Weekly Mass Torts Bulletin 2024-August-20
SC Rejects Sackler Family’s $6B Opioid Settlement
The U.S. Supreme Court recently overturned a contentious settlement that would have allocated billions of dollars to treatment programs and victims of the opioid epidemic.
This decision, which blocks the Sackler family from receiving protection against future lawsuits, highlights ongoing legal and ethical debates surrounding the family's role in the crisis.
Justice wrote the majority opinion for the 5-4 decision, stating that the Sacklers were seeking more extensive relief than what is typically granted in bankruptcy cases. He noted that the family hoped to eliminate claims related to wrongful death and fraud without contributing a significant portion of their assets. "Describe the relief the Sacklers seek how you will, nothing in the bankruptcy code contemplates (much less authorizes) it," he wrote.
In contrast, another justice who dissented warned that the court's ruling would have a "devastating" effect on the thousands of victims affected by the opioid epidemic. She emphasized that these victims would be deprived of the substantial monetary recovery they had fought for over years of litigation. Chief Justice and the court's liberal justices joined in dissent.
She urged Congress to amend U.S. bankruptcy law to address the repercussions of the court's decision, which she predicted would lead to significant harm. She stressed that the issue should be carefully examined by lawmakers to prevent further chaos.
The justice pointed out that the bankruptcy law does not explicitly grant courts the authority to allow third parties, like the Sacklers, to evade future liability. While acknowledging that this decision might disrupt Purdue Pharma's current reorganization plan, he suggested that increased legal exposure for the Sacklers could result in better terms in future negotiations. He referenced an argument from the Justice Department, noting that "if past is prologue," there could be a more favorable deal on the horizon.
The case revolves around Purdue Pharma and its executives, who were instrumental in the production and promotion of OxyContin, a highly addictive opioid. This drug played a significant role in the opioid crisis, which has claimed hundreds of thousands of lives in the United States and caused widespread devastation.
As part of a proposed settlement, the Sackler family had agreed to pay $6 billion to affected families and states. In return, they sought immunity from future civil liability claims. Purdue Pharma had marketed OxyContin as a safer, less addictive painkiller, promoting its use for extended periods and for more common injuries. This strategy contributed to the Sacklers' wealth and their reputation for philanthropy.
However, lawsuits and media reports revealed that the Sackler family continued to push OxyContin even after becoming aware of its addictive potential. This led not only to widespread addiction but also to many individuals turning to heroin and other opioids when they could no longer access the prescription drug. According to the Centers for Disease Control and Prevention, nearly 645,000 people died from opioid overdoses between 1999 and 2021.
In concluding his opinion, the justice acknowledged the complex policy issues at play but emphasized that it is not the court's role to resolve them. He argued that Congress should determine whether third parties can be shielded from future lawsuits, underscoring that the court's responsibility is to interpret and apply the law as it stands. He concluded, "nothing in present law authorizes the Sackler discharge," reaffirming the court's decision to reject the settlement that would have protected the Sacklers from future legal claims.
Bayer Seeks Immunity From Roundup Lawsuits in Farm Bill
Bayer is reportedly urging Congress to include provisions in the latest version of the Farm Bill that would protect the company from future Roundup lawsuits related to the risk of non-Hodgkin’s lymphoma.
Allegations suggest that Bayer played a role in drafting the initial version of the bill currently under review. Roundup, containing glyphosate as its active ingredient, has been widely used both in agriculture and residential settings as a weed killer. Despite being marketed as safe, increasing research links glyphosate to serious health risks.
In 2015, the World Health Organization’s International Agency for Research on Cancer classified glyphosate as a probable carcinogen. This classification has led to restrictions on Roundup use worldwide due to concerns about its potential to cause non-Hodgkin’s lymphoma and other cancers.
Over the past decade, Bayer and its Monsanto subsidiary have faced more than 120,000 lawsuits, alleging that users developed cancer after using Roundup. While Bayer has settled many of these cases, paying out over $10 billion, the company still faces thousands of ongoing lawsuits, with new cases emerging as users continue to develop health issues.
To limit its liability, Bayer is pushing for legislation that would provide immunity from such lawsuits, focusing its efforts on the U.S. Farm Bill. This bill, passed every five years, governs agricultural policies, including regulations on pesticide use.
A draft version of the Farm Bill reportedly includes a provision crafted by Bayer, which would establish uniform pesticide labeling laws at the federal level, preventing states from enforcing their own labeling requirements. This provision aims to shield the company from litigation if its product labels comply with U.S. Environmental Protection Agency (EPA) standards.
