Legal Newsline

Friday, April 3, 2020

Judge rejects Hawaii's opioid lawsuit; State plans to try again

State Court

By Daniel Fisher | Feb 20, 2020

Connersclare
Connors

HONOLULU (Legal Newsline) - In an order issued quietly late last year, a Hawaii judge dismissed the state’s lawsuits against opioid manufacturers and distributors - at least the third time in two years a judge has rejected theories the pharmaceutical industry is responsible for the crisis of addiction and overdose deaths caused by legal and illegal drugs.

A North Dakota court dismissed that state’s lawsuit against now-bankrupt Purdue Pharma last May, saying the manufacturer couldn’t control how doctors prescribed its products. And a Connecticut judge dismissed lawsuits by several cities in January 2019, saying allowing them to proceed would result in “junk justice.”

Hawaii sued opioid manufacturers and distributors last June, saying Purdue deceptively marketed OxyContin and other opioids and distributors sold “far larger quantities of opioids than they knew could be legitimately prescribed.” The state, represented by Texas law firm Baron & Budd and a local law firm, accused the companies of violating Hawaii’s unfair and deceptive trade practices law, which it said allowed it to seek damages without proving the defendants caused any specific harms. 

The distributors moved to dismiss the state’s case last September, saying it failed to explain how they could have misled consumers since they served as wholesale middlemen and didn’t present marketing materials, deceptive or otherwise. It was not their job “to second guess decisions of Hawaii-licensed doctors to prescribe FDA-approved medicines for their patients,” the distributors argued.

In brief orders issued Dec. 17, Judge James C. McWhinnie agreed. The complaints were “primarily conclusory” and the state failed to explain how the distributors engaged in either unfair trade practices or unjust enrichment, the basis for the lawsuits. The cases were dismissed without prejudice, meaning the state can revise its claims and refile them.

“Respectfully, we disagree with the court's decision,” said Krishna Jayaram, special assistant to Hawaii Attorney General Clare E. Connors. “We intend to re-file our case, establish defendants' liability, and recover money from the defendants that will help us address the opioids epidemic in our communities.”

A lawyer for Mallinckrodt, which took a lead role on the defense side, declined comment. Distributors and pharmacies are in the midst of intense talks with state AGs and private lawyers representing more than 2,000 cities and counties over a global settlement that could exceed $50 billion. Legal fees in such a settlement could top $10 billion, based on contingent-fee contracts virtually all of those municipal plaintiffs, and many states, signed with outside lawyers.

Hawaii’s approach to the litigation was slightly different than many other government plaintiffs in that it sued under the state’s consumer protection statute instead of citing public nuisance law. But the state ran into the same conundrum that plaintiffs in North Dakota and Connecticut encountered: Skeptical judges questioned how they could show a cause-and-effect relationship between opioid-related costs and the legal business of selling prescription drugs. 

Other judges have been more welcoming of these claims, including U.S. District Judge Dan Polster, who is overseeing federal multidistrict litigation. He has repeatedly rejected the industry’s motions to dismiss and once described the North Dakota court as “by leaps and bounds, an outlier” for finding that state’s lawsuit preempted by federal law.

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Organizations in this Story

Hawaii Attorney GeneralPurdue Pharma L.PMallinckrodtBARON & BUDD