Opioid MDL Judge Considers Request to Certify Unprecedented Nationwide Class Of Government Entities To Negotiate Settlement

The federal district judge overseeing a nationwide multidistrict litigation (“MDL”) matter comprised of nearly 2,000 individual lawsuits brought against opioid manufacturers and distributors is considering a proposal by local government plaintiffs to certify a nationwide “Negotiation Class” for the purpose of reaching a potential settlement of the claims at issue.  See In re National Prescription Opiate Lit., No. 1:17-md-02804 (N.D. Ohio).  On August 6, 2019, Judge Aaron Polster heard argument on the request by plaintiffs seeking certification of a voluntary opt-in class—comprised of 51 cities, counties and municipalities—who seek the certification of a nationwide Negotiation Class, comprised of the following:

[A]ll counties, parishes, and boroughs (collectively, “counties”); and all incorporated places, including without limitation cities, towns, villages, townships, and municipalities, as defined by the United States Census Bureau (collectively “cities”) as listed on the Opioids Negotiation Class website. . . .

The plaintiffs represent that the purpose of the Negotiation Class is to provide and maintain an identified and durable body of cities and counties to negotiate the parameters of a settlement for the plaintiffs.  To that end, Plaintiffs have proposed that, if certified, the Negotiation Class would be unable to enter into a binding settlement unless each of the following constituencies approve of the proposed settlement:

• 75% of the total number of cities and counties that filed suit as of June 14, 2019;
• 75% of the total number of cities and counties that did not file suit as of June 14, 2019;
• Counties and cities representing 75% of the total voting populations of all cities and counties (based on 2010 Census data) that filed suit as of June 14, 2019;
• Counties and cities representing 75% of the total voting populations of all cities and counties (based on 2010 Census data) that did not file suit as of June 14, 2019.

Each county or city (both those that have filed suit and those without any ongoing litigation against the defendants) would cast its vote to approve or disapprove a proposed settlement through a website set up by plaintiffs’ counsel. The vote would then bind the residents of the voting government entity. As with any other class action under Rule 23(b)(3), any local government plaintiff could opt out of the class and refuse to participate in the settlement.

While drug manufacturers have declined to take a position on the local government plaintiffs’ motion for class certification, drug distributors have opposed plaintiffs’ motion.  These defendants argue that Rule 23 does not authorize certification of a “negotiation class.”  Pointing out that the plaintiffs’ request is wholly novel and has never been approved by a prior federal court, the distributor defendants argue that Rule 23(e) permits certification “for purposes of settlement” only if there is a duly negotiated settlement, and not for the purpose of negotiating a settlement in the first instance. The distributor defendants have also opposed the proposed negotiation class on the basis that the plaintiffs do not seek certification for any specific case or cases, but rather for “all cases” within the MDL—what the distributor defendants term a “free-floating ‘MDL class.’”  Many state attorney generals—a number of whom are bringing their own suits in their respective state courts—have also opposed the requested Negotiation Class, saying the proposal undermines finding a collaborative and effective response to the opioid crisis.

Given the novelty of a Negotiation Class, plaintiffs’ motion raises a series of questions and issues that Judge Polster and the parties will need to unpack and obstacles to reaching a global settlement (such as, for example, why restrict the relevant population count to the “total voting population,” rather than total population?).  Nevertheless, it is clear that the Court is giving serious consideration to certifying a class for purposes of settlement.  On August 19, 2019, Judge Polster also issued an order appointing two attorneys “interim class counsel.” The Court’s August 19 Order also provides explicitly that the appointed interim class counsel are to “facilitate negotiations between counties/cities and Defendants, not to interfere with any of the States’ settlement discussions or intrude in allocation discussion between a State and its own counties and cities.”

Class action practitioners will await a ruling, which could break new ground relating to the flexibility and discretion district courts have in managing complex multidistrict litigation.