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Opioid Litigation: A Class of Its Own

Deaths caused by opioids—both legal and illegal—have been rising since the 1990s, wreaking havoc on communities across the United States. ((Opioid Overdose: Understanding the Epidemic, Centers for Disease Control and Prevention (last updated Dec. 19, 2018), https://www.cdc.gov/drugoverdose/epidemic/index.html.)) In 2017, an average of 130 Americans died from opioid overdoses every day, ((Id.)) and the United States Department of Health and Human Services declared the opioid crisis a public health emergency in that same year. ((HHS Acting Secretary Declares Public Health Emergency to Address National Opioid Crisis, U.S. Department of Health & Human Services (Oct. 26, 2017), https://www.hhs.gov/about/news/2017/10/26/hhs-acting-secretary-declares-public-health-emergency-address-national-opioid-crisis.html.))

In an effort to combat the crisis, several cities, counties, and states across the country have brought lawsuits on behalf of the affected citizens. On December 12, 2017, the Judicial Panel on Multidistrict Litigation ordered the centralization of a large number of these federal litigation cases in the Northern District of Ohio for consolidated pretrial proceedings. ((Transfer Order, In re National Prescription Opiate Litigation, No. 1:17-MD-02804 (N.D. Ohio Dec. 12, 2017).)) The centralized cases, officially labelled the National Prescription Opiate Litigation, all focus on the role played by manufacturers and distributors of opioid medications in causing the current opioid crisis. ((Id. at 3.)) Specifically, plaintiffs across the country allege that these manufacturers and distributors failed to accurately disclose the risks of their opioid medications or to adequately monitor and respond to suspicious orders of their prescription opioids. ((Id.))

The resulting centralized litigation is both massive, involving literally thousands of parties, and incredibly complex. Given that I am far from an expert on litigation of this complexity, I will avoid diving into the minute details of these proceedings. Rather, I intend to focus on the possible implications of a single order, and the accompanying memorandum opinion from Judge Polster, the judge presiding over the consolidated proceedings, which certified a “Negotiation Class.” ((Order Certifying Negotiation Class & Approving Notice, In re National Prescription Opiate Litigation, No. 1:17-MD-02804 (N.D. Ohio Sep. 11, 2019) [hereinafter Negotiation Class Order]; Memorandum Opinion Certifying Negotiation Class, In re National Prescription Opiate Litigation, No. 1:17-MD-02804 (N.D. Ohio Sep. 11, 2019) [hereinafter Memorandum Opinion].))

At a high level of generality, this Negotiation Class, an entirely novel and untested concept, ((See Frequently Asked Questions, In Re: National Prescription Opiates Litigation, https://www.opioidsnegotiationclass.info/Home/FAQ (las updated Jan. 16, 2020, 10:46:48 AM) (Question 2).)) is a type of class certification that allows a select number of representatives to negotiate a settlement for the entire Class. The Class, as initially proposed, would include all counties and municipalities in the United States, totaling 34,458 individual entities. ((Memorandum Opinion, supra note 7, at 16.)) Each of these entities, however, were given the opportunity to opt out of inclusion in the Class in light of the Class’s proposed allocation for any settlement later reached. ((Negotiation Class Order, supra note 7, at 1. See also Frequently Asked Questions, In Re: National Prescription Opiates Litigation, https://www.opioidsnegotiationclass.info/Home/FAQ (las updated Jan. 16, 2020, 10:46:48 AM) (Question 20); Allocation Map, In Re: National Prescription Opiates Litigation, https://allocationmap.iclaimsonline.com/ (last updated Jul. 18, 2019, 12:53:06 PM).)) A deadline for these opt-out decisions was set for November 22, 2019. ((Negotiation Class Order, supra note 7, at 1.)) According to a proposed order filed by Class Counsel on January 13, 2020, 551 entities filed timely, unrescinded opt-outs, and 5 more filed late opt-outs, leaving 33,902 entities with either no opt-out or a rescinded opt-out. ((Corrected [Proposed] Rule 23(c)(1)(B) Negotiation Class Membership Order at 853, 868, 870, In re National Prescription Opiate Litigation, No. 1:17-MD-02804 (N.D. Ohio Jan. 13, 2020).)) This early opt-out deadline is one aspect of the Negotiation Class that differentiates it from traditional settlement or trial class actions. ((Memorandum Opinion, supra note 7, at 9.)) Another is the process by which the Class can reach and approve a settlement.