Despite scientific concerns and the World Health Organization's classification, the EPA has maintained that glyphosate is safe. Some states, like California, have taken a stricter stance, requiring cancer warnings on Roundup labels, which Bayer has resisted legally. Bayer has also lobbied for similar protections in other states, including Idaho, where recent legislation could make it harder for individuals to file claims against the company.
As the Farm Bill's fate remains uncertain, particularly in an election year, Bayer officials have denied that the proposed provision would completely shield the company from liability, stating that the final decision still lies with the courts.
Court Picks 10 Paraquat Cases for New Bellwether Trial Round
The U.S. District Judge overseeing all Paraquat lawsuits has selected a new set of 10 bellwether cases to undergo case-specific discovery and preparation for trial, following the dismissal of the initial four bellwether cases earlier this year.
Currently, about 6,000 product liability lawsuits are pending in the federal court system against Syngenta and Chevron, the manufacturers of the controversial weedkiller Paraquat. The plaintiffs in these cases allege that the companies failed to adequately warn users about the link between Paraquat and Parkinson’s disease.
Given the common factual and legal issues among the claims—brought by individuals who were diagnosed with Parkinson’s after regularly using, mixing, or transporting Paraquat—the lawsuits have been centralized before a U.S. District Judge in the Southern District of Illinois since June 2021, as part of a federal multidistrict litigation (MDL).
To better understand how juries might respond to the evidence and testimony, the Court previously initiated a “bellwether” process, where a small group of Paraquat lawsuits were selected and prepared for trial. However, in April, the Judge dismissed those cases after excluding the plaintiffs' expert witnesses from testifying, leaving the claimants without a way to prove that their Parkinson’s disease was caused by Paraquat exposure.
In response to the dismissal of the first set of bellwether cases, the Judge indicated the Court’s intent to swiftly identify a new group of cases for trial, setting a tight schedule for discovery and trial preparation. A court order was subsequently issued, announcing the selection of 10 new Paraquat lawsuits for case-specific discovery as part of the revised bellwether trial pool.
The parties involved have until August 20, 2024, to voluntarily dismiss any of the selected cases without prejudice, allowing the court time to choose replacement claims if necessary. Once the final group is confirmed, plaintiffs must submit completed Fact Sheets to the defendants by September 3, with depositions to be conducted by November 25. By December 16, 2024, the parties are required to provide the Court with a one-page summary for each selected case.
The new bellwether cases all involve allegations that exposure to Paraquat led to serious health issues, specifically Parkinson’s disease. For example, one case involves a plaintiff from Illinois who used Paraquat for 27 years and was diagnosed with Parkinson’s in 2018. Another case features a plaintiff from Alabama who claims he developed Parkinson’s after years of exposure to Paraquat while working in Indiana.
These lawsuits are believed to rely on different expert witness testimony and methods to establish the connection between Paraquat and Parkinson’s disease, differing from the previously dismissed cases. Additionally, a significant number of Paraquat cases are pending in various state courts, which may have different standards for the admissibility of expert witness testimony.
Should Syngenta and Chevron be unable to reach a global settlement following the bellwether trials, the thousands of remaining claims may be sent back to their original districts for individual trials.
FDA Approves Purdue Pharma’s New Overdose-Reversal Drug
Purdue Pharma has recently secured approval from the Food and Drug Administration (FDA) for a new auto-injector device designed to reverse opioid overdoses.
The device, named Zurnai, uses nalmefene, a more potent relative of the well-known overdose-reversal drug naloxone, marking another addition to the growing list of nalmefene-based products aimed at combating the opioid epidemic.
The FDA’s approval of Zurnai reflects the agency’s ongoing efforts to increase the availability of opioid overdose reversal agents. “The FDA remains focused on broadening access to opioid overdose reversal agents, including naloxone and nalmefene,” stated the FDA commissioner, emphasizing the importance of offering a variety of options to address the overdose crisis.
Despite this approval, Purdue Pharma remains a controversial figure in the battle against opioid addiction. The company’s aggressive marketing tactics, particularly around OxyContin, are widely blamed for exacerbating the opioid crisis, leading to widespread addiction beginning in the late 1990s. Purdue and its owners, the Sackler family, have faced numerous lawsuits, as well as extensive negative media coverage, including books and TV shows that cast them as key villains in the opioid epidemic.
Purdue’s involvement in providing solutions to the crisis it helped create is met with deep suspicion from many in the addiction advocacy community. These groups view the company’s efforts as a form of damage control rather than genuine attempts to address the crisis. In an effort to mitigate this skepticism, Purdue has announced that it will sell Zurnai at cost and claims not to profit from its existing nalmefene product, which is used in hospitals. “Zurnai can be an important new tool to save lives in critical moments,” said the company’s president, emphasizing Purdue’s commitment to addressing the overdose crisis without profiting from it.
