Oklahoma Attorney General Mike Hunter said there is no question Monday was a “day of reckoning” for pharmaceutical companies that helped accelerate the spread of dangerous opioids across the country.
Minutes after Cleveland County District Judge Thad Balkman announced his order for Johnson & Johnson to pay $572 million for its role starting and exacerbating Oklahoma’s ongoing opioid epidemic, Hunter triumphantly declared that the pharmaceutical company will “finally be held accountable” for the thousands of deaths and addictions its products caused in Oklahoma.
But questions remain over how, when and whether Oklahoma will get a chance to spend the money.
Attorneys for the state and the pharmaceutical giant wasted little time Monday before planning for the legal challenges ahead. Here’s a look at some of the largest questions facing the verdict.
What happens now?
Johnson & Johnson announced shortly after Balkman read his decision that the company will appeal the ruling and ask an appellate court to put Balkman’s order on hold while the case plays out.
We do not believe the facts or the law support this decision today,” said Sabrina Strong, an attorney for Johnson & Johnson. “We have many strong grounds for appeal and we intend to purse those vigorously.”
That means Oklahoma is unlikely to see a check from Johnson & Johnson until appeals work their way through the courts, a process that can take months or even years. In a press release from Johnson & Johnson, the company predicted the appeal could carry into 2021 because of the number of anticipated post-trial motions and amount of work preparing for the potential appeal.
But where the case will go is still undecided.
Alex Gerszewski, a spokesman for Hunter, said the Oklahoma Supreme Court has the authority to retain the case or assign it to the Oklahoma Court of Civil Appeals.
Strong, meanwhile, said that Johnson & Johnson could even ask the country’s highest court to intervene on due-process grounds.
“I think it’s fair to say there are some serious constitutional problems with the decision today,” she said. “And these are issues we think could be interest to the U.S. Supreme Court, if necessary.”
What’s the status of the previous settlements?
Regardless of what happens with the appeals portion of the case, Oklahoma can count on collecting hundreds of millions from two other pharmaceutical companies.
Oklahoma previously negotiated a $270 million settlement with Purdue Pharma and a $85 million settlement with Israeli-based Teva Pharmaceuticals for their roles in the opioid crisis.
Gerszewski said the money from the Purdue settlement, which includes using about $200 million to set up an endowment at the Oklahoma State University’s Center for Wellness, remains unspent at this point. He didn’t give a timetable for when that money will be put to use but said that it is still in the “early stages.”
But he said the Teva settlement money is now in a bank account in the state treasury. That means the money, with the exception of 15% of the award, or $12.75 million, that went to attorney fees, could soon be available for lawmakers to divvy up.
“The money is dedicated for use in addressing and ending the opioid epidemic in our state and will be directed to those purposes by the Legislature,” he said.
How will the verdict affect other cases?
Legal watchers and state and local governments across the country were closely monitoring Oklahoma’s case. It was the first state trial seeking to make opioid manufacturers pay for their role in fomenting the opioid crisis.
In addition to dozens of other states that are pursuing their own lawsuits, more than 2,000 counties, cities and other municipalities are bringing a class-action lawsuit against opioid manufacturers, distributors and pharmacies that is currently before a federal judge in Ohio.
More than 50 Oklahoma cities and counties earlier this summer additionally announced they will contract with a law firm to seek damages related to the opioid epidemic.
But with an appeal likely in Oklahoma’s case, it is unclear if Balkman’s ruling will affect these lawsuits.
Johnson & Johnson argued in their post-ruling press release that Monday’s decision won’t have a “binding impact” on other courts. But the company added that it “remains open to viable options to resolve these cases, including through settlement.”
Hunter, however, said other jurisdictions that are leading their own lawsuits should feel a sense of optimism after Balkman’s ruling.
“The (legal) record that is now available to my colleagues in other states is certainly something that is going to assist this process around the country,” he said. “There is no question in my mind that these companies knew what’s going on at the highest levels, but they couldn’t keep making money off of it, and that’s why they should be responsible.”
How is Oklahoma planning to spend the funds?
If the state’s case survives an appeal and Balkman’s order is upheld, the question remains about how the money will be spent.
Balkman, in his 42-page ruling, stated that the proper remedy for the public nuisance caused by Johnson & Johnson is “equitable abatement.”
However, he said the state did not “present sufficient evidence” that a 20- to 30-year, $17-billion abatement plan that would address a wide range of treatment and education was necessary.
Instead, he laid out a $572 million abatement plan that includes about $264 million for addiction treatment services, $103 million for pain management benefits, $57 million for universal screening services, $20 million for medical treatment for infants born with neonatal abstinence syndrome, and $11 million for investigatory and regulatory actions.
He also said that outside attorneys hired by the state are entitled to collect fees from the abatement proceeds pursuant to their contract with the state, which calls for them to collect 25% from the first $100 million and 20% from $100 million to $200 million.
Balkman and Hunter both said that some legislative authority, however, might be needed for Oklahoma to ultimately spend the funds.
Hunter said he’s already started meeting with legislative leaders and Gov. Kevin Stitt to plan their next moves.
“There is going to be a united front with regard to how we proceed with this,” he said. “This is going to be an important step forward in dealing with the epidemic.”