Opioid Litigations and Public Nuisance: Updates From California, Oklahoma, and Ohio

Dean Reuter:  Welcome to Teleforum, a podcast of The Federalist Society's practice groups. I’m Dean Reuter, Vice President, General Counsel, and Director of Practice Groups at The Federalist Society. For exclusive access to live recordings of practice group Teleforum calls, become a Federalist Society member today at fedsoc.org.

Guy DeSanctis:  Welcome to The Federalist Society’s webinar call. Today, March 8, we discuss "Opioid Litigations and Public Nuisance: Updates from California, Oklahoma, and Ohio." My name is Guy DeSanctis, and I’m Assistant Director of Practice Groups at The Federalist Society. As always, please note that all expressions of opinion are those of the expert on today’s call. Today, we are fortunate to have with us John Shu, professor, attorney, and legal commentator. Throughout the panel, if you have any questions, please submit them through the question-and-answer feature so that our speaker will have access to them for when we get to that portion of the webinar. With that, thank you for being with us today. John, the floor is yours.

John Shu:  Thank you, Guy, and thank you all for joining us today on this discussion about the opioid litigation. In fact, quite a bit happened in the past two weeks. For those of you who may be unfamiliar with the litigation overall, starting around 2014, certain municipalities, including counties, in California started to sue the opioid manufacturers, distributors, and then later the pharmacies. Probably the three largest bellwether cases were in California, Oklahoma, and Ohio. The Oklahoma and California cases were state-level litigations. And then the Ohio case was a very large, MDL Judge Dan Polster was the district court judge. That Ohio case involved the pharmacies, CVS, Walgreens, Rite Aid, Giant Eagle, Walmart. I should say that in the Ohio case, before it went to trial, Giant Eagle, which is a regional grocery store chain that has pharmacies in it, and Rite Aid, based out of the wonderful town of Camp Hill, Pennsylvania, decided to settle the case before trial.

The main issue, legal issue, around these cases is what’s commonly known as a public nuisance. Public nuisance is something that has been around since the English common law. The first time we really have any written record of it in the English common law is around 1536. At that time, public nuisance was something that really if something was interfering on the king’s property, which is essentially almost everything, and it was interfering with the public, that was considered a public nuisance. Now, over the years in the United States, various states and even certain cities or municipalities have put into their statutes or ordinances an actual definition of public nuisance. But there all essentially the same. The history of public nuisance indicates that it was usually tied to some kind of land use or property. So, for example, it would be something that -- maybe something that interfered with a lake, a public roadway, maybe something that was a building. So, for example, a building that was emitting noxious fumes or dumping sewage into a public waterway, river.

Now however, starting in around 1999, 1998, 1999, like many bad things during the Clinton administration, the fact of the matter is that the tort bar or the plaintiffs’ bar began to use and try to stretch public nuisance in ways that really it was never designed to do. In other words, we’ve had product liability. We’ve had false or deceptive advertising or marketing, which by the way is not protected by the First Amendment. Although people have tried to claim First Amendment protections. They tried to stretch that out starting with cigarettes. You may remember from all those years ago during the Clinton administration, you had state attorneys general—perhaps the most famous of them at the time was Mike Moore from Mississippi—in coordination with the Justice Department, and they settled with tobacco companies. At that time, it was still called Phillip Morris, not Altria, Phillip Morris, BAT, et cetera, et cetera. It was like a $246 billion settlement, which was the largest in history, and it still is.

But over the years, the plaintiffs’ attorneys have used public nuisance for all kinds of fields. They’ve used it for lead paint. Not too long ago in 2018 from a ConAgra v. the People of California, ConAgra filed through certiorari. They petitioned for a certiorari because they were found to have been liable for lead paint under the public nuisance theory. The court denied that petition in 2018. But I think the petitioners at that time, they made it very clear that public nuisance was, as a misused and misinterpreted theory of tort, was being expanded way beyond from what it should be and, if allowed to stand, would continue to go even further.

But we’ve tried to -- we’ve seen cases where they’ve seen lead paint, global warming or climate change. In other words, if you’re a natural gas or oil producer, you are creating a public nuisance that either led to false or deceptive marketing or false or misleading statements or omissions, like a securities case. Those cases were struck down. You saw Eric Schneiderman in New York who was the former Attorney General at that time who had to step down because of his personal proclivities. But Letitia James tried to continue it. She didn't get very far.

