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Litigation Lessons
The Arkansas opioid epidemic is a local problem in need of local solutions. This has been our theme since we filed the united litigation on behalf of Arkansas counties, cities, and the state, on the ides of March 2018. All 75 Arkansas counties are plaintiffs together — authorized by their county judges. Nearly all 500+ cities and towns of Arkansas also are engaged in this litigation through their mayors and the Arkansas Municipal League. Counties and cities have worked together as a team from Day 1.
Our case is still the only case like it in the country. County, city, and state governments have not united to this degree in any other case in the United States.
The unity of Arkansas governments has been beneficial in national settlement negotiations and the bankruptcy proceedings of two significant opioid manufacturers. Arkansas counties and cities speak with a powerful voice in national negotiations, just as in your lawsuit.
We have worked since Spring 2020 to negotiate a memorandum of understanding (MOU) among the county, city, and state governments of Arkansas to control what happens with funds designated for Arkansas from any settlement, bankruptcy, or judgment, in opioid litigation. An MOU among all the governments of Arkansas is essential. At a meeting in December 2020 about the MOU, Arkansas Gov. Asa Hutchinson asked us to obtain signed acknowledgements from county judges and mayors authorizing AAC Director Chris Villines to sign the MOU for counties and authorizing Municipal League Director Mark Hayes to sign the MOU for cities. We obtained and provided the acknowledgements as requested.
Gov. Hutchinson, Arkansas Attorney General Leslie Rutledge, Villines, and Hayes, all signed the Arkansas Opioids MOU in July. The MOU we have negotiated with the state includes an equal split of Arkansas settlement dollars among the state, counties, and cities — 1/3 of every dollar is allocated to the state, 1/3 of every dollar is allocated to cities, and 1/3 of every dollar is allocated to counties.
This unified, equal split among the governments of Arkansas is an excellent result for the Arkansas governments, and most important, for the people of Arkansas. The Arkansas Opioids MOU unites the governments of Arkansas, and will help the state, counties, and cities, ensure that settlement funds that flow into Arkansas are used appropriately to fight the opioid epidemic in Arkansas. The Arkansas MOU and the unity of Arkansas governments also increases the likelihood that our collective share of any national settlement will be the maximum amount available to Arkansas under the settlement, instead of a lesser amount. We worked for over a year to negotiate this MOU among the governments of Arkansas, and we are excited to achieve the goal of unity among Arkansas governments and an allocation and abatement plan for Arkansas that makes sense for Colin Jorgensen Arkansas. Huge congratulations Risk Management are in order, because the govern- Litigation Counsel ments have come together and agreed to do their best to respond to the Arkansas opioid epidemic, together. Your vision has been realized in the Arkansas Opioids MOU.
The Arkansas Opioids MOU is probably the best news we will be privileged to report, related to opioid litigation — but there is more good news. Recently, there has been news of $26 billion in potential national settlements with several of the opioid defendants: distributors McKesson, Cardinal Health, and AmerisourceBergen, and manufacturer Johnson & Johnson (Janssen). The potential settlements with these defendants were made public in late July. The legal team representing Arkansas counties has been involved in these settlement discussions from the beginning, and we have closely reviewed the proposed national settlement agreements — over 500 pages and extremely complex.
Under the potential settlements, states had until early September to decide whether to participate. Forty-two states, including Arkansas, approved the settlements. The defendants determined this was a sufficient number to move forward with the process. Counties and cities now have 120 days to decide whether to participate in the potential settlements. The majority of Arkansas county judges and mayors have already decided to participate in these settlements. If the settlements make it to the finish line, they will become effective in April 2022, and 18 years of payments to governments across the country will begin in April and July 2022.
There is also news from the Purdue bankruptcy. In September, the judge presiding over the Purdue bankruptcy in the Southern District of New York — Judge Robert D. Drain — confirmed the Purdue bankruptcy plan in a six-hour ruling from the bench (later reduced to a written order). The confirmation plan reorganizes Purdue in bankruptcy and provides for payments to plaintiff governments and other creditors nationwide. The Purdue bankruptcy plan operates much like a settlement because the bankruptcy creditors are mostly opioid litigation plaintiffs. Most governments that have lodged claims in the Purdue bankruptcy support the
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plan recently approved by Judge Drain, including Arkansas counties and cities.
But the United States Trustee and three states are appealing Judge Drain’s confirmation order. They requested a stay of the confirmation order pending their appeal. If the confirmation order is put on hold pending appeal, this could delay payments to government plaintiffs/creditors from the Purdue bankruptcy for months, or even years. Arkansas counties and cities are part of a large group of local governments that oppose the request for a stay of the confirmed Purdue plan.
I prepared a declaration of sworn testimony to assist with this effort, and my declaration was admitted into evidence on this issue at a hearing on Nov. 9, 2021. I testified briefly at the hearing, in response to questions from Judge Drain. At the end of the hearing, Judge Drain declined to issue a stay, partially in reliance on the evidence from Arkansas. Funds from the Purdue bankruptcy could begin to flow around the same time as funds from the other potential settlements, in 2022 — although the precise timing is unknown at this time.
Opioid litigation settlement dollars — from the potential settlements with the distributors and Janssen, the Purdue bankruptcy, and other future settlements and bankruptcies — will be subject to court supervision. These funds can only be spent for future programs, projects, and strategies to end the opioid epidemic. For these future efforts to be effective, Arkansas counties must continue our cooperation with cities and with the state. That partnership began with the MOU. Together, we can use these settlement dollars to establish a remediation program designed to help Arkansans who have been harmed by the opioid epidemic. No county or city can do this alone, nor can the state.
We are in discussions with representatives of the Attorney General’s Office and the Governor’s Office, and leadership of the House and Senate, about building an appropriate structure and process for management and disbursement of Arkansas opioid funds. Much work remains to be done, but we are right where we want to be — to maximize the impact of your opioid litigation on our communities, families, and addicts.
Here is a portion of my testimony in the Purdue bankruptcy on behalf of Arkansas counties — it mirrors the message we have delivered through your litigation from the beginning:
“If we had enough funding to equip all first responders in all corners of the state with naloxone and give naloxone directly to addicts and those close to addicts, more lives would be saved. If we had enough funding to provide syringe services and other recommended interventions, more lives would be saved. If we had enough funding to pair immediate interventions with short-term diversion programs and long-term treatment programs, we could reduce the number of repeat overdoses. And more lives would be saved. And some of those saves would lead to stable recovery — not only lives saved but lives reborn.”
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The Association of Arkansas Counties, Arkansas Municipal League, numerous law enforcement officers, city leaders, and county judges joined Arkansas Attorney General Leslie Rutledge on Oct. 7, 2021, for a press conference during which the General announced a multimillion dollar opioid settlement and a collaboration among the state, cities, and counties. Left: The Attorney General discusses the settlement and Memorandum of Understanding (MOU). Right: AAC Executive Director Chris Villines remarks upon the collaboration.
