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AGENDA ITEM REVIEW FORM |
6.G.
Regular City Council Meeting
- Meeting Date:
- 11/13/2019
- Department Head:
- Kay Macuil
- Submitted By:
- Kay Macuil, City Attorney, Attorney's Office
Action Requested:
Motion
Order
Order
ITEM:
Discussion and possible action on any and all matters regarding Order No. 2019-10. An order of the Mayor and City Council of the City of San Luis, Arizona to remain in the class-action case titled In re National Prescription Opiate Litigation. (Kay Marion Macuil, City Attorney)
SUMMARY:
This summary takes information from the second attachment to this agenda item, notice.
The Case:
In re National Prescription Opiate Litigation, Federal District Court, Northern District of Ohio, Multi-District Litigation
Case No. 2804.
Towns, cities and counties across the country have sued manufacturers, distributors, and retailers of prescription opiate drugs seeking reimbursement for monies spent addressing the opioid crisis. This lawsuit centralizes the lawsuits into one case.
Rights the City of San Luis retains while remaining in the case:
The Case:
In re National Prescription Opiate Litigation, Federal District Court, Northern District of Ohio, Multi-District Litigation
Case No. 2804.
Towns, cities and counties across the country have sued manufacturers, distributors, and retailers of prescription opiate drugs seeking reimbursement for monies spent addressing the opioid crisis. This lawsuit centralizes the lawsuits into one case.
(As an aside, there are separate lawsuits filed in state courts. Arizona filed the attached fraud case against the drug company INSYS Therapeutics, Inc. (INSYS) (a Chandler, Arizona company) to reimburse consumers and to pay penalties. Five INSYS executives were convicted criminally in a Boston Federal Court. INSYS agreed to pay $225 million to settle criminal and civil investigations. The company has filed for bankruptcy. (See attached Reuters article). Arizona also filed the other two (2) attached cases one in Maricopa County against Purdue and another case against Sackler in the U.S. Supreme Court for fueling the opiate crisis. In those cases, the State of Arizona is the filing party, not any of the state's cities, towns or counties. As of the writing of this agenda item, the U.S. Supreme Court has not yet set a date to hear the case.)
The case of In re: National Prescription Opiate Litigation brings criminal charges against thirteen (13) defendants: Purdue, Cephalon, Endo, Mallinckrodt, Actavis, Janssen, McKesson, Cardinal, AmerisourceBergen, CVS, Rite-Aid, Walgreens, and Wal-Mart for:
- two (2) violations of the Racketeer Influenced and Corrupt Organization (RICO) Act and
- two (2) violations of the Controlled Substances Act (CSA)
The Notice
All counties and cities across the country did nothing to be included as plaintiffs in the class action. The attached notice gives the counties and cities the opportunity to opt-out of the lawsuit.
What it means to participate in the negotiation class
The parties have not settled, but if San Luis remains in the case, San Luis will be bound to any settlement the parties reach.
All counties and cities across the country did nothing to be included as plaintiffs in the class action. The attached notice gives the counties and cities the opportunity to opt-out of the lawsuit.
What it means to participate in the negotiation class
The parties have not settled, but if San Luis remains in the case, San Luis will be bound to any settlement the parties reach.
Rights the City of San Luis retains while remaining in the case:
- the right to pursue its own case unless the Ohio federal court approves a settlement,
- the right to vote on any settlement proposed, (Note, a settlement will not be accepted unless supported by 75% of the towns, cities and counties which stay in the case. The voting number for San Luis depends on the population of the city of San Luis).
Payment for the Litigation:
The court will deduct from any money judgment the cost of litigation and the attorneys' fees.
The San Luis City Council Decision:
If the decision is to opt-in, approve the order to the City Attorney and Staff to remain in the case.
If the decision is to opt-out, the deadline is Friday, November 22, 2019, to submit an Exclusion Request Form if the decision is to opt-out, so the motion would be "I MOVE TO ORDER THE CITY ATTORNEY TO TAKE ALL ACTIONS NECESSARY TO OPT-OUT OF THE LITIGATION AS PRESENTED.
However, since there is no cost to staying in the litigation, and there is leverage in battling these big corporations together, the City Attorney recommends the motion provided below.
The court will deduct from any money judgment the cost of litigation and the attorneys' fees.
The San Luis City Council Decision:
If the decision is to opt-in, approve the order to the City Attorney and Staff to remain in the case.
If the decision is to opt-out, the deadline is Friday, November 22, 2019, to submit an Exclusion Request Form if the decision is to opt-out, so the motion would be "I MOVE TO ORDER THE CITY ATTORNEY TO TAKE ALL ACTIONS NECESSARY TO OPT-OUT OF THE LITIGATION AS PRESENTED.
However, since there is no cost to staying in the litigation, and there is leverage in battling these big corporations together, the City Attorney recommends the motion provided below.
RECOMMENDATION / SUGGESTED MOTION:
I MOVE TO ADOPT AND APPROVE ORDER NO. 2019-10 TO BE A PART OF THE NATIONAL OPIATE LITIGATION AS PRESENTED.
Fiscal Impact
- IS THERE FISCAL IMPACT ASSOCIATED WITH THIS ITEM:
- No
- CITY/STATE/FEDERAL FUNDS:
- City
- TOTAL:
- 0
- BUDGETED AMOUNT:
- N/A
- AVAILABLE AMOUNT TO TRANSFER:
- N/A
- ACCT NAME & GL#/REMAINING BALANCE BEFORE PURCHASE:
- N/A
FISCAL IMPACT STATEMENT (IF THIS IS A BUDGET TRANSFER, YOU MUST ATTACH THE BUDGET ADJUSTMENT FORM):
Litigation costs will be paid out of the class action settlement if any.
Attachments
- Order No. 2019-10 Opiate Litigation
- Notice of Opiate Litigation
- AZ v Purdue Pima County Court Case
- Az v INSYS Maricopa County Court Case
- INSYS Bankruptcy Article
- US Supreme Court Case
- US Supreme Court Docket