Oklahoma City, OK (WorkersCompensation.com0 – There has been no shortage of opioid litigation in the past few years. Once we found out just how addictive drugs like Oxytocin can be, many states filed lawsuits against large pharmaceutical companies to compensate their citizens for the harm caused by these addictive substances.
A new story in Oklahoma illustrates the complexity of these lawsuits. There, a settlement was reached with Purdue Pharma that paid a large sum of money for a drug treatment center at Oklahoma State University.
Unfortunately, the state of Oklahoma did not receive any money in the settlement that was reached. Many of the cities in Oklahoma did receive money. When a second settlement was reached with a different defendant, the lawmakers were careful not to miss out on the settlement proceeds.
This is a common occurrence in litigation where plaintiffs will attempt to settle lawsuits against multiple defendants on an individual basis. Oftentimes, parties may want to have confidentiality or other terms in connection with the monetary settlement. If the settlement amounts are public, they could act as a signal to other parties of the potential liability should cases go to trial.
So, to fix their mistake, Oklahoma passed a law requiring that all settlement money go into the state treasury. This prompted municipalities to intervene in the cases where the state was the party so that they may have a say in how the settlement money is allocated. An intervention is when a motion is filed in civil litigation and a party seeks to enter a lawsuit in which they are not named because they have an outcome in the litigation.
What happens to the settlement money may be in dispute under the new law. Some say that the settlement money may need to be in an escrow account before it is dispersed. This could cause litigation which could further delay access to the funds.
Attorneys likely want the settlement money to go into an escrow account so claims can be made for attorney’s fees prior to the funds be handed over to the state which is the client. Without this, the attorneys may have to wait for approval of a legislature or other administrative body before being paid. With upcoming settlements likely to be reached with Johnson and Johnson, this may be an issue. The parties likely have an interest not to delay reaching settlements for fears that the relevant companies could declare bankruptcy.
Some may seek to get the law to not apply to the settlement entirely which could cause litigation for years. This would require lawsuits to go through circuit court, an appellate court, and possibly the supreme court of a state. The cities are the ones who likely fight to keep this law from applying because their control is being diminished by the law. The issue may also apply to parties litigating in federal court as multiple lawsuits have been brought there as well. Some states have allowed consolidation of these lawsuits in federal court.
Opponents of the law believe that it will enable the legislature to appropriate the settlement funds to projects that are not even related to the opioid epidemic. In theory, the funds should be spent on things like education projects, recovery centers, and medical treatment for those affected by the addictive drugs.
Recall that the opioid lawsuits are traveling under the theory of public nuisance. Here, the party brings a suit stating that the defendant has engaged in conduct which has committed a tort against the entire society. Naturally, different communities have different stories about how opioid have affected them and are looking to get involved on how the settlement money is allocated.