CLEVELAND (Legal Newsline) – A magistrate judge has recommended that a bellwether trial against the opioid industry proceed, rejecting nearly all of the arguments presented by manufacturers, distributors and retailers in their motions to dismiss hundreds of lawsuits accusing them of causing a national crisis.
In a 103-page report released late Friday, Magistrate Judge David A. Ruiz said it was too early to dismiss a lawsuit by Summit County, Ohio, before plaintiffs have been allowed to sift through millions of documents industry defendants are being forced to disgorge during discovery.
The magistrate judge, hired by U.S. District Judge Dan Aaron Polster to help administer the massive multidistrict litigation over opioids, recommended only part of Summit County’s nuisance claim be dismissed due to a conflict with an Ohio law restricting certain public nuisance claims involving regulated products. But Ruiz recommended all of the other claims - including fraud, racketeering, negligence and unjust enrichment - be allowed to proceed,
The report represents a thorough defeat of the industry’s attempt to halt the MDL and increases the pressure to negotiate a settlement, even if an agreement that fairly apportions liability and distributes the proceeds will prove extremely difficult to achieve.
Defendant companies filed their first motions to dismiss in May, based on arguments they can’t be held responsible for injuries stemming from poor prescribing practices by physicians or the illegal diversion of their products. The municipal plaintiffs fail to name a single physician who was misled by their marketing information, for example.
But Ruiz said it was enough for the plaintiffs to describe an alleged scheme to influence doctors with materials designed to minimize the risk of addiction and encourage more liberal prescribing of opioids, without identifying any doctors who were taken in by fraud.
The magistrate judge also rejected arguments illegal acts “broke the chain of causation” necessary to find a defendant liable, saying the opioid industry knew or should have known that they were shipping more pills into communities than could be absorbed through legal use.
“These actions can to some extent, given the allegations, be attributed and foreseeable to defendants, who allegedly both flooded the market with opioids and created the demand for them,” Ruiz wrote.
Defendants also argued the so-called municipal cost recovery rule prohibited them from being forced to pay the costs of services that are normally provided by municipal governments. But Ruiz rejected that too, saying the rule can be suspended when a defendant’s conduct is “ongoing and persistent.”
The report is not surprising, given how rare courts grant motions to dismiss in any type of civil litigation. At this stage of a case, the court must treat every allegation as factual, allowing Ruiz to conclude the plaintiffs have made a plausible case the opioid industry collectively conspired to mislead doctors about the safety and efficacy of their products and sell unreasonable amounts into the community.
If Judge Polster accepts the recommendations, it leaves defendants facing the full range of potential liability, dramatically increasing the dollar amount they must plug into their settlement calculations. But the broad range of defendants, from local pharmacies to huge distributors like McKesson and Amerisource Bergen, means there will be substantial room for argument among the defendants over who is liable for what.
Defendants are also unlikely to agree to any settlement that doesn’t end the litigation for good, a task that is complicated by the involvement of states and the federal government outside of the MDL.