By Leeann Doerflein and Noah Crenshaw | Daily Journal
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Indiana Attorney General Todd Rokita issued sharp criticism this week against cities and towns opting out of a national opioid settlement.
Franklin and Greenwood are among 80 cities and towns in Indiana opting out of a settlement involving Purdue Pharma, maker of OxyContin, and the Sackler family, the company’s owners; Cardinal Health; McKesson; AmerisourceBergen; and Janssen, a subsidiary of Johnson and Johnson.
Other central Indiana cities, including Indianapolis, Fishers and Noblesville have also opted out, along with major northern Indiana cities including Fort Wayne, Lafayette and South Bend.
Indiana is set to get a $507 million payout from the $26 billion lawsuit.
However, so many cities have opted out the settlement amount could be cut in half, as those 80 cities comprise about half of the state’s population. The settlement is being apportioned based on both population and negative effects from the opioid epidemic.
“The master settlement agreement says that opting out of the state settlement will cut the amount of money coming to the state and local communities in half — possibly $250 million dollars — severely limiting the number of programs that can be supported to help those in need right now,” Rokita said in a guest column published today.
Local cities opted out because they joined another lawsuit that has a greater chance of having a significant payout, attorneys for both Franklin and Greenwood said. They were already part of that lawsuit prior to Rokita joining the settlement on Indiana’s behalf.
“In 2017, many local government units joined forces to file claims against opioid manufacturers and distributors to force them to compensate them for the damages the drugs caused to their communities. The state did nothing to assist in the litigation and acted only after our lawyers were close to reaching a settlement,” said Shawna Koons, Greenwood’s city attorney, in a statement.
The lawsuit Franklin and Greenwood are involved in includes several of the same companies included in the state’s lawsuit. The suit, filed with the U.S. District Court in northern Ohio, is more wide reaching, and both city attorneys said it is more likely to result in more benefit to taxpayers.
The cities could not participate in both lawsuits and would not be able to recover court costs they’ve invested.
Rokita wrote that cities were persuaded by out-of-town attorneys to opt out and don’t realize what they’re losing with their decisions.
“Unfortunately, local leaders in communities like Franklin and Greenwood have been advised by their private attorneys, most of whom do not live or work in the communities they represent, to opt out of this once-in-a-generation deal. However, as the final pieces of this massive settlement came together, it has become apparent that your local leaders were probably not provided full information about the ramifications of opting out of the state plan and the loss of financial benefits for your community that would result from that decision,” Rokita’s statement reads.
Franklin and Greenwood’s attorneys take issue with Rokita’s claims.
Both Koons and Lynn Gray, Franklin’s city attorney, are local residents. As their city’s main legal counsel, they both personally presented the facts to their city leaders without interference from outside counsel, they said.
“The attorney general’s action is disappointing to say the least. Not only does it fail to recognize the independence and thoughtful decision making of local leaders, it fails to mention many significant facts related to the opioid litigation. As the city’s legal counsel, I do live, work and pay taxes in this community and have for 36 years,” Gray said in a statement. “Also, contrary to the attorney general’s comment, I am not paid from any opioid settlement.”
Rokita claimed local governments could stand to gain 50% of the anticipated $507 million from the settlement.
Right now, it is unclear how much money will be distributed to communities in Indiana. That’s a big reason why both cities opted out, attorneys for Franklin and Greenwood said.
Legislation for distribution of the settlement funds were tacked onto the state’s budget bill without clarity on how much local governments will get and when that might come.
The bill says the state will receive 15% of any settlement, localities will split 15% and the Family and Social Services Administration will get 70% to distribute around the state. Half of the 70% could be spent by local governments but it is not clear what restrictions there would be or how much would be received.
With that still up in the air, the local cities did not feel comfortable taking part in the settlement, they said.
“Nearly 80 Indiana communities opted out and I am not aware of any willing to return after hearing more details. The true risk to local communities is allowing settlement money to remain in control of the state and not local elected officials with greater knowledge of the needs of their residents,” Koons said.
Cities also had no input on the legislation and feel it is unfair to be asked to join the settlement when they have been more aggressive in going after opioid manufacturers and distributors than the state, Gray said.
“The 11th hour legislation, passed in conjunction with the state budget bill, left local municipalities and counties who had done significant heavy lifting in holding opioid manufacturers and distributors accountable, with very limited options and virtually no input in the resolution. Leaders at the local level deserve better and most importantly, local folks deserve a voice,” she said.
Participating in the settlement would also prevent the cities from initiating any new claims against firms involved in the settlement, Gray said.
Rokita warned the lawsuit is not a guaranteed win and urged Franklin and Greenwood residents to call their local officials.
“Opting out of the state settlement could possibly leave your community to fight against massive corporations and their lawyers for years, or even decades, with no guarantee of any payout. If these cases even make it to trial, the litigation costs and attorney fees will surely be so high that paying them would eat up much of the funding the community is awarded,” the column says.
