Billion-Dollar J&J Verdict Winner Now Leads Charge in Opioids Suit
Billion-Dollar J&J Verdict Winner Now Leads Charge in Opioids Suit
(Bloomberg) -- Mark Lanier used a block of cheese and a hay bale as props in a St. Louis courtroom last year to make his case that Johnson & Johnson baby powder causes cancer. It worked. Jurors ordered J&J to pay $4.7 billion in damages.
The verdict was the third multibillion-dollar award for Lanier, the Texas-based lawyer now leading the attack for two Ohio counties against a group of drug companies, including McKesson Corp. and Teva Pharmaceuticals Industries Inc., in the first federal trial of more than 2,000 state and local government lawsuits over the U.S. opioid epidemic. Opening arguments start Monday.
It’s Lanier’s job to convince a Cleveland jury the companies fanned the flame of addiction, a claim the industry disputes. The success of his argument may influence future trials and settlement talks that could extract $50 billion from drug makers and distributors. Lanier, a 58-year-old ordained Baptist minister and former professional chess player, has already shown how he can wow juries from Texas to New Jersey in high-profile cases.
“What’s his secret? A photographic memory, laser-beam attention to detail, and an incredible work ethic,” Richard Arsenault, a Louisiana-based lawyer who worked with Lanier on a case that led to $9 billion jury verdict in 2014. Unlike many trial attorneys, Lanier has a knack for communicating “complex facts in an understandable and compelling way,” Arsenault said.
In the J&J trial last year, Lanier whipped out a block of yellow cheese and a knife and began carving away to provide a down-home visual of how the talc used in baby powder is mined. He also used the bale of hay to demonstrate how difficult it is to find cancer-causing asbestos fibers in talcum powder.
“I’m a big believer in using real demonstratives to make a point,” Lanier told an audience at a California trial-lawyers meeting in 2018. “I’m a big believer in actually letting the jury see.”
For the Cleveland case, where Cuyahoga and Summit counties are seeking $8 billion in damages, the list of more than a dozen defendant drug makers and distributors has been reduced by settlements and dismissals to just McKesson, Teva, Cardinal Health Inc., AmerisourceBergen Corp., Henry Schein Inc. and pharmacy chain Walgreens Boots Alliance Inc.
Lanier will argue that Teva, along with its Actavis and Cephalon units, downplayed the health risk of opioid painkillers and oversold their benefits. He’ll also draw a bullseye on distributors like McKesson, Cardinal Health, Schein and AmerisourceBergen for allegedly turning a blind eye to suspicious orders and engaging in racketeering and conspiracy.
Defense lawyers say Lanier will have a hard time proving distributors acted in concert and plotted strategy together, a requirement for a racketeering claim, given evidence of intense sales and pricing competition between the companies.
Terminated Customers
In court filings, McKesson said it blocked millions of red-flagged opioid orders over the years and terminated customers over their mishandling of the addictive painkillers. The company also contends U.S. Drug Enforcement Administration regulations covering suspicious orders underwent changes during the time cities and counties accuse McKesson of fumbling opioid shipments.
“McKesson will introduce evidence establishing that it complied with DEA’s shifting guidance regarding suspicious orders,” the company’s lawyers said in a filing.
Teva said Lanier can’t point to any wrongful marketing of the company’s opioid painkillers that “caused harm” in the Ohio counties. “Plaintiffs cannot present any evidence of a single Ohio (or other) doctor who was misled by any statement made” by Teva or its units about opioids, the company said in a court filing.
However, it may be no coincidence that almost all defendants in the Cleveland case offered to settle the thousands of opioid cases just days before the start of the trial, said Carl Tobias, a University of Richmond law professor who teaches about mass-tort cases.
“He’s the best plaintiffs’ lawyer in the U.S. right now and maybe in the whole world,” Tobias said. “He’s got a string of big-dollar victories over the years that make companies start thinking settlement even before the case is tried.”
