State Supreme Court Hears Arguments on AmerisourceBergen’s Insurance Litigation Timeline

The West Virginia Supreme Court of Appeals heard two cases Tuesday morning involving AmerisourceBergen, a major drug company involved in opioid settlements with the state.

AmerisourceBergen has asked two of its insurance companies – ACE American and St. Paul – to pay for their opioid settlement costs. However, the case the state Supreme Court heard Tuesday morning is about whether litigation on AmerisourceBergen’s insurance coverage in West Virginia should influence how and when parallel cases in other states, centering on Delaware, should continue. 

Lawyers argued whether AmerisourceBergen sought a “preferable” state judiciary system rather than letting cases in other states proceed at the same time. Arguments to halt the other cases concern the concept of “comity,” which involves respecting other state’s judicial systems and consistency between rulings.

Chief Justice Tim Armstead voluntarily disqualified himself from hearing the case on Sept. 12. Armstead cited the general disqualification rule in the Code of Judicial Conduct but did not provide further comment. Judge Robert Ryan from the Twenty-First Judicial Circuit sat in on temporary assignment.

The court’s fall term ends in November.

Big 3 Drug Companies Argue For Supreme Court To Block Possible Appeal

Depending on what the court decides, it could allow the localities to appeal an opioid case they lost two years ago.

The City of Huntington and Cabell County have asked the West Virginia Supreme Court of Appeals to define what constitutes a public nuisance under state law. 

Depending on what the court decides, it could allow the localities to appeal a case they lost two years ago. 

The defendants – Amerisource, Cardinal Health and McKesson – have filed a brief that argues that the high court should uphold the previous narrow interpretation by the circuit court of what is considered a public nuisance. 

“If this court chooses to answer the certified question, it should confirm that West Virginia public nuisance law does not and should not apply to the distribution of lawful products like prescription opioid medications,” the brief said. 

The plaintiffs said that the court has never applied public nuisance law to the distribution of products. They said that the localities failed to provide any state example in which a public nuisance had been applied to the distribution of products. 

The brief goes on to outline that localities have exaggerated and distorted the companies’ role in the epidemic. While the companies acknowledge there is an opioid epidemic, they say in the brief that they didn’t cause it. 

“(Distributors’) conduct in shipping prescription opioids, needed to fill legitimate prescriptions written by West Virginia doctors, was not wrongful and did not cause the opioid epidemic,” the brief said. 

The defendants also took issue with the plaintiffs suing for a large sum of money as a form of abatement. 

“Even where parties have been ordered to clean up environmental nuisances, the remedy never included paying for the treatment of downstream personal injuries or social programs with remote connections to the defendant’s conduct,” the brief said. 

The State of West Virginia’s case, also based on the idea that opioids created a public nuisance, yielded a billion-dollar settlement. However, it was settled outside of court. 

If the court rules that the distribution of opioids constitutes a public nuisance, then Huntington and Cabell can request an appeal. 

The localities will still have to prove in an appeals case that the distributors caused harm, that the distributors’ conduct was unreasonable, and that they have requested proper abatement to remedy the damage. 

The court is expected to decide by the end of this year. 

Huntington, Cabell File Appeal Argument In Case Against Opioid Distributors

Following Cabell County and Huntington’s loss of their opioid lawsuit, the localities appealed that decision. Now the state supreme court is involved, and the city and the county have filed a 40-page brief with the court – asking it to see things their way.

Following Cabell County and Huntington’s loss of their opioid lawsuit, the localities appealed that decision. Now the state supreme court is involved, and the city and the county have filed a 40-page brief with the court – asking it to see things their way. 

The localities didn’t lose for lack of evidence. They lost on a general disagreement on what qualifies as a “public nuisance.” The U.S. District Court for the Southern District of West Virginia had a narrow interpretation of what constitutes a public nuisance. This differed from what both the plaintiffs and other courts have considered to be a public nuisance.  

When Huntington and Cabell appealed the case, the appellate court looked to the West Virginia Supreme Court of Appeals to answer this question: Can public nuisance laws be used to successfully sue drug distribution companies? 

Huntington and Cabell argued in their brief that the answer to that question is yes. And there is plenty of case law cited to support that, including a statewide opioid lawsuit that was won on a nearly identical premise and legal standard. The brief also lists other smaller lawsuits against energy and lumber companies that successfully used a public nuisance charge.

In a 1997 case against Kermit Lumber, a public nuisance legal standard was successfully used by the state of West Virginia. The court said in its decision that the term “public nuisance” does not have an exact definition, generally it has been described as the doing of, or failure to do something, that adversely affects the safety, health or morals of the public, or creates a substantial annoyance, inconvenience or injury to the public.  

“The federal district court opined that West Virginia law does not recognize a public nuisance claim based on the distribution of a controlled substance. Petitioners maintain that the district court erred in reaching that conclusion,” the brief said. 