You’ve seen it with firearms. In other words, that the mere existence of firearms created a public nuisance in the increase in crime, the costs with having to help to save people who were gunshot victims, the cost to police, to society, decrease in property values, et cetera. By the way as a note, in the firearms cases, you’ll note that they all begin with Beretta. We would be something like, for example, the City of Cincinnati v. Beretta USA et al. It’s not because it’s necessarily Beretta that was targeted. All the major firearms manufacturers were targeted. It’s just that Beretta is the B so that’s why they chose Beretta. I’ve had students ask me, “Why is it always Beretta? They must stink.” That’s not the case.

And now, we’ve progressed beyond to that to now opioids. And the opioid situation is even more complex than the other ones because you have the entire supply chain being sued. So you have the manufacturers. Probably the most infamous is the Purdue Pharma, which is now in bankruptcy, and the Sackler family, but also Johnson and Johnson, CASSEN, and all those other ones. You have the distributors. And then, most recently in Ohio, you have the pharmacies, so all up and down the supply chain.

One thing that is very similar to the lead paint and the firearms is that the opioid industry is heavily regulated. Obviously, there’s federal regulations through the DEA and the FDA, but also every state has some kind of regulation through it. As a matter of fact, in the California opioid litigation where the trial judge in Orange County California, Judge Peter Wilson, noted as part of his opinion ruling against the plaintiff’s attorney that, in California, there’s actually a series of state statutes that encourage—encourage—the availability of opioids for terminal cancer patients, amputees, just in general patients who are suffering from either acute severe pain or chronic debilitating pain. And generally speaking, policy there was designed to help these patients and to make sure that they patient-doctor -- that the state was not inserting itself too much into the patient-doctor relationship.

So, now, with respect to the Oklahoma case, there’s been a lot that was made of the fact that the Oklahoma Supreme Court last fall ruled against the plaintiff’s attorneys when the trial court had pretty firmly ruled in favor of them. But in the Oklahoma case and several other states, that case has settled. I don’t think all the documents have been signed yet. But starting last year in 2021, the parties came to a terms sheet, if you will, of $21 billion. Now, the problem was at that time that the manufacturers wanted, understandably, what they called a critical mass of states and municipalities to sign on such that they wouldn't be then litigating again and again and again. So the final settlement as reported was something around $26 billion.

Out of that 26, 2.3 reportedly has been set aside specifically for attorneys’ fees and costs. And in case anybody thinks that’s a lot of money, last year in 2021, a Wachtell Lipton profit sharing partner was $7.5 million and average revenue from AROYA was $3.6 million. The Wachtell is only like 210 attorneys. So a $2.3 billion payday out of one set of cases, that’s pretty good. That settlement does not include the settlement with the Native American tribes at approximately $575 million, and it doesn’t include individual settlements with individual states. We’ve seen numbers around $80 million, $75 million, etc., etc.

I should say that in the Oklahoma case, originally the trial judge had ordered $475 million in damages. The plaintiff’s attorneys were not happy with that. The way that the trial judge got to 475 in Oklahoma is he calculated that 475 million was 1 year of abatement costs to the state of Oklahoma. Whereas the plaintiff’s attorneys wanted something more along the lines of 20 years’ worth of abatement costs, or 9.3 billion. It had nothing to with the fact that their contingency would be much higher. That’s just an absolute coincidence on their part.

At any rate, the settlement is $26 billion. Johnson and Johnson has agreed to pay five. The other manufacturers will put in 21. Johnson and Johnson by far the largest of the manufacturers, even though they don’t produce, sell, distribute, market opioids anymore. The main opioid that was from Johnson and Johnson that was at issue was their fentanyl patch, DURAGESIC patch, which was again specifically designed for cancer patients and other terminal, end-stage patients.

Now, I mentioned before that there’s a common law definition of public nuisance. More than that, there’s also individual state statutes. I’m going to just go over very quickly what some of these statutes are. And the reason is because I feel it’s important. For example, in certain states, you’ll see that it refers only to the public. But in other states, they’ll specifically define that it doesn’t have to the general public. It only has to be a certain number of people or a sizeable number of people. And so, the plaintiff’s lawyers were very smart in choosing certain states to act as bellwether states, and I can tell you that it made a lot of sense for them to go through the state statutes as it were.

Generally speaking, a public nuisance is when somebody unlawfully interferes with the public’s right to use public land or water or when someone uses his land to intentionally engage in illegal activity and disturbs the public access to or use of nearby land or water. Now, almost all the states distinguish between public nuisance and private nuisance. Individual plaintiffs, Mr. or Mrs. Smith, generally don’t have the standing to raise a public nuisance case. And once they try to raise a private nuisance case, meaning let’s say there’s a factory that’s spewing sewage into the river, they’ve got to show that they as individual plaintiffs are affected in a different way or significantly worse than the rest of the community. Well, that’s hard to do, number one. And number two, it doesn’t provide a significant recovery for the contingency lawyers. I mean, you’re only talking about one or two people or maybe a family, and that’s not helpful.

