CENTRAL ISLIP, N.Y. (Legal Newsline) - A collection of Long Island cities that challenged a New York law ending their separate lawsuits against the opioid industry vowed to appeal a federal judge’s decision dismissing their case, saying they have been denied their share of the multibillion-dollar opioid settlement pot.
The City of Babylon and eight others sought a declaratory judgment blocking New York Attorney General Letitia James from enforcing the New York Mental Hygiene Law, passed in June 2021, that extinguished opioid claims filed after June 30, 2019. The Long Island cities filed their lawsuits in December 2019.
They claimed the law was written to protect lawsuits filed before the deadline by municipalities represented by New York law firm Napoli Shkolnik, while cutting out cities represented by Georgia lawyer Mark Tate.
In a Dec. 19 decision, U.S. District Judge Kio Matsumoto rejected Babylon’s arguments, saying that absent narrow exceptions, political subdivisions like cities and counties are barred from suing the state that created them. The judge dismissed claims based on the U.S. Constitution as well as claims New York violated its own home rule statute by passing the law, which was required to obtain $1.1 billion in settlement money from opioid defendants.
Tate said he will appeal the decision, saying Judge Matsumoto “ignored binding precedent” allowing New York municipalities to sue over laws they believe unfairly single them out for different treatment.
“Instead of helping and recognizing the ability of the municipalities of Long Island to participate in recovery, she decided to bar them from recovery,” Tate said, noting the judge “has a long and credible history of being reversed,” including when the U.S. Supreme Court blocked a COVID-era executive order restricting religious gatherings that the judge had upheld.
In her ruling, the judge said New York lawmakers passed the bill in order to obtain more than $1 billion in settlement funds dedicated to opioid treatment programs across the state. While New York’s home rule law sets up a procedure for enforcing “special laws” that treat individual municipalities differently, the judge ruled, this law addressed “a substantial state-wide concern.” Babylon and other cities didn’t lose anything of value because their lawsuits had only the speculative promise of bringing them money, the judge ruled.
Babylon and the other cities argued the law unfairly singled them out, especially since Nassau and Suffolk Counties were able to settle separate opioid lawsuits, paying Napoli Shkolnik $50 million in fees. In an amended complaint dismissed by Judge Matsumoto this week, Babylon claimed Napoli told Tate and several others when they complained about the effect of the law that they were “SH_T OUT OF LUCK.”
Private lawyers recruited thousands of cities, counties, hospital districts and other government entities as plaintiffs at the outset of opioid litigation in a successful strategy to overwhelm defendants with lawsuits and force them to the settlement table. But as the New York federal court ruling shows, that strategy was based on the dubious premise that as political subdivisions, the municipal plaintiffs wouldn’t ultimately be forced to accept settlements negotiated by the states. The defendant companies demanded state laws extinguishing municipal suits to achieve global peace, and lawmakers accommodated them.