. The companies argued all claims stemming from the labeling and marketing of their products were preempted by federal regulations, which dictate what the companies can tell doctors and control the distribution of each pill from the factory floor to pharmacists’ shelves. 

The judge rejected that argument as it applies to marketing practices  – opening the door to multiple claims under state consumer protection and business laws – saying they weren’t preempted because the FDA doesn’t regulate marketing materials.

“It’s certainly a closer call whether preemption applies” to FDA-approved labeling, the judge wrote. The manufacturers cited the FDA’s refusal to tighten labeling requirements in 2013 after Physicians for Responsible Opioid Prescribing filed a petition to prohibit them from promoting long-term use of opioids. 

But the plaintiffs presented evidence of post-approval studies that could have supplied enough information about the addictive properties of opioids to allow the manufacturers to unilaterally change their labels, the judge said. The U.S. Supreme Court, in its 2008 decision Wyeth v. Levine, left ample room for claims to survive under state law even over FDA-approved labeling. 

The judge allowed public nuisance claims to proceed, despite a 2003 decision by New York’s highest court dismissing a similar suit against Sturm, Ruger & Co. for lack of causation. The gun cases were based on the illegal possession and use of firearms, the judge wrote, while the claims against the opioid industry are based at least in part on legal use of the drugs. 

“It is at least arguable that the manufacturer defendants were in a position to anticipate or prevent” opioid abuse, the judge wrote. “It does not seem unfair, therefore, to hold them potentially accountable.” He went on to say he was “doubtful” proximate cause is necessary in a public nuisance case.

The manufacturers also claimed the municipal cost doctrine prevents municipalities from suing over the costs of public services but the judge rejected that argument, saying the counties were suing over misrepresentations that led to opioid abuse and to extend the doctrine to these claims “would distort the doctrine beyond recognition.”

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Organizations in this Story

Actavis Allergan Allergan, PLC Johnson & Johnson Pfizer Purdue Pharma L.P

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