HUNTINGTON — Talks were underway in Charleston last week in an effort to settle all West Virginia-based lawsuits filed against drug industry companies for their alleged roles in the opioid crisis.
The move comes after nationwide settlement talks perceived as slighting the Mountain State fell through last month.
The negotiations, originally ordered for state-based cases by a state judicial panel, marks the first time a state has broken out of national negotiations to work toward a universal settlement resolving all state and federal opioid cases in that state, according to Huntington-based attorney Paul T. Farrell Jr. He is leading the talks on behalf of the plaintiffs in the multiple lawsuits.
As of Friday, all West Virginia plaintiffs, including Cabell County and Huntington, have proposed a $1.25 billion settlement, which would go to plaintiffs in the cases, Farrell said. Attorneys fees would be awarded separately from the $1.25 billion and would be determined by a panel of West Virginia Judges overseeing state opioid cases.
The deal also leaves open the opportunity for West Virginia Attorney General Patrick Morrisey to make his own settlement with some defendants in the state lawsuits.
“What that means is … we have all decided to speak with one voice and to negotiate separately from the national scene with the defendants,” Farrell told The Herald-Dispatch on Friday.
About 3,000 lawsuits against opioid firms have been filed by different governments and other entities across the United States; Cabell County and Huntington were among the first.
In general, they argue the defendants breached their duty to monitor, detect, investigate, refuse and report suspicious orders of prescription opiates coming into the states and fueled the opioid crisis through aggressively promoting their products. The defendant companies have generally denied the claims, saying they abided by the laws in place in carrying out their business.
From 2006 to 2014, 1.1 billion pain pills were supplied to West Virginia, with 261 million coming from distributor Cardinal Health, 172 million from McKesson and 169 million from AmerisourceBergen. As the number of pills sent to the state decreased over the years, those who developed drug-dependency issues turned to illicit street drugs, like heroin, to cope. During those years, the number of overdose deaths in the state skyrocketed, either from prescription drugs or illicit drugs.
In 2017, more than 70,000 people in the United States died from drug overdoses, with about two-thirds stemming from use of a prescription or illicit opioid, according to the Centers for Disease Control and Prevention. The CDC said West Virginia had the highest overdose rate in the nation in 2017, while Ohio ranked second and Kentucky ranked fifth.
The lawsuits seek payment to help remedy the problems drug dependency has caused governments, first responders, citizens and businesses in the area.
National deal falls through
As talks started to settle the thousands of nationwide claims last year, West Virginia was among the first to reject a proposed $18 billion national universal settlement, which would be paid over an 18-year period to resolve all cases against the drug industry across the United States.
The allocation for West Virginia would have amounted to $8.9 million per year, or about $160 million total over the 18 years. Fifteen percent of that would have gone to attorneys general and counties each, with the remaining 70% going into a recovery fund. That breaks down to about $6.2 million for the recovery fund annually and $1.3 million each for the attorney general and county funds. For Cabell County, that deal would have yielded about $130,000 yearly.
However, due to past settlements by the West Virginia Attorney General’s Office, defendants had argued West Virginia should not receive funds for the recovery and attorney general funds, leaving the state receiving just $1.3 million to split among the counties.
That deal fell through in February.
Farrell said the original national deal would have West Virginia “suckling from the hind teat” for nearly two decades.
“We don’t have 18 years,” he said. “If we were to wait 18 years, that would be an entire other generation lost to the epidemic. That’s why we want the money. Now.”
Nearly 400 lawsuits in West Virginia
In West Virginia, there are currently almost 400 lawsuits filed in federal or state courts by governments, individuals, hospitals, unions and more.
Federal cases filed nationally have all been joined as part of a multi-district litigation and are being heard by Cleveland-based U.S. District Court Judge Dan A. Polster. The cases are sent back to their local districts once Polster believes they are ready for trial, as has happened with lawsuits filed by Cabell County and Huntington.
Similarly, cases filed in West Virginia state court have been gathered to be heard before a mass litigation panel (MLP) court.
There are currently 95 lawsuits before the West Virginia panel, and more than 275 West Virginia-originated lawsuits are filed in federal court.
