CINNCINATTI (CN) — The Sixth Circuit ruled Thursday against the use of a novel form of settlement class devised to pursue opioid manufacturers for their role in the U.S. opioid addiction crisis.
The appellate court found that the class, which would have brought every city and county in the U.S. to the negotiating table for a settlement over racketeering and state-law claims, violated federal civil procedure rules.
The class, referred to as a “negotiation class,” would have required any city and county that did not want to be involved in a potential class action settlement against a group of opioid manufacturers and distributors to opt out of it before the settlement.
U.S. District Judge Daniel Polster of the Northern District of Ohio approved the class in September 2019, saying it would expedite relief to municipalities and counties involved in over 1,300 lawsuits filed against pharmaceutical companies for their role in the rapid expansion of opioid abuse and overdoses across the U.S. in the last 20 years.
The negotiation class would have required 75% of voting class members in several categories to approve any settlement, with population weighting for each government entity. Its proposal also included an allocation map for any potential settlement that would have allowed political subdivisions to compute their share based on addiction cases, distribution and overdose deaths.
A coalition of six Ohio cities opposed this model and joined with the drug companies to the Sixth Circuit, where a three-judge panel heard arguments in July.
Senior U.S. Circuit Judge David McKeague, a George W. Bush appointee, wrote Thursday that the class “is not authorized by the structure, framework or language of Rule 23” of the Federal Rules of Civil Procedure, which governs the qualifications required to certify class actions.
Polster and the plaintiffs, McKeague found, had overstepped.
“The Supreme Court has specifically cautioned that ‘a mere negative inference does not in our view suffice to establish a disposition that has no basis in the rule’s text,’” he wrote.
Beyond noncompliance with Rule 23, McKeague wrote that the negotiation class would have negotiated issues well beyond the common federal claims used to certify it and that the plaintiffs had not shown why a litigation or settlement class were not feasible options.
“While there are drawbacks to both approaches, the opioid crisis MDL [multidistrict litigation] might be amenable to either,” McKeague found. “There is no apparent reason why some of the procedural elements of the negotiation class, such as the supermajority voting scheme and county-level allocation formula, could not be used to facilitate the participation of more plaintiffs in a lawful settlement class.”
U.S. Circuit Judge Eric Clay joined McKeague in the opinion, but U.S. Circuit Judge Karen Moore penned a dissent. Both are Bill Clinton appointees.
In the dissent, Moore argued that “texts and canons of construction should not ensnare our interpreting and applying a Federal Rule of Civil Procedure. Rather, courts should contemplate a liberal reading that fulfills the rules’ broader design and that does justice for the parties.”
She also argued that the six cities and the defendants should not have been granted appellate review at all.
Attorneys for the plaintiff cities issued a statement lamenting the decision and saying that they were looking at other options.
“Our priority through this litigation … is to find effective, pragmatic methods to reach resolution in court and at the negotiation table to address the immediate needs of communities around the country impacted by the significant and ongoing harm from the opioid epidemic. The negotiation class was one such method,” attorneys Paul Farrell, Paul Hanly and Joe Rice wrote.
They emphasized that they would still be seeking a national agreement alongside more local models.
“Defendants must deliver funding that will provide communities the resources they need for full abatement to move this case toward a full resolution,” the attorneys wrote.
The group Lawyers for Civil Justice, which filed an amicus brief with the Sixth Circuit opposing the class, celebrated the decision in a statement.
“Today’s decision affirms the longstanding principle that a district court that goes outside the lines of the federal rules abuses its discretion and its rulings cannot stand,” attorney Mary Massaron, who authored the brief, wrote. “It reinforces that the Federal Rules of Civil Procedure are the law and must govern in all civil cases, including MDLs.”