(Bloomberg Opinion) -- They kicked the can down the road.
That’s the best way to describe what happened at the bellwether opioid trial that was set to begin Monday morning in Cleveland. Last week, the two sides — companies being sued for their alleged role in the opioid crisis and lawyers suing them on behalf of states, cities and counties nationwide — tried to fashion a global settlement. As it’s been outlined in the media, that settlement could have seen the defendant companies offer more than $50 billion to the plaintiffs to stop the litigation.
That effort ended in failure Friday night. So over the weekend, the parties engaged in a smaller but more manageable task: settling with the two Ohio counties who were the plaintiffs in the upcoming trial. They succeeded at around 1 a.m. on Monday. For the companies — Cardinal Health Inc., McKesson Corp., AmerisourceBergen Corp. and Teva Pharmaceutical Industries Ltd. — the money being handed over to the plaintiffs is pocket change: some $260 million spread over 18 months. But for the two counties, Summit and Cuyahoga, it’s badly needed money that will help them treat and mitigate opioid addiction.
Still, with more than 2,000 opioid cases yet to be tried, this settlement only offers a temporary reprieve. A significant portion of those cases are in the courtroom of Judge Dan Aaron Polster of the Northern District of Ohio. Soon enough, he will schedule another bellwether trial, and they’ll start it up all over again.
Unless, that is, they manage to put a global settlement in place. There is not much doubt at this point that that’s going to happen. The two sides just couldn’t get there by Monday morning. Which is why they punted.
What stands in the way of a global settlement? The states had already accepted the deal offered by the companies. But when they took it to the lawyers for the cities and counties, they got shot down. These smaller entities are deeply suspicious of letting the states take the lead. They don’t want to allow the same thing to happen with opioids that happened with tobacco in the late 1990s: The states took all the settlement money, and most of them put it in their general coffers instead of using it for tobacco control efforts.
Outside the courthouse after Polster had announced the settlement, I asked the well-known plaintiffs’ lawyer Joe Rice, who is leading the charge for the cities and counties, for his reaction to the claim that his clients were blocking a global settlement. He was unapologetic.
“We did not agree to those terms,” he replied. “If we are the hold-up of that settlement we did a really good thing.” He added that his clients are still talking to the states and the defendants. But, he added, “It’s gotta be fair and it’s gotta be now.”
Immediacy – Rice’s “now” – is the second stumbling block. The three distributors, Cardinal, McKesson and AmerisourceBergen, initially offered to pay $18 billion over 18 years as their contribution to a global settlement. But outside the courthouse, several county executives stressed that the opioid crisis was a true national emergency and they couldn’t wait 18 years to get all the money due them.
Another reporter asked Rice if the settlement with Summit and Cuyahoga counties was likely to serve as a template for future settlements. That seems pretty unlikely. If every government entity suing over opioids got the kind of money the two Ohio counties are getting, it would come to over $300 billion. Because they were first in line, Summit and Cuyahoga counties got very lucky.
There are other reasons both sides need to find a way to settle this litigation. In late August, a judge ordered Johnson & Johnson to pay $572 million to Oklahoma for its alleged role in that state’s opioid crisis. (The amount was later reduced by $107 million because the judge made a math error.) J&J is appealing, arguing in part that the state’s novel use of “public nuisance” law to bring the case was a “misapplication” of the law. If the verdict is overturned, it will embolden the defendant companies because many of the opioid lawsuits are built on local public nuisance laws. If the verdict us upheld, however, the $50 billion currently on the table may look like peanuts to the plaintiffs.
There is no question that the cities and counties that have sued desperately need money to help end the crisis. There is also no question that the only way they’re going to get that funding is from the big companies they’re suing. The only other potential source, the federal government, hasn’t put up anywhere near the kind of money these damaged and desperate communities require.
The companies may not like all of this. They may not think it is fair. They may wish they could hold out and fight in court. But society is demanding that they pay up for their roles in the opioid scourge. And sooner or later, they will.
To contact the editor responsible for this story: Timothy L. O'Brien at tobrien46@bloomberg.net
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Joe Nocera is a Bloomberg Opinion columnist covering business. He has written business columns for Esquire, GQ and the New York Times, and is the former editorial director of Fortune. His latest project is the Bloomberg-Wondery podcast "The Shrink Next Door."
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