Fourth Circuit says opioid distributors can face public nuisance claims

RICHMOND, Va. (CN) — The Fourth Circuit on Tuesday held that drug distributors could be held accountable for their role in fueling the opioid epidemic.

The opinion, penned by Senior U.S. Circuit Judge Barbara Keenan, reversed a West Virginia-based federal court’s decision holding that local governments’ public nuisance claims failed as a matter of law because West Virginia common law does not permit such claims based on the distribution of prescription drugs.

“We decline the defendants’ request to restrict the scope of public nuisance under West Virginia law by excluding as a matter of law harm suffered by the general public originating from the distribution of opioids,” the Barack Obama appointee wrote. “The state Supreme Court has not identified any particular type of product-based harm that should be excluded from qualifying as a public nuisance. And nothing in that court’s jurisprudence indicates that public nuisance under West Virginia law should be restricted by carving out any product-based harm.”

In separate, now consolidated cases, Huntington, West Virginia, and surrounding Cabell County lodged a public nuisance suit against prescription opioid distributors AmerisourceBergen Drug Corporation, Cardinal Health Inc. and McKesson Corporation, which hold a 90% market share of opioid distribution.

“The opioid epidemic in West Virginia continues to have a devastating impact on the health and welfare of communities throughout the state,” Keenan wrote. “In fact, it is undisputed in the present appeal that West Virginia is ‘ground zero’ for the opioid epidemic in the United States.”

Drug manufacturers like Perdue and Johnson & Johnson sell their products to distributors supplying pharmacies. The localities settled cases involving manufacturers and pharmacies. The localities claim the distributors repeatedly shipped opioids to pharmacies in quantities that the distributors knew or should have known exceeded any legitimate uses for the drugs.

Under the Controlled Substances Act, distributors are obligated to maintain adequate controls against diversion, including exercising due care to confirm that all pharmacy orders are legitimate before filling them.

The localities claim that to avoid responsibility, the distributors continuously raised the threshold of opioids a pharmacy could order without being considered suspicious. The localities claim the distributors supplied the area that shares roughly 100,000 people with 80 billion units of opioids over 20 years, totaling 40 units per resident.

The three-judge panel also disagreed with the lower court’s opinion that the localities had failed to prove the elements of the claim. The lower court held that the local governments had not established the distributors’ conduct unreasonably interfered with a public right, a required element for stating a common law claim for public nuisance under West Virginia law.

In granting judgment to the distributors, the lower court read the Controlled Substances Act narrowly, as requiring distributors only to decline to ship to rogue or illegitimate pharmacies, rather than requiring them to decline service to legitimate pharmacies like CVS or Walgreens that order suspiciously large quantities of opioids. Keenan called this analysis an error.

“If the distributors’ duties under the act were as limited as the district court held, the act’s purpose to prevent diversion of controlled substances would be substantially undermined,” Keenan said. “When the district court found that the distributors substantially complied with their duties under the act and did not unreasonably interfere with a public right, those findings necessarily were based, at least in part, on the court’s incorrectly narrow perception of what those duties were.”

The panel also reversed the lower court’s rejection of the local governments’ abatement plan, which would cost $2.5 billion to address prevention, treatment, recovery and special populations. The lower court said the plan had no relation to any of the purported misconduct.

“West Virginia law permits abatement of a public nuisance to include a requirement that a defendant pay money to fund efforts to eliminate the resulting harm to the public,” Keenan said. “West Virginia has long characterized abatement as an equitable remedy.”

Nearly 645,000 people died from overdoses involving any opioid, including prescription and illicit opioids, from 1999-2021, according to the U.S. Centers for Disease Control and Prevention. Opioids are substances that work in the nervous system of the body or in specific receptors in the brain to reduce pain.

“Hundreds of pregnant women have been admitted for treatment of opioid use disorder and, at times, up to 10% of babies born at Cabell Huntington Hospital have suffered from neonatal abstinence syndrome,” Keenan wrote. “The number of children placed in foster care has doubled.”

Types of opioids include prescription opioids like oxycodone and morphine, often prescribed following surgery or injury or for health conditions such as cancer. Synthetic opioids derived from chemicals rather than opium poppy plants include methadone and fentanyl.

All opioids, including heroin, are chemically similar, with the same biological mechanism and similar effects. Often, people turn to illegal opioids like heroin after running out of their prescription opioids following surgery or injury.

Attorneys representing the distributors did not respond to a request for comment. U.S. Circuit Judges Robert King, a Bill Clinton appointee, and DeAndrea Benjamin, a Joe Biden appointee, concurred in the opinion.

“We’re gratified by the Fourth Circuit’s careful and meticulous ruling that the opioids distributors can be held liable for the public nuisance they created,” David Frederick of Figel & Frederick, representing the localities, said in a statement. “Huntington and Cabell County were devastated by the opioids crisis and the need for abatement remedies is still crucial to assist the community in addressing the crisis.”