Cabell and Huntington say that the more than 81 million dosage units that flooded a community of around 100,000 people, and the drug epidemic that ensued, is the responsibility of three drug manufacturers — McKesson, AmerisourceBergen and Cardinal Health. Those three companies supplied 89 percent of the Oxycontin that was sent to Cabell County. 

The localities say in the brief that the unreasonable opioid distribution practices that they say caused addiction, overdose deaths, infectious diseases, crime and decimated neighborhoods interfered with public health safety, property and resources. 

The brief also outlined the detrimental effect the epidemic had on babies and pregnant women in the state. 

“Thousands of babies — at times up to 10 percent of all newborns in Cabell/Huntington — have been born with neonatal abstinence syndrome due to pregnant mothers opioid use,” the brief said. 

The brief also lays out facts around the drug manufacturer’s failure to properly monitor the distribution of highly addictive substances, including multiple instances when federal regulators intervened with the companies warning them of lack of oversight in distribution and even taking punitive action. 

“In 2005, DEA met with respondents to convey the rising problem of opioid diversion and warned them that failing to maintain effective controls against diversion would create a crisis,” the brief said. 

It goes on to say that respondents did not take action to combat an influx of pills headed to small, rural areas like West Virginia, but instead took actions that incentivized employees of the drug distribution companies to continue the trend. 

“Respondents (Cardinal, McKesson, AmerisourceBergen) used sales employees to conduct due diligence even though respondents compensated those workers based on how many opioids they sold,” the brief said. 

West Virginia Public Broadcasting has reached out to all three companies but did not hear back in time for publication. The three companies’ brief, which will argue why the narrow interpretation of a public nuisance by the fourth circuit court should be upheld, is scheduled to be filed May 20.

Rite Aid Agrees To Opioid Settlement

The pharmacy chain Rite Aid has settled a case over its involvement in the state’s opioid crisis.

West Virginia Attorney General Patrick Morrisey announced a settlement Thursday with the pharmacy chain Rite Aid that could provide up to $30 million dollars for recovery efforts in the state. The lawsuit alleged that Rite Aid contributed to the state’s opioid crisis by oversupplying addictive pills.

The West Virginia First Memorandum of Understanding, or MOU, is an agreement by counties and cities on how to spend funds received from opioid settlements. Following the MOU, the settlement funds from Rite Aid go to state and local programs for the reduction of opioid addiction.

In May, Teva and Allergan settled for $161.5 million; in April, drug manufacturers Johnson & Johnson settled for $99 million; and in March, Endo Health Solutions settled for $26 million.

In a July ruling, the three big drug distributors McKesson, Cardinal Health, and AmerisourceBergen were found not liable in a case brought by Cabell County and the City of Huntington. In August, the same distributors settled for $400 million with other cities and counties in the state.

Although Rite Aid settled their case, a trial is set in September as part of the Mass Litigation Panel for remaining pharmacy defendants.

Cabell County Appeals Opioid Ruling

Officials with the Cabell County Commission are moving to appeal a federal judge's ruling.

The Cabell County Commission voted unanimously to appeal a federal judge’s ruling in favor of drug distributors AmerisourceBergen, Cardinal Health, and McKesson.

Judge David Faber ruled that the state’s public nuisance law did not apply to the three distributors for distributing 81 million addictive pills over the span of eight years.

Huntington Mayor Steve Williams spoke before the commission, indicating that the city is backing the appeal.

“Our constituents need to know we’re not giving up,” he said. “I’m proud to be able to stand by the Cabell County Commission with the City of Huntington, for us to aggressively continue forward on abating this scourge from our community.”

Initially, Huntington and Cabell County asked for more than $2.5 billion to fund opioid response programs.

Huntington Mayor Reacts To Opioid Verdict

A federal judge ruled in favor of three drug distributors that were accused of fueling the opioid epidemic in Huntington and Cabell County. Local leaders are considering their next step.

Judge David Faber ruled that opioid distributors AmerisourceBergen, Cardinal Health, and McKesson did not create a public nuisance by distributing 81 million pills over the span of eight years in Huntington and Cabell County.

“The distribution of medicine to support the legitimate medical needs of patients as determined by doctors exercising their medical judgment in good faith cannot be deemed an unreasonable interference with a right common to the general public,” Faber wrote.

The judge stated that the plaintiffs failed to demonstrate that the wave of addictive painkillers were because of unreasonable conduct, and that the defendants were acting in a legitimate response to keep up with the demand set by doctor prescriptions.

“I don’t know what more that we needed to prove,” Huntington Mayor Steve Williams said. “It was a collaborative effort of the manufacturers, the distributors, and the pharmaceutical companies.“

Huntington and Cabell County asked for more than $2.5 billion in order to fund opioid response programs as part of a 15-year abatement plan.

According to Williams, the defendants denied responsibility to assist in the community’s recovery.

“One thing that frankly aggravated me in the trial is when the defendants were indicating that the City of Huntington should be paying for all these recovery programs,” he said.

Williams indicated that the plaintiffs plan on meeting with legal counsel to discuss their next steps.

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