Oklahoma to receive $8.9M in multi-state settlement with drug company over opioid crisis

Oklahoma Reaches Multi-Million Dollar Settlement with McKinsey & Company for Role in Opioid Epidemic

OKLAHOMA CITY – Attorney General Mike Hunter today announced the state of Oklahoma will receive $8.9 million as part of a 47-state, $573 million settlement with consulting firm McKinsey & Company for the company’s role in the nation’s opioid epidemic.

The settlement resolves investigations by state attorneys general into McKinsey for advising opioid companies on how to promote and devise unconscionable marketing strategies for the highly addictive drugs to increase opioid sales.

The money Oklahoma receives will go to the state treasury account created to receive opioid settlement money. According to the agreement, the money must be used by the state to abate the opioid epidemic.

Attorney General Hunter said McKinsey’s actions played a significant role in the opioid epidemic.

State to Appeal Judge Balkman’s Final Order in Opioid Case

State to Appeal Judge Balkman’s Final Order in Opioid Case

OKLAHOMA CITY – Attorney General Mike Hunter today announced that the state intends to appeal Cleveland County District Judge Thad Balkman’s final order issued last Friday in the trial against Johnson & Johnson.

The state agrees with Judge Balkman’s final order on a multitude of fronts. For example, the court correctly applied Oklahoma’s public nuisance law to this case, found that Johnson & Johnson is a direct cause of the state’s opioid epidemic, the epidemic is a public nuisance and menace to Oklahoma, and Johnson & Johnson is responsible for abating the nuisance.

However, attorneys for the state take issue with the part of the court’s ruling that only requires Johnson & Johnson to pay for one year of the state’s abatement plan, which was carefully designed by state officials.

“Judge Balkman’s conduct of both pre-trial and trial proceedings was informed and balanced,” Attorney General Hunter said. “His final order was correct and evidence-based as to causation and Johnson & Johnson’s culpability. However, we respectfully disagree with his order where it says Johnson & Johnson must only fund one year of cleaning up the public nuisance he found Johnson & Johnson created, after the company deceived and bombarded our doctors and Oklahomans with lies, leading to the deadliest manmade public health crisis in our nation’s history. This limitation directly opposes evidence presented during trial and the state’s public nuisance law, which requires full remediation of the problem. It is crystal clear under Oklahoma law that once a company is found liable for causing a public nuisance, it must pay what it takes to clean it up until the nuisance is gone.

“During the trial, the state’s expert witnesses repeatedly testified that it could take up to 30 years or more to take our state back to where we were before the crisis began. Our abatement plan was put together by some of the foremost experts in the state and nation on what it will take to overcome this tragedy that continues to grip our state. All of these experts agree that there are dire consequences if we do not end the crisis in its entirety, and that it will get much worse and more Oklahomans will die. Johnson & Johnson had no abatement expert of its own and failed to present a competing abatement plan.”

The attorney general agrees with the position taken by Governor Kevin Stitt, President Pro Tempore Greg Treat and House Speaker Charles McCall in the amicus brief filed on their behalf, that since the Court found Johnson & Johnson created the public nuisance, Johnson & Johnson should be required to fund all abatement costs until the nuisance they created has been abated.

Read the state’s abatement plan: https://bit.ly/34j2rnv.

The state has until Dec. 16 to file its appeal.   

AG Hunter clarifies using SC Johnson "family company" slogan in reference to Johnson & Johnson during opioid case

Oklahoma Attorney General Mike Hunter

State Clarifies Position on Calling Johnson & Johnson a Family Company

Reference in no way intended to create confusion between 
Johnson & Johnson and SC Johnson

OKLAHOMA CITY - The state of Oklahoma’s reference to Johnson & Johnson as not living up to its image as “a family company” was in no way intended to cause confusion with the separate and independent company S.C. Johnson.

One company, S.C. Johnson, makes household cleaning products. The other, Johnson & Johnson, was the kingpin of the Oklahoma opioid crisis.

“We understand why no company, including S.C. Johnson, would ever want to be associated with Johnson & Johnson’s involvement in the opioid crisis,” said Attorney General Mike Hunter. “Our references to Johnson & Johnson not being “a family company” were made in regards to its efforts to market itself as a family friendly company—including running commercials in Oklahoma throughout our trial posing itself as a company that provides products to your family from the moment a baby is born until the end of life. Of course, the thousands of Oklahomans who have died from what the court described as a “menace to Oklahoma” caused by Johnson & Johnson disagree.

