By: Sarah Meigs

Member, American Journal of Trial Advocacy

The City of Everett, Washington recently filed suit against the makers of OxyContin in an attempt to hold the company liable for the costs the city has incurred fighting the opioid epidemic.[1] Major news sources are calling this suit the “first-of-its-kind.”[2] But that isn’t necessarily the truth. A quick search of Westlaw reveals that Purdue Pharma has been sued many times, including previous suits by states and municipalities.

What makes the City of Everett’s suit different are the claims being asserted. Purdue Pharma has been sued multiple times for deceptive marketing, consumer protection claims, and other torts.[3] The City of Everett, however, is the first to allege negligence and gross negligence based on claims that the company knew its product was being diverted to the black market and did nothing to stop it.[4] The remaining counts alleged by Everett are the familiar claims of unjust enrichment, consumer protection, public nuisance and punitive damages.[5] In the age of ever-expanding mass-tort claims and theories, it begs the question as to whether the City of Everett could actually prevail on its claims.

“Drug diversion is fueled both by physicians who knowingly or unknowingly prescribe scheduled drugs to persons who do not actually need them.”[6] Although it is often inadvertent, doctors in America routinely prescribe pain medications to patients who do not need it and, in fact, intend to sell it on the black market.  Those doctors offices who purposefully prescribe these drugs to those who do not need them in order to reap the profits, are often referred to as “pill mills.”[7] In this case, the City of Everett alleges that doctors in Lake Medical, a Los Angeles based clinic, were running such a  “pill mill” and Purdue executives were not only aware of this clinic and its practices, but did nothing about it.[8]  The case further alleges that OxyContin acquired from Lake Medical was transported to and sold on the streets of Everett.[9]

Purdue Pharma, like all other pharmaceutical manufacturers, tracks the orders for its product placed by clinics, pharmacies, hospitals, etc. The City alleged that the amount of OxyContin ordered by Lake Medical and the surrounding pharmacies were completely out of line with the orders of typical clinics and pharmacies and that the companies tracking system, at the very least, detected this abnormality. [10] There is also evidence, in the form of internal company emails, that company officials who visited the clinic reported there was a line of suspicious individuals out the door of the clinic.[11] The emails go on to openly say that these officials believe the clinic to be something of a “pill mill,” and urged the company to contact the DEA.[12] To make matters worse, the company itself placed one of the Lake Medical Physicians on “Region Zero”[13] for suspiciously high rates of prescription of high dose OxyContin. A pharmacist in the region also reported to the company that Lake Medical was exploiting homeless people in its scheme to fraudulently obtain mass quantities of the drug.[14] Finally to top things off the Executive Director of Controlled Substance Act Compliance for the company admitted that a wholesaler alerted the company to the alarming trend in southern California AND the same director admitted that the tracking system was a “gold mine” of information that should have easily tipped off Purdue.[15] All of these accusations, taken together, should be more than sufficient to show that the company had actual, or at least constructive, knowledge of the diversion of its product. After all of these reports the company did absolutely nothing; No report was ever filed with the DEA – not even an internal investigation by the company itself.

If all of these accusations and plenty more contained in the complaint[16] can be shown to be true, the City is not going to be hard pressed in showing that Purdue’s actions fall far short of due care. Causation is the next obvious hurdle for the City. Public entity suits provide a unique method to circumvent [the causation problems faced by drug user plaintiffs] by alleging that a pharmaceuticals manufacturer has harmed the community as a whole through its product marketing, distribution practices, or both.[17] The City further alleges that a specific drug dealer named in the complaint moved from the Lake Medical area, and used the clinic to obtain the drug and transport it to Everett for sale on the black market. Obviously one drug dealer cannot be the source of a city wide epidemic but it serves as a powerful link in a causal chain between Lake Medical and the City located more than 1000 miles away.

Purdue is known for its aggressive no settlement strategy in OxyContin cases.[18] There are a few suits in which a city or state government has won a favorable settlement; most notably the states of Kentucky and West Virginia. Both Kentucky and West Virginia won multimillion-dollar settlements to fund their drug abuse and education programs as well as law enforcement and medical programs.[19] While the West Virginia settlement details are hard to come by, it is public knowledge that Purdue settled the Kentucky case while admitting no wrong doing.[20] In this case, Purdue isn’t likely to be so lucky. The evidence of serious wrongdoing and neglect is piling up quickly, and the media feeding frenzy has already begun. [21]

The likelihood of this case making it to trial depends on many considerations, but two are particularly notable. The first, and most obvious consideration is the City’s likelihood of success. A favorable jury verdict for the city does not seem to be a farfetched idea. The City has alleged some very serious wrongdoing on the part of a large and well known pharmaceutical manufacturer. A large portion of the country’s population holds a strong anti-“big pharma” stance.  This sentiment arose most recently following the case of Martin Shkreli and the Epipen pricing incidents. These factors tip the balance in favor of a potential jury seeing the City as a sympathetic plaintiff and increase the odds of a favorable verdict. Also, as previously mentioned, the public entity suit breaks down many of the causation barriers faced by individual plaintiffs.[22]

