More than 2,000 cities and counties — including Dayton and Montgomery County — sued various players in the prescription drug industry and the cases were combined into one lawsuit overseen by Judge Dan Polster in the Northern District of Ohio.
The structure is a novel and never-done-before “negotiation class” — essentially a detailed framework for how the different companies being sued could reach settlements with local governments. And not just the ones who already sued, but every city, township and county in the country.
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Doing it this way, the drug companies are protected from additional lawsuits down the road and have more incentive to settle.
The part of the trial that is set to begin Monday involves defendants Summit and Cuyahoga counties, which were chosen as the first “test” cases because they are in Polster’s jurisdiction. It’s meant to be a bellwether — to see how strong the arguments on both sides are and possibly result in a settlement with the entire national class.
But it could proceed with only a resolution for those two counties. Other jurisdictions would hold their own trials or reach their own settlements with various defendants piecemeal after that. The Cleveland case is scheduled to last through December, the second set of defendants anticipated to hold a trial are in West Virginia.
But Polster has encouraged a national settlement, calling several parties to meet and discuss Friday even after a jury was seated earlier in the week. No settlements were announced by deadline Friday.
Some defendants, including Johnson & Johnson, have already settled with Summit and Cuyahoga counties in this first case, but not with the consolidated national class. Others including OxyContin maker Purdue Pharma agreed to file for bankruptcy as part of settlements that will now be decided in bankruptcy court, not civil court.
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Franklin County and the City of Lakewood are the class representatives from Ohio and would help negotiate any proposed settlements.
If a settlement were to be offered to the class, all members would vote and 75 percent would need to approve it.
It’s unknown how much money could potentially be offered in such an agreement, but estimates of the damages from the opioid epidemic range from 50 billion to more than a trillion dollars.
Money from a class settlement would be distributed at the county level based on a formula including how many pills were distributed there and how many deaths occurred. Each county could decide with its own municipalities how to split the pot. If they can’t decide, the class framework lays out a default allocation percentage.
Under the default, if Montgomery County received $2.8 million of a hypothetical $1 billion settlement, the city of Dayton would get about $464,000. Any settlement is expected to be much larger than the hypothetical $1 billion.
If no national settlement is reached in the coming weeks, Dayton, Montgomery County and any other local governments that sued in federal court will have the ability to schedule a local trial like Summit and Cuyahoga did. That would take place in the Southern District of Ohio.
An online tool at opioidsnegotiationclass.info breaks down the default allocation for each local entity.
Not everyone is happy with the class structure of the litigation. Ohio Attorney General Dave Yost filed a brief in August saying settlements should happen at the state level and local governments shouldn’t have to decide if they want to opt into the class before they know the settlement amount.
“Every community has to make a determination whether they’re in or out before they even know what the deal is. Local governments will have to make a big decision,” Yost said. “And if they do nothing, that is their big decision – they’re in, whether it’s good, bad or ugly.”
Counties and cities are in favor of the current structure because they argue very little money from past settlements with states — like the Big Tobacco settlement in the 1990s — ever trickles down to them.
In a statement in August, Summit County said, “At this level of government, we are in the best position to serve our local communities and we know what we have spent and what we need for the future.”
Staff writer Kaitlin Schroeder contributed to this story.
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