Public Health Epidemics - Warning: This Litigation "Cure" Could Kill an Economy

A recent article in the Financial Times, Drug Industry faces ‘tidal wave’ of litigation over opioid crisis (subscription may be required), notes that officials at every level of government – states, cities and counties – are launching suits against companies that make or distribute opioids seeking a tobacco-style settlement to help deal with the epidemic.   Noting that these suits are a harbinger of the quarter of a trillion dollar tobacco settlement, government entities like the District of Columbia are putting out requests for proposals inviting firms to bid for contracts that will generate up to $45 million in contingency fees for the successful bidders.

Firms defending the cases are predicting that this “tidal wave” of suits brought at almost every level of government in almost every state put the odds of a “global settlement” at more than 50/50, adding that “the costs of drug treatment are astronomical and have threatened to bankrupt a lot of counties.”    One defense lawyer notes that the contingency arrangement “insulates officials from the financial risk of losing in court.”  Another commentator Professor Richard Ausness of the Kentucky College of Law notes that “[o]nce you get a critical mass,” states, cities and counties are bound to join suit hoping to get a piece of the money on the table, “particularly when it doesn’t cost politicians anything.”

Veterans of the tobacco wars will recognize the inflammatory fuel of public outrage at play.   A public health epidemic is identified, the deep pocket that manufactures the legal product is targeted for the social costs irrespective of the law or evidence that would hold up in court, state and local politicians enter into alliances brokered by law firms that stand to earn millions, if not billions, from the rush to suit and settlement, and those governments pocket huge streams of money relieving them from budget crises and the need to address decades of government bloat.  What gets lost in the fray is that these “made to settle” lawsuits and the lavish money that defendants throw on the table are paid for by…the public at large.  In the case of opioids, it will be vastly higher pharmaceutical prices, which can only have a deleterious effect on already out of control health care costs and a struggling economy.  The end game of all such suits, known as regulation by litigation, is that punitive, regressive taxes are levied in stealth without representation, by lawyers in exchange for an exorbitant share of the proceeds.  Such regulation by litigation is an abuse of the rule of law, taxation without representation and an evasion of democratic accountability.