The problem with a public nuisance, as you can see from the definition, what happens is that it’s the government—no, not the federal government—the state, county, or municipal government that sues to protect the public’s common right to access or use the land, the water. And then what they do is they ask the court not for damages -- the product liability, defect, false advertising case, you have specific damages. No, no, no. Here, you’re asking for an injunction. You’re asking the court to enjoin the illegal activity. Dear Company X. Knock off the sewage dumping or be held in contempt, et cetera, et cetera. However, where does the money come in? The money comes in abatement costs. So how much does it cost to clean up the river, the land, get rid of the demolition material, the detritus, et cetera, et cetera?

So what has happened with opioids as with the firearms and the lead paint and, of course, the cigarettes, we have a sad situation where the plaintiffs’ attorneys are literally in cahoots with the municipalities and the states. Oh, yeah, from time to time, I may interchange state and municipality, but I think you all know what I mean. Instead of having by name—yes, it’s the attorney general or the county council or the city attorney—but really, it’s the plaintiffs’ attorneys that are doing it, and they have an agreement with the states and municipalities that they will receive some amount of money. So for example, in the recent settlement with Johnson and Johnson and the other manufacturers, $2.3 billion for the plaintiff’s attorneys alone. That’s theirs. That doesn’t go to the states or the people or anything like that.

Traditionally, under public nuisance, the items of the public nuisance, the manufacturer of those items, are not liable for the public nuisance. So for example, one common public nuisance are illegal gambling locations, so illegal gambling rings, illegal gambling games or circles. Well, if a group of criminal decides to use a particular piece of property at the corner of Lexington and -- 42nd and Lex as an illegal gambling ring, does that mean that the manufacturer of the cards or the manufacturer of the dice, would they be held liable? Could they be sued under public nuisance? Well, traditionally, the answer is no because, number one, they have no control over how people use their otherwise legal products. I would note for the record that paying cards and dice are much less regulated in terms of manufacturing than opioids or firearms. The municipality would sue the building owner, especially if you knew that the stuff was going on. There are some localities that have gang injunctions. California tried this until it was deemed to be politically unpopular. Well, I should say politically popular for everyday citizens, politically unpopular with certain special interest groups.

So, yeah, you could enjoin the criminal organization, enjoin the gangs, enjoin the players. You could enjoin the players if you could show that there were regular players that were contributing to the public nuisance. But the dice makers or the card makers? How about the guy who made -- the company who made the felt tables or the chairs? You couldn't have a gambling ring without them. Or the chips, assuming there were chips? Anyway, so that’s one of the problems that I have with extending public nuisance to things like firearms and opioids because they’re both such highly regulated industries at both the federal and the state levels, and not just at the manufacturing point, but distribution, the sale. There’s also third parties that are involved. With opioids, for example, you can’t just go somewhere and buy opioids. They’re considered Schedule II drugs. You have to have a prescription from an actual physician. And so, there’s a lot of intervening factors between the alleged abuse of opioids and the manufacturer in the context of a public nuisance.

But a lot of the states and a lot of the attorney generals that got involved, you would think, well, they’re Republicans. Some of them might even be Federalists. They should follow an originalist, textualist reading. Yeah, that’s not the case. That didn't happen. We’ve had cases where Mike Hunter in Oklahoma, probably the most famous, Hunter pushed it pretty hard until where he had to resign because of his personal proclivities. He was a real leader in pushing the opioid cases through. So it really isn’t a Republican-Democrat thing. And it’s certainly not an originalist-nonoriginalist thing. Perhaps, it should be. But really, it’s a money or not money thing.

And I suppose from that, you could understand why there’s so much involved. There’s so much money that it’s really hard for a state to turn it down and especially when you have broad statutes. So for example, in West Virginia -- now, West Virginia has been hit harder than a lot of states with the opioid crisis. I mean, you talk about the Appalachian states, states like also California, Oklahoma, Pennsylvania, Ohio especially. I mean, there’s states all over the union that have been afflicted by opioid overdoses. However, those stats don’t really distinguish between opioids that come from prescriptions and opioids that come from either China illegally or over the border illegally. For example, there’s a big difference between a prescription opioid like fentanyl versus fentanyl that comes over the border and is made in some laboratory in rural Mexico or rural China or even rural India.

