Sarasota, FL (WorkersCompensation.com) – OxyContin has become somewhat of a four letter word with the advent of the opioid crisis. Now, Purdue Pharma, the company that made the drug, is being sued in practically every state in the country. The lawsuits claim inter alia that the company failed to warn consumers about the addictive effects of OxyContin which have allegedly caused thousands of people to abuse the drug. Purdue is not the only company facing these lawsuits as many others have suffered the same fate.
Purdue is owned by the Sackler family. These lawsuits allege that the Sackler family engaged in a misleading marketing scheme to increase sales of the drugs and get patients addicted to them.
Purdue and its lawyers have stated that the lawsuits against their company are political and not based in facts. Mary Jo White of Debevoise & Plimpton who represents Purdue stated, “the objective is and remains to try to achieve a global resolution.”
Settling these cases is likely in the company’s best interest. Litigation is expensive. Litigation attorneys can charge high hourly rates and these cases can drag on for years — even if the case does not go up on appeal. If it were to go to an appellate or even a state supreme court, the company could be tied up in litigation for over a decade or more. Settling is often in the best interests of the defendants even if they did not do anything wrong because proving that they did nothing wrong in so many different lawsuits would likely cost more than the amount of settlement or the cost of the potential to be found liable.
Settling will not be easy. Many of the cases will have to be settled on an individual basis as the Sackler family is being sued not just by plaintiff attorneys but by state and local governments as well. Settling with government entities oftentimes must be contingent on the approval of government bodies.
Some believe that the opioid lawsuits will end up with the largest civil settlement funds in US history. Some have compared it to the type of lawsuits brought against cigarette companies years ago. The lawsuits are based in part on the theory of public nuisance. Public nuisance is a common law claim where the general public is alleged to have suffered damages as a result of some tortious interference of others.
Some of the lawsuits seek to sue the Sackler family individually for the alleged bad acts of the company they own. The company has attempted to file motions to dismiss on this issue, based on the theory that should there be any liability it will be against the company only. Theories such as piercing the corporate veil come to mind, which could allow lawsuits against the owners individually if they failed to observe corporate formalities. Otherwise, the plaintiffs would have to demonstrate that the Sackler family committed tortious acts themselves outside of their roles with the company.
One option that some companies take when needing to litigate claims of this magnitude is to set up a settlement fund and file an interpleader action. This type of lawsuit forces anyone who believes they have a claim against them to sue them in one lawsuit so they don’t have to engage in many actions in separate jurisdictions. The claims against the Sackler family and Purdue, however, are on consolidated or multijurisdictional dockets in separate jurisdictions. We will have to wait and see whether the Plaintiffs are willing to be negotiate with the Slacker family, or if they will want to push the cases to trial.