Posted October 2nd, 2018.
Andrew Miller says the damage to not only Pittsylvania County, but localities across the nation, caused by the opioid epidemic is self-evident.
Miller, a lawyer for the Washington, D.C.-based Sanford Heisler Sharp, LLC, is part of the legal team made up of representatives from a trio of law firms representing Pittsylvania County in its lawsuit against 20 companies on all levels of the drug supply chain.
His firm is representing more than 30 localities in Virginia in their own suits, as well as others beyond the commonwealth’s borders. He said the city of Alexandria and Dickenson County were their first two lawsuits — each on opposite ends of the state.
He said the distance — both physically and culturally — between the two was a prime example of the epidemic’s far-reaching effects.
“Everybody knows people’s lives have been affected by this problem,” said Miller. “From Alexandria to Dickenson, everyone has been affected by this.”
Legal experts specializing in torts — a legal term for civil wrongs that intentionally or accidentally injures another party — have kept a close eye on the litigation surrounding the opioid epidemic.
Most lawsuits claiming fraud or negligence are part of tort law.
University of Virginia Law vice dean Leslie Kendrick said the plethora of lawsuits against pharmaceutical companies are “the most significant thing happening in the world of torts right now.”
“It could be a very important moment both for the opioid movement and the tort system,” she said.
She said it’s being compared to the successful cases brought against the big tobacco companies by 46 states that resulted in the Tobacco Master Settlement Agreement in 1998.
Not only were the four companies involved required to pay out billions of dollars but also were slapped with several restrictions as injunctive relief, like limiting their ability to advertise products to minors. The payout to the commonwealth resulted in the formation of the Virginia Tobacco Revitalization Commission, which directed funding to such projects as building Institute for Advanced Learning and Research in Danville.
Though both the opioid epidemic and tobacco cases are examples of public health crises, however, it’s uncertain if the opioid cases will manage to yield similar results.
“The outcome of these cases is an open question,” she said.
The tobacco case was built on the states recovering tobacco-related health care costs that were dealt out to individuals through Medicaid. Localities weren’t filing their own lawsuits to recoup the rise in costs attributed to tobacco use like they are today in the case of opioid addiction and overdose.
In this case, they’re focused on the drug companies’ roles in creating a public nuisance and leaving the local governments to foot the bill for any consequences.
Kendrick said the majority of other tort cases involving public nuisance claims have been unsuccessful. “Tobacco is an outlier,” she said. “Historically, it hasn’t been that successful over time.”
Lawsuits against lead paint or firearm manufacturers have been dismissed for the most part.
“Dismissal of cases is a blow to the states and localities,” said Kendrick.
Pittsylvania County’s $50 million suit claims that each company played a role in creating the opioid epidemic, from the opioids’ manufacturing to distribution and on to management in pharmacies.
The drug manufacturers launched “misinformation campaigns” to paint a rosier view of their product, according to the county lawsuit. The drug distributors failed to properly monitor and report suspicious orders. The pharmaceutical benefit managers (PBMs) — the middleman between drug companies and pharmacies — turned a blind eye to drug misuse and failed to regulate when setting the list of drugs and dosages used by particular hospitals and insurance plans.
In the lawsuit, the rise of prescription opioids is depicted as the result of a multi-level conspiracy, stating the drug manufacturers and PBMs coordinated their efforts to achieve “the maximum profit at the expense of patients.”
Asked about the lengthy list of defendants, Miller said they believe each company named has been a player in the scheme.
The county’s suit lists 11 causes of action against the defendants, including creating a public nuisance, violating the Virginia Consumer Protection Act, fraud, conspiracy and various forms of negligence.
To prove each case, University of Richmond Law professor Carl Tobias said the law firms in these opioid-related cases will need evidence that the companies were engaging in fraud or understating the risks.
“I don’t know how difficult that is going to be to prove,” he said. The firm will have to review “what representations were made, what the companies knew and whether they were acting improperly by their actions.”
When the court reviews complaints, Tobias said it may throw away some of the defendants or causes of action if part of the claim is deemed invalid.
“Lawyers will plead all possible causes of action and some of them they may lose … It’s better to be broader and then see what the court will accept,” he said.
He added, “One live cause of action or one live count, you can move forward.”
Even if some defendants are dropped, “one may stick,” he said.
With the county’s firms working on similar cases, Tobias said the list of cases might make the legal team more valuable to the next locality it approaches as they already have some information gathered.
Miller said the litigation comes at no cost to the county; the law firms waived any form of a retainer fee and is using what is known as a contingency fee model.
According to the county’s retainer agreement, if the lawsuit is successful then the firms will receive 25 percent of the settlement. If the case is dismissed, then no compensation is required. The law firm assumes this risk when it takes the case.
Kendrick said the use of a contingency is “very standard” in tort litigation.
Tobias noted that taking on so many cases of a similar kind can help to reduce a firm’s risk of losing profit.
“All they have to do is win some of the cases in order to make this economic model work,” he said. “To start from scratch takes a lot longer. This builds their expertise, their clients benefit and it minimizes their risk overall.”
Some critics of the contingency model are skeptical of the sizeable amounts that are awarded in some cases, believing they may exceed reasonable limits.
In the tobacco settlements, the lawyers representing the first three states to settle — Florida, Mississippi and Texas — received $8.2 billion, according to a report by the New York Times in 1998.
Kendrick, who isn’t critical of the contingency fee arrangement, said it comes down to the parties involved weighing the shifting monies to cover the potentially hefty cost of paying their lawyers or sharing the settlement.
“It’s a trade off,” she said.
Other critics have said the model may call into question lawyers’ motivations when negotiating a settlement agreement.
In the county’s case, Miller said their legal team is primarily motivated by the chance for injunctive relief.
He said when the time comes to settle, they will advocate for their client and discuss “what they want and need when the time comes.”
“The companies need to start doing things to solve the problems that they’ve created,” said Miller.
While such defendants as CVS Pharmacy have created programs in response to the opioid crisis, Miller said he thinks most of these are to fix public relations.
“I think much of that is a desire to influence public opinion rather than a remedy to the harm they caused,” he said.
With the majority of the opioid lawsuits in the early stages of the litigation process, Kendrick said the dockets are “extremely active” as parties file motions to dismiss. She said few cases are anywhere close to a resolution.
“We’re still very early in the process on this wave of opioid litigations, so what’s going to happen remains to be seen,” said Kendrick.
It’s expected that it will be several months before any predictions on the outcome can be made.