Anyway, having said that, here’s the West Virginian definition of public nuisance. A public nuisance is anything which annoys or disturbs the free use of one’s property or which renders its ordinary use or physical occupation uncomfortable. A nuisance is anything which interferes with the rights of a citizen either in person property the enjoyment of his property or his comfort. And a condition is a nuisance when it clearly appears that enjoyment of property is materially lessened and the physical comfort of person in their homes is materially interfered thereby. That’s a pretty broad definition. But that’s not even the worst of it.

I mean, there’s definitions where you’re just talking about the general comfort of the people. So for example, in California—which probably has one of the largest or broadest definitions that I’ve seen, but it’s a two-part definition—so California Civil Code 3479, anything which is injurious to health including but not limited to the illegal sale of controlled substances or is indecent or offensive to the senses or an obstruction to the free use of property so as to interfere with the comfortable enjoyment of life or property or unlawfully obstructs the free passage for use in the customary manner of any navigable lake, river, bay, stream, canal, basin, or any public park, square, street, or highway is considered a nuisance.

And then a public nuisance is one which affects at the same time an entire community or neighborhood or any considerable number of persons. That’s the catchphrase that you’re looking for where you don’t have to have the whole community or neighborhood affected. Any considerable number of persons—considerable, by the way, is never defined; I’ve never seen a state that defines what considerable its—considerable number of persons although the extent of the annoyance or damage inflicted upon individuals may be unequal. Well, that’s the problem. That’s a very broad definition, and it literally says anything. So where do we see this going in the future? In other words, what’s the big deal? They settled the case. There’s still the Ohio verdict out there. The jury in the Ohio MDL found the remaining pharmacies to be liable for a public nuisance and false and deceptive procedures and marketing, whatever.

I understand people that are in the defense bar would say, “Well, Judge Polster made a lot of errors,” and all this other jazz. Yes, he probably did. Are they reversible? Well, it’s dependent on the Sixth Circuit obviously. But it wouldn't surprise me if the remaining pharmacies came to a decision, especially after the Johnson and Johnson settlement. I don't know. Based on what’s happening in Ohio, I don't know. It may be worth it to settle it once and for all as Rite Aid and Giant Eagle did. Because I guarantee you, they settled for a lot less than the jury verdict. That’s not unknown. But as I’ve said, we’ve seen oil, natural gas, global warming or climate change, guns, lead paint.

Well, now you say, “Well, what’s left? What’s left?” You can’t do gambling casinos. Well, why not? Well, because gambling casinos are, number one, heavily regulated. And you say, well, that doesn’t matter because firearms and opioids are heavily regulated. Yeah, but you very rarely see public nuisances around the gambling casinos. But number two, gambling casinos hire an awful lot of unionized labor. I’m sure that’s just a coincidence. So it’s unlikely that they’ll be sued. I would like to say that I don’t see industries like the solar power industry or anything like that being sued by the large plaintiffs’ firms. But when they say anything, I’d really be fascinated to see. What about piles of masks? Do you sue the mask manufacturers for not properly disposing of them? I mean, if you stretch the definition, one of the firearms cases in Cincinnati, the Ohio Supreme Court -- the trial court had said, “Yeah, this is stretch.”

But the Ohio Supreme Court said, “No, no, no. It’s enough to go beyond a motion to dismiss.” And the firearms company said, “Yeah, but we’re really regulated. There’s no way that we should be responsible for what a criminal does or even a group of criminals do with our stuff. We follow the law when we make it. We follow the law when we distribute it. We follow the law when we ship it. And we ensure that the retailers follow the law as well.” And they said, “Yeah, but you didn't follow the law when it comes to deceptive marketing.” Well, deceptive marketing is really a judicial decision, isn’t it? It’s not a statutory or other decision. And so, that becomes a problem.

Very recently, we had employees who sued companies for COVID as a public nuisance. So for example, in Pennsylvania and in Chicago, we saw employees of McDonald’s and Amazon sue for a public nuisance. In other words, they said that COVID-19 is a public nuisance and that the companies either remaining open as they were allowed to do as an essential company or as a failure to take certain steps to protect the workers are a public nuisance. Now, the cases themselves haven’t gotten very far, and that’s really because the judges have said, “Well, this is kind of a workers’ compensation issue, not really a public nuisance issue.” Except that that’s kind of how it started also with the lead paint and the cigarettes, which were the first industries to be sued by public nuisance. In other words, in the beginning, the judges were extremely skeptical, kind of like, “Well, it really is a product defect issue or a product liability issue, not a public nuisance issue.” But, as the lawsuits keep coming and the plaintiffs’ attorneys were able to find friendly judges, many of whom they donated to—again, just a coincidence though, there’s nothing there—that became a real problem.