Settlements Offered
McKesson, Cardinal Health and AmerisourceBergen offered a combined $18 billion to wipe out opioid suits filed against the distributors, people familiar with the proposal told Bloomberg News earlier this week. Teva offered more than $15 billion in generic drugs, including those that help fight opioid overdoses, the people added.
U.S. District Judge Dan Polster, overseeing the Cleveland trial and the thousands of similar cases, summoned the chief executive officers of McKesson, Cardinal Health, AmerisourceBergen and Teva to meet with him Friday about their settlement proposals.
The judge, who has publicly pushed the companies and municipalities to come up with a global settlement, may want to give a final shove to parties as they spar over billion-dollar details of a massive accord. If their settlement proposals are accepted, the companies would be dropped from the current trial and any further opioid cases.
Teva spokeswoman Kelley Dougherty, McKesson spokesman David Matthews, and AmerisourceBergen’s Gabriel Weissman declined to comment Thursday on whether their companies are pressing ahead with trial preparations.
Brandi Martin, a Cardinal Health spokeswoman, said Thursday she couldn’t comment on whether the company would settle its opioid claims or defend itself in Cleveland. Phil Caruso, a Walgreens spokesman, said he couldn’t comment on pending litigation. Ann Marie Gothard, a Schein spokeswoman, didn’t return calls and emails for comment.
Some Setbacks
To be sure, Lanier has had some setbacks. Last year, a federal appeals court threw out a $151 million verdict over defects in J&J artificial hips citing misrepresentations by Lanier to the jury, including some intended to besmirch the company’s reputation. He’s also lost at trial. In 2007, a New Jersey jury rejected Lanier’s arguments that Merck & Co. didn’t properly warn a consumer who suffered a heart attack after taking its now-withdrawn Vioxx painkiller.
More than 400,000 Americans have died of opioid overdoses over two decades as U.S. addiction rates surged, forcing local communities to spend more on treatment and police services. In the Cleveland case, the judge said plaintiffs can show jurors how McKesson and other opioid distributors allegedly flooded states with pills and left a costly trail of pain in their wakes.
Dose Overflow
In West Virginia -- one of the hardest-hit by the opioid epidemic -- records show one pharmacy in Kermit, population 400, received almost 5 million doses from McKesson between 2005 and 2006. McKesson, Cardinal Health and AmerisourceBergen, along with other distributors, shipped a total of 76 billion pain pills over a six-year period starting in 2006, according to the U.S. Drug Enforcement Administration.
Lanier will try to sway jurors to find Teva, the distributors and Walgreens created a nationwide nuisance through careless handling of medications. He’ll likely argue illegal marketing of opioid painkillers -- coupled with lax oversight of shipments of the medicines -- created a public-health crisis still plaguing American communities.
In August, Oklahoma officials successfully used the nuisance theory against Johnson & Johnson. A state court judge ordered J&J to pay $572 million over its opioid-painkiller sales tactics in the state, though he acknowledged this week he made a $107 million math error that he will correct in a future ruling. The company paid $20.4 million earlier this month to get out of the Cleveland case.
The Ohio counties contend the defendants are on the hook for more than $8 billion over public outlays targeting the opioid crisis in their locales. Jurors in the case will weigh liability while Polster will decide damages himself later.
A verdict for the companies may force local governments to rethink how to proceed. But a verdict for the two Ohio counties could be costly for the industry because drugmakers and distributors face thousands of additional cases, in which Lanier may be the lead lawyer.
Pharma executives should probably consider settling rather than face Lanier again and again, said Richard Ausness, a University of Kentucky law professor who teaches about litigation. “I would think seeing a lawyer of his caliber on the other side of the courtroom should give them pause,” Ausness said. “He’s big league.”
The case is In Re National Prescription Opioid Litigation, 17-md-2804, U.S. District Court, Northern District of Ohio (Cleveland).
--With assistance from Riley Griffin.
To contact the reporter on this story: Jef Feeley in Wilmington, Delaware at jfeeley@bloomberg.net
To contact the editors responsible for this story: David Glovin at dglovin@bloomberg.net, Steve Stroth
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