Issues to Watch

Household Name or Opioid Kingpin: Johnson & Johnson the Target of the Landmark Case in a Series of Opioid Trials


Micah Millsaps*

In a landmark decision on August 26, 2019, Judge Balkman of the Cleveland County District Court ruled in favor of the State of Oklahoma in its lawsuit against Johnson & Johnson and ordered the company to pay $572 million in damages for its role in the opioid crisis in the state.  Meghan Keneally, Oklahoma Judge Orders Johnson & Johnson to Pay $572M in Opioid Suit, ABC News (Aug. 26, 2019, 5:21 PM), https://abcnews.go.com/US/oklahoma-judge-set-reach-decision-latest-major-opioid/story?id=65193231.  Johnson & Johnson was the first of many pharmaceutical companies to face trial in the nationwide effort to combat the crisis and its lingering effects.  Jan Hoffman, First Opioid Trial Takes Aim at Johnson & Johnson, N.Y. Times (May 26, 2019), https://www.nytimes.com/2019/05/26/health/opioid-trial-oklahoma-johnsonandjohnson.html.  Opioid addiction is an ever-growing epidemic, responsible for approximately 400,000 deaths over the past two decades.  Lenny Bernstein & Katie Zezima, Purdue Pharma, State of Oklahoma Reach Settlement in Landmark Opioid Lawsuit, Wash. Post (Mar. 26, 2019, 6:05 PM), https://www.washingtonpost.com/national/health-science/purdue-pharma-state-of-oklahoma-reach-settlement-in-landmark-opioid-lawsuit/2019/03/26/69aa5cda-4f11-11e9-a3f7-78b7525a8d5f_story.html.  In light of this epidemic, state and local governments have taken action by initiating lawsuits against those who are accused of being the root of the problem, starting with opioid manufacturers and distributors, and extending to pharmacies carrying opioid drugs.  Jeff Overley, J&J, Okla. Face Moment of Truth in Milestone Opioid Trial, Law360 (Aug. 23, 2019, 6:40 PM), https://www.law360.com/articles/1191679/j-j-okla-face-moment-of-truth-in-milestone-opioid-trial.  As the first state to reach trial in the series of opioid lawsuits, Oklahoma is likely to set the tone for the nearly two thousand pending lawsuits that will follow.  See id.

I.  Johnson & Johnson Trial

In June of 2017, the Oklahoma attorney general initiated a lawsuit against three pharmaceutical companies that the state believed to be responsible for the opioid crisis in Oklahoma.  Bernstein & Zezima, supra.  Despite settlements by two of the pharmaceutical companies, Johnson & Johnson opted to fight the accusations against its company, making it the sole pharmaceutical company in the line of fire in the first of many state trials.  Lenny Bernstein, Spotlight Shifts to Johnson & Johnson as First Major Opioid Trial Nears in Oklahoma, Wash. Post (May 4, 2019, 8:00 AM), https://www.washingtonpost.com/national/health-science/spotlight-shifts-to-johnson-and-johnson-as-first-major-opioid-trial-nears-in-oklahoma/2019/05/03/403237d6-66a6-11e9-82ba-fcfeff232e8f_story.html.  Oklahoma sought $17 billion in compensation from Johnson & Johnson, see Overley, supra, on the theory that “the compan[y] took part in minimizing the dangers of opioids, resulting in widespread overuse, deaths and huge costs for health-care providers and law enforcement.”  Bernstein, supra.  The crux of the State’s argument rested on the theory of public nuisance.  Overley, supra.  The second facet of the State’s argument concerned the company’s previous ownership of two subsidiary companies in the business of refining and producing ingredients used in the manufacturing of opioids, such as Oxycodone.  Bernstein, supra.  By characterizing Johnson & Johnson as the “kingpin behind the public-health emergency[,]” the State hoped to be the first to successfully receive compensation in what is expected to be a large wave of litigation surrounding the opioid epidemic.  Hoffman, supra.

