WEBVTT - Public Nuisance Strategy Effective In J&J Opioid Case

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<v Speaker 1>Welcome to the Bloomberg Law Podcast. I'm June Grosso. Every

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<v Speaker 1>day we bring you insight and analysis into the most

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<v Speaker 1>important legal news of the day. You can find more

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<v Speaker 1>episodes of the Bloomberg Law Podcast on Apple Podcasts, SoundCloud

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<v Speaker 1>and on Bloomberg dot com slash podcasts. Johnson and Johnson

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<v Speaker 1>shares rose as much as five point four per cent

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<v Speaker 1>after an Oklahoma judge ordered the company to pay far

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<v Speaker 1>less than some investors had expected in the first trial

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<v Speaker 1>by a state seeking compensation for the public health crisis

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<v Speaker 1>spawned by opioid pain killers. Bloomberg News legal reporter Jeff

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<v Speaker 1>Feely is on the line with us with what this

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<v Speaker 1>might mean going forward. Jeff, glad to have you with us.

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<v Speaker 1>One eye opener for me. Judge Thad Bachman ruled J

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<v Speaker 1>and J created a temporary public nuisance. That's really how

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<v Speaker 1>we characterized this. Yes, public nuisance is basically a doctor

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<v Speaker 1>and that says if somebody creates a harm that affects

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<v Speaker 1>the community that you know, you can be responsible for it.

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<v Speaker 1>He found that the nuisance that was created was not

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<v Speaker 1>a permanent one, you know, a dam or something like

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<v Speaker 1>that that you know damns up a river, but instead

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<v Speaker 1>a nuisance that can be abated over a short period

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<v Speaker 1>of time, and that's of course treatment of opioid related stuff.

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<v Speaker 1>And there was talk of a duping of doctors. Yes,

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<v Speaker 1>the the idea is that J and J, through its

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<v Speaker 1>marketing tactics, basically dupe doctors into believing that it was

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<v Speaker 1>fine too um prescribe opioids for ailments that weren't approved,

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<v Speaker 1>you know, ailments such as pain relief for dental procedures,

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<v Speaker 1>regular arthritis, you know, things like that. Opioids were not

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<v Speaker 1>created for that purpose. They were created as a you know,

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<v Speaker 1>treat serious pain. And of course the allegation is that

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<v Speaker 1>J and J came up with the you know, this

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<v Speaker 1>expansion so it could boost its profits. So what is

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<v Speaker 1>this likely to mean for J and J and UH

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<v Speaker 1>other drug companies going forward. Well, the the award that

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<v Speaker 1>was handed down, which was equivalent of one year's worth

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<v Speaker 1>of extra resources to combat the opioid problem in Oklahoma,

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<v Speaker 1>was far less than the state had asked for. The

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<v Speaker 1>state had asked for a maximum of seventeen point five

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<v Speaker 1>billion to boost resources over the course of thirty years.

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<v Speaker 1>One of the other significant points about the ruling, however,

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<v Speaker 1>is that For the first time, the U. S. Court

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<v Speaker 1>has endorsed the idea that that governments can use this

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<v Speaker 1>public nuisance theory to hold companies accountable for their marketing

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<v Speaker 1>and sales practices. This is the first time it's been done,

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<v Speaker 1>and there are at least forty five other lawsuits by

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<v Speaker 1>states and more than two thousand lawsuits by cities and

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<v Speaker 1>counties that are relying on the same theory to you know,

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<v Speaker 1>hopefully in their mind, hold opioid makers and distributors liable

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<v Speaker 1>for their mishandling of these drugs. Now, how does this

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<v Speaker 1>ring up? What was the states asking for? What had

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<v Speaker 1>been anticipated? And what does Jane j pay? The state

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<v Speaker 1>had asked the idea of public nuisances that you know

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<v Speaker 1>you've got you've harmed the community, so you have to

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<v Speaker 1>find a way to remedy the harm. The state had

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<v Speaker 1>produced three different plans to remedy the harms created by

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<v Speaker 1>jan Ja's over aggressive marketing of opioids. There was a

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<v Speaker 1>twenty year plan, a twenty five year plan, and a

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<v Speaker 1>thirty year plan. The third year plan, again, the maximum

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<v Speaker 1>that they had sought would have been seventeen point five billion.

