A handful of municipalities are fighting efforts to force them to sign on to opioid settlements negotiated by state attorneys general and private lawyers, as the nation's largest pharmacy chains have offered $13.8 billion to resolve litigation.
In an order last week, U.S. District Judge Dan Aaron Polster asked Georgia Attorney General Chris Carr to opine on the constitutionality of a statute passed in May that required municipal plaintiffs to honor settlements negotiated at the state level. The Hospital Authority of Wayne County is challenging the law, Georgia Code 10-13B-1, saying the Georgia Constitution bars retroactive laws.
Municipal plaintiffs on Long Island in New York are pursuing a similar challenge in federal court against AG Letitia James, who negotiated a $1.1 billion settlement with distributors in 2021. Judge Polster in June dismissed their cases despite the pending federal lawsuit, calling the municipalities’ arguments “somewhat inchoate” and AG James’ responses “fair” and “well-reasoned.”
The lingering opposition to settlements reflects concerns by some plaintiffs and their lawyers that opioid litigation will follow the pattern established with lawsuits against the tobacco industry in the 1990s. Those cases ended with a $260 billion multistate settlement signed in 1998, but individual municipalities saw little of the money while plaintiff lawyers won more than $14 billion in fees.
Private plaintiff lawyers took a different tack with the opioid litigation, signing up thousands of counties, cities and municipal districts as clients by promising them their lawsuits would guarantee they get a share of any settlement proceeds. But some of those same lawyers, working in concert with state AGs, negotiated settlements that in many cases required state legislators to pass laws effectively nullifying the lawsuits of their municipal clients in order to provide closure to the companies they sued.
Long Island cities including Islip, Oyster Bay, Hemstead and Babylon sued AG James to challenge an amendment to the state Mental Hygiene Law, passed in June 2021, that extinguished claims filed after June 30, 2019. The Long Island cities filed their lawsuits in December 2019.
Savannah, Ga., attorney Mark Tate signed up the cities as clients and believes the law unconstitutionally deprived them of their share of settlement funds. His clients have gotten none of the money while Nassau County, which was represented by attorney Paul Napoli of Napoli Shkolnik, has received $2.9 million so far.
In an amended complaint filed in federal court earlier this year, Tate says Napoli told him and several others when they complained about the effect of the law that they were “SH_T OUT OF LUCK.” In an interview, Tate said “the result of the legislation in New York was that the Long Island municipalities are cut out from any direct payment.”
“We believe, based on Paul’s statement that we’re sh*t out of luck, that it’s certainly no accident Long Island was cut out,” he said. Their lawsuit is still pending before U.S. District Judge Kiyo Matsumoto in New York, with no decision on the state’s motion to dismiss expected before the end of the year.
Napoli Shkolnik negotiated the direct payment of $50 million in fees for settling the Nassau County and Suffolk County lawsuits against Amerisource Bergen, Cardinal Health and McKesson. The firm played a lead role in settlement negotiations in federal multidistrict opioid litigation overseen by Judge Polster, along with other firms such as Motley Rice and Simmons Hanly Conroy.
The Georgia hospital authority, in an Oct. 26 motion in federal court in Ohio, objected to the defendants’ motion to dismiss its claims as barred under Georgia Code 10-13B-1. That law says “the interests of the state as a whole” require “a unified settlement structure” and prohibit “any and all past, present or future claims on behalf of any governmental entity” against settling defendants.
The Wayne County Hospital Authority argues its lawsuit was filed in federal court long before the law was passed, however, and the state Constitution generally bars statutes from retroactively stripping plaintiffs of “vested rights.” Legislators can pass laws that alter procedural rules affecting past and future cases, the hospital authority argues, but the state Supreme Court has rejected laws that retroactively strip parties of their substantive rights.
Robert Smith, attorney for the hospital authority, declined to comment on pending litigation. The Georgia Attorney General’s Office also declined to comment.