Settling Opioid Litigation Through the Lens of the 1998 Tobacco Settlements

By Brendan Sullivan, Associate Editor

Opioid litigation, which has been the subject of much national discussion, appears to be crawling towards a settlement.  But finding agreement is proving to be a troublesome task.  Ohio Attorney General Dave Yost recently voiced his displeasure with the progression of proposed settlements with Purdue Pharma, the massive OxyContin manufacturer.[1] In particular, Yost argued that money obtained from opioid settlements should fund programs that target opioid abuse, rather than fund the pocketbooks of lawyers who litigated these cases.[2] Indeed, the lawyers stand to make a fortune—their portion of the settlements could be in the billions.[3]

Before making any settlement decisions, states should study the 1998 tobacco agreements. The tobacco settlements provide guideposts to balancing two competing interests: public health concerns and remuneration for legal services.[4]  Revisiting the  tobacco settlements will also urge legislatures to combat the deeply embedded social forces that perpetuate the opioid crisis.[5]

The 1998 Tobacco Settlements

On November 23, 1998, tobacco manufacturers and forty-six states entered into a Master Settlement Agreement (MSA) settling state claims against the tobacco industry.[6]  Like the ongoing opioid litigation, the lawsuits against tobacco manufacturers sought to reimburse the government for massive expenditures incurred in halting a public health crisis.[7] The MSA required participating manufacturers to compensate states, eliminate youth-centered advertising, and comply with state attempts to curtail smoking.[8]

But the states did not always allocate their MSA funds exclusively to tobacco prevention programs.[9] For example, the Ohio legislature created a foundation, which was to receive $10 billion under the MSA, to implement a plan to reduce future tobacco use.[10] Despite an impressive improvement between 2002 and 2008, where adult smoking decreased by twenty-four percent, the Ohio legislature diverted future payments to other programs.[11] The legislature dismantled the Foundation after it refused to hand over $190 million, when the Foundation stated that it was independent of the legislature and could use the funds for tobacco use prevention.[12] And Ohio was not alone in diverting settlement funds from tobacco use prevention.[13] In some shocking cases, states used MSA funds to support tobacco growers.[14]  

Applying the Lessons Learned from the 1998 Tobacco Settlements to Opioid Litigation

The parties pursuing this litigation should switch their focus from punishing pharmaceutical companies to creating systems to fund programs that will utilize settlement funds appropriately.[15] Undoubtedly, these suits will rightfully punish pharmaceutical companies severely if settlements continue to increase in amount.[16] Yet, a punitive model does not account for the apparent goal of this litigation, which is to remedy the social and economic harm caused the rampant opioid addiction crisis.[17] This may require legislators to strictly restrict how they can use these funds to avoid the pitfalls of the 1998 tobacco settlements.

Some commentators have suggested that nothing short of state constitutional amendments would prevent the legislature from diverting settlement funds elsewhere.[18] But this approach would be expensive, and potentially unpopular.[19] In 2018, Ohioans defeated a constitutional amendment that would have reduced jail time for drug offenders and provided more funding to state rehabilitation programs.[20] Regardless, any proposed constitutional amendment would likely fail, including one that diverts state funds to programs that combat the opioid crisis.[21]

Other commentators have called for pharmaceutical companies to publicly disclose documents related to the lawsuits, which was required from tobacco companies under the MSA.[22]  While this proposal might uncover whether these corporations manufactured opioids with a sinister motive, it does little to resolve how to allocate settlement dollars.  If anything, this kind of retributive thinking inadequately addresses the root causes of opioid addiction.[23] Furthermore, it seems to presume that defendants—present and future—will simply shift blame to those around them, including doctors, illegal drug dealers and internet sellers.[24]

Hope for the Future

Yet, there is some hope that these settlements will mitigate the opioid crisis if legislatures allocate settlement funds appropriately.[25] Ultimately, settlement funds should remedy problems where they sprout and bloom— in areas that suffer from poverty, homelessness, and lack of employment.[26] These areas bear the brunt of the opioid crisis as evidenced by the positive correlation between these factors and continuing opioid addiction.[27] To begin, legislatures could reverse extreme sentences for those incarcerated opioid addicts and provide drug offenders employment opportunities, regardless of past felonies for drug use.[28]

