Corporate Law – Cities Suing Companies

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Corporate Law – Cities Suing Companies

One doesn’t usually think of corporations as killers or towns as victims, at least not in the literal sense, but that is very much the case in the opioid epidemic.Indianapolis Mayor Joe Hogsett recently unleashed a bold new move: to fight the scourge of painkiller abuse by suing pharmaceutical companies and distributors.

Popular prescription opiate derivatives like OxyContin and Oxycodone have resulted in record numbers of addicts, many of who eventually go on to use heroin, sometimes dying of overdose. The crisis is only growing and has finally been officially recognized by the Trump administration for what it is.

Every weekend, opiate emergencies fill the ERs of local hospitals and jails are full to overflowing. More people now die of drug overdoses than in automobile accidents. “Opioids are killing Americans. Opioids are killing Hoosiers. Opioids are killing our neighbors right here throughout the city of Indianapolis,” Hogsett said.

According to research from Indiana University, there were almost 350 deaths from drug overdoses in Marion County over the previous year. Drug deaths state-wide reached almost 1,500.

The law firm of Cohen & Malad, LLP, will represent the city on contingency, hoping to reap one-third of any settlements and will not charge the city any hourly or upfront costs. The city has named Purdue Pharma, Endo, and Teva – three manufacturers of opioids – as well as three distributors (Cardinal Health, McKesson Corporation, and AmerisourceBergen) as putative defendants. More could follow.

A New Strategy

This is not the first time a city has taken legal action against opiate producers and distributors. Purdue Pharma, Endo, and Malinckrodt Pharmaceuticals were all sued by several counties in Tennessee in July and then by Louisville, Kentucky, a month later, alleging the companies failed to take action against suspicious activity by reporting it to the U.S. Drug Enforcement Administration.

Ohio, Mississippi, and Washington state have all filed similar lawsuits, as has the city of Seattle. All in all, almost 80 lawsuits have been filed countrywide.

It is hard not to see the parallel with the litigation against big tobacco decades ago. The precedent is an established path of successful legal actions that brought about significant change in the industry that might otherwise never have happened. The tobacco companies suffered tremendous financial losses as a result, but it was better for them than the alternative of multiple long, drawn out lawsuits involving thousands of plaintiffs.

The action could produce a windfall bonus for Indianapolis and force the industry to face the consequences of the crisis.

The Tobacco Parallel

For their part, the companies deny any role in creating and profiting from the opioid epidemic. Unlike tobacco, painkillers play an important role in medicine and alleviating suffering. Prescription medications are tightly controlled by existing laws which, if they are broken, are broken by other entities in the industry.

In addition to the litigation strategy, Indianapolis has created Mobile Crisis Assistance Teams consisting of a police officer, a paramedic, and a licensed doctor to respond to emergencies.

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