Seward is one of hundreds of potential beneficiaries to settlements reached in a massive class action lawsuit against the makers and distributors of prescription opioid medications, which have been linked to an explosion of addiction and substance abuse.
The city received notice at the end of September that it had been placed on a master list of beneficiaries, certified by the federal judge overseeing a consolidated case against the drug companies in Ohio’s northern judicial district.
That judge, Judge Dan Polster, is presiding over a class action lawsuit being led by 49 cities and counties on behalf of every city, county, borough and incorporated area in the country, all of which have been automatically included in the class unless they opt out by Nov. 22.
Those who remain in the class will be consulted regarding any eventual settlement, which, in the first approximation, must be approved by 75 percent of the members.
The vote counting is somewhat more complicated, and requires 75 percent approval across six voting pools, accounting for those members that filed lawsuits before June 2019, those that did not, as well as weighting votes according to population and according to the expected portion of any settlement apportioned to the members.
In other words, approval requires the agreement of a very wide cross-section of the members, who must also represent a supermajority of the affected population.
The proceeding, known as “In re: National Prescription Opiate Litigation,” targets 13 companies alleged to have played a role in the manufacture, distribution and dishonest promotion of prescription opioid medications, such as OxyContin.
One of the companies, Purdue Pharma, has already filed for bankruptcy and put forward a plan to provide $10 billion to plaintiffs in a plan backed by dozens of local governments that had sued Purdue, reports Bloomberg.
Other than Purdue, the litigation involves the drug makers Cephalon (now a subsidiary of Teva Pharmaceutical Industries), Endo, Mallinckrodt, Actavis, and Janssen; distributors McKesson, Cardinal Health and AmerisourceBergen; and the retailers CVS, Rite-Aid and Walgreen’s.
Judge Polster has certified two claims under the federal Racketeer Influenced and Corruption Organizations Act, or RICO, and two issues under the federal Controlled Substances Act, meaning that members of the class can benefit from settlements pursuant to those matters.
The plaintiffs allege that under RICO that five of the defendants “misled physicians and the public about the need for and addictiveness of prescription opioids, all in an effort to increase sales,” according to the class action notice set by the United States District Court for the Northern District of Ohio.
The plaintiffs further allege, in a second RICO claim, that eight of the defendants “ignored their responsibilities to report and halt suspicious opioid sales, all in an effort to artificially sustain and increase federally-set limits … on opioid sales.”
The two issues under the Controlled Substances Act allege that all of the defendants were obliged to “create systems to identify, suspend, and report unlawful opioid sales, and that Defendants failed to meet those obligations.”
None of the claims of issues have yet been decided.
If Seward remains a member of the class, it will ultimately receive a portion of any settlement approved by the class. Just how much Seward receives would be determined by a formula approved by the court that takes into account the distribution of harms from the defendant’s alleged misconduct.
The court has published a website for the case which includes a map of the probable distribution of settlement funds, assuming a $1 billion payout. Under that hypothetical settlement, the Kenai Peninsula Borough would receive $164,701 and Seward would receive $11,585.
The money distributed at the borough-level would be partially distributed among incorporated towns and cities according to an agreement between the borough and the cities.