Changing public perception of the opioid crisis could also be a solution.  Viewing the victims of the crisis—the “addicts”—as criminals further enhances the likelihood of their perpetual addiction because they are barred access from employment and opportunities to undo the addiction pitfalls.[29] Furthermore, these struggling people experience improper mental health treatment, societal blame and discrimination that inspires a lack of motivation to seek treatment.[30] Therefore, legislatures are less likely to use any funds from settlements to combat these issues and are prone to spend the money on irrelevant programs, as they did with the tobacco settlement funds. If states view these victims as citizens in need, it can become less likely that the legislatures will divert funds from social programs as they did in the tobacco settlements. Without changing the public perception of those who suffer from opioid addiction, states will not solve the underlying issues necessary to combat opioid addiction.[31] While the current litigation promises retribution for victims, states should use settlement dollars to curb the social and systematic issues that perpetuate the opioid crisis. 

 
Footnotes

[1] Ohio AG Dave Yost Airs Misgivings About Proposed Multi-billion-dollar Opioid Settlement in Letter, (Oct. 17, 2019), Cleveland.com, https://www.cleveland.com/court-justice/2019/10/ohio-ag-dave-yost-airs-misgivings-about-proposed-multi-billion-dollar-opioid-settlement-in-letter.html

[2] Id.

[3] Larry Bernstein, With Opioids Trial Set to Start, Settlement Takes Shape, Washington Post, Oct. 18, 2019, at A1.

[4] See, e.g., Micah L. Berman, Using Opioid Settlement Proceeds for Public Health: Lessons From the Tobacco Experience, 67 U. Kan. L. Rev. 1029 (2019).

[5] Dayna Bowen Matthew, Un-burying the Lead: Public Health Tools Are Key to Beating the Opioid Epidemic (Jan. 2018), https://www.brookings.edu/wp-content/uploads/2018/01/es_20180123_un-burying-the-lead-final.pdf.

[6] Robin Miller, Annotation, Validity, Construction, Application and Effect of Master Settlement Agreement (MSA) Between Tobacco Companies and Various States, and State Statutes Implementing Agreement; Use and Distribution of MSA Proceeds, 25 A.L.R.6th 435 (2007).

[7] See Bernstein, supra note 4 at 1033 (citing Nicolas P. Terry, The Opioid Litigation Unicorn, 70 S.C. L. Rev. 637, 639 (2019)).

[8] See Master Settlement Agreement, § III(a) (Permanent Relief- Prohibition on Youth Targeting), Public Health Law Center, https://www.publichealthlawcenter.org/sites/default/files/resources/master-settlement-agreement.pdf.

[9] See, e.g., Paul L. Keenan, Death by 1000 Lawsuits: The Public Litigation Response to the Opioid Crisis Will Mirror the Global Tobacco Settlement of the 1990s, 52 New Eng. L. Rev. 69, 89 (2017) (citing 15 Years Later, Where Did All the Cigarette Money Go?, NPR (Oct. 13, 2013, 5:52 PM EST), https://perma.cc/B8S4-Q4QK)).

[10] See Bernstein, supra note 4 at 1040 (quoting Ohio Rev. Code § 183.07 (2000) (repealed 2008)).

[11] Id. at 1040-1041 (citing Health Policy Institute of Ohio, The State of Tobacco Use Prevention and Cessation in Ohio, 7 (June 2015), https://www.healthpolicyohio.org/wp-content/uploads/2016/03/PolicyBrief_Tobacco.pdf; Strickland's Plans, Cincinnati Enquirer, Feb. 6, 2008, at B5).

[12] Id. at 1041-1042 (citing Tobacco Use Prevention & Control Found. Bd. Of Trustees v. Boyce, 941 N.E.2d 745, 748 (Ohio 2010)).

