Wednesday, August 28, 2019

WSJ: An Oklahoma Opioid Stickup


The Wall Street Journal opined yesterday on the recent news out of Cleveland County, where a district judge gave Oklahoma Attorney General Mike Hunter a favorable ruling that ordered Johnson & Johnson to pay $572M to the State over its role in the opioid crisis.

Here are some excerpts from the opinion piece:
An Oklahoma Opioid Stickup
The $572 million ruling greatly expands product liability tort law.

[Wall Street Journal Editorial Board] The ruling Monday by an Oklahoma judge that Johnson & Johnson must pay $572 million for selling opioids will be cheered by everyone who wants a scapegoat for the scourge of addiction. But the ruling could have far larger, and more dangerous, consequences by opening a vast new arena for product-liability suits.

[...] 
Mr. Hunter has since focused on his $17 billion claim that Johnson & Johnson “abate” the alleged public nuisance caused by opioid addiction. Public-nuisance torts usually involve damage to property, and the remedy is enjoin or correct nuisances. But state AGs and the trial bar have been stretching public-nuisance law beyond its intended purpose. New York City and Oakland, California, have tried to use public-nuisance law to sue oil companies for damages they claim they will incur in the future from climate change.

Oklahoma’s opioid shakedown is equally dubious. J&J’s opioids, which include a fentanyl patch and crush-resistant pill, constitute less than 1% of Oklahoma’s prescription opioid market. The Food and Drug Administration approved the drugs and their black-box warnings, and they’re still legal. Patients may only obtain the drugs with prescriptions through government-licensed pharmacies.
[...] 
Judge Balkman also stretches the traditional public-nuisance limitation with respect to property damage by claiming that J&J is liable because its sales reps were trained in their Oklahoma homes, used company cars and sent messages to homes of thousands of Oklahomans via computers. By this standard, cell manufacturers could be liable for damages caused by distracted drivers.

The state’s $572 million “abatement” claim is brimming with pork to fund government agencies, new opioid treatment centers and licensure boards such as the Board of Dentistry and Veterinary Board. Patients won’t receive much benefit, but the plaintiff attorneys who helped Mr. Hunter will be winners, having already raked in $60 million from the Purdue settlement. [...]

You can read the full editorial here, but it is behind a paywall.

Here are some other perspectives on the ruling. From the U.S. Chamber Institute for Legal Reform:
“An Oklahoma Opioid Stickup”: The Wall Street Journal editorial board took aim at yesterday’s ruling by an Oklahoma judge that Johnson & Johnson must pay $572 million for what Judge Balkman called “misleading marketing” of opioids in the state, even though the company’s sales make up less than one percent of Oklahoma’s prescription opioid market. Little of that money will go directly to plaintiffs, but their lawyers will take home $90 million.

As the editorial board points out, the ruling relied on a distorted application of public nuisance law, which does not require a direct causal link between a defendant’s action and harm to a plaintiff. With this bench verdict, Judge Balkman has added fuel to many of the over 2,000 cases in the federal opioid litigation in Ohio which rely on public nuisance. He has also effectively confirmed that public nuisance laws can be used to skirt the more stringent requirements of product liability law, validating recent efforts by the trial bar and state AGs to use this legal theory as a basis for suing energy companies over climate change. As ILR President Lisa Rickard said in response to the ruling, under public nuisance “almost any industry could be the target of large-scale litigation.

From the Independent Women's Forum:
STATEMENT OF INDEPENDENT WOMEN’S FORUM IN RESPONSE TO JUDGE’S RULING IN OKLAHOMA OPIOID CASE 
Today’s verdict distorts public nuisance law beyond recognition and puts manufacturers of all lawful products at risk.

WASHINGTON, DC -- Today’s verdict by Judge Thad Balkman that Johnson & Johnson must pay $572 million to the Oklahoma state government as penance for the opioid crisis puts manufacturers of all lawful, but politically unpopular, products at risk.

The lawsuit brought by Oklahoma Attorney General Mike Hunter sought billions in damages from the producers of federally regulated prescription opioids. Purdue Pharma and Teva Pharmaceuticals settled with the state without admitting wrongdoing prior to trial.

The epidemic of opioid abuse is a serious public health issue that requires complex and interdisciplinary public policy solutions. Unfortunately, Judge Balkman’s decision punishes the makers of valuable prescription medicines and does little to solve this complex public health problem.

Judges should not be allowed to regulate the distribution of federally-controlled medicines outside of the normal regulatory process or to redistribute wealth from the private sector to the public sector for the purpose of funding government spending. That is, quite simply, an abuse of the system of the American justice.

Jennifer C. Braceras, the director of Independent Women's Forum’s Center for Law & Liberty, issued the following statement in response to the verdict:

“Sadly, most people today know of someone who has grappled with opioid addiction. But lawsuits brought by publicity-seeking politicians won’t solve the problem. The verdict is a victory for taxation by litigation, but it is consumers who will pay the price in the form of higher prices and reduced access to pain medications for patients who need them.”

Read the IWF Legal Brief on public nuisance lawsuits against pharmaceutical companies HERE.

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