Weekly Mass Torts Bulletin 2023-September-11

Kroger Will Pay $1.4B To Resolve Opioid Lawsuits

In order to settle the hundreds of lawsuits filed by American states, local governments, and Native American tribes alleging Kroger's pharmacies contributed to the country's opioid epidemic, Kroger said it will pay up to $1.4 billion.

To resolve the majority of the opioid lawsuits it encountered, Kroger agreed to pay up to $1.2 billion to American states, counties, and municipalities, as well as $36 million to Native American tribes. Additionally, $177 million will be paid to cover legal costs and fees.

The proposed settlement, which depends on the involvement of 33 qualifying states and the District of Columbia, cost Kroger $1.4 billion. The $1.2 billion would be distributed over a period of 11 years.

The Cincinnati-based grocery chain, which is attempting to combine with its smaller competitor Albertsons, has stated that it would not plead guilty as a condition of the agreement and that it will fight any additional claims that the tentative agreement does not address.

Attorneys general from California, Colorado, Illinois, North Carolina, Oregon, Tennessee, and Virginia spearheaded the discussions that resulted in the agreement.

States, municipal governments, and Native American tribes have filed thousands of lawsuits alleging that drug firms minimized the hazards associated with opioid medications and that distributors and pharmacies disregarded warning signs that the drugs were being trafficked illegally.

According to attorneys for the plaintiffs, the case has resulted in settlements totaling more than $51 billion, with agreements already reached with significant medication manufacturers and the country's leading distributors.

The company Kroger was the target of almost 2,000 similar cases. It had recently agreed to pay $58.5 million to resolve drug claims made by New Mexico, and $62 million to resolve claims made by West Virginia.

The North Carolina Attorney General, who assisted in guiding discussions with Kroger, issued a statement saying that these funds "will help save lives" and "we will make sure these companies can't repeat their mistakes."

The $13.8 billion in settlements with three major drugstore chain operators—CVS Health Corp., Walgreens Boots Alliance, and Walmart—agreed to last year were followed by this one by Kroger.

The main attorneys for the cities and counties involved in the lawsuit referred to Kroger's agreement as the first by one of the smaller, local supermarket pharmacies that had contributed to the drug epidemic in a statement.

According to the attorneys, this $1.2 billion agreement-in-principle is a start in the right direction towards holding each firm that contributed to the opioid crisis responsible and guaranteeing the distribution of critical resources to hard-hit areas.

According to the U.S. Centers for Disease Control and Prevention, from 1999 to 2021, overdoses involving opioids, both prescription, and illegally killed close to 645,000 individuals in the United States.

Philips To Pay $479M To Resolve CPAP Class Action Settlement

A prominent producer of CPAP devices, Philips Respironics, has chosen to pay up US$479 million to resolve a number of lawsuits.

The accusations originate from claims that the company's products released harmful foam and gas right into the mouths of consumers. According to the model, the compensation for people who purchased, rented, or borrowed the recalled gadgets will range from US$55 to US$1,552 per unit.

Additionally, according to court filings, an additional US$100 will be given for each device that is returned. It's crucial to keep in mind, though, that Philips has not admitted guilt as part of this arrangement.

The settlement only pays for the expenses related to user and vendor reimbursement for the devices they purchased. However, it does not include claims for medical bills and personal harm damages, which are still open and being looked at, according to the court documents.

Philips Respironics recently replaced 2.5 million sleep apnea devices, including different ventilators, BiPAP, and CPAP versions, after recalling 10.8 million of them. The oldest of the 16 models being recalled is a 2009 model.

The business informed consumers and medical professionals in 2021 that the foam in its sleep apnea equipment might break down into particles. The users may eat or inhale these particles if they pass via the air passage of the gadget. This might have negative impacts on other organs, including the kidneys and liver, as well as harmful carcinogenic consequences and health hazards like headaches, asthma, and other conditions.

According to Philips Respironics, the settlement has been designed to swiftly benefit qualifying patients in the United States and to boost consumer trust in the reliability and safety of Philips Respironics products.

Philips stated in a 2021 recall announcement that there had been no reports of deaths allegedly brought on by the foam in its products. However, the Food and Drug Administration has received more than 105,000 complaints since April 2021, including 385 cases of fatalities connected to the disintegration of the foam.

Philips is one of the market's leading participants. The sleep apnea device business is a multibillion dollar industry.

Dallas County Receiving $40M As A Part Of Opioid Settlement

From the initial payout of a federal settlement to treat and prevent opioid addiction, Dallas County got millions of dollars.

In response to the epidemic of drug misuse, pharma manufacturers and distributors agreed to pay billions. Dallas County is expected to receive a total of $40 million from the federal settlement with the medication manufacturers, with $10 million already present and being used.

A funding from the Centers for Disease Control will also provide millions more to support the response to opioid overdoses. According to the Dallas County Commissioner, Dallas County was among the first to enter the fight, investing $50 billion over the following 18 years.

