Prosecutors, TN AG battle over Big Pharma suit

With the death toll rising and the flow of opiates from Big Pharma unabated, state prosecutors and the Tennessee Attorney General’s office are locked in a legal battle for power and money.

Tennessee Attorney General Herbert Slatery III is challenging the legal authority of 14 state district attorneys general to sue Big Pharma and its partners in the opiate supply chain and insisting they had no right to engage a private law firm.

The DAs – representing 47 counties in Middle and East Tennessee - contend Slatery sat idly by as the opioid epidemic decimated their communities, so they took matters into their own hands under state laws they say give them the right to hire a law firm and mount their own legal fight against Big Pharma and its partners.

Nashville law firm Branstetter, Stranch and Jennings last year filed lawsuits in several state courts, including circuit courts in Campbell and Sullivan counties, on behalf of state prosecutors in judicial districts throughout East and Middle Tennessee against Big Pharma and its partners, including distributors.

Slatery’s office earlier this week filed motions to intervene in those cases – nine months after the first such lawsuit was filed.

Legal documents and letters obtained by USA TODAY NETWORK-Tennessee show the two sides aren’t just warring over authority. Money – who gets it and where it goes – is also at the root of the disagreement on how best to hold Big Pharma and its partners legally and financially accountable for the opioid epidemic.

Slatery’s office has repeatedly said it was investigating the possibility of suing Big Pharma but has yet to do so. But Slatery was recently tapped to lead a committee of attorneys general across the nation formed at the direction of a federal judge in Ohio who is pushing for a fast settlement with Big Pharma.

Is ‘global settlement’ a money grab?

He argued in a letter to the DAs that he was much better positioned than they to get the state a share of that money, and their lawsuits were interfering with the possibility of what he termed a “global settlement.”

“My office has devoted significant resources to this issue and is leading a coalition of approximately 40 states actively investigating opioid manufacturers and distributors. “… we have the ability to seek relief for the state and its political subdivisions through a global resolution. Your litigation complicates that effort.”

The DAs fired back that local communities – not the state – have borne the costs of the opioid epidemic, and local communities should be afforded the lion’s share of any damages that might result from Big Pharma litigation. Slatery’s proposed “global settlement,” they argue, is a money grab for state coffers.

“We know the idea of rolling up various opioid-related lawsuits into one settlement can seem appealing, especially when (Big Pharma is) already pleading poverty - despite billions in revenue generated at the expense of our citizens,” a letter on behalf of the DAs read. “That said, we also know that in these situations, local communities lose out.”

They noted the state attorney general’s office – under Slatery’s predecessor – was part of a 2007 settlement with Purdue Pharma, the manufacturer of widely abused opioid OxyContin.

In that case, Tennessee received roughly $720,000 of the $19.5 million settlement. Of that money, $400,000 went to cover attorneys fees for the attorney general, according to the district attorneys.

The DAs also pointed out the attorney general’s office had authority under that settlement to force Big Pharma and its partners to reveal when communities received shipments of more opiates than population but did nothing.

“The terms of the settlement went unenforced and Tennessee settled its claims for pennies on the dollar,” the DAs’ letter stated. “The limited monies that were received went into state coffers in Nashville, not into the hands of the smaller communities bearing the greatest need.

“The results of this failed effort have been another decade lost to growing opioid-fueled abuse, addiction, and death,” the letter stated. “Our local communities have been devastated in this wake and we cannot, and we must not fail again.”

Lying about opiates’ addictive properties

There are two sets of tracks being laid across the nation in what is shaping up to be a Big Tobacco-style legal fight to force Big Pharma to cough up money for the addiction its wares have wrought. Like Big Tobacco, Big Pharma and its partners are accused of lying about the addictive properties of opiates.

The DAs are opting for state court action and are using state laws they argue give them specific authority to do so, including the Drug Dealer Liability Act.

Others, including the county commissions of Campbell and Scott counties, are using racketeering laws and federal court, where U.S. District Judge Dan Aaron Polster of Ohio has already been tapped to try to marshal what’s known as a multidistrict litigation, or MDL.

He is urging a speedy, tough settlement of the more than 200 lawsuits that have been filed on behalf of local governments and hospitals and other groups across the nation in the past two years. Slatery has been participating in conferences helmed by Polster.

Jonathan Taylor, with the Knoxville firm Taylor & Knight and Nashville firm Lieff Cabraser Heimann & Bernstein, has filed MDL actions against Big Pharma on behalf of several East and Middle Tennessee county governments. Like the DAs, county governments also are trying to ensure any money reaped from Big Pharma goes back to local communities, Taylor said.

“A number of county commissions that we represent in Tennessee have recognized their responsibilities to taxpayers and have understood the urgency of bringing these lawsuits now,” Taylor said.

Slatery has not filed any challenges to those MDL cases. In response to questions from USA TODAY NETWORK-Tennessee on Wednesday, Slatery’s office pointed to an opinion column Slatery recently wrote.

In that column, Slatery made clear he is backing the MDL settlement effort.

Dave Boucher and Jamie Satterfield

A war with AG’s office?

Stephen Crump, who serves as district attorney general for the 10th Judicial District, in Southeast Tennessee said he and his fellow DAs don’t want a war with Slatery’s office but feel compelled to act.

“I think it’s a shame in a war that ought to be us against them, it’s started out as us against us,” Crump said. “We have acted as they sat. We hope that they will join us in this, but we will not go away. The only group that benefits from their actions would be the opioid manufactures. It’s certainly not Tennesseans.”

Jared Effler, a district attorney general whose district includes Campbell and Claiborne counties, pointed on Wednesday to the 2007 settlement as proof he and his fellow DAs were right to file suit.

“That settlement failed to provide any resources to our rural communities and has allowed the opioid epidemic to explode,” he said.

Campbell County currently ranks third in the nation for the number of opiate prescriptions as a percentage of population, with a rate of 195 prescriptions for every 100 citizens. Claiborne County ranks seventh.

Hearings on the motion to intervene filed by Slatery’s office have not yet been set.