So we saw McDonald’s and Amazon and then probably -- those are in local courts. But perhaps the most famous of the federal lawsuits about COVID-19 and public nuisance is Smithfield. So in Smithfield Foods Inc. in western district of Mississippi, it wasn’t even the employees per se. It was the special interest group, the Rural Community Workers Alliance, that they claimed that they represented the workers. We never found out how many workers they actually represent. But the Rural Community Workers Alliance sued Smithfield Foods in a federal court claiming a public nuisance. The judge did dismiss the case, again based on OSHA and administrative law issues as opposed to the court trying to go ahead with the public nuisance case. But again, and that was in Milan, Missouri, not Milan, Italy, too bad for the plaintiffs.

I think we’re going to see more and more of it. I just don’t see how, even if all the opioid supply chain defendants from top to bottom, even if they settle and there’s this mismatch of legal precedent, some at the trial level, some at the state supreme court level, some at the federal level, I just don’t see that it’s going to stop. There have been certain cases, in 2011, Justice Ginsburg—may she rest in peace—wrote the opinion in American Electric Power Company v. the state of Connecticut. And there you had carbon dioxide emissions. Really, the opinion wasn’t so much about public nuisance per se. She only mentioned public nuisance once. But that was one of the main claims that the plaintiff’s attorneys pushed. Now, Justice Ginsburg really -- the opinion was really more about the Clean Air Act and the EPA action, but that was definitely part of it.

Then, we’ve had other -- in the ConAgra case, as I mentioned, the Supreme Court denied certiorari. This was in the fall of 2018. Our friend Paul Clement, who at the time he was with Kirkland and Ellis, Paul represented ConAgra. And what was interesting to me was the alleged deceptive advertising was from a single pamphlet in 1931. And by 2018, ConAgra had nothing to do with lead paint at all. As a matter of fact, when we talk about ConAgra, nobody ever thinks about lead paint. Literally, its name is ConAgra. And that was here in California. I just think these cases are going to continue, and I think they’re going to find new industries and new reasons to try and keep pushing and expanding the definition of public nuisance.

You’ll notice that most of the jurisdictions by the way are either states or counties, even though many municipalities have their own definitions of public nuisance. And, of course, most of them that I’ve seen are in harmony with the state. But why not represent cities? Well, really, you’re better off if you can represent the state through the attorney general. Again, regardless of whatever party, you can convince him or her that the monetary remediation allegedly for abatement is worth it.

One last example before we turn to questions, in the Johnson and Johnson settlement, a certain amount of money is supposed to be for hospitals, and a certain amount of money is supposed to be for treatment programs and whatnot. Okay. Here’s the thing. In other situations where you’ve had sue and settle kind of deals, there’s no prohibition against a municipality or a state using that money to fund so-called nonprofits or special interest groups in doing the abatement. So in other words, if a group like—I don't know—the Trumbull County Opioid Rehab Center Inc. of 501C whatever, if they can take the money that’s supposed to be for abatement or treatment, but they don’t have to use all of it for treatment. They can use some of it to lobby -- or let me rephrase that. There’s no restriction that I can see against them using to lobby their elected officials for other things in the future. To me, that’s problematic.

When the public reporting on this -- and I understand they all have a certain limitation on time and space in their publications or broadcasts. I get that. But the fact of the matter is that there’s no -- there doesn’t appear to be, even in the settlements, a guarantee that 100 percent of the money that’s supposed to be used for abatement, which is -- I mean, you’re not collecting the -- the municipalities are not collecting damages as in a product liability. They’re collecting abatement money. If you’re going to collect all that money and you’re going to claim it’s for opioid abatement, it really should go to opioid abatement, period, whether it’s treatment or police, EMT, whatever. But I suspect with the opioid settlements as with other settlements in the past, some of that money is going to go towards community groups, so-called community groups. They tend to lean strongly left in their political leanings, and they’re not afraid to use that money as they should. So with that, I think let’s turn to questions.

Guy DeSanctis:  Yes. It looks like we have a few in the Q&A. We have one question. Do you think there is a federal substantive due process challenge to these public nuisance claims?

John Shu:  Well, there could be. That actually -- and it’s a good question. ConAgra for Paul Clement brought that up in its cert position. The heart of that particular substantive due process claim was that they’re using aggregate evidence. And in the opioid cases, there were all aggregate evidence. Now, you say, “Well, what’s aggregate evidence? I don’t understand.”  Okay. Well, instead of proving that a particular set of plaintiffs or a particular group of plaintiffs suffered exact damages, you just say, “Well, in the aggregate, the regression analysis, the statistical analysis shows that Johnson and Johnson or Purdue started making opioids in 2011, or whatever. And ever since then, there’s been a climb in opioid overdoses and opioid deaths. Therefore, they’re liable.” Now, that’s kind of a problem because there’s no specific evidence or proof.

