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Sunday, December 15, 2019

Oklahoma wanted decades of funding from opioid verdict, but will get only one year's worth

Attorneys & Judges

By John O'Brien | Nov 15, 2019

Balkman
Balkman

NORMAN, Okla. (Legal Newsline) – Oklahoma’s landmark verdict in its opioid case against Johnson & Johnson does not mean the company must pump billions of dollars into the state over the next 30 years, a judge ruled Friday.

Cleveland County District Court Judge Thad Balkman wrote in a 44-page order that attorneys representing Oklahoma Attorney General Mike Hunter’s office did not prove that abatement of the “public nuisance” he says J&J caused will take the decades they say it will, ordering the company instead to pay for only the first year of the proposed plan.

This means the verdict, for now, will not turn into a multi-year cash cow for private lawyers hired by the state. In contrast, the giant tobacco settlement of the 1990s requires cigarette companies to make yearly payments to states in order to do business in them, and the private lawyers who engineered the agreement still get their cut.

“(T)hough several of the State’s witnesses testified that the plan will take at least 20 years to work, the State did not present sufficient evidence of the amount of time and costs necessary, beyond year one, to abate the opioid crisis,” Balkman wrote.

The addiction crisis experienced by Oklahoma was the result of misleading marketing by J&J of its opioid products, Balkman ruled, constituting a “public nuisance.” He ruled this despite the company’s relatively small market share in the state and even though Oklahoma did not put on a witness who was addicted to the company’s products – a time-release patch and a pill.

The trial opened on May 27 and the verdict against J&J and subsidiary Janssen was announced on Aug. 26.

The $572 million judgment (later reduced by roughly $100 million because of a calculating error) was far less than attorneys for the state had asked for, $17.5 billion. That amount was the estimated cost of a proposed state-run abatement plan to reverse the opioid crisis that could take 30 years to achieve.

“You said the $572 million was all you could do at this time,” Brad Beckworth, the Nix Patterson attorney hired by Oklahoma on a contingency fee, told Balkman at an earlier hearing. "Your honor has a duty to fully abate the (opioid) crisis.”

Steve Brody, the attorney for Johnson & Johnson with the law firm of O’Melveny in Washington, D.C., argued the state did not present sufficient evidence to abate the crisis beyond one year and that such a move would violate separation of powers principles under law.

“There is no basis for what the state has asked you to do today,” Brody said. “There is not sufficient evidence to support a multi-year abatement policy.”

Balkman also rejected J&J’s argument that settlements with co-defendants should offset part of the verdict against it.

“(T)here has been no finding of fault entered against any other potential tortfeasor, nor was any such finding requested by Defendants before or during trial.”

Two other co-defendant pharmaceutical companies, Purdue Pharma of Connecticut and Teva Pharmaceutical based in Israel, earlier settled with Oklahoma - $270 million from Purdue and $85 million from Teva. That left J&J (and Janssen) as sole defendants in the case.

In the Purdue Pharma settlement, private attorneys took in $60 million, while about $200 million went to a research project at Oklahoma State University, which is Hunter's alma mater.

Purdue Pharma has since declared bankruptcy, while other defendants reached settlements with two Ohio counties that were plaintiffs in the first federal trial. A global settlement remains elusive, as state attorneys general like Hunter argue that the cities and counties with lawsuits in federal court have usurped their authority to represent the citizens of states.

New York plaintiffs recently obtained a trial date in state court, and private lawyers representing counties and municipalities are encouraging clients to stay out of a proposed “negotiation class” led by other lawyers.

Settlement values in that proposed class action are “wholly inadequate” to what they can get by taking the companies to trial, attorneys say. A deadline on whether to join the negotiation class and accept its settlement value matrix hits soon.

In Oklahoma, J&J is appealing the verdict against it.

From Legal Newsline: Reach editor John O’Brien at john.obrien@therecordinc.com

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Organizations in this Story

Oklahoma Attorney General's OfficeJohnson & JohnsonNIX PATTERSON

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