It’s arguably the most complex, potentially lucrative litigation since the $240 billion tobacco settlements 20 years ago. And this time around, public health experts want to ensure that resources to combat the opioid epidemic aren’t squandered.
Only a pittance of the billions in tobacco company payouts has been spent on combating tobacco use. Instead, much of the money, which the industry continues to pay out, is plowed into state slush funds and used to patch budget shortfalls. In the most extreme cases, states sacrificed future payments for much smaller, but immediate infusions of cash to pay workers, or build schools and roads. One state even renovated a morgue.
“It didn’t matter if it was a blue state or a red state,” said Mark Greenwold, a senior consultant at the Campaign for Tobacco-Free Kids. “Wherever they needed money, the state needed a quick financial fix, this was an easy way to do it.”
In 2017, states received $7.3 billion in tobacco company payouts, but spent just $492 million on efforts to prevent kids from smoking and help smokers quit, according to the Campaign for Tobacco-Free Kids, which tracks the annual payments to states and how much state officials actually appropriate for prevention and cessation. Over the last five years, less than 10 percent of the nearly $40 billion in tobacco payments went toward such efforts. That’s less than a quarter of what the CDC says states need for comprehensive tobacco control.
“We cannot fail in making sure whatever dollars we get in a resolution go to treatment and emergency response and education,” said former Mississippi Attorney General Mike Moore, who helped lead the nationwide effort against Big Tobacco, and is now representing several states in opioid lawsuits.
But it’s likely to be even more challenging to ensure that proceeds from a settlement with opioid manufacturers and distributors actually go toward addressing the addiction crisis. That’s primarily because of the bewildering array of parties seeking compensation for purported damages from the business practices of those companies — and the more than 1,100 lawyers representing them.
Most of these cases have been amassed before a single federal judge in Cleveland. U.S. District Court Judge Dan Polster has chosen three Ohio cases — filed by Cleveland, Summit County and Cuyahoga County — to represent the larger class and fast track toward a potential trial next March. But he’s also pushing the parties to engage in serious settlement talks.
The Summit County lawsuit provides a stark portrait of the addiction epidemic in just one swath of the country — a county of 542,000 residents that received an average of 36.5 million opioid pills per year — or 67 pills for every resident for every year between 2010 and 2016. In 2016, an unintentional overdose was recorded every 3.6 hours on average, leading to 298 deaths. The county estimates the costs of the epidemic at $155 million over a decade but does not elaborate on how the figure is calculated or what it includes.
James Tierney, a former Maine attorney general, worries that lawyers are peddling lawsuits to local officials desperate to show constituents they’re doing something — anything — to address the opioid crisis, and that any settlement will be diluted by paying out legal fees to scores of attorneys.
“They don’t have anybody to pay right now because there’s so much confusion,” Tierney said. “Who would they give the money to?”
A group of 41 state attorneys general, spanning the geographical and political spectrum, is proceeding with its own, parallel investigation to the lawsuits into the business practices of opioid manufacturers and distributors. Their efforts could eventually meld with any settlement negotiations.
“We’re very conscious that our constituents are dying every day, and it’s the biggest public health crisis — drug crisis, certainly — that this country has ever faced,” said Perry Zinn Rowthorn, chief deputy attorney general in Connecticut who is involved in the opioid investigation. “We think it’s incumbent upon all of us to get a reasonable deal that bends the curve on the crisis.”
State officials who were involved in the tobacco talks said efforts to impose constraints on how states spent the money ran into legal and political hurdles. Any restrictions seen as an infringement on state legislators’ power of the purse would probably have faced a court challenge.
“The conclusion was that it would be unconstitutional,” said Sen. Richard Blumenthal (D-Conn.), who at the time was Connecticut’s attorney general. In retrospect, he said he wishes that had been tested in court, and he hopes that more guardrails are put in place on any opioid settlement.
But there was also a lack of political will. Tierney, the former Maine attorney general, recalled that as more states joined the settlement talks, the emphasis shifted from solving the public health crisis posed by smoking to simply securing a big payday from the tobacco companies.
“There was a lot of pressure from governors and legislators,” Tierney recalled. “They really wanted the money.”
That pressure could prove to be even more intense with the opioid lawsuits given the scores of cities, counties and hospitals all hoping for payouts.
But the unified front also made the state attorneys general a daunting force.
“One of the single, most powerful things that we had going for us is that we all joined together,” said Christine Gregoire, who was Washington state attorney general at the time. “They saw that they were going to have litigation that would just go on forever, and that these were formidable lawyers that they were up against.”
One significant constraint was placed on the tobacco windfall: The settlement reached by 46 states required spending $1.7 billion on efforts to reduce smoking by kids and prevent tobacco-related diseases. Now known as The Truth Initiative, the fund has by all accounts played a significant role in reducing the devastation from smoking. (Four other states — Florida, Minnesota, Mississippi and Texas — reached separate settlements with the tobacco companies.)
That could serve as a blueprint for determining how to use proceeds from an opioids settlement.
“What you really need to do is at that critical time have the states say to the judge, ‘We will only settle if the money goes to public health,’” Tierney said.
Even without additional guardrails on how the tobacco payouts could be spent, a sea change in tobacco use has occurred in the two decades since that settlement.
In 1997, 1 in 4 high school seniors were daily smokers, according to HHS. By 2015, that percentage had plummeted to 1 in 20.
“In the years since those first state lawsuits, smoking has been in historical decline,” Blumenthal said. “Even after all the criticism, the tobacco actions have had profound effects.”
Another major legacy of the tobacco settlements was the court-ordered release of millions of documents detailing decades of marketing practices and legal tactics utilized by the companies. The tobacco industry database, housed at the University of California, San Francisco, contains nearly 15 million documents spanning 90 million pages.
Doug Blanke, who was a key player in Minnesota’s lawsuit against the tobacco companies, worries the aggressive timeline set forth by Polster could make it difficult to unearth that type of evidence that pushed the tobacco companies to settle. He points out that the companies asserted attorney-client privilege to protect more than 230,000 documents in Minnesota’s lawsuit, and that it took two years of legal skirmishes to eventually get about 40,000 of them released.
“If the pharmaceutical industry wages the same kind of resistance, if they use the same kind of never-give-an-inch litigation strategy, then going to trial in a year sounds very difficult to me,“ said Blanke, now director of Mitchell Hamline School of Law’s Public Health Law Center in Minnesota.
For all the similarities, however, the tobacco settlements are an imperfect lens through which to view the opioid litigation. One significant difference: Painkillers have a medically approved use. Tobacco, by contrast, often leads to disease and death even when used as intended.
But probably the biggest difference — and the one likely to shape any settlement — is the scope of use.
In 1998, nearly 50 million American adults smoked. The number of Americans addicted to prescription painkillers is estimated to be closer to 2 million — although that ignores illicit opioids like heroin and fentanyl — and some estimates of opioid addiction go higher. Between 1999 and 2016, a staggering 350,000 Americans died from opioid overdoses. But that’s still less than the annual carnage from tobacco — although tobacco deaths tend to occur among older people.
“The scope of the tobacco settlement in all likelihood is much, much larger than what any settlement would look like here because of the amount of money in the industry and the nature of the damages,” said Connecticut Attorney General George Jepsen. “I think that talk of the tobacco settlement raises expectations in a way that are probably unfortunate.”