Special master to consider default against Endo in opioid trial

A sculpture made out of opiod pill bottles is set up next to Democratic presidential candidate and former Vice President Joe Biden's campaign bus in Somersworth, New Hampshire, U.S., February 5, 2020. REUTERS/Rick Wilking
  • N.Y. AG calls appointment "a last-resort extension of mercy" to Endo
  • Endo accused of withholding "smoking gun" evidence until mid-trial

(Reuters) - A New York judge has appointed a special master to advise him on whether to impose default judgment or contempt against drugmaker Endo International Plc for withholding evidence in a trial over its role in the opioid epidemic.

Justice Jerry Garguilo in Suffolk County Supreme Court named Joseph Maltese, a now-retired judge in the state's Appellate Division, Second Department, at a hearing Wednesday morning. Garguilo said Maltese would deliver a report and the parties would have a chance to respond.

Though Garguilo did not rule, he expressed concerns about Endo's conduct. He noted that the company had been sanctioned with default judgment over similar allegations in a separate case in Tennessee, which it ultimately settled for $35 million last month.

The judge said the record appeared to show that Endo became aware of relevant discovery before jury selection began in June in New York.

"If we're just before the commencement of jury selection, why doesn't somebody get on the phone to the plaintiffs and say, 'Wait a second, we just came up with some information you should have?'" Garguilo asked.

The appointment of the special master drew a strenuous objection from the New York Attorney General's office, which is suing Endo and other drugmakers alongside Nassau and Suffolk Counties.

John Oleske, a lawyer for the state, called the appointment "a last-resort extension of mercy" to Endo that would impose "additional burdens" on New York as it continues to try the case while combing through late-produced evidence.

New York sought default judgment on Aug. 2, accusing Endo and its attorneys at Arnold & Porter Kaye Scholer of dumping "vast troves of smoking-gun evidence" mid-trial. The company and the firm have denied that any evidence was withheld deliberately.

Garguilo subsequently entered an interim order requiring Endo to provide a list of late-produced evidence with information about its chain of custody by Aug. 4. The state said Endo failed to comply and moved for contempt.

Garguilo on Wednesday said he agreed Endo had not complied with the interim order, though he said he would wait for Maltese to weigh in on whether it amounted to contempt.

The disputed evidence included records of Endo sales' representatives visits to New York prescribers and other internal documents.

In a new filing last week, the state said it had identified a previously unproduced email from a witness, a former Endo employee, to her husband expressing concerns about the company's marketing practices. The employee nonetheless testified in a deposition that the company always adhered to regulatory standards, according to the state.

More than 3,000 lawsuits have been filed by state and local governments accusing opioid manufacturers of falsely marketing opioid drugs as safe, and distributors and pharmacies of ignoring red flags that they were being used illegally.

Johnson & Johnson and the nation's three largest distributors have offered to settle claims nationwide for $26 billion. Endo and its co-defendants in the New York trial – AbbVie Inc and Teva Pharmaceutical Industries Ltd – are not part of that settlement.

The case is In Re Opioid Litigation, Suffolk Supreme Court, No. 400000/2017.

For Suffolk: Jayne Conroy of Simmons Hanly Conroy

For Nassau: Hunter Shkolnik of Napoli Shkolnik

For New York: John Oleske of the New York Attorney General's office

For Endo: James Herschlein of Arnold & Porter Kaye Scholer; Hank Bullock of Mayer Brown; Jonathan Redgrave of Redgrave

For Teva: Nancy Patterson of Morgan, Lewis & Bockius

For Allergan: Mike Brock of Kirkland & Ellis

Read more:

Endo now faces contempt as well as default in N.Y. opioid trial

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Brendan Pierson reports on product liability litigation and on all areas of health care law. He can be reached at brendan.pierson@thomsonreuters.com.