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Negotiations stalled for months because of attorney fees. Countless lawyers contributed varying amounts of work and fought over who should get what salary. Now, approximately $1.6 billion will be paid to private attorneys representing thousands of counties and municipalities, $50 million to private attorneys working for states, and approximately $350 million in fees and costs. (Many states are represented by their own salaried government attorneys.)
Another critical lever in advancing settlement terms has been the high-stakes gamble of a lawsuit. Distributors are on lockdown pending trial in West Virginia federal court and a tribunal. New York state court. The West Virginia lawsuit is pending, but on Tuesday, New York Attorney General Letitia James announced a $1,179 billion settlement with distributors that frees them from the lawsuit. This money will be deducted from the total $26 billion deal. Ms. James said payments to New York could begin in two months.
There is constant tension in the talks over the division of funds between states and small governments, including cities and counties.
The new agreement envisions a national formula for distributing money to states, and the flexibility to broker an agreement with locals in each state, with the bulk of funding aimed at easing the opioid epidemic and preventing its recurrence.
For months, states and states even elbowed each other as they battled the defendants. The distribution to each state is now based on extensive federal data and includes metrics such as a state’s population, overdose deaths, opioid pill sales, and disorders related to painkiller use.
Most states will likely set up their own payment plans. Ohio, North Carolina, Arizona, Texas, Florida, and others have already mediated through internal, state-specific formulas. Last month, New York legislature passed legislation that would ensure that all funds from the opioid litigation settlement go into a “locked box” to be used only to address the crisis.
Johnson & Johnson is known for being a company willing to try lawsuits rather than settle down, but it has faced rivers of negative publicity lately: lawsuits over talcum powder-related asbestos deaths, a recall some sunscreens, and reports rare adverse neurological events associated with a single dose of Covid vaccine. The company continues to be tried in California state court, but settled with the state of New York and two New York counties on the eve of court last month.
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