At the forefront of its opposition, Johnson & Johnson asserted that opioid drugs and the ingredients used to make such drugs are highly regulated by multiple agencies, such as the Food and Drug Administration and the Drug Enforcement Agency.  Id.  The company, therefore, denied liability due to its compliance with the laws and regulations of these organizations, which are strictly monitored.  Id.  Judge Balkman was not convinced by Johnson & Johnson’s arguments and ruled in favor of the State of Oklahoma by ordering Johnson & Johnson to pay $572 million in damages.  See Keneally, supra.

II.  Pretrial Settlements and the Effects on Future Lawsuits

The amount awarded to the State was significantly higher than the amounts recovered from the other parties to the Oklahoma lawsuit—Purdue Pharma L.P. (Purdue) and Teva Pharmaceutical Industries (Teva).  See Hoffman, supra.  Purdue, best known for its product OxyContin, was among the named parties in the Oklahoma lawsuit.  Bernstein & Zezima, supra.  Purdue is one of the major companies being targeted for its paramount role in opioid addiction nationwide.  Id.  Taking the company’s role in the opioid crisis into account and considering the misrepresentation in the marketing of its products—specifically, the underrepresentation of the drug’s addictive properties—Oklahoma viewed Purdue as one of the primary companies owing compensation to the state.  Id.  In March 2019, before litigation ensued, Purdue settled the case for $270 million.  Id.  As part of the settlement agreement, an initial payment of $102.5 million is expected from Purdue to establish a research and treatment foundation for opioid addiction.  Id.  Additionally, the court banned Purdue from promoting its products in the State of Oklahoma until 2026.  Id.

The effects of Purdue’s settlement on future litigation in this area remain to be seen.  As a major player in opioid distribution nationwide, Purdue is facing multiple pending lawsuits across the country and potentially billions of dollars in damage awards.  See id.  Although this settlement resulted in a sizeable payout, one concern is that the assets of pharmaceutical companies will be quickly depleted by states who are first to initiate lawsuits against each company.  Id.  Purdue’s discussion of bankruptcy following its settlement with the State of Oklahoma evidences the weight of this concern.  Id.  Purdue’s decision to settle is also expected to have a ripple effect, leading other pharmaceutical companies in future lawsuits to the same realization concerning the weight of the claims being brought against them.  Id.  This has already been seen by Teva—the smallest of the three companies in Oklahoma’s lawsuit—which followed in Purdue’s footsteps by agreeing to settle the matter with the State for $85 million.  Hoffman, supra.  The court’s decision in the Johnson & Johnson case, in conjunction with the disparity in the companies’ payouts, will likely impact the upcoming opioid cases.  Although Johnson & Johnson maintained its innocence and delivered what was believed to be a strong case, it did not succeed in escaping liability for opioid addiction and the epidemic in Oklahoma.  See Keneally, supra.  If the outcome of this case is any indication of what can be expected in future opioid cases, pharmaceutical companies are likely to settle before cases ever reach the courtroom.

III.  Conclusion

Oklahoma is not alone in the search for justice.  Bernstein & Zezima, supra.  As of September 2019, nearly every state has initiated lawsuits against major pharmaceutical companies, seeking compensation for the damage resulting from opioid addiction.  Mike Spector, OxyContin Maker Purdue Pharma Files for Bankruptcy Protection, Reuters (Sept. 15, 2019, 11:26 PM), https://www.reuters.com/article/us-purdue-pharma-bankruptcy/oxycontin-maker-purdue-pharma-files-for-bankruptcy-protection-idUSKBN1W1058.  Purdue remains at the forefront of many of these lawsuits.  Id.  The next opioid trial is expected to take place in Ohio in late October.  Bernstein & Zezima, supra.  The multidistrict lawsuit is a consolidation of lawsuits initiated by cities and counties against all of the prominent pharmaceutical companies in the United States, Overley, supra, including Purdue.  Bernstein & Zezima, supra.  It will be interesting to see whether pharmaceutical companies in this case fight it out in court or follow Purdue and Teva’s lead by settling before trial ensues.

*Micah is a second-year student at the University of Baltimore School of Law, where she serves as a staff editor for Law Review. Micah is a member of the Royal Graham Shannonhouse III Honor Society.  This past summer, she interned for John H. Denick & Associates. This semester, Micah is a Law Clerk for Dan Goldstein.

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