The $50 billion was given to states all around America by opioid producers to remedy the damage that opioid addiction has caused. The commissioner claimed that Dallas was affected in a way that is beyond the comprehension of the majority of people.

An increasing number of overdose cases have been treated by emergency departments and first responders. Five individuals died from opioid overdoses in Texas on average every day last year.

Dallas County has just received $11 million from the Centers for Disease Control to increase its response to opioid overdoses. It has aided in the establishment of a 24-hour hotline for opioid prevention, the expansion of opioid response teams, and the placement of chemical dependence counsellors within Parkland Hospital's emergency room.

What the county will earn from merchants like CVS, Walgreens, and Walmart is still up for negotiation.

3M Will Pay $6B To Veterans In Faulty Earplugs Suit

Manufacturer of chemicals and consumer goods 3M said that it has agreed to pay $6 billion to resolve claims filed by U.S. military members that the company's defective earplugs caused them to suffer hearing loss or other severe ailments.

Payments for the settlement, which consists of $5 billion in cash and $1 billion in 3M shares, will be made over the course of 2029.

Aearo Technologies, a business that 3M bought in 2008, and 3M have both been sued by hundreds of thousands of veterans and active duty service personnel for its Combat Arms Earplugs. According to the law firms representing plaintiffs, the military personnel claimed that a flawed design caused the items meant to protect ears from close-range guns and other loud noises to loosen slightly and enable hearing impairment.

The Florida-based legal firm states that 3M previously agreed to pay $9.1 million to resolve a complaint on behalf of the government alleging the business willfully provided faulty earplugs to the U.S. military in an online description of the action. Additionally, the company stated that since 2019, 3M has lost 10 of the 16 claims that have gone to trial, giving plaintiffs millions of dollars so far.

The plaintiffs' attorneys stated in a joint statement that the latest settlement constitutes a significant win for the thousands of men and women who heroically served our nation and returned home with life-altering hearing damage.

The deal, which covers all claims in the multidistrict lawsuit in Florida, coordinated state court litigation in Minnesota, and possible future claims, was not an admission of culpability, according to 3M's statement.

When used properly, the items at issue in this lawsuit are safe and effective, the manufacturer said. If some agreed-upon conditions of the settlement agreement are not met, 3M is ready to continue defending itself in the lawsuit.  

Through bankruptcy court, 3M has already attempted to lessen its exposure to the earplug case. Aearo filed for bankruptcy in 2022 as a distinct business, taking liability for claims; however, the application was later rejected in a bankruptcy court in the United States.

In addition to the earplug case, 3M agreed in June to pay at least $10.3 billion to resolve claims that numerous U.S. public drinking water systems were contaminated with potentially dangerous substances. With this agreement, water suppliers will get compensation for contamination caused by per- and polyfluorinated compounds, sometimes referred to as "forever chemicals."

The settlement amount might total $12.5 billion, although the arrangement hasn't been finalized yet. 22 solicitors general urged a federal court to reject the proposed settlement last month, arguing that it let 3M off too easily and that it didn't give individual water suppliers enough time to decide how much money they would receive. In some cases, they claimed, the deal could shift liability from the company to providers and that it didn't give water suppliers enough time to decide how much money they would receive.

According to the New York Attorney General, 3M consented to significantly alter the terms of the settlement. These modifications, which are reflected in a proposed court order, include extending the time period during which qualifying water systems must review the deal and eliminating uncapped indemnification in 3M's favor.

The judge gave the arrangement preliminary approval, according to court documents. The deal will benefit U.S.-based public water systems nationwide that provide drinking water to the vast majority of Americans without the need for additional litigation by or on behalf of public water systems, according to a spokesperson for 3M. The company was pleased to have to clarify the agreement and see the attorneys general objections withdrawn; the spokesperson added.

Although these arguments were dropped, five solicitors general nevertheless submitted an amicus curiae letter raising issues with the settlement payment's size and timing.

LA County Sues Pharmacy Benefit Firms Over Opioid Crisis

Los Angeles County has joined a growing list of local governments that have accused pharmacy benefit managers—unknown middlemen in the prescription drug business—of fueling the opioid crisis by dispersing dangerously addictive drugs throughout the country.

The county said in a complaint filed in Los Angeles County Superior Court that Express Scripts Inc. and OptumRx Inc. conspired with pharmaceutical companies to market highly addictive opioids as a reliable alternative for treating moderate pain.

In the county's emergency rooms, schools, and child welfare system, the opioid pandemic has caused chaos that is detailed in the 59-page filing: Due to their parents' addictions, children are either raised by relatives or placed in foster care. The number of overdose patients visiting the county's emergency departments is rising. Additionally, the lawsuit claims that at least six pupils overdosed at the commencement of the 2022–23 academic year.

According to the complaint, pharmacy benefit managers, or PBMs, who serve as a liaison between insurance providers and medication makers, are partially to blame for the growth in addiction. In reality, the corporations choose which medications are covered by insurance providers and how much a patient would have to pay for them. Many even operate their own pharmacies with postal delivery.

