On The Case

As Ohio AG tries to shut down opioid bellwether trial, MDL leaders say he’s ‘outlier’

(Reuters) - Ohio Attorney General Dave Yost believes that the people of his state will be disadvantaged if two Ohio counties, Cuyahoga and Summit, go to trial next month in federal court in Cleveland with claims that opioid manufacturers, distributors and sellers contributed to a crisis of drug abuse.

The counties contend that they’ve spent billions of dollars to deal with opioid abuse and have litigated for two years to hold opioid defendants accountable. But in an interview on Tuesday, Yost said that Ohio’s opioid problem is statewide. So the liability of companies that make and sell prescription opioids, he said, should be determined in a statewide case – specifically, in the two Ohio state-court suits his office is litigating against opioid defendants.

Want more On the Case? Listen to the On the Case podcast.

To protect what he believes to be his sole authority to prosecute claims stemming from Ohio's opioid epidemic, the AG filed a mandamus petition Friday at the 6th U.S. Circuit Court of Appeals. Yost asked the 6th Circuit to enjoin U.S. District Judge Dan Polster of Cleveland from proceeding with an Oct. 21 bellwether trial in the multidistrict litigation consolidating claims about 2,000 cities, counties and other local governments that seek to hold opioid defendants liable for hundreds of billions of dollars for their alleged contributions to abuse of prescription drugs. According to the Ohio AG’s petition, only the attorney general is vested with the authority to prosecute claims that affect the health and comfort of people across the state.

The bellwether trial “will cripple the federal dual-sovereign structure of these United States,” the petition said, by permitting a federal judge to usurp Ohio’s power to prosecute claims of harm to its citizenry. In fact, according to Ohio, the entire MDL is an improper attempt by local governments (and presumably, the private lawyers who represent the approximately 2,000 plaintiffs in the opioid MDL) to grab for settlement money that properly belongs to the state treasury.

“They’re taking pieces of our case and rushing to court,” Yost told me. “That’s not good for Ohio.”

Opioid settlement money is an increasingly tantalizing prospect for state and local governments. Opioid defendants continue vehemently to deny allegations that their marketing and sales practices contributed to abuse of prescription drugs, but some have nevertheless reached settlements as trial dates have neared. News broke late last month that Purdue Pharma and its owners, the Sackler family, are trying to negotiate a global opioid settlement for $10 billion to $12 billion.

Ohio contended in its mandamus petition that Judge Polster, who has been pushing hard for settlements, is allowing MDL plaintiffs to capitalize on the leverage of the looming bellwether trial, to the detriment of state AGs litigating their own state-court cases against many of the same defendants. Ohio, according to its AG’s mandamus petition, can’t settle its own cases against opioid defendants because defendants are also worrying about claims by local governments in the MDL.

That’s a theme we’ve heard before from state AGs, most notably in opposition by more than two dozen of them to a proposal asking Judge Polster to certify a novel “negotiating class” of all of the cities, counties and local governments in the country. Among the AGs’ objections to the proposal: Its formula for allocating settlement money interferes with states’ rights to decide for themselves how to divvy up the funds. Instead of facilitating global settlements, the AGs argued in June, the MDL was driving a wedge between states and local governments.

In that context, I wondered if the Ohio AG’s mandamus petition was a harbinger. As litigation against opioid defendants moves into the crucial stage in which plaintiffs’ megabillion-dollar claims will be tested in trials in state and federal courts, will other state AGs assert that they alone have to power to negotiate settlements and allocate the proceeds? Is the Ohio petition the start of a concerted effort by state AGs to undermine the MDL?

Not according to two of the lead plaintiffs’ lawyers in the MDL, Joe Rice of Motley Rice and Paul Geller of Robbins Geller Rudman & Dowd. Rice told me Tuesday that he considers the Ohio AG an “outlier.” Most AGs, he said, are working with the MDL plaintiffs, not against them, in joint settlement talks with defendants. “I think this petition is the exception,” Rice said.

Rice pointed out that the previous Ohio AG, Mike DeWine, worked closely with MDL plaintiffs in the early stages of the litigation. DeWine, who is now Ohio’s governor, actually criticized the current AG’s mandamus petition on Friday, pointing out that local governments have borne a lot of the cost of the drug abuse epidemic. “It would not be fair to either pass a law or try in court to preclude their rights,” DeWine said.

Paul Geller said in an email that he does not consider the Ohio AG’s petition to be the leading edge of a revolt by state AGs. Other top state lawyers, he said, “understand that a comprehensive global resolution will necessarily involve states as well as the political subdivisions that have been front line litigators for the past two years.”

Geller said he was puzzled by the timing of the Ohio AG’s petition, given that Summit and Cuyahoga counties have been litigating for two years to push their cases to a bellwether trial date. Cuyahoga County counsel Hunter Shkolnik of Napoli Shkolnik had even harsher words for any state AGs who attempt to cut the MDL plaintiffs out of settlement talks: “They are acting like pirates, coming in to take the spoils of the hard work we’ve done,” Shkolnik said. “To step in now and say, ‘We’re going to pass laws to take over the case,’ or ‘We’re going to the appellate courts to take over the case,’ smacks of a power grab.”

Yost told me his office has been studying the question of the state’s sovereign authority to prosecute opioid claims since he took office in January. His mandamus petition, he said, should not have come as a surprise, considering that it reiterates arguments that he and other AGs asserted in June when they objected to a prospect of a negotiating class in the MDL. “It’s never too late to follow the law,” he said.

Yost also said that plaintiffs’ lawyers in the MDL are underestimating his backing from other state AGs. “They don’t have any idea what the other state attorneys general think,” he said. “I expect a significant show of support for my position.” (Yost declined to say what form that support would take when I asked if he anticipated amicus filings by other AGs in his mandamus case.)

Yost said he does not dispute that local governments should have a significant say in any allocation of settlement money from opioid defendants. Ohio, he said, has even participated alongside other state AGs in joint settlement talks with MDL plaintiffs, including recent negotiations with Purdue Pharma. But he said the state’s view is that Ohio’s claims must be prosecuted by Ohio’s AG, not by individual counties that happen to have been picked to stand at the head of the line.

“We shouldn’t be rewarding the first person to the courthouse,” he said.

If Yost’s mandamus petition is successful, it could embolden top lawyers from other states to attempt to cut local governments out of opioid litigation. I asked law professor Adam Zimmerman of Loyola, who has written about competition between state AGs and private MDL plaintiffs, about the Ohio AGs’ chances at the 6th Circuit. Zimmerman said in an email that he doubts the petition will be granted. Among other problems, he said, the AG did not adequately explain how it will be harmed by a non-binding bellwether trial, which will not preclude a trial of Ohio’s own case in state court. “At this moment in time, the harm Ohio claims it will suffer from a bellwether trial sounds way too speculative for a mandamus petition—especially one that seeks to not just enjoin, but dismiss every county and city claim,” Zimmerman said.

Yost countered that the state will be harmed if the bellwether trial results in inconsistent verdicts. He also said that if the bellwether goes forward to a verdict, defendants in his case will argue that Cuyahoga and Summit must be carved out of the state-court litigation. “The law professor’s comments suggest he does not understand our case,” Yost said.

Whatever you think of the AG’s mandamus petition – and of his argument that he owns all of Ohio’s opioid claims – you have to marvel at the complexity of the opioid litigation. We’re going to be looking back at the case law from this gigantic case for a long time.