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Opioid judge forgives plaintiffs’ `egregious’ failure to disclose contract with key witness

By Daniel Fisher | Apr 30, 2019

CLEVELAND (Legal Newsline) - It was “egregious” and it was unjustified, but the failure of plaintiff lawyers to reveal they’d put a star witness on the payroll more than a year ago didn’t justify the ultimate sanction of barring him from testifying in an upcoming trial,  the judge overseeing federal multidistrict litigation against the opioid industry has decided.

In an April 26 order overruling his own special master, U.S. District Judge Dan Aaron Polster said it would be needlessly harsh to bar Dr. Russell Portenoy from testifying in the first bellwether opioid trial scheduled for later this year. Portenoy, once a vocal advocate of using opioids to treat chronic pain, negotiated a settlement and consulting agreement with plaintiff lawyers in March 2018 but defense attorneys only learned of it in January of this year. 

Earlier this month, Special Master David Cohen recommended sanctions against the plaintiffs for failing to disclose their agreement with Portenoy for more than 10 months, despite repeated requests by defendant companies for any agreements or releases with healthcare practitioners involved in the litigation. Cohen recommended barring Portenoy from testifying in lawsuits by Summit and Cuyahoga counties in Ohio scheduled to begin trial in October. 

In his order, Judge Polster said the failure to disclose Portenoy’s agreement “was not substantially justified,” and “egregious given caliber and sophistication” of the plaintiff lawyers. But “nothing in the record” convinced the judge it was “more than an honest mistake,” Judge Polster ruled, and defense lawyers still have time to depose Portenoy and ask him questions designed to show whether he has changed his opinions since striking a deal with the plaintiffs. The judge also ordered plaintiff lawyers to pay deposition costs up to $100,000.

Judge Polster has pushed for a quick settlement since he was selected to oversee the federal MDL, which now includes some 1,500 lawsuits by cities, counties, hospital districts and other entities accusing the opioid industry of flooding their communities with medically unnecessary drugs. 

Defendant companies have repeatedly complained about what they consider to be pro-plaintiff rulings intended to pressure them into settlement talks. Among other things, defendants say Polster has allowed the plaintiffs to stonewall them on crucial evidence and miss deadlines to identify expert witnesses and information critical to their theories of the case.

The failure to disclose a settlement and consulting agreement with Portenoy deprived defendants of months of time to investigate his expected claims that doctors were gulled by false and misleading marketing information about the addictiveness of opioids, defendants said.

Portenoy, described as “a paid shill for the manufacturer defendants” in court filings, faced potential bankruptcy unless he could strike a settlement agreement with the plaintiffs suing him. Defendants are likely to use the release of claims and consulting income from the plaintiffs to try to show his testimony is tainted by self-interest.

After he signed an agreement with the plaintiff lawyers on March 5, 2018, Judge Polster wrote, the defendants “served numerous requests for production and interrogatories on Plaintiffs.”

“Either a response describing the existence of the Settlement Agreement or the Agreement itself would have been responsive to some of these requests and one or the other should have been produced” under the Federal Rules of Civil Procedure, the judge wrote. Instead, plaintiff lawyers “either failed to disclose the Agreement or affirmatively denied its existence.”

Plaintiff lawyers, led by Linda Singer of Motley Rice, said the failure occurred because of the multifaceted nature of their legal effort, where the “left hand didn’t know what the right hand was doing.” Judge Polster agreed the non-disclosure was likely inadvertent, but said the standard for sanctions isn’t whether it was intentional or malicious, but rather if it was justified and reasonable. 

Defendants, on the other hand, have plenty of time to recover from their delayed discovery, the judge wrote. Portenoy’s public statements denouncing the opioid industry are unchanged from when he settled with the plaintiffs, the judge said, and the defendants knew that plaintiffs were engaged in serious settlement negotiations with physicians last spring. 

Opioid plaintiffs are building their cases on claims manufacturers, distributors and pharmacists engaged in a broad conspiracy to fraudulently promote the use of opioid painkillers and allow them to be sold in medically unnecessary amounts, creating a “public nuisance” that will cost hundreds of billions of dollars to fix. Once addicted to prescription opioids, the plaintiffs say, patients switched to cheaper illegal heroin and fentanyl, which account for the bulk of opioid-related deaths. 

Defendant companies say they operated in an environment of rigorous oversight by the Drug Enforcement Administration, which set the number of pills to be manufactured and tracked them from factory to pharmacy window. They also complain that the plaintiffs haven’t provided evidence of prescriptions that were medically unnecessary, instead relying on theories of “aggregate proof” based on the idea fraudulent marketing induced doctors to prescribe pills to patients who didn’t need them. 

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

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