In the Ohio case, the pharmacies specifically said the judge, the plaintiffs, have not been able to point to any specific prescription that was illegally written or viewed. “Well, what are we supposed to do? We can’t -- as pharmacists, we’re not supposed to interfere with the patient-doctor relationship. As a matter of fact, certain state statutes specifically don’t allow us to do that. Unless they can point to a specific set of prescriptions that were bad, I don't really think we should be responsible for a public nuisance.” Well, that didn't fly with Judge Polster. He looked at the aggregate evidence. He specifically ruled that it should be admitted. It should be used, and he used it in instructing the jury. Now, the damages phase, abatement phase, is going to happen sometime later this spring. I can practically guarantee you that he’s going to mention the aggregate evidence as part of the information.

The other problem I think with the aggregate evidence it doesn’t distinguish between legal opioids and illegal opioids. In other words, yes, there may have been an increase in opioids. In overdoses, if you start looking at 1991, which is when the data was being kept by HHS and whatnot, it increases every single year. The Sackler family really wasn’t involved at that time. That’s not to say they’re good people. I don't know them. I’m just saying that the data shows that there’s -- year over year since ’91 there’s always been increases in overdoses and abuse. So that’s a real problem with aggregate evidence. It’s a tough sell in terms of a due process claim, but it’s certainly something that they should pursue. Again, that’s one of the reasons why the plaintiff’s attorneys chose public nuisance as opposed to a straight-on deceptive marketing or product liability claim. Let’s go to the next question.

Guy DeSanctis:  Yeah. This one is from earlier. And they asked, “If the manufacturer, distributor, or pharmacy settles, what prevents from being sued again by other states, government entities, counties, departments, individual plaintiffs, et cetera?”

John Shu:  Well, that was one of the sticking points when Johnson and Johnson mentioned it or first announced that they had come to a terms sheet. I should say Johnson and Johnson et al. It wasn’t just Johnson and Johnson. But because they were the biggest both in terms of size and revenue, it’s really been named the Johnson and Johnson settlement. So that was a concern. Even to this day, there are still states—West Virginia, Alabama, Washington state—that are reluctant to join in into that settlement. So I think it’s important for the settling defendant, settling company, to make sure this is – so it’s kind of like tobacco litigation. This was a one-time deal, and it’s for everybody. In other words, if you can’t get everybody to sign on, then forget about it because it’s not worth it, again very similar to the litigation that we saw in the tobacco companies during the Clinton administration. Yeah. So that’s a very good question.

It's really incumbent upon them. The other thing is that the payments are spread out over time. Probably not the plaintiffs’ attorneys’ part of that, though, that’s probably a lump sum. But the payments to the municipalities and the states are spread out over time. Even the judge, the trial judge, in the Oklahoma case, I mean, the plaintiffs were asking for like 20 billion. And the judge was like, “Eh.” The trial judge gave them one year’s worth of abatement, $475 -- $475 million, sorry. And combined with all the other settlements, it was well over a billion at that time. And the plaintiff’s attorney was like, “No, no, no. This is no good. We need at least 20 years’ worth of abatement.” Twenty years? All right. That didn't happen. Of course, Oklahoma Supreme Court overturned it. But the settlement -- a $26 billion settlement for everybody, that’s a lot. I mean, that’s more than 20 years.

Guy DeSanctis:  Thank you for that question. Another one from earlier, do the states follow any set procedures in hiring private plaintiff lawyers, or do campaign contributions come into play?

John Shu:  Well, I’m sure that the elected state’s attorney general would tell you that campaign contributions from the plaintiffs’ bar have nothing—nothing—to do with the decision to hire or not hire a plaintiffs’ firm in going after a particular industry. Every state has its own procedure. Every state has its own political needs and desires. I’m sympathetic to the extent that there really is a problem. This predates the Biden administration. It predates -- I mean, it’s been going on for a long time. It predates the Trump administration. Again, it’s not a Republican or Democrat thing. But at the same time, it’s hard for me to be overly sympathetic because you have these problems of the illegal stuff coming in.

