Cities could still benefit from opioid suit after new TN Supreme Court ruling

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BY KATE COIL
Communications Specialist for Tennessee Municipal League (TML)

The Tennessee Supreme Court has ruled that opioid manufacturers can be sued under the state’s 2010 Drug Dealer Liability Act, allowing a suit originally filed by seven district attorneys general on behalf of children born addicted to opioids and local governments to move forward.
The state supreme court ruling directly addresses a lawsuit filed jointly by Knox County District Attorney Charme Allen, Anderson County DA Dave Clark, Eighth District DA Jared Effler, Ninth District Attorney Russell Johnson, and Tenth District Attorney Stephen Crump. The lawsuit was brought on behalf of governments in their districts and two children born addicted to opioids. The suit alleges opioid manufacturers Purdue Pharma, Endo Pharmaceuticals, Teva Pharmaceuticals, and Mallinckrodt were fully aware that their products were being diverted to illegal uses and were marketed in a misleading manner.
Mallinckrodt and Purdue Pharma have since filed for bankruptcy and were granted a stay of litigation, but the suit against the remaining companies remains active. Funds from Mallinckrodt and Purdue Pharma may still result from federal settlement with the U.S. Department of Justice.
A unanimous opinion, authored by Justice Sharon G. Lee, on behalf of the court found hat the drug companies could not “invoke their status as otherwise lawful companies to avoid civil liability” for intentionally flooding “communities in East Tennessee with highly addictive opioids they knew would be sold in the illegal drug market.”
Following the ruling, Eighth District DA Jared Effler released a statement on the court’s findings.
“I am pleased that the Tennessee Supreme Court has affirmed our long-held position that the Drug Dealer Liability Act applies to Big Pharma,” Effler said. “We look forward to presenting our case to a jury as soon as the COVID-19 pandemic allows us to do so.”
J. Gerard Stranch IV, a Nashville-based lawyer who represented the district attorneys at the state supreme court, said local governments still stand to benefit from the lawsuit, which covers 47 counties and the municipalities located within them.
“The Tennessee Supreme Court affirmed our theory that the all the opioid manufacturers are liable under the Drug Dealer Liability Act, but said the district attorneys could not be the party that brought the lawsuit,” Stranch said. “They would have to be the attorneys in the lawsuit, because that is the court’s interpretation of the statute. Since the DAs have been bringing the suit on behalf of counties and cities, what we are doing is going through and substituting the counties and cities in the suit. We are going around getting those counties and municipalities authorizing the case to continue and a retention agreement, as we have already done in some counties before this ruling came down as a belt-and-suspenders approach. The case will then continue with no harm and no delay and more importantly no loss of statute date.”
Stranch said municipalities could see significant results from the suit if litigation against the companies is successful.
“There could be millions of dollars coming into the coffers to deal with the opioid crisis,” Stranch said. “We have lost a generation of people to opioids, and we don’t have the funding at the county or the city level to deal with the problem. We have some folks we’ve talked to who said all they need is an ambulance so when someone has an overdose they can transport them to the hospital.
Municipalities in the counties listed in the lawsuits can best help the suit by fast-tracking resolutions, Stranch said.
The suit’s journey to the Tennessee Supreme Court began in 2018 when a Campbell County judge ruled the Drug Dealer Liability Act “does not apply to manufacturers who are legally producing and distributing opioid medications,” a ruling by the Tennessee Court of Appeals overturned it in September 2019.
Drug companies involved in the suit appealed the Tennessee Court of Appeals ruling. This prompted Tennessee Attorney General Herbert Slatery’s office to issue an amicus brief asking the Tennessee Supreme Court to hold the companies liable under the Drug Dealers Liability Act but asking that district attorneys themselves be prohibited from being plaintiffs in the suit themselves.
The attorney general was concerned district attorneys general serving as plaintiffs in such cases could jeopardize similar cases the attorney general’s office is bringing against opioid manufacturers.
The original East Tennessee suit has since expanded to include similar suits filed in Middle and Northeastern Tennessee for a total of 47 of the state’s 95 counties being represented by 14 district attorneys.
In 2019, Tennessee saw another record-breaking year in terms of opioid overdose deaths with 2,089 Tennesseans that year alone. The state’s rate of neonatal abstinence syndrome (NAS) also increased to its highest ever in 2019 with 69% of NAS cases seen in babies whose mothers had been prescribed opioids by a healthcare provider.
Stranch said that anyone who has questions about the suit can reach out to him at gerards@bsjfirm.com or contact their local district attorney.
To read the Tennessee Supreme Court’s opinions on the case in full, visit http://www.tncourts.gov/courts/supreme-court/opinions/2020/12/17/jared-e…