How a federal appeals court could upend the opioid lawsuits
At least four petitions ask the U.S. Court of Appeals for the Sixth Circuit to review a judge's handling of the multidistrict litigation over the opioid crisis.
At least four petitions are pending before the U.S. Court of Appeals for the Sixth Circuit that, if successful, could unravel much of the work done in the opioid lawsuits, including preparations for a trial later this month.
U.S. District Judge Dan Polster, who is overseeing more than 2,000 lawsuits in multidistrict litigation over the opioid crisis, has issued several rulings in the past month focused on both a potential global settlement and the Oct. 21 trial. The appellate petitions, brought by a hodgepodge of parties that includes the opioid defendants and the states and cities suing them, ask the Sixth Circuit to review many of Polster’s decisions.
To be sure, appeals courts rarely question a judge’s decisions in multidistrict litigation, but the opioid litigation presents many unprecedented issues.
“Toss out everything we thought about presumptions about when a court would act because this case is just a whole new ballgame,” said Benjamin Beaton, a partner in the Cincinnati office of Squire Patton Boggs and author of the Sixth Circuit Appellate Blog. “These are big questions, and while it’s not ordinary for a circuit court to weigh in on this stage, there are questions raised that may make the Sixth Circuit compelled to weigh in now since there might not be a chance later.”
Unlike most appeals, particularly in multidistrict litigation, the petitions before the Sixth Circuit come from all sides of the case. The only significant parties not seeking appellate review are the plaintiffs’ executive committee, representing the cities and counties suing over the opioid crisis, and most of the major defendants that manufacture the prescription painkillers. The majority of those defendants, most recently Johnson & Johnson on Tuesday, have reached settlements resolving claims brought against them by the two plaintiffs in this month’s trial, Ohio’s Summit and Cuyahoga counties. Purdue Pharma agreed last month to a global settlement, which it valued at up to $12 billion, to resolve all the opioid cases as part of its Chapter 11 bankruptcy filing.
Take a look at the opioid petitions before the Sixth Circuit right now:
Stop the trial
Perhaps the petition most likely to get the Sixth Circuit’s review is Ohio Attorney General Dave Yost’s petition for writ of mandamus to halt this month’s trial, now against six opioid companies. The trial, scheduled to take place in Cleveland, is the first bellwether in the multidistrict litigation and follows a $572 million judgment for Oklahoma in the first opioid trial in the nation.
Yost’s Aug. 30 petition argues the two counties going to trial are infringing on state sovereignty in bringing legal claims on behalf of its residents. Ohio has filed two lawsuits against several opioid companies.
In a notice filed last month, Yost attempted to bolster his argument with a Sept. 19 letter from one of the opioid defendants, Allergan PLC, which claimed that Ohio could no longer pursue recoveries on behalf of the residents of the two counties in the trial because it had reached a $5 million settlement with them.
“The Allergan letter crystallizes the harm of the bellwether trials in Ohio,” he wrote. “At least one defendant has taken, and others likely will take, the (incorrect) position that the political subdivisions can assert the state’s claims and bind Ohio.”
Both the U.S. Chamber of Commerce and attorneys general from 14 other states and the District of Columbia, have filed amicus briefs supporting the petition.
What stands apart from the other petitions is that the Sixth Circuit, acknowledging the potential conflict with the states, ordered Polster and the plaintiffs’ executive committee to respond, which they both did this week.
“That is [the] clearest indication that the Court of Appeals is watching closely,” Beaton said. “If there had been any doubt before then, on whether the Sixth Circuit was paying close attention to this case, that was put to rest by its order last week requesting a response from the plaintiffs and the judge himself.”
Polster, on Tuesday, called the petition “untimely in the extreme,” given that Yost and his predecessor, Mike DeWine, now Ohio’s governor, had multiple opportunities to object to the trial plans. He also said the petition hinged on a “faulty premise” that counties were suing on behalf of Ohio residents when, in fact, they were pursuing their own economic claims.
On Wednesday, Peter Weinberger, of Cleveland’s Spangenberg, Shibley & Liber, who is plaintiffs’ liaison counsel in the multidistrict litigation, responded with similar claims. He also said that Ohio’s attorney general had no standing in federal court because, among other things, the trial’s outcome “is in no way binding on the state of Ohio.” Even if he had standing, he wrote, Yost had forfeited his right to intervene in federal court after failing to do so in the multidistrict litigation for the past 18 months.