I think Johnson and Johnson as part of evidence introduced the fact that in terms of overdoses, opioid overdoses, 95 to 97 percent of overdoses were from illegal opioids, the illegal fentanyl, the illegal oxy or whatever. It wasn’t the stuff that they made or prescribed because they all have chemical tags in them that you can tell if you bothered to do the analysis. I think that was actually a -- to me, that’s a pretty good argument from a policy side, that really, they’re not the ones that are responsible to this extent, to a public nuisance extent. And also, the law already exists to hold them responsible. If a pharmacist is in cahoots with a bad doctor, a dirty doctor, and they’re in cahoots and just enabling or helping pill mills crank out prescriptions to everybody who has a sprained toenail, there’s already federal and state law to step in and fix that and hold those who do that kind of behavior accountable. Well, the problem is from the plaintiffs’ bar’s perspective, there’s no money in that. I mean, that’s generally a criminal action. It’s also an administrative action if they want to yank the pharmacies or pharmacist’s license and the doctor’s medical license. But there’s no money in that. Just like there wouldn't be enough money in a straight up product defect or product liability case with respect to these opioids.

I mean, when Johnson and Johnson made these opioids, I mean, they’re pretty careful about doing it. Whereas, if some cartel guy in the hinterlands of whatever country is making illegal synthetic fentanyl or other opioids, I mean, he could be using all kinds of contaminated stuff. That’s the criminal law issue. That’s public policy issue. What do you do? Do you secure the border? But there’s all kinds of things you could do. But suing companies using public nuisance and intentionally trying to expand the meaning of public nuisance way beyond what it was intended to be, that’s not the right thing to do. I would also add that it’s important, I think, for the judges.

I mean, if you look at the transcripts from Judge Polster starting from the beginning of the pharmacy cases in Ohio, I mean, it’s pretty clear. He made it really clear that he was pushing for a settlement. He might as well just held the pharmacies in contempt and say, “Listen, I’m putting your CEOs in contempt. Pack your toothbrushes until you guys settle.” I mean, he really, really, really pushed hard, some might say excessively hard for a settlement. And, again, I get it. There’s a lot of states that have this opioid crisis. I mean, even the defendants in all their pleadings, I’ve never seen a defendant, an opioid defendant, claim that there’s no opioid problem in the United States. I mean, that’s just a given. I don’t even know why the judges have to mention that in their opinions. It’s a given. Everybody stipulates there’s an opioid crisis.

The problem is what kind of opioid? The illegal opioids? And then heroin, by the way, is considered an opioid. Pharmacies just don’t dish out heroin, but you can find it easily in Portland, LA, New York, definitely San Francisco. I mean, come on. You can find heroin anywhere. But that’s considered an opioid overdoes. It’s not clear to me how Johnson and Johnson is responsible for heroin or for the cartels putting fentanyl in the black tar heroin. It’s just not clear to me. So anyway, that’s a good question from Howard. Thank you very much.

Guy DeSanctis:  Yeah. Thank you for that question. Our next one is, what are the obstacles to public nuisance suits against state and municipal governments arising from their enforcement of COVID-19 lockdowns and vaccine mandates?

John Shu:  Well, it depends on what you mean by obstacles. I mean, if you’re talking about defenses, I think the ones that have worked so far are just basically to say, “Well, if you’re going to sue us for keeping our businesses open, and then claim that our COVID-19 protocols were a public nuisance, in other words were insufficient to the point they were public nuisance,” really, that’s a workers’ comp/OSHA/maybe EPA issue. It’s not really a public nuisance issue. And also, it’s not clear as to what is the public right that’s being interfered. In other words, you have to have some kind of public good or public right.

Now, in the opioid situation, much like the firearms situation, the public right was, well, you have increased costs for the police, EMT, hospitals, decrease in property value, because you don’t really want to live in a neighborhood where there’s opioid people around or violent criminal gangs around. But with the COVID-19, that was significantly less clear. And also, for example, with the Smithfield plant in Milan, it’s not like it’s in the middle of town. I mean, it’s a pretty isolated area. Now, the counterargument to that from the plaintiff’s side would be, “Yeah, but I mean, it’s a virus. So it’s a public nuisance because if any of our workers that we represent catch a virus, they can spread it, so now it’s a public nuisance.” I mean, okay, I suppose that’s true. But if you do that, then you’re going to have to sue public nuisance for the common flu or the common cold or whatever. I mean, there’s a lot of places where you can stretch that.

Guy DeSanctis:  Thank you for that question. The next one is, how does the fact that some states are decriminalizing drug possession affect calling the drug a public nuisance?