The second consideration, and arguably most important, is the potential precedent that a trial and its ultimate appeals could set. A favorable outcome to the City could set a dangerous precedent not only for other pharmaceutical companies, but following this logic, also for similar suits brought against gun manufacturers and the like. Even if Purdue avoids trial, a favorable settlement, especially as to the negligence claims, could potentially open the floodgates for suits brought by similarly situated governments of all sizes.  This opening of the floodgates not only applies to Purdue, but to all other pharmaceutical manufacturers as well. The West Virginia case did not receive the media coverage that this case has already garnered, nor was the internet as powerful a tool as it is today. There is no doubt that the coverage that this case has already received has many city and state governments watching this case very closely. The opioid epidemic in this country touches thousands of cities, towns, and families who could now potentially have a more viable case against Purdue and other opioid manufacturers.

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[1] Complaint, City of Everett v. Purdue Pharma, No. 17 2 00469 31, 2017 WL 342558 (Wash. Super. Jan. 19, 2017)

[2] Stephanie Gosk and David Douglas, OxyContin Maker Purdue Pharma Hit With Unprecedented Lawsuit by Washington City, NBC News (Mar. 9, 2017, 11:29 PM), http://www.nbcnews.com/storyline/americas-heroin-epidemic/oxycontin-maker-purdue-pharma-hit-unprecedented-lawsuit-washington-n731571.

[3] See generally, City of Chicago v. Purdue Pharma L.P., 2015 WL 2208423 (N.D. Ill. May 8, 2015) Purdue Pharma L.P. v. Commonwealth of Kentucky, 704 F.3d 208 (2^nd Cir. 2013); West Virginia v. Purdue Pharma, No. 01-C-137-S (W. Va. Cir. Ct. filed June 21, 2001).

[4] Complaint, City of Everett, No. 17 2 00469 31, 2017 WL 342558 (Wash. Super. Jan. 19, 2017).

[5] Id.

[6] Joseph B. Prater, West Virginia’s Painful Settlement: How The Oxycontin Phenomenon And Unconventional Theories Of Tort Liability May Make Pharmaceutical Companies Liable For Black Market, 100 Nw. U. L. Rev. 1409, 1415 (2006).

[7] Id.

[8] Complaint, City of Everett, No. 17 2 00469 31, 2017 WL 342558 (Wash. Super. Jan. 19, 2017).

[9]  Id.

[10] Id.

[11] Id.

[12] Id.

[13] list of doctors that the company suspects of recklessly prescribing OxyContin to drug dealers and addicts. Id.

[14] Id.

[15] Id.

[16] Id.

[17] Joseph B. Prater, West Virginia’s Painful Settlement: How The Oxycontin Phenomenon And Unconventional Theories Of Tort Liability May Make Pharmaceutical Companies Liable For Black Market, 100 Nw. U. L. Rev. 1409, 1420 (2006).

[18] Id. at 1433.

[19] See, Landon Thomas Jr., Maker of OxyContin Reaches Settlement With West Virginia, The New York Times (Nov. 6, 2004), http://www.nytimes.com/2004/11/06/business/maker-of-oxycontin-reaches-settlement-with-west-virginia.html?_r=0; Kentucky settles lawsuit with OxyContin maker for $24 million, CBS News (Dec. 23, 2015, 5:11 PM), http://www.cbsnews.com/news/kentucky-settles-lawsuit-with-oxycontin-maker-for-24-million/.

[20] Kentucky settles lawsuit with OxyContin maker for $24 million, CBS News (Dec. 23, 2015, 5:11 PM), http://www.cbsnews.com/news/kentucky-settles-lawsuit-with-oxycontin-maker-for-24-million/.

[21] See generally, Stephanie Gosk and David Douglas, OxyContin Maker Purdue Pharma Hit With Unprecedented Lawsuit by Washington City, NBC News (Mar. 9, 2017, 11:29 PM), http://www.nbcnews.com/storyline/americas-heroin-epidemic/oxycontin-maker-purdue-pharma-hit-unprecedented-lawsuit-washington-n731571; Phuong Le, OxyContin Maker Asks Judge To Toss Case Brought By City, The Associated Press (Mar. 21, 2017, 7:24 PM), http://bigstory.ap.org/article/f39e8f850f4344f597673d72cf98dec1/oxycontin-maker-asks-judge-toss-case-brought-city; WA City Sues OxyContin Maker for Opioid Epidemic, MSN.com (Mar. 14, 2017), https://www.msn.com/en-us/news/us/wa-city-sues-oxycontin-maker-for-opioid-epidemic/vp-AAoklrf.

[22] Thomas, supra note xvii, at 1420.