WHITE PLAINS, N.Y. (Legal Newsline) - Florida and nearly every other state have objected to attempts by Native American tribes, hospitals, schools and lawyers for insurance consumers and opioid-addicted infants to file class actions against the estate of bankrupt Oxycontin manufacturer Purdue Pharma, saying their claims aren’t suited for class treatment.
In a 16-page filing with federal bankruptcy court in White Plains, N.Y., private lawyers hired by Florida Attorney General Ashley Moody say all five proposed classes should be blocked because they involve individualized claims for personal injury or are derivative of the claims of others. Hospitals, school districts and the proposed class of insurance customers all are asserting they paid increased costs because of the opioid-related health problems of others and courts have previously rejected such claims over cigarette use and prescription drugs.
Florida was joined on Thursday by private lawyers representing most of the other states and territories, who said individual members of the proposed classes have had more than enough time to file claims under a deadline the court extended one month until July 30
The filings represent another attempt by states to wrest control of opioid litigation away from private lawyers who recruited thousands of cities, counties, hospital districts and other entities as clients for lawsuits against opioid manufacturers and distributors. The Purdue bankruptcy is a prominent test case since it involves limited assets that must be spread among a growing list of claimants. The states raise multiple legal arguments against the class actions that might also be used to defeat pending requests for class treatment in federal multidistrict litigation pending before U.S. District Judge Dan Polster in Ohio.
Some 85,000 claims have already been filed with the court, ranging from entire states to individuals who accuse the company of causing their addiction or the death of a loved one. The court recently extended the claims deadline to July 30.
Florida targeted some of the potentially most expensive claims with its filing. Indian tribes have filed massive claims in the federal multidistrict litigation over opioids and in the Purdue bankruptcy, and some 40 tribes are seeking class status on behalf of all 530 recognized tribes in the U.S. Florida says they fail to cite any authority allowing this subset of tribes to sue on behalf of the other sovereign entities. The state also says the tribes are pressing parens patriae claims on behalf of their members and that procedure isn’t available in class actions.
“Florida does not dispute that opioids have had a profound, negative effect on Native American tribes, just as they have had on the States,” says Florida, which is represented by Christopher Spuches of Agentis PLLC. “However, the Tribes have no sovereign or quasi-interest over members of other Native American tribes and any individual damages claims are not within the Tribes’ parens patriae standing.”
Purdue also objected to the class, saying the company and its subsidiaries are “committed to ensuring that one hundred percent of their assets are devoted to addressing the opioid crisis pursuant to a confirmed plan of reorganization.”
The class claims “do not advance these goals and are unsupported by the applicable legal standards.” They weren’t certified by a court before Purdue filed for bankruptcy and would “introduce needless complexity and cost to these already highly complicated and costly proceedings” including additional notice and opt-out procedures, Purdue said.
Florida also challenges the request for class status for children afflicted with neonatal abstinence syndrome related to their mothers’ opioid abuse. Such claims involve highly individualized facts and injuries and cannot be grouped together into a class action, Florida says, citing a string of decisions involving opioid litigation more than a decade ago as well as decisions involving cigarettes and allegedly defective tires.
Hospitals, school districts and insurance consumers also are ineligible for class treatment in the Purdue bankruptcy because they are asserting damages that were actually incurred by individuals, Florida says. Nine federal circuit courts of appeal have ruled such claims derivative, the state says, involving questions of causation and proof that can’t be resolved classwide.
“The Hospital Claimants’ claims are largely derivative of their patients’ own tort claims and therefore cannot be afforded class treatment,” Florida says. “In analogous cases involving tobacco litigation, courts have held that hospitals, when seeking recovery for costs incurred in responding to smokers’ injuries, lack standing to assert tort claims for the injuries that were derivative of their patients’ injuries.”
One problem with allowing such claims to proceed is determining a payout scheme that prevents claimants from recovering multiple times for the same injury. States don’t present that difficulty to the court, Florida says, because they have unique police powers to protect all their citizens.
Purdue filed for bankruptcy in September 2019 because of crushing litigation costs. Those costs have continued in bankruptcy, with lawyers and other professionals billing the estate for millions of dollars a month in what one expert said could be a decade of fighting over the company’s assets. Purdue continues to sell the products government plaintiffs say caused a widespread public nuisance, meanwhile. For the month of May, the company reported $142 million in sales and some $12 billion in assets.