Summit County’s opioid lawsuit is going forward despite Purdue Pharma’s bankruptcy
Purdue Pharma’s bankruptcy filing Sunday night may not dramatically affect Summit County’s ongoing lawsuit against Big Pharma, attorneys said.
The county has engaged outside law firms to try the case, and lead counsel Hunter Shkolnik of New York-based Napoli Shkolnik, PLLC, said they’d known this was coming for a while.
Purdue Pharma, which created OxyContin and has been accused of deceptive marketing that resulted in its increased proliferation, is a defendant in Summit County’s lawsuit. Around 2,000 parties, including cities, towns and counties, have an active lawsuit against the opioid industry, according to reports.
“We knew Purdue was never going to be at the trial — they’ve made that pretty clear for a year now,” the attorney said.
The litigation continues against opioid distributors, which Shkolnik characterized as the parties most responsible for the opioid crisis. Nearly half a million people died between 1997 and 2017 in the United States from opioid overdoses, according to the Centers for Disease Control and Prevention.
More than a million opioid pills were distributed in Summit County between 2006 and 2012, enough for roughly 24 pills per year for every man, woman and child, according to a trove of data released by the Drug Enforcement Agency.
Earlier this summer, the county added 55 defendants to its suit, including Purdue Pharma and members of the family who founded the company, the Sacklers. The pharmaceutical giant is portrayed in court documents as misleading doctors about the addictiveness of OxyContin.
On Sunday, Purdue Pharma filed for bankruptcy as part of a proposed settlement. The plan calls for Purdue Pharma to essentially transform into a public-benefit company by declaring bankruptcy and reforming as a different company that would continue to manufacture OxyContin but donate the proceeds to the plaintiffs in the lawsuit, according to media reports.
The lawsuit also names pharmacy chains like CVS and Walgreens, stores like Walmart, Costco and Smith’s Food and Drug, and distributors like AmerisourceBergen, Cardinal Health and McKesson Corporation.
Shkolnik said Purdue Pharma was just one player in a very large case.
“The litigation’s not ending, not at all,” Shkolnik said. “In less than four weeks I am one of the lead trial attorneys in the first (multidistrict litigation) mass trial against the other defendants — the big distributors, the big chain pharmacies.”
The county’s suit doesn’t put a price tag on the damages it seeks, but asks for compensatory and punitive damages. All of the money from a potential settlement or judgment will go back into the community, Summit County Attorney Margaret Olson has said, to be used for things like education and prevention efforts or an addiction center.
Shkolnik did not say how much money the county might receive from the proposed settlement. Since it would involve Purdue Pharma declaring bankruptcy, the payments would be determined by a bankruptcy court.
The outside law firms pursuing the case for the county would not be paid unless the county receives money from a judgment or settlement. That group of attorneys is Salt Lake City-based Dewsnup, King, Olsen, Worel, Havas and Mortensen and Magleby, Cataxinos and Greenwood, and New York City-based Napoli Shkolnik, PLLC
Shkolnik said he did not know how Purdue Pharma’s proposed settlement would affect his firm’s compensation.
The CDC describes the opioid crisis in three waves, with the first being the proliferation of prescribed painkillers. That led to people seeking cheaper or stronger alternatives like heroin — the second wave — and eventually to synthetic opioids like fentanyl, the third wave.
Court documents claim the defendants, including Purdue Pharma, were integral in the uptick of opioid prescriptions as they set about a systematic marketing strategy to mislead prescribers into thinking the painkillers were not addictive.
“Purdue started a fire,” Shkolnik said. “The distributors – such as McKesson, AmerisourceBergen, Cardinal Health (and) Walgreens – poured gasoline on it.”
Many states that have litigation against the company have balked at the proposed settlement, which is reported to be worth about $12 billion. The Sacklers would pay about $3 billion of that amount. In March, Bloomberg estimated the family’s net worth at $13 billion. Detractors of the proposed settlement have said the cost is not high enough to the family and that they would be allowed to keep their wealth.
One state attorney general who rejected the settlement deal, North Carolina’s Josh Stein, called the settlement a “getaway plan.”
“The Sackler family sucked billions of dollars out of Purdue and is now throwing the carcass of this drug company into bankruptcy,” Stein wrote in a statement.
Shkolnik said another ruling by an Ohio judge overseeing one large group of opioid lawsuits may present an alternative resolution for Summit County. U.S. District Judge Dan Polster approved a plan that would appoint 51 cities and counties to serve as “class representatives” and a group of attorneys to serve as class counsel for the negotiation class.
The groups would hash out an agreement that would set levels of remuneration that would cover all 3,000 counties and 30,000 municipalities in the United States, according to court documents.
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