Opioid Makers Endure Setback as Judge Lets N.Y. Lawsuit Proceed

(Bloomberg) -- Purdue Pharma LP, Johnson & Johnson and other opioid makers faced one of the first extensive reviews of their legal defenses to claims they violated consumer-protection laws and created a public nuisance with the sale of the pain killers. They lost.

New York state court Judge Jerry Garguilo on Monday rejected the pharma companies’ requests for the lawsuits to be thrown out on a myriad of grounds, concluding lawyers for eight counties could move forward with their claims.

“It is at least arguable that the manufacturing defendants were in a position to anticipate or prevent the claimed injuries,’’ Garguilo wrote in a 36-page ruling. ‘It does not seem unfair, therefore, to hold them potentially accountable.’’

While the ruling is based solely on New York law, it could provide a roadmap for other judges around the U.S. weighing whether states and local governments can proceed with claims that Purdue and other opioid makers understated the risks of prescription opioids and overstated their benefits.

Robert Josephson, a Purdue spokesman, didn’t immediately return a call and email on Tuesday seeking comment on Garguilo’s ruling. Andrew Wheatley, a J&J spokesman, also didn’t immediately respond to an email.

“The decision has national significance because it rejects, in a carefully reasoned decision by a highly respected justice, each and every argument that the opioid manufacturers make in every case nationwide,” Paul Hanly, a New York-based lawyer for the counties, said in an emailed statement.

A federal judge in Cleveland is overseeing a consolidation of suits filed by U.S. cities and counties seeking to recoup the costs of dealing with opioid addictions and overdoses as part of a settlement similar to the 1998 Big Tobacco accord.

That judge has said he wants a deal addressing the companies’ business practices and roots of the crisis. The manufacturers are attempting to have those cases thrown out as well.

Purdue and other makers and distributors of opioids, including McKesson Corp., have been holding separate talks with state attorneys general seeking to resolve the opioid litigation. The companies are preparing to take their chances in court rather than paying billions of dollars to settle, Bloomberg News reported last month.

In the New York case, the Long Island-based Garguilo concluded opioid makers’ main defense -- that the U.S. Food and Drug Administration’s approval of their products bars state-court suits against them -- was flawed and provided no basis for dismissing the suits.

He reasoned FDA approval of the safety of the synthetic painkillers doesn’t mean states can’t “seek to protect their residents from the unlawful actions of the defendants concerning those drugs,’’ according to the ruling.

The companies also sought to persuade Garguilo the governmental entities’ deceptive-marketing claims also were preempted by FDA regulations dictating what manufacturers can tell doctors about their products. The judge shot that down, noting the FDA doesn’t regulate marketing materials.

Hanly added that Garguilo’s ruling only applies to opioid makers. He said the judge plans to issue a separate decision on drug distributors’ requests to have the counties’ suits dismissed.

The case is In Re Opioid Litigation, Index no. 40000/2017, Supreme Court of New York, Suffolk County

©2018 Bloomberg L.P.