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<v Speaker 1>The amount that the judge awarded was something like three

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<v Speaker 1>or four percent of that of that request. So J

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<v Speaker 1>and J will have to pay five hundred and seventy

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<v Speaker 1>two million, which is again the equivalent of one year's

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<v Speaker 1>extra resources for more treatment, more policing, cover hospital costs,

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<v Speaker 1>all tied to the fall out of opioid addictions. Yeah,

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<v Speaker 1>and so what's next in in this opioid prosecution? What's

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<v Speaker 1>next is the first federal case of the consolidated cases

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<v Speaker 1>before Judge Polster in Cleveland is set to go to

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<v Speaker 1>trial October twenty one before a jury in Cleveland. Don't

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<v Speaker 1>forget the Oklahoma case was a non jury case was

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<v Speaker 1>heard by the judge himself. This will be the first

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<v Speaker 1>jury trial first, you know, the first panel to consider

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<v Speaker 1>UH opioid makers and distributors liability for the crisis. So

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<v Speaker 1>is this then seen as a victory for the drug companies?

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<v Speaker 1>Where where does it come down? Well, it's a victory

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<v Speaker 1>for the drug companies, specifically J and J in terms

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<v Speaker 1>of the amount of money that they're required to pay. Again,

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<v Speaker 1>it's a little bit of a pyric victory because the

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<v Speaker 1>judge did find that this public nuisance theory is valid

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<v Speaker 1>and can be used all the other states and cities

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<v Speaker 1>and counties are planning to use that, So that's more

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<v Speaker 1>ammunition for them going forward with more confidence that that

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<v Speaker 1>theory will fly at trial. Again, we don't have no

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<v Speaker 1>idea what the appellate courts in Oklahoma think about this theory,

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<v Speaker 1>and we won't for years probably now. There there had

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<v Speaker 1>been arguments during this trial that the J and J

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<v Speaker 1>was something of a of a kingpin in this crisis.

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<v Speaker 1>How was that portrayed? J and J at one point

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<v Speaker 1>on a couple of companies that grew and processed opium,

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<v Speaker 1>which is used in opioids, you know, as part of

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<v Speaker 1>as the pain the painkilling ingredient. Ah, they sold those

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<v Speaker 1>companies a couple of years ago. But the Oklahoma Attorney

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<v Speaker 1>General made the argument that J and J had a

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<v Speaker 1>stake in every company's opioid painkiller that was marketed in

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<v Speaker 1>the in the state because they provided the active pharmaceutical

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<v Speaker 1>ingredient for that drug. So that's why they were colorfully

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<v Speaker 1>tagged as the kingpin. Of course, the J and J folks,

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<v Speaker 1>you know, I thought that was totally out of bounds,

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<v Speaker 1>using you know, drug cartel language to describe a company

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<v Speaker 1>that operates under FDA regulation and as the world largest

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<v Speaker 1>prodserve healthcare goods. And is there any indication that there

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<v Speaker 1>are going to be a lot more cases or will

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<v Speaker 1>this be wrapped up fairly soon? This will not be

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<v Speaker 1>wrapped up fairly soon. There are settlement talks going on

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<v Speaker 1>both with the states attorneys general and the consolidated cases

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<v Speaker 1>before Judge Poster in Cleveland. Those talks are not progressing

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<v Speaker 1>very quickly from what I can tell, and I suspect

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<v Speaker 1>we're going to see lots of trials come next year

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<v Speaker 1>and our thanks to Bloomberg's Bloomberg News legal reporter Jeff

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<v Speaker 1>Feeley joining us on the line on the opioid trial.

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<v Speaker 1>Thanks for listening to the Bloomberg Law Podcast. You can

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<v Speaker 1>subscribe and listen to the show on Apple podcast, SoundCloud,

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<v Speaker 1>and on bloomberg dot com slash podcast. I'm June Brosso.

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<v Speaker 1>This is Bloomberg