“Going forward we will not refer to Johnson & Johnson as “a family company” because the Johnson & Johnson family of companies most certainly are no such thing.”

Johnson & Johnson’s Broken Pledge
Recently, Johnson & Johnson CEO Alex Gorsky signed the Business Roundtable’s (BRT) redefined statement on the purpose of a corporation.

Since 1997, the BRT has endorsed principles of shareholder importance, which have typically said corporations exist to serve shareholders. The updated statement, released last month, moves to redefine the purpose of a corporation to promote an economy that serves all stakeholders.

Gorsky — a former sales representative for Janssen — said the new statement “affirms the essential role corporations can play in improving our society when CEOs are truly committed to meeting the needs of all stakeholders.”

Attorney General Hunter said Gorsky has already broken the promise they made in signing on to the BRT’s redefined statement.

“It is beyond disappointing that Gorsky and Johnson & Johnson have already broken the promise they made just two weeks ago,” Attorney General Hunter said. “Indeed, even after a judge found that the very sales division Gorsky used to work for engaged in deceptive conduct that caused the opioid crisis. Gorsky has not only allowed a post-trial marketing campaign where it continues to deny any responsibility but also continues to utterly disrespect Judge Thad Balkman and the state of Oklahoma.

“On behalf of families of the more than 6,000 Oklahomans who lost their lives due to the menace that Johnson & Johnson caused, I would like to personally invite Gorsky to come meet with me in Oklahoma so he and his company can accept responsibility, live up to its code of conduct, the “purpose of a corporation” and help us start the healing process.”

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.

AG Hunter celebrates after judge issues $572M judgment in opioid trial

Attorney General Hunter Celebrates Major Victor for the State after Judge Balkman Issues $572 Million Judgment in Opioid Trial

 Johnson & Johnson held liable for harm caused to Oklahomans, fueling opioid epidemic

NORMAN, OKLA.  – Attorney General Mike Hunter today commended Cleveland County District Judge Thad Balkman for ruling in the state’s favor and ordering Johnson & Johnson and its subsidiaries to pay $572 million to abate the ongoing opioid epidemic in Oklahoma.

The judge’s ruling is the first of its kind in the country to find an opioid manufacturer liable for the harm caused from the opioid crisis in the United States.

“Today is a major victory for the state of Oklahoma, the nation and everyone who has lost a loved one because of an opioid overdose,” Attorney General Hunter said. “Judge Balkman has affirmed our position that Johnson & Johnson maliciously and diabolically created the opioid epidemic in our state. Our evidence convincingly showed that this company did not just lie and mislead, they colluded with other companies in route to the deadliest manmade epidemic our nation has ever seen. When deaths and sales of the drugs began to skyrocket in tandem, the company repeatedly ignored the problem and built its billion dollar brand out of greed and on the backs of the pain and suffering of Oklahomans.

“It is my hope that this judgment will provide some solace to the thousands of families, who have tragically lost a loved one due to an opioid overdose. It should also inspire a sense of optimism in those still struggling with an opioid addiction because we remain committed to abating the crisis, thus bringing about a brighter future for those suffering and our state.

“Additionally, I continue to be grateful for the talented team of attorneys who worked on this case. It took tremendous courage to take this case on. These are attorneys who have suffered greatly not just during this case with substantial time away from their families and forgoing taking on other cases, but many on this team have also lost loved ones to an addiction to these deadly drugs. They know firsthand the anguish of burying a family member, who they first had to watch spiral into despair.

“Finally, just as we have said at different stages of the case when Johnson & Johnson pulled out all the stops to try to derail or stall the case, we appreciate Judge Balkman’s wisdom and openness. He saw through the company’s desperate acts to delay justice for Oklahomans.”

To read Judge Balkman’s judgment, click here.

According to the U.S. Centers for Disease Control and Prevention there have been nearly 400,000 overdose deaths in the United States between 1999 and 2017. Evidence presented by the state during trial showed that since 2000 approximately 6,000 Oklahomans died from an opioid overdose, while thousands more are still struggling with addiction.

Through evidence presented at trial, the state successfully showed during this time period that Oklahoma doctors were targeted over 150,000 times by Johnson & Johnson sales representatives. The sales representatives aggressively marketed and bombarded doctors with pseudoscience and misleading information that downplayed the risks of opioids, leading to the public nuisance. As a result, when opioid sales in Oklahoma began to skyrocket, the death toll from unintentional prescription drug-related overdoses mounted, leaving behind broken homes, families and communities.