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West Virginia Seeks Separate Opioid Deal to End Lawsuits

March 3, 2020, 5:42 PM

West Virginia cities and counties are close to reaching a $1.25 billion settlement that could resolve nearly all liability in that state for the entire opioid supply chain, according to a lead attorney in the litigation.

The novel deal would break West Virginia apart from all other nationwide negotiations to resolve legal action brought by cities, counties, hospitals, and Native American tribes in the state, said Paul Farrell, a West Virginia lawyer and co-lead counsel representing roughly 3,000 cities and counties in the multidistrict litigation.

It would pull parties from two separate tracks of litigation—the cases before the Mass Litigation Panel in West Virginia state court and the West Virginia municipalities in federal court—for one deal to end virtually all claims in the state.

About 250 lawyers gathered in Charleston last week for a mediation which served as the beginning of discussions for a “West Virginia-only plan,” Farrell said.

The Strategy

The reasoning behind the deal is that the state could otherwise be left behind in nationwide, global settlement talks.

“The short answer is: West Virginia has been disproportionately impacted,” Farrell said. “The longer answer is that the current national settlement [proposal of $18 billion] does not allocate enough money to West Virginia, and they’re saying that the money that they are earmarking for the state has already been released by the West Virginia attorney general.”

West Virginia is striking out on its own to reach a settlement because other states’ attorneys general have sought to cut West Virginia from any global settlements—largely due to deals Attorney General Patrick Morrisey (R) has previously reached with 13 pharmaceutical wholesalers and distributors.

Morrisey’s office didn’t immediately respond to a request for comment.

Since 2016, Morrisey has reached a total of $84 million in settlements with 13 different drug wholesalers and distributors, including $72 million, combined, from Cardinal Health Inc., AmerisourceBergen, and McKesson Corp. From 2006 to 2012, those three companies delivered 198.7 million, 131.4 million, and 123.4 million opioid pills into West Virginia, respectively.

By comparison, two counties in Ohio just reached a deal with the same three companies for $215 million—nearly three times what Morrisey secured for his own state. The two Ohio Counties—Cuyahoga and Summit—have a combined population of nearly 1.8 million people, roughly the same as West Virginia.

Undetermined Formula

It remains to be seen how much each company would contribute toward the West Virginia-only settlement, and officials still need to determine a formula for how to divide the money between the various plaintiffs.

None of the $1.25 billion would go toward attorneys’ fees. Lawyers would be paid a rate that would be determined by the West Virginia Mass Litigation Panel.

The proposed settlement is separate from cases brought by Morrisey against drugmakers Teva Pharmaceutical Industries Ltd., Johnson & Johnson, as well as state claims in Purdue Pharma LP’s bankruptcy proceedings. The attorney general could continue to negotiate a settlement, likely with other states as part of a national deal to resolve liability for companies within the opioid supply chain.

The companies could accept or reject the proposed West Virginia settlement as soon as this week.

The case is In Re Nat’l Prescription Opiate Litigation, N.D. Ohio, No. 1:17-md-02804, 2/21/20.

To contact the reporter on this story: Valerie Bauman in Washington at vbauman@bloomberglaw.com

To contact the editors responsible for this story: Fawn Johnson at fjohnson@bloomberglaw.com; Andrew Childers at achilders@bloomberglaw.com

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