John Shu:  Yeah. I mean, that’s a policy question that really the judiciary is ill-equipped to handle. There have been some judges in the past on public nuisance suits, not necessarily opioid suits, that have said, “This really isn’t for the judiciary.” We’ve had many smart thinkers. John Malcom from Heritage and myself have said that this really is a policy issue that should be addressed by the state legislatures and the governments, not really the judiciary. I mean, that’s insane. But I would say this. For example, California, this is a pretty open state when it comes to drugs. I don’t mean just marijuana. I mean like pretty much everything in terms of the lack of enforcement if you’re just personally using it. I mean, San Francisco has an open-air needle exchange area. I don’t know what to tell you. That certainly is not going to affect the municipalities or the plaintiffs’ attorneys from suing. So I would say the drug legalization, bogus.

Guy DeSanctis:  Thank you for that question as well. Our next one is, does product liability law work as a solution for the opioid epidemic when many states have safe harbors for pharmaceuticals which expressly prohibit litigation?

John Shu:  Well, so that’s what I was saying about it being a policy issue. That, yeah, if at some point the state must have thought, “Hey, we don’t really want to be going after companies that produce legal, highly regulated products.” If they really want to go after them, they could amend the law. It’s really up to the legislature and the governor, not the state judiciary. The other issue is the fact that you have -- that this public nuisance stuff is just strict way beyond what it should be. This ain’t it. I’m sorry. This is not it. If you have a factory that’s dumping sewage, if you have an abandoned property that’s being used as a crack house or whatever, a gambling den or whatever, I mean, yes, definitely.

But people have tried in the past to sue construction companies because they were paving a road. Now, they weren’t doing it out of the goodness of their heart. They were doing it because the state of X contracted with them to do it, but they sued anyway based on a public nuisance. In those cases, they were able to raise a defense, “Hey, you guys can’t sue us. We wouldn't have done this except for the state. So forget about it.” And those cases were dismissed, at still significant litigation costs, I might add.

Now, certain opioid companies and pharmacies did try to raise it. In other words, “We’re so heavily regulated that we might as well be considered a state actor.” Those arguments didn't fly. I, myself, am not particularly sympathetic to that argument. Just because you’re regulated doesn’t mean you’re a state actor. But I am sympathetic to the fact that the whole concept of public nuisance has been flipped. Because where we are right now, pretty much anything can be a public nuisance. As I’ve read to you, there’s certain states where it literally says anything that makes you uncomfortable.

Guy DeSanctis:  Going off that -- unfortunately we only have time for about one more question. But assuming a legitimate need to regulate nuisance behaviors, what might a revised public nuisance statute look like?

John Shu:  Well, I hope you mean at the state level. But, yes, a revised public nuisance statute should just go back to the original understanding and the original meaning. I’m talking about Edward III meaning of public nuisance, where it’s not a way that the plaintiffs’ attorneys can make an end run around properly pleading a product defect or liability case or having the proper evidence, submitting the proper evidence, at least enough to survive a motion to dismiss or demur that the defendants are actually responsible for their behavior. This whole business of aggregate evidence is very dangerous, very dangerous. I don’t think it’s healthy for the legal system, the litigation system.

So I think if the sates were to make it very clear -- I mean, one easy way is to tie it to real property. Now, I will say this. The Oklahoma trial judge did say he was afraid to be flipped, which he was anyway, so too bad. But he tried to tie it to real property. In the Oklahoma case, Johnson and Johnson case, by saying, “Yeah, Johnson and Johnson sent their reps to pass out pamphlets and talk to doctors at their offices and their homes—homes—in Oklahoma. So there’s a real property tie, and therefore, that’s the public nuisance.” That’s not -- come on. That ain’t it. Everybody knows that’s not it.

But I very much appreciate all of you joining us. I hope you all learned something and found it useful and at least moderately amusing. Although I did joke around from time to time, I will say that this is a very serious legal issue, the overexpansion of public nuisance. And as we’ve already seen from the COVID-19 cases, it’s going to continue on with different industries and different claims. I’m concerned that unless there’s some serious pushback from the judiciary and also from the state legislatures and governors, that it’s just going to get worst. But thank you very much. I appreciate it.

Guy DeSanctis:  Thank you. On behalf of The Federalist Society, I want to thank our expert for the benefit of his valuable time and expertise today. And I want to thank our audience for joining and participating. We also welcome listener feedback by email at [email protected]. As always, keep an eye on our website and your emails for announcements about upcoming Teleforum calls and virtual events. Thank you all for joining us today. We are adjourned.

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Dean Reuter:  Thank you for listening to this episode of Teleforum, a podcast of The Federalist Society’s practice groups. For more information about The Federalist Society, the practice groups, and to become a Federalist Society member, please visit our website at fedsoc.org.