The approval of Zurnai also comes at a time of ongoing debate about the effectiveness and necessity of high-dose overdose reversal medications like naloxone and nalmefene. As fentanyl has become the leading cause of opioid overdose deaths, first responders have noted that standard doses of naloxone are often insufficient to revive victims. This has led to the development of higher-dose, more complex naloxone products, which are significantly more expensive.
However, the effectiveness of these high-dose products remains uncertain. While they work by blocking opioid molecules from accessing brain receptors, this process can induce severe withdrawal symptoms, which can drive recently revived individuals to leave medical care and potentially relapse, risking further overdoses.
Nalmefene, though more potent than naloxone, has faced criticism from harm-reduction groups who argue that its increased potency could lead to even more severe withdrawal symptoms, potentially outweighing any benefits.
This FDA decision also comes amid ongoing controversy surrounding Purdue and the Sackler family. In June, the Supreme Court struck down a settlement agreement that would have allowed Purdue to emerge from bankruptcy and use its profits for addiction treatment and prevention while granting the Sacklers immunity from civil lawsuits related to the opioid crisis. The court’s 5-4 decision, which crossed ideological lines, ruled that bankruptcy law does not permit such immunity from civil suits.
J&J Secures Claimant Backing for $6.5b Talc Settlement Plan
Johnson & Johnson (J&J) has reached a significant milestone in its ongoing efforts to resolve tens of thousands of lawsuits related to allegations that its baby powder and other talc-based products caused cancer.
A crucial 75% of claimants have voted in favor of the company’s proposed $6.5-billion settlement, a key requirement set by J&J for moving forward with its plan to place a subsidiary in bankruptcy protection. This step is part of J&J’s third attempt to use bankruptcy as a means to resolve the litigation, which has seen the company accused by approximately 61,000 claimants of selling products contaminated with asbestos, leading to ovarian and other cancers. J&J has consistently denied these allegations, maintaining that its products are safe.
The 75% approval rate among claimants was established by J&J as a necessary benchmark, reflecting a provision in U.S. bankruptcy law, to proceed with another bankruptcy bid. The deadline for casting votes was July 26, and while the final tally is not yet available, J&J has expressed confidence that the settlement proposal would secure enough support from plaintiffs to move forward. This approval is crucial for J&J’s strategy to consolidate all claims into one settlement through a bankruptcy process, which could prevent the company from facing future lawsuits or multibillion-dollar verdicts.
J&J’s strategy, often referred to as the “Texas two-step” bankruptcy, involves transferring its talc liability to a newly created subsidiary, which then declares Chapter 11 bankruptcy. The intent is to use the bankruptcy proceedings to force all plaintiffs into a single settlement without requiring J&J itself to declare bankruptcy. This maneuver, however, has faced significant opposition and legal challenges. To proceed, the company must secure the support of 75% of claimants before the subsidiary can request a bankruptcy judge to enforce the deal on all claimants. Bankruptcy judges have the authority to enforce global settlements that can permanently halt all related lawsuits and prevent new ones from being filed.
This move has not been without controversy. J&J has been engaged in a contentious battle with lawyers representing plaintiffs who oppose the settlement, with some calling the voting process a "fake bankruptcy election" that would not hold up in court. The opposition argues that J&J’s maneuver is a way to avoid accountability and that the company’s new settlement attempt should fail for similar reasons as its previous two.
J&J’s earlier attempts at resolving the litigation through bankruptcy were rejected by federal courts on the grounds that the subsidiary created to handle the liabilities was not in "financial distress," a key criterion for such a bankruptcy filing.
J&J’s current settlement proposal differs from its previous efforts by focusing exclusively on claims related to ovarian and other gynecological cancers, building upon earlier settlements the company reached with state attorneys general and individuals who had sued after developing mesothelioma, a rare form of cancer linked to asbestos exposure.
Despite the positive vote, J&J’s strategy still faces significant legal hurdles. Recently, the Supreme Court ruled in Purdue Pharma’s bankruptcy case to limit the ability of courts to halt lawsuits against entities that are not themselves bankrupt, without the consent of those who have sued. While J&J contends that this ruling does not impact its settlement proposal, as U.S. bankruptcy law offers explicit protections for asbestos defendants that have not declared bankruptcy, some legal experts argue that J&J may not be eligible for these protections.
Moreover, proposed legislation in Congress seeks to restrict companies’ ability to shield themselves from lawsuits by placing a shell company into bankruptcy, which could further complicate J&J’s efforts to resolve these claims through its current strategy.