The West Virginia panel involves five circuit court judges. They are Alan Moats, of Barbour and Taylor counties, and Derek C. Swope of Mercer County, who decide the merits of the cases, as well as Debra Scudiere, of Monongalia County; Jay M. Hoke, of Boone and Lincoln counties; and Joanna I. Tabit, of Kanawha County, who decide the resolution issues.
Those judges recently ordered the state plaintiffs and defendants to enter mediation and invited the federal plaintiffs and the state attorney general to join on those talks.
According to Farrell, about 250 attorneys representing both sides in the cases met at the Chase Bank Building in Charleston for two days to start those talks.
Farrell; Paul J. Hanly Jr. of Simmons Hanly Conroy; and Joe Rice of Motley Rice LLC are co-lead attorneys in the federal litigation. Because of his experience in the federal cases and his involvement with West Virginia cases, Farrell was selected to lead negotiations during the discussions in Charleston. Rice was also on hand.
The first objective of the meeting was to have open and direct discussions separately for the state, and the second was to make an offer the lawyers were comfortable recommending to their clients.
“The important thing is that these are West Virginian lawyers representing the West Virginia communities and cities,” Farrell said.
He would not go into further detail about the internal mediation discussions that occurred over those two days, citing confidentiality issues. But this move has rallied all of the West Virginia plaintiffs and lawyers, including the attorney general, under the West Virginia flag, he said.
“We’ve agreed that it’s in the best interest of West Virginia to speak with one voice to get the largest amount of money as quickly as possible,” he said. “And then we’re going to rely upon the West Virginia family to decide what’s in the best interest of West Virginia.”
The settlement proposal
The defendants were offered a universal settlement of West Virginia cases for $1.25 billion, all of which would go to the plaintiffs to directly combat fallout from the opioid crisis. The offer also seeks an additional attorneys’ fees, which would be awarded by the West Virginia MLP court.
Farrell said he reached that amount by looking at what smaller-scale settlements have been elsewhere in the country and comparing that to the financial ability of the defendant companies as more of them file for or consider bankruptcy.
Instead of being paid over an 18-year period, like the proposed national settlement had entailed, the settlement would be paid immediately, according to the proposal put forth by the plaintiffs’ attorneys. It also leaves room for Morrisey to reach his own settlement with opioid manufacturers, in which money would go toward state claims and programs.
Transparency and accountability is important, Farrell said, and that’s why the request for attorney fees was made separate from the abatement amount.
Last year, Farrell said he would seek a $500 million settlement from the defendants in the Cabell County Commission and Huntington cases alone, which included attorney fees.
The Cabell County Commission hired Farrell on a contingency basis, with him taking 30% of any damages that may be won but not charging the county if no damages are awarded. It is unclear what percentage Charles “Rusty” Webb, who represents Huntington, was to receive upon his hiring.
Farrell said the $1.2 billion for the plaintiffs is a non-negotiable number and would first have to be approved by the individual plaintiffs and attorney general before the deal is finalized, if the defendants accept.
“We are not haggling,” he said. “This is the number.”
Trial date a factor
The deal only remains on the table until Farrell begins opening arguments at a trial expected to occur later this year for claims made by the Cabell County Commission and city of Huntington.
A trial date has not been set in those cases, which will be heard together. However, Charleston-based District Judge David A. Faber is expected to set a date when the sides involved in those cases meet Thursday, March 5, in Charleston for a status hearing. Farrell said he hopes the date is set for some time in June.
Farrell said if the Cabell County and Huntington trial begins, the fallout for the defendants could be brutal.
“You can buy peace in the state of West Virginia for the devastation you caused,” he said. “Or if you don’t take this opportunity, then we’ll go to trial for Cabell County, and then we’ll set up trials for Kanawha County, Boone, Logan, Mingo, McDowell, Wyoming, Raleigh (…) with some of the best lawyers in the nation (from our state).”
The importance of setting a deadline is that the opioid pill companies are now on the clock, he said.
The details of how the money sought by the plaintiffs’ attorneys would be split have not been reached because talks are still in early stages, Farrell said.