The “negotiation” class
Other likely candidates for the Sixth Circuit review are two petitions seeking to appeal Polster’s certification of a “negotiation” class. That Sept. 11 certification ruling focused on potentially resolving the claims of more than 33,000 cities, counties and other governments, but some of the defendants and several states, including Ohio, objected to the novel idea.
The Sixth Circuit, Beaton said, would “undoubtedly” be interested in such an issue of federalism.
“The Sixth Circuit is not afraid to follow the law where they think it takes them, even if the outcome may depart from what other courts have done,” he said. “There will be great interest within the Sixth Circuit in this novel question and in ensuring the massive MDL doesn’t create new law that goes in a potentially wrong and very significant direction.”
Lawyers for the distributors, which include McKesson Corp. and Cardinal Health Inc., and for pharmacies, including CVS and Rite Aid, called it an “unauthorized expansion” of Federal Rule 23 of Civil Procedure, according to their Sept. 26 petition.
Moreover, they raised concerns that such a novel idea might not withstand appellate review, just as an asbestos settlement unraveled under the U.S. Supreme Court’s 1997 decision in Amchem Products v. Windsor.
“Granting this petition will be important regardless of how this court rules on the merits,” they wrote. “In the absence of appellate review, defendants will be reluctant to engage in settlement discussions with the negotiation class, fearing the outcome that occurred when a considerably less ‘inventive’ application of Rule 23 was applied in the asbestos litigation.”
In a separate petition, also filed on Sept. 26, six cities in Ohio argued that the certification failed to give cities and counties, as class members, an opportunity to opt-out of a negotiated settlement.
On Tuesday, attorneys general from the District of Columbia and a dozen states, including Ohio, Delaware and Texas, filed an amicus brief supporting both petitions. They wrote that Polster, in certifying such a class, created a “new governmental entity” that usurps the interests of the states and could reduce the potential pool of money available to its residents.
“Rule 23 is hardly the only problem plaguing the certified class,” they wrote. “The even more fundamental problem — and the primary reason for the amici states’ involvement here — is the degree to which the certified class will undermine state sovereignty and the structure of state government.”
In an amicus brief, filed on Tuesday in the defendants’ petition, the U.S. Chamber of Commerce said the “negotiation” class “departs from the requirements of Rule 23 and threatens to distort class action practice.”
Recuse the Judge
Least likely to succeed is a petition to recuse Polster from all the cases, including this month’s trial.
On Sept. 26, Polster rejected a recusal motion, brought by distributors going to trial this month. They petitioned the Sixth Circuit to review that decision.
“Judge Polster has lost sight of his judicial responsibilities under Article II — neutrality, discretion, and restraint,” they wrote in their petition, filed on Tuesday. They said Polster’s remarks in court and in the press about his “personal mission” to solve the opioid crisis have made it appear that he wants the corporate defendants to pay. “None of this is normal or appropriate for a federal judge,” they wrote.
They also said it was inappropriate for Polster, who has been involved in settlement negotiations, to rule on an abatement program of potentially $8 billion if the jury, in the trial that begins this month, finds the defendants created a public nuisance.
The Sixth Circuit has reversed Polster once before. On June 20, a split panel found that Polster should have granted a request from news organizations to make public a federal database of pharmaceutical drug distribution.
But Beaton said that was a very different issue than the “big questions” now before the Sixth Circuit.
What remains unclear, he said, is how soon the Sixth Circuit would act, if it does. On Wednesday, Polster denied an expedited motion from all the defendants to stay the multidistrict litigation so that the Sixth Circuit would have time to rule on its multiple petitions. The defendants plan to make the same request to the Sixth Circuit on Friday.
In the recusal petition, lawyers for the distributors and pharmacies have asked the Sixth Circuit to expedite its decision, noting that jury selection in the trial begins on Oct. 15.
“All these plaintiffs will be watching the first bellwether trial, as will potentially thousands more plaintiffs whose decision to file lawsuits of their own may turn on the outcome of the trial,” they wrote. “A trial of this magnitude and importance should not occur under the shadow of questions about the district judge’s ability to hear the case, especially when the broader consequences of a verdict could not be undone by a subsequent ruling of this court.”
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