In an open meeting Thursday at the St. Francois County Courthouse annex, the County Commission heard an update on the county’s lawsuits over the opioid abuse epidemic.
Jack Garvey of the St. Louis law firm Carey, Danis and Lowe spoke on a conference call about the lawsuit that counties, cities and states have filed against opioid manufacturers and distributors. He first gave a history about the attempted bankruptcies and settlements that were thrown out by a court.
“We had retained bankruptcy counsel for St. Francois County and the other 22 counties that we represent,” he said. “The bankruptcy by Purdue (Pharma) was filed in New York. The issue in the Purdue bankruptcy has always been the immunity of the Sackler Family from opioid lawsuits, both from families of deceased addicts and from state and local entities.
“We filed our lawsuit and one of the defendants was Richard Sackler and Purdue. We served Richard Sackler outside of his Florida condominium, so he is in the lawsuit. Once they filed for bankruptcy, a stay was put in place for the company and 16 of the family members. That is unique and rarely happens. What happened next was negotiation between the Sacklers, Purdue and the states and counties, where our bankruptcy counsel recommended to us — and we agreed — to enter into the settlement with Purdue. It meant that Purdue was going to put $4 billion in, along with money from the Sackler Family, into a trust and that money would be sent to the states and the counties. In Missouri, it was anticipated would receive about $200 million of that money. All of that would have been for abatement purposes. One hundred percent of it would go to any type of opioid program.”
However, Garvey stated that nine states objected to the granting of bankruptcy status to Purdue and immunity status to the Sacklers.
“They appealed it to the district court judge in New York and she agreed with those states, reversing the bankruptcy court decision and saying the Sacklers could not have immunity,” he said. “Or, if they were, something more had to be done with the plan, which meant they had to put more money into the plan. Right now, I cannot tell you what is going to happen with the Purdue bankruptcy. I anticipate that it will go forward in one way or another where payments will be made. Right now, Purdue is appealing it, but they are also negotiating with the attorney generals and county representatives on another settlement where they will have to give more than $4 billion.”
Garvey then turned to a second manufacturer bankruptcy, Mallinckrodt Pharmaceutical of St. Louis.
“That is a smaller amount of money, $1 billion that they would return to the states and counties,” he said. “The judge has not decided on that yet, but I anticipate that he will order the bankruptcy to go through probably in late February or March. At which time the state will also receive money and we’ll have to negotiate with the attorney general.”
Presiding Commissioner Harold Gallaher asked what “weight” St. Francois County is going to have in an agreement.
Garvey answered that the funding has not yet been decided. “The 45 states involved in this were going to set up a separate abatement program, separate from their government and run the money through there. Missouri has passed a law that says any money received by the state must go into general revenue and then for specific departments as decided by the governor. We knew that about $200 million was going to come back, but not reached the stage of what portion is allocated to the counties and what portion goes to the state.”
Garvey noted that approximately 15% of the money received by the county does not have to go towards the opioid problem, but the other 85% does.
Another settlement with Johnson and Johnson and with three distributors — AmerisourceBergen, Cardinal Health and McKesson — has been finalized. Garvey detailed what the amount was and what is the next step in disbursing the funds.
“The total amount of money from those four defendants together to the state of Missouri is $455 million,” he said. “The money is payable over 18 years. Both settlements are loaded with incentives and bonuses and also sticks to encourage the attorney general to enter into an agreement with the counties and cities on the apportionment of that money.
“If the attorney general does not get the cooperation of the 100 counties that have filed lawsuits, then the state will lose 46% of that $455 million.”
According to Garvey, negotiations were started a year ago with the state.
“We had several talks with (the attorney general’s) staff,” he said. “He made an offer that the counties would get 15% of the proceeds. We went back with a counter that the counties and cities would take 60%. The attorney general was upset with that position by the counties and shut down negotiations for about three months. We finally got back to the table with him two weeks ago in St. Louis and had a seven hour meeting. We have not reached a deal yet, but there’s somewhat of a framework in place.”
One of agreements of the framework is that the lawyer’s percentage of the funds is void. They would receive up to 15% from a fund set aside in federal court where the St. Francois County case is currently.
Garvey detailed the second agreement of the framework.
“The attorney general does not believe that the counties and cities have the infrastructure on their own to responsibly appropriate the money in response to the opioid problem,” he said. “They propose that the counties and cities get 15% in a direct payment. We propose that the remainder up to 50% would be provided to the county to turn over to a regional commission made up of the counties in their region. The region is already there through the department of mental health’s treatment centers. The region would have a commission with members appointed by the county commissioners. The member of the commission must either have experience in drug treatment or health related to drug addiction, or law enforcement background related to interdiction or enforcement of drug laws.”
Garvey stressed that the funds do not sound like much right now, however, there are more settlements to come.
“If St. Francois County would receive the 15% direct payment it would be approximately $496,000 that would be payable over the 18 year period,” he said. “Remember, this would just be the beginning of settlements that we are starting. This is just the four defendants, but I anticipate other defendants over the next year to begin settling.”
Mark Marberry is a reporter for the Farmington Press and Daily Journal. He can be reached at 573-518-3629, or at email@example.com