Alabama Hospitals Hard Hit by Opioids Take Case to State Court

Alabama hospitals trying to speed up relief in the opioid crisis will face manufacturers in the first opioid state trial involving hospitals July 24.

Hospitals across the country are taking a two-pronged approach to get opioid relief funds faster from opioid manufacturers: They are suing in state courts for faster trials in addition to federal courts. Alabama hospitals are seeking $300 million to $500 million from the defendants in the state suit.

The hospitals say their state suits are distinct from the multidistrict litigation being overseen by a federal court in Ohio, which involves cities and counties nationwide. As providers on the front lines of the opioid crisis, they say the operational impact felt by hospitals and the rest of the health-care system is different from the harms governments have alleged in their suits.

The state court strategy is to advance hospitals’ claims toward resolution, complementing the national litigation, said David McMullan, an attorney of Barrett Law Group, which represents 945 hospitals in 43 states and has filed 25 cases in state and federal courts on behalf of hospitals in the opioid crisis.

Heading to Trial

Eight Alabama hospitals will proceed to trial July 24. Steven Martino of Taylor Martino Rowan, an attorney for the hospitals, said they are bringing a public nuisance claim for relief against nine marketing and distributor defendants, including AmerisourceBergen, Allergan, Anda, Cardinal Health, Johnson & Johnson, McKesson, Teva, H.D. Smith, and Henry Schein Inc.

Martino said the defendants have led hospitals to allocate additional medical and financial resources to treat opioid patients.

Opioid use disorder accounted for around 66 million emergency outpatient visits and 760,000 inpatient visits annually in the US from 2017 to 2022. Hospitals estimate that caring for such patients costs more than $95 billion per year nationally, according to data from PINC AI Applied Sciences. If the payer mix remains unchanged, Medicare and Medicaid programs would bear approximately $67 billion of the expense.

Don Barrett of Barrett Law Group said the hospitals are willing to settle with the defendants before trial but are also eager to use the trial as an opportunity to showcase the impact of opioids on the hospital system.

“If you trial the case and win it, you’re going to get more money than you would if you settle the case because a settlement is a compromise which takes into account the risks and the opportunities for both sides,” Barrett said in an interview.

Setting Example for Other States

Barrett said the Alabama trial would set a precedent for hospital cases in different jurisdictions to reach settlements at agreed-upon amounts. The Barrett Law Group has represented hospital lawsuits in Arizona, Florida, Kentucky, Mississippi, Tennessee, and Texas. They plan to file suits in California, Maryland, and South Dakota in the near future. Alabama was the first to schedule a state trial.

“The best outcome for the trial is the jury returns a verdict in the plaintiff’s favor,” Martino said.

The hospitals are seeking injunctive relief, abatement of the public nuisance, monetary damages, and reimbursement for all costs, including interest, expenses, and attorneys’ fees, according to the complaint.

McMullan added that a negative verdict would be influential, but it wouldn’t signify the end of litigation due to ongoing hospital lawsuits in multiple states.

Separately, hospitals have asked the federal judge in Ohio to appoint Barrett as interim class counsel to exclusively represent their interests. They argued that their claims have provable damages that are separate from those of states and municipalities.

“We certainly have a desire and a necessity and ability to have a real abatement program so that we’re going to be able to present that to the court, and, in a way, it’s going to do something to stop this opioid epidemic,” Barrett said in an interview.

Federal Litigation

On the federal level, hospitals are waiting for Judge Dan Aaron Polster of the US District Court for the Northern District of Ohio to certify the proposed class action that includes Southwest Mississippi Regional Medical Center, et al. v. AmerisourceBergen Drug Corp., et al. and other nationwide acute care hospitals’ suits.

“We hope that Judge Polster will certify a class, which will make it more efficient and easier to handle all the hospital cases,” Barrett said.

However, distributor defendants AmerisourceBergen, Cardinal Health, and McKesson, and pharmacy defendants CVS, Walgreens, and Walmart, filed separate motions arguing against the class counsel appointment in the federal case. The distributors asserted that “a class action is not an appropriate bellwether and a motion for class certification would only delay the resolution of the hospital cases.”

“Hospitals frequently implement their prescribing guidelines and they (or their employees) regularly purchase, prescribe, dispense, and administer prescription opioids,” the distributors wrote in a June 8 filing. “These circumstances, which will bear on questions of commonality, predominance, typicality, and superiority, will vary hospital by hospital.”

‘Similarly Situated’

Elizabeth Burch, Fuller E. Callaway Chair of Law of the University of Georgia School of Law, said she is surprised to hear the hospitals are pursuing class action certification.

“The problem for a class action certification is that the plaintiffs have to be similarly situated enough and the defendants have to be similarly situated,” Burch said.

McMullan argued that while no class actions have been certified in the federal multidistrict litigation, the court could potentially certify only a subset of the issues, such as liability issues. These include the defendants’ alleged collective creation of an opioid market, use of campaigns to alleviate worries among chronic pain patients, and their failure to fulfill regulatory obligations in opioid distribution.

“We believe that with some effort the court could certify both issues—liability and damages—but even if it didn’t feel comfortable certifying the damages question, that the liability issues could be certified as a class action alone,” McMullan said. He said varying damages among class members doesn’t prevent class certification if a common methodology to calculate damages is present.

Defendants in the Alabama state suit didn’t respond to requests for comment.

The case is DCH Health Care Auth. v. Purdue Pharma, Ala. Cir. Ct., No. CV-19-07, complaint filed 8/25/22.