[13] See Nicolas P. Terry, The Opioid Litigation Unicorn, 70 S.C. L. Rev. 637, 648-649 (2019).

[14] Id. at 649 (citing Allison MacMunn, Tobacco Settlement Anniversary Marks 20 Years of Opportunity for States to Prevent, Reduce Tobacco Use, Am. Lung Ass’n (Nov. 20, 2018), https://www.lung.org/about-us/media/press-releases/tobacco-settlement-20-years.html). 

[15] See, e.g., id. at 663-664 (citing David Herzberg, et al., Recurring Epidemics of Pharmaceutical Drug Abuse in America: Time for an All-Drug Strategy, 106 Am. J. Pub. Health 408, 409-410 (2016)) (arguing that opioid litigation funds will be used for enhanced criminal enforcement of opioid addiction rather than adopting “preventative health strategies”).

[16] See Lenny Bernstein, et al., Last-ditch Opioid Settlement in Ohio Could Open Door for Much Larger Deal, Washington Post (Oct. 21, 2019), https://www.washingtonpost.com/health/ohio-counties-drug-firms-reach-260m-settlement-averting-trial/2019/10/21/c9ac1dd4-f39f-11e9-ad8b-85e2aa00b5ce_story.html.

[17] See, Berman, supra note 4 at 1051.

[18] Id. at 1055-1056.

[19] See, e.g., id. (citing Alan Greenblatt, Lawmakers Eye Changes to Ballot Measures--Past and Future, Governing (Jan. 16, 2019, 4:00 AM), http://www.governing.com/topics/politics/gov-lawmakers-block-ballot-measures.html.

[20] See Katie Wedell, Ohio Voters Overwhelmingly Reject Issue 1, Which Would Decriminalize Low-Level Drug Offenders, Dayton Daily News (Nov. 5, 2018), https://www.daytondailynews.com/news/state--regional-govt--politics/cutting-through-the-hype-what-issue-would-mean-ohio/PwBI4cm5Dge1tjalcGHpIP/.

[21] See, e.g., Opinion, Enquirer Endorsement: No On Issue 1, Cincinnati Enquirer (Nov. 4, 2018, 7:09 AM), https://www.cincinnati.com/story/opinion/2018/11/04/enquirer-endorsement-no-issue-1/1811742002/ (arguing that the only way for state money to go to drug treatment “is for the legislature to pass a budget with money earmarked for that specific purpose.”).

[22] See Megan J. Wolff, Opioid Settlements Have a Big Downside, CNN (Oct. 22, 2019 9:09 AM), https://www.cnn.com/2019/10/22/opinions/opioid-settlements-purdue-pharma-transparency-matters/index.html.

[23] See, Terry, supra note 13 at 652-653.

[24] Id. (citing Koenig v. Purdue Pharma Co., 435 F.Supp.2d 551, 555 (N.D. Tex. 2006); Jared S. Hopkins & Jef Feeley, Drug Firms Blame Opioid Crisis on Illicit Websites, Dealers, BLOOMBERG (July 19, 2018, 5:10 PM), https://www.bloomberg.com/news/articles/2018-07-19/drug-companies-seek-to-blame-opioid-crisis-on-illegal-dealers).

[25] Id. at 652 (citing Matthew, supra note 5).

[26] See Matthew, supra note 5.

[27] Id.

[28] Id.  

[29] Id.; See also The President’s Commission on Combating Drug Addiction and the Opioid Crisis, Final Report 5 at 83 (Nov. 1, 2017) https://www.whitehouse.gov/sites/whitehouse.gov/files/images/Final_Report_Draft_11-1-2017.pdf (finding that increased employment opportunities for addicts post-conviction “is a critical part of the solution to this drug crisis); see also, e.g., Terry, supra note 13 at 667 (criticizing focusing opioid litigation on blaming pharmaceutical companies rather than addressing the root causes of the opioid crisis).

[30] Id. at 115.

[31] Id.