As mentioned, a select group of forty-nine entities are allowed to serve as Class Representatives and negotiate settlement(s) on behalf of the entire Class with thirteen specifically enumerated Defendants. ((Negotiation Class Order, supra note 7, at 2-3.)) To be officially accepted, however, any negotiated settlement would need to be approved by six supermajority votes (75% or greater) from six unique categorizations of the Negotiation Class. ((Memorandum Opinion, supra note 7, at 6. The six categorizations are class membership by number, class membership by population, and class membership by allocation for both litigating and non-litigating entities. Id.)) Once approved, the settlement would bind all member of the Class, including those that voted against it, and any monies received would be allocated according to the plan mentioned previously. ((See Frequently Asked Questions, In Re: National Prescription Opiates Litigation, https://www.opioidsnegotiationclass.info/Home/FAQ (las updated Jan. 16, 2020, 10:46:48 AM) (Questions 20, 27).)) Some other procedural and substantive characteristics further differentiate the Negotiation Class from prior class action mechanisms, including the ability for Class members to continue to pursue separate litigation, but these characteristics are not worth delving into for the purposes of this article.

There are a few interesting points to note with regards to the Negotiation Class. For the case at hand, the Negotiation Class could help expedite the reaching of a global settlement, and a global settlement would go a long way towards helping localities combat and remedy the effects of the opioid epidemic. Take, for instance, the recent settlement of roughly $260 million that Cuyahoga and Summit counties of Ohio reached with five of the thirteen enumerated Defendants. ((Jan Hoffman, $260 Million Opioid Settlement Reached at Last Minute With Big Drug Companies, N.Y. Times (Oct. 21, 2019), https://www.nytimes.com/2019/10/21/health/opioid-settlement.html.)) If this number were extrapolated to a global settlement, using Cuyahoga and Summit counties’ shares in the proposed allocation, ((Allocation Map, In Re: National Prescription Opiates Litigation, https://allocationmap.iclaimsonline.com/ (last updated Jul. 18, 2019, 12:53:06 PM).)) the resulting value would be roughly $47.28 billion, with roughly $35.46 billion going directly to counties and municipalities. While sources estimate that the financial burden of opioid abuse is much higher, ((See Ryan N. Hansen et al., Economic Costs of Nonmedical Use of Prescription Opioids, 27 Clinical J. Pain 194, 198 (2011) (estimating a cost of $53.4 billion in 2006 alone); Curtis S. Florence et al., The Economic Burden of Prescription Opioid Overdose, Abuse, and Dependence in the United States, 2013, 54 Medical Care 901 (2016) (estimating a cost of $78.5 billion in 2013); Economic Toll of Opioid Crisis in U.S. Exceeded $1 Trillion Since 2001, Altarum (Feb. 13, 2018), https://altarum.org/news/economic-toll-opioid-crisis-us-exceeded-1-trillion-2001 (projecting a cost of $199.9 billion in 2020).)) it still seems like a decent starting point, especially given that this only accounts for five of the thirteen enumerated Defendants. On the other hand, the large number of entities involved could lead to significant delays in apportioning funds from any possible settlement due to significant administration costs, which would hinder the ability of local communities to respond to the immediate demands of the opioid crisis.

Despite it being a creative and potentially expedient method for resolving this massive set of claims, however, it seems unlikely that the Negotiation Class will have far-reaching effects outside the current litigation. That is to say, the Negotiation Class might be limited to the present circumstances. Even assuming that its existence will survive judicial scrutiny if appealed, ((On appeal, it would likely be challenged for both failing to meet specific provisions of Rule 23, such as commonality and predominance, and extending beyond the scope of the courts’ powers under Article III of the Constitution. See Memorandum of Certain Defendants in Opposition to Plaintiffs’ Renewed and Amended Motion for Certification of Rule 23(b)(3) Cities/Counties Negotiations Class, In re National Prescription Opiate Litigation, No. 1:17-MD-02804 (N.D. Ohio Jul. 23, 2019).)) the factors that prompted this form of class action are particular and quite rare.

Specifically, the existence of a credible claim against the opioid manufacturers and distributors for essentially every municipality in the United States made it prudent to allow for some type of efficient global resolution. However, because the opt-out deadline was set before any settlement would be reached—and reasonably so considering the need to allow Defendants to adequately assess their settlement position—it was necessary to allow each Class member to retain some continued control via the required supermajority votes. Similarly, individual Class members were granted necessary flexibility by allowing them to continue pursuing their own litigation efforts while the Negotiation Class works towards a global resolution. It seems rather unlikely that all these factors—particularly the inclusion of every municipality in the United States—will arise again in the near future, if at all, and so the Negotiation Class will probably go down as a fascinating but ultimately short-lived innovation in the American legal system.

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Joseph Schiller

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