The county asserts that the corporations promoted harmful medications they knew would bring them a sizable profit rather than fighting for the lowest price. According to the lawsuit, the defendants are not just spectators to the opioid catastrophe. They contributed to the flames.

A request for comment was not answered by OptumRx or Express Scripts representatives. Express Scripts spokespersons have referred to similar lawsuits as unfounded. Express Scripts Administrators LLC, Medco Health Solutions, ESI Mail Pharmacy Service Inc., Express Scripts Pharmacy Inc., OptumInsight Inc., and OptumInsight Life Sciences Inc. are also included as defendants in the lawsuit.

Governments at the municipal, state, and federal levels have pursued major firms that spearheaded the opioid epidemic in an effort to hold them responsible for the destruction taking place in their communities as opioid fatalities continue to rise. Numerous lawsuits have been filed against opioid producers, distributors, pharmacies, and pharmaceutical benefit managers in recent years.

Similar lawsuits have been brought by counties in Ohio, Texas, and Virginia, alleging that a small number of pharmaceutical benefit administrators ignored clear indications of drug misuse and addiction.

Maine To Get $1.4M To Deal Opioid Crisis In Rural Areas

To lower the risk of deadly overdoses from fentanyl and other opioids in rural regions, Maine will receive $1.4 million in federal funds.

The money was announced by the U.S. Department of Health and Human Services as part of a national initiative to lower overdoses in rural areas. The Wabanaki Public Health & Wellness program and the MaineHealth statewide provider network will each get $900,000, the majority of the funds, to assist rural towns in meeting urgent needs, including distributing opioid overdose reversal drugs. The remaining $500,000 will support the MaineHealth network's efforts to prevent, treat, and care for newborns exposed to opioids in rural communities.

More than 100,000 people die nationwide each year from overdose, and residents of rural communities who are addicted to fentanyl, heroin or other opioids can face additional challenges in accessing treatment and recovery services, according to the DHHS. Along with geographic isolation and transportation barriers, rural parts of the state also have fewer providers of mental health and substance use health care.

Far too many rural families have faced the devastation of overdose, and these deaths are felt deeply across rural communities where often everyone knows someone lost too soon, said the department’s health resources and services administrator.

Despite increasing availability to treatment and the overdose-reversing medicine naloxone, overdose fatalities in Maine hit a record for the third year in a row in 2022, taking an estimated 716 lives. Between January 1 and July 31 of this year, there were 366 overdose deaths in Maine, which is fewer than the 397 overdose deaths during the same time frame previous year.

Dispute Among Pennington County & State Over Opioid Money

In order to cover the county's legal expenses, Pennington County is requesting that the state adjust its national opioid settlement amounts in court.

The nationwide opioid settlement resulted from two legal avenues: state attorneys general suing opioid makers and distributors for their involvement in the opioid crisis and a multidistrict lawsuit filed against them.

In 2018, the South Dakota attorney general brought a claim against distributors and producers. In April 2021, Pennington County, the first local government from South Dakota to take part in the federal opioid multidistrict litigation, filed their complaint. When a court decided the multidistrict case would become a class action lawsuit and encompass all subdivisions in all states, those two legal paths converged.

The announcement that South Dakota will join the federal settlement came three months after Pennington County entered the multidistrict litigation.  

The result was that South Dakota counties and cities, including Sioux Falls and Rapid City, got settlement funds without taking part in the legal action.

The counsel for Pennington County has filed two challenges to have Janssen Pharmaceuticals, one of the corporations that reached a settlement in court, recalculate the first three years of South Dakota's local government settlement allotments.

The lawyer also argued that the state ought to have included a "backstop" requiring all state subdivisions to contribute to the costs of Pennington County's legal fees. The settlement stated that backstops are at the states' discretion, hence, it is not necessary.

In the first two years of the Janssen settlement allocations, Pennington County earned close to $50,000. According to court records, it will earn an additional $43,713 in the third year of allocations and hundreds of thousands more in the following years.

As of the third phase of settlements, it owes 15% of the total Janssen settlement in legal expenses, which, without accounting for future allocations, comes to almost $14,000. The county requests an increase in its allocations of that amount in order to pay the fees and establish the backstop while also accounting for its legal costs. The additional money would be taken from the settlements given to all the other South Dakota counties and towns. 

The state contends that it is not compelled to implement a backstop since one was not included in the South Dakota opioid settlement memorandum agreement at the time Pennington County agreed to it. In a letter in response to the disagreement, South Dakota's Chief Deputy Attorney General claims that state law forbids the use of opioid settlement monies to pay for legal expenses.

The Janssen settlement gave litigating parties a means to request compensation for legal expenses, the deputy attorney general adds. However, because Pennington County filed three months after the deadline, the county cannot get a reimbursement for its legal expenses from the settlement.

Pennington County's final resort is a backstop, he said. Even after the county agreed to a memorandum of agreement with the state, he claimed it asked for a backstop, but nothing was done. The fight before Hughes County Court is the county's most recent attempt, despite a resolution it approved earlier this year asking the backstop.