April 23, 2019 / 12:56 AM / 4 months ago

Purdue’s Sackler family wants global opioids settlement: Sackler lawyer Mary Jo White

(Reuters) - Mary Jo White of Debevoise & Plimpton represents four members of the family that controls Purdue Pharma, the company that developed and marketed the painkiller OxyContin. Purdue, along with other opioid makers, wholesalers and distributors, is facing more than 2,000 suits by state, city and county officials who blame prescription opiates for sparking an unprecedented epidemic of drug abuse.

In rare public comments on behalf of the Sacklers, White told me why the family believed the litigation against them and their company is legally dubious, factually misleading and politically motivated.

But White also said the Sacklers do not want to litigate these cases to their bitter end. The family, she said in the first disclosure indication of the family’s stance on the opioids litigation, want to settle.

“The objective is and remains to try to achieve a global resolution,” said White, a former Manhattan U.S. Attorney and Securities and Exchange Commission chair. “Purdue and the Sackler family members, given this litigation landscape, would like to resolve with the plaintiffs in a constructive way to get the monies to the communities that need them, to the people that are addicted ... rather than to pay attorneys’ fees for years and years and years to come. You’re talking 2,000 cases. How long will they take to go through the court system?”

The Sackler family has not previously said it wants to settle the litigation globally, said Joe Rice of Motley Rice, co-lead counsel in multidistrict litigation consolidating about 1,500 opioid suits in federal court in Cleveland. “It appears Ms. White has now made public the willingness to settle,” he said in an email. “The issue is who are ‘they,’ what are they willing to settle, how, when, and for what consideration.”

White acknowledged that settling more than 2,000 cases will not be easy. “You have municipalities and counties as well as state AGs involved in these matters,” she said. “And getting all of those plaintiffs in a global resolution is very difficult.”

I should note that White does not represent the entire Sackler family in the opioids litigation. A different wing of the family has counsel from Paul Weiss Rifkind Wharton & Garrison and Joseph Hage Aaronson. A representative from that branch told me, however, that the entire family shares White’s view.

NOVEL THEORIES OF LIABILITY

Purdue and its billionaire owners, who have been named individually in more than 200 suits, have been singled out for public opprobrium, especially after a Massachusetts state-court judge unsealed a 277-page complaint by Attorney General Maura Healey in January. The Massachusetts complaint accused members of the Sackler family of orchestrating a marketing scheme to push sales of OxyContin, netting them billions of dollars at the expense of patients who became addicted to prescription painkillers.

White contends that state politicians and plaintiffs’ lawyers working for contingency fees have contorted the law on public nuisance, negligence and fraud in an attempt to hang liability on companies that sold government-approved products under tight federal regulation. Plaintiffs’ demands for billions of dollars to abate the opioid crisis, for example, are based on a theory that prescription opioids constitute a public nuisance. State and local officials asserted similar nuisance theories against tobacco and gun manufacturers, but the claims were never tested to a definitive conclusion in either the tobacco case, which defendants settled for about $250 billion before substantive litigation, or the gun litigation, which Congress took out of the hands of the courts when it passed federal protection for gunmakers. Opioid defendants argue that nuisance laws are restricted to property offenses and do not apply to the sale of highly regulated, prescription drugs used safely by countless patients.

Nor, according to White, can plaintiffs tie the alleged cost of opioid abuse directly to prescription drug defendants. The epidemic of drug overdoses in the past several years, according to White, is not due to misuse of prescription painkillers but to a rise in illegal heroin from Mexico and fentanyl from China. “Let’s see what the real problem is and what the real solutions are rather than playing a litigation blame game with the fingers pointed in the wrong direction,” White said.

So why, if Purdue and the Sacklers believe their legal arguments are so strong, is White pushing for a global settlement? Every defendant, of course, must weigh the costs and benefits of settling rather than litigating claims they consider dubious. What makes the analysis so fraught in the opioids litigation, though, is the sweep and severity of the allegations against the pharma defendants.

The claims are gargantuan: An expert plaintiffs’ witness in the nationwide MDL in Cleveland recently estimated that it will cost nearly half a trillion dollars to undo the damage wreaked by the opioids crisis. “The pain, death and heartache (the opioid epidemic) has wrought cannot be overstated,” wrote U.S. District Judge Dan Polster in a December 2018 decision refusing to dismiss MDL claims by Cleveland and two Ohio counties. “Plaintiffs allege that defendants have contributed to the addiction of millions of Americans to these prescription opioids and to the foreseeable result that many of those addicted would turn to street drugs.”

Polster is one of several judges to have denied preliminary defense motions to toss plaintiffs’ cases. One state court judge in Connecticut has sided with defendants, holding that local government officials could not specifically tie their costs to the actions of prescription drug defendants. No judges have yet ruled on individual defendants’ motions to dismiss.

MDL co-lead counsel Paul Hanly of Simmons Hanly Conroy rejected White’s contention that plaintiffs are trying to capitalize on anti-opioids sentiment. “Our cases assert strong legal, not political, claims against the Sacklers and all of the other defendants,” he said in an email. “Ms. White’s comments are belied by the facts that Judge Polster (in the MDL) has denied motions to dismiss brought by any number of defendants also claiming that the allegations are without a proper legal basis … and such motions have met the same fate in the New York state coordinated cases.” Defendants including Purdue are looking at an October 2019 trial date in the MDL, Hanly said, and a 2020 trial date in the consolidated New York litigation.

MASTERMINDS OR BLAMELESS BOARD MEMBERS?

White said that the Sacklers regard the funding of addiction treatment as “a social responsibility,” not a legal obligation. By her telling, litigation isn’t the right way to set national policy in an crisis that implicates law enforcement and the regulation of prescription drugs that can be addictive but can also be used safely by patients with chronic pain. And according to White, this litigation, in particular, has been impacted by factors other than the merits of plaintiffs’ claims.

“Let’s be clear: There is a major public health crisis that we’re all dealing with,” White said. “But in terms of litigation, what you always want are all of the motivators to be merits-based so that politics are not playing a role, incentives are not playing a role that alters the outcome.”

In that regard, the Sacklers regard the Massachusetts AG’s complaint as particularly misleading, arguing in a pair of dismissal motions filed earlier this month that the AG flagrantly misrepresented many of the documents cited in her complaint and does not even have jurisdiction over any of the family members.

White and the defense filings allege that the suit twists and mischaracterizes ordinary boardroom documents, such as budget presentations and sales reports, to create the impression that Purdue directors masterminded the company’s opioids marketing strategy. The defendants maintain that what the documents actually show is board members acting like responsible directors.

Massachusetts Attorney General Healey responded in an email statement: “For years, members of the Sackler family tried to shift the blame and hide their role in creating and profiting off the opioid epidemic,” she said. “Our lawsuit exposed their illegal deception, and we will aggressively pursue our case against them.”

White said she is “very optimistic” that judges will eventually agree that her clients and other Purdue directors are not individually liable, if the litigation gets that far.

But the Sacklers, she said, would rather it end with a global deal. “This is not a crisis of my clients’ or Purdue’s creation,” she said. “One of the concerns about all of these litigations and the publicity surrounding them and the misleading allegations ... take the public focus off the real problems and how to address them,” White said.

The views expressed in this article are not those of Reuters News.

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