By: Joan Cerniglia-Lowensen, Esquire and Kathryn Jackson, Esquire
The nationwide opioid crisis has changed the way the entire health care industry prescribes painkillers. Health care providers are encouraged to view these medications differently. In the past, providers believed that if a patient truly had pain, if opioids were prescribed, there was little risk of addiction. This approach has proven to be both incorrect and dangerous. Federal and state governments alike are setting forth new standards and regulating prescriptions like never before. As discussed in Liability of Healthcare Providers in the Wake of Maryland Opioid Crisis, liability and licensure penalties for prescribers and pharmacists is at its most sensitive peak.
Desperate to confront the crisis at its source, a new litigation strategy has emerged. This strategy includes attempting to hold both the prescriber and the pharmaceutical company responsible civilly. The United States is no stranger to these types of suits. Suits began against the tobacco industry as early as the 1950s, and eventually culminated in the Master Settlement Agreement in 1998. The suits were commenced by state governments and alleged that the companies’ deceptive trade practices ultimately caused widespread tobacco-related health problems. The settlement agreement required the companies to pay $365.5 billion and submit to stricter oversight by the FDA, including warning labels and advertising regulations. [1]
Does the success of tobacco litigation mean pharmaceutical companies should be overly concerned? Not necessarily. These types of lawsuits in response to nationwide crises are not always an easy path for Plaintiffs. Consider the attempt by plaintiffs to hold gun manufacturers liable for mass shootings. In the late 1990s and early 2000s, many state government attempted to confront the problem of rising gun violence as they did with the tobacco industry. These attempts were made to hold manufacturers accountable. However, in 2005, Congress passed the Protection of Lawful Commerce in Arms Act (PLCAA)), which protected the gun and ammunition manufacturing industry from civil liability for crimes resulting from the criminal misuse of their products.[2]
Although the overall path this litigation will take has yet to be revealed, it is certain that state governments are steadily continuing the effort. Hundreds of lawsuits have been filed by state and local governments thus far, and the President has even spoken publically encouraging the Justice Department to follow suit.[3] Although there are many differences between the suits in terms of venue, several commonalities in allegations and defendants may encourage pharmaceutical companies to propose a consolidation or master settlement in the future.
In City of Los Angeles v. Purdue Pharma et al., filed in May of this year, the Plaintiff’s complaint alleged four counts: (1) public nuisance, (2) violation of Racketeer Influenced and Corrupt Organizations Act (RICO), (3) negligence, and (4) negligent misrepresentation.[4] These claims are generally representative of the other complaints filed in various states. Some plaintiffs, like the City of Philadelphia, for example, have also alleged violations of state consumer protection laws.[5] Perhaps one of the most inclusive of the state court pleadings, the County of Nacogdoches, Texas brought ten separate counts- also adding allegations of unjust enrichment, common law fraud, and gross negligence.[6]
The perfect storm is definitely brewing in federal court, however, where over 62 similar cases against pharmaceutical companies have been consolidated in Northern District of Ohio. Two Maryland cases, filed by Montgomery and Cecil counties, were joined as tag-along consolidations in early 2018. Currently the court is still hearing motions opposing the consolidation and has yet to hear the issues. However, with the number of cases being brought and subsequently consolidated, it undoubtedly appears state governments are not backing down on holding pharmaceutical companies responsible.
In anticipation of this litigation, at least one insurance company has gone on the offensive. Travelers Insurance has obtained two judgements in two jurisdictions finding that it has no duty to defend its insured pharmaceutical companies for their role in the opioid crisis.[7] Although the case in California state court is still on appeal, and the other decision by the Eleventh Circuit is unreported, these decisions certainly could be the beginning of a trend of refusing coverage in the upcoming momentous federal litigation.
Prudent pharmaceutical companies will make certain that their insurance contracts provide defense and indemnity for these suits. Though the future is uncertain regarding these suits, it is clear that the issue will continue to be litigated in various jurisdictions at a costly amount.
[1] See Master Settlement Agreement, Public Health Law Center at Mitchell Hamline School of Law http://www.publichealthlawcenter.org/topics/tobacco-control/tobacco-control-litigation/master-settlement-agreement (last accessed Sept 21, 2018). [2] 15 U.S.C. §§ 7901-7903. [3] See Rebecca Ballhaus, Trump Calls On Justice Department to Sue Opioid Companies, Wall Street Journal (August 16, 2018) https://www.wsj.com/articles/trump-encourages-justice-department-to-sue-opioid-companies-1534438160 [4] La case [5] City of Philadelphia v. Allegan PLC et al., No. 002718 (Pa. Com. Pl. 2018). [6] County of Nacogdoches v. Purdue Phama L.P. et al., No. C1833767 (Tex. Dist. 2018). [7] See Traveler’s Property Casualty Co. of America v. Actavis, Inc. et al., 16 Cal.App.5th 1026 (2017); see also Traveler’s Property Casualty Co. of America v. Anda, Inc. et al., 658 Fed.Appx. 955 (11th Cir. 2016).Joan Cerniglia-Lowensen is a Member with Pessin Katz Law, P.A. (PK Law). She has close to twenty five years of civil litigation experience throughout the State of Maryland in both state and federal courts. Prior to becoming an attorney, Ms. Cerniglia-Lowensen was a registered nurse achieving both a BSN and a MS with a major in nursing. As an attorney, she primarily practices in the health care defense field. She defends nurses, doctors, veterinarians, dentists, healthcare providers, healthcare facilities, mental healthcare workers, urgent care facilities and nursing homes in medical malpractice matters; professional liability and tort claims; and disciplinary actions before various regulatory boards. She provides risk management advice to a variety of healthcare entities, insurers and individuals and continuing education to healthcare workers and entities; and has been published in both journals and texts on issues of risk management and liability of healthcare professionals. She also defends individuals and entities in a variety of civil litigation matters. She can be reached at 410-339-6753 or jclowensen@pklaw.com.
Kathryn Jackson is an associate in the firm’s Medical Malpractice Defense Group. She recently passed the Maryland bar and was sworn in as an attorney in Maryland.
