J&J’s $465 Million Opioid Judgment Overturned by OK Court

The Oklahoma Supreme Court on Tuesday overturned a $465 million judgment against Johnson & Johnson in a state-filed lawsuit alleging that the drugmaker fueled the opioid epidemic through deceptive painkiller marketing.

Source: Reuters | Published on November 10, 2021

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The decision was the latest setback for states and local governments attempting to hold pharmaceutical companies accountable for a drug abuse crisis that the US government claims resulted in nearly 500,000 opioid overdose deaths over a two-decade period.

The court ruled that the state's public nuisance law does not apply to the manufacture, marketing, and sale of prescription opioids, and that a trial judge overstepped his bounds in holding the company liable under it.

"However serious the opioid addiction problem is in Oklahoma, public nuisance law does not provide a remedy for this harm," wrote Justice James Winchester.

Based in New Brunswick, New Jersey In a statement, J&J stated that while it sympathized with those affected by the epidemic, the court "appropriately and categorically rejected the misguided and unprecedented expansion of the public nuisance law."

Oklahoma Attorney General John O'Connor expressed disappointment in a statement and vowed to pursue a related case against major drug distributors. On appeal, his office requested $9.3 billion from J&J to fund treatment and other programs to combat the epidemic.

The Oklahoma lawsuit was the first of over 3,300 lawsuits filed against pharmaceutical manufacturers, drug distributors, and pharmacies in connection with the opioid crisis to go to trial.

The trial took place prior to an agreement reached this year between J&J and the three largest U.S. drug distributors – McKesson Corp, Cardinal Health Inc, and AmerisourceBergen – to pay up to $26 billion to settle thousands of opioid-related lawsuits.

LAWS RELATING TO PUBLIC NUISANCES

The decision came just days after a similar trial in California pitting several large counties against J&J and three other drugmakers resulted in a preliminary ruling in favor of the companies.

Cleveland County District Judge Thad Balkman ruled in August 2019 that J&J engaged in misleading marketing about the benefits and risks of addictive opioids for years while selling the painkillers Duragesic and Nucynta, causing a public nuisance.

Prior to trial, the state settled related claims for $270 million with OxyContin maker Purdue Pharma and $85 million with Teva Pharmaceutical Industries Ltd.

J&J argued that there was scientific support for the marketing claims and that Duragesic and Nucynta, which it no longer promotes, accounted for a small percentage of opioids sold in Oklahoma.

It also claimed that the state's public nuisance law should not be applied.

Winchester agreed in his ruling on Tuesday that the law only applied to discrete, localized problems involving criminal or property-based conflicts, not policy issues.

"The district court's expansion of public nuisance law enables courts to manage public policy issues that should be handled by the legislative and executive branches," Winchester wrote.

The Oklahoma ruling, according to Paul Geller, a plaintiffs' lawyer at the law firm Robbins Geller Rudman & Dowd who helped draft the $26 billion nationwide settlement proposal, could lead to increased participation in the settlement.

"Perhaps understanding that, despite the gravity of the epidemic, trials are inherently risky and appellate courts are largely unpredictable will eventually help increase participation," he said.

Eight states have refused to sign on to the J&J deal, which has agreed to pay up to $5 billion. Local governments in states that have signed on have until January to do so. Participation determines the final payout.

According to Elizabeth Chamblee Burch, a law professor at the University of Georgia, the Oklahoma ruling, combined with the California decision, may cause states and localities that have not supported the proposed nationwide settlement to reconsider their positions.

"To the extent that people are hesitant to enter into that settlement, this definitely changes the risk profile," Burch said.

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