As published on Legal Newsline:

Sixteen years ago in a case involving gunmaker Sturm, Ruger & Co., a New York appeals court refused to apply public nuisance law against the manufacturer of a legal product, saying that doing so would transform nuisance law “into a monster that would devour in one gulp the entire law of tort.”

Yesterday, a judge in Oklahoma disregarded that warning and held Johnson & Johnson liable for every aspect of the state’s opioid crisis, from the abuse of prescription drugs to overdose deaths caused by illegal fentanyl and heroin. In a 42-page decision that reads like one of the state’s legal briefs, Cleveland County Judge Thad Balkman ordered J&J to pay $572 million for creating a “public nuisance” by spreading the “false and misleading” message that opioids should be prescribed to treat chronic pain.

With his decision Judge Balkman erases the line between public nuisance law and the law of products liability that most courts have honored so far, said Donald J. Kochan, a professor at Chapman University’s Fowler School of Law. One of the fundamental principles of tort law is that plaintiffs must prove causation: The defendant’s actions were the direct cause of the plaintiff’s injuries.

Judges who apply public nuisance law to widely sold products can eliminate that requirement and replace it with a generalized duty to avoid selling anything that might result in harm to somebody else.

“The misunderstanding of public nuisance terms leaves it open to this type of judicial misunderstanding,” said Kochan, who studies property and nuisance law. Judges “find the crisis first – like climate change and the opioid epidemic – and work backwards to find liability.”

Nowhere in his ruling does Judge Balkman mention the fact that the Food and Drug Administration approved J&J’s products for the exact uses he says led to the opioid epidemic, nor does he acknowledge J&J’s vanishingly small share of the market, estimated at less than 3% in Oklahoma. Relying mostly on the testimony of four state witnesses, the judge found that the simultaneous increase in opioid prescriptions from all companies and overdose deaths from legal and illegal drugs between 1996 and 2015 established a cause-and-effect relationship sufficient to find J&J liable for all of the state’s costs for one year of “abatement.”

Johnson & Johnson immediately said it will appeal the decision. It laid out the grounds for that appeal in filings before and during the 33-day trial, including:

Oklahoma nuisance law doesn’t allow lawsuits over products. The century-old law has been used almost exclusively to address property-based nuisance claims, such as noisy activities or pollution. It even contains a “safe harbor” provision saying nothing that is done under “express authority of a statute can be deemed a nuisance,” which J&J argues would include its federally approved marketing and labeling of opioids.

– No jury. Under Oklahoma law, defendants facing monetary damages can demand a jury trial. But Judge Balkman denied this request, agreeing with the state that Oklahoma was seeking “abatement,” not monetary damages, even the only thing the state ever sought was, in fact, money.

– No causation. The state’s lawyers repeatedly stated, “If you oversupply, people die.” But Oklahoma never presented any evidence of specific doctors who overprescribed opiates because of acts by J&J, or patients who received drugs improperly. The state’s key witness, Dr. Andrew Kolodny, didn’t provide any statistical models to account for J&J’s tiny share of the legal opioid market or account for other factors including far larger sales by Purdue Pharma and generic manufacturers and the flood of illegal fentanyl and heroin into the state.

– Federal preemption. The Food and Drug Administration approved J&J’s products and labels, raising the argument Oklahoma can’t find it liable for selling the products for uses it disagrees with. The state also built a significant part of its case on J&J’s former ownership of Noramco, a company that supplied wholesale opiates to other manufacturers. But the federal government regulated every aspect of the business including yearly production limits, leaving little room for the state to say Noramco oversupplied the market.

– First Amendment: The state is punishing J&J and Janssen for promoting its products in a way Oklahoma dislikes, but “the First Amendment forbids the government from using tort law to pick winners and losers in debates about matters of public concern,” J&J argued. It said it is also constitutionally allowed to lobby regulators and fund doctors and outside organizations that support using opioids to treat chronic pain.

– No joint and several liability. J&J argues it can’t be ordered to pay for the entire cost of fixing the state’s opioid problems because the law doesn’t allow joint and several liability unless an injury is “indivisible.” Oklahoma’s opioid crisis has multiple individual causes and effects, from doctors who operated illegal “pill mills” to addicts who purchased only illegal drugs, it says.

Judge Balkman either rejected these arguments or didn’t even mention them in his decision. On the First Amendment, for example, he simply said J&J’s marketing materials were “commercial speech” and not entitled to protection if they were false and misleading.

To prove they were false and misleading, he cited the state’s own experts including Kolodny, a fierce critic of the opioid industry who tried and failed to convince the FDA to place constraints on pharmaceutical marketing.

The judge also said continuing medical education programs that J&J funded were false and misleading, citing  Dr. Danesh Mazloomdoost, witness for the state and director of a Kentucky pain clinic who acknowledged on the stand he had never attended a medical education seminar in Oklahoma.

In another sign the judge appeared to adopt the state’s positions uncritically, he said the FDA described several studies J&J cited in some of its marketing materials as “false and misleading.” In fact, the FDA in a 2004 letter ordered J&J to stop citing the studies because they didn’t support its statements about the effectiveness of its Duragesic fentanyl patches.

The judge also based his finding of causation on the say-so of two state witnesses, both of whom with strong interests in obtaining funding from J&J. One was Terri White, the Commissioner of Mental Health, who also testified the state needs a $17-billion, 20-year program to abate the opioid crisis. The other was Jason Beaman, chair of the psychiatry department at the Oklahoma State University Center for Health Sciences, which already got $200 million of the $270 million Purdue settlement.

The judge didn’t address J&J’s argument that there were many intervening factors to break the chain of causation between its sale of prescription opioids and the crisis of addiction and overdose deaths. Prescribing physicians, for example, must make an independent decision on whether a patient needs opioids, an intervening step the judge disregarded.

Johnson & Johnson also blamed Oklahoma itself for removing time limits on opioid prescriptions through its Soonercare assistance program in 2000, which was followed by a large increase in OxyContin prescriptions and overdose deaths. The state also placed immediate-release opioids on the least-restricted tier of its Medicaid formulary, while J&J’s were Tier 2 and Tier 3 drugs requiring prior authorization.

The state also failed to implement a prescription monitoring program to reduce “doctor-shopping” until 2015, despite evidence state officials knew for years the centralized database would make it harder for patients to obtain narcotics from multiple prescribers, the company said.

While Judge Balkman’s decision isn’t binding on any other court and may be overturned on appeal, it injects new vigor into lawsuits by nearly 2,000 cities and counties concentrated in federal multidistrict litigation in Ohio. Many rely on similar theories of public nuisance, and U.S. District Judge Dan Aaron Polster has scheduled a pair of bellwether trials to begin in October.

If more courts adopt Oklahoma’s reasoning however, public nuisance litigation could spread to other products that provide both benefits and harms. Alcohol and cellphones are two frequently mentioned targets, since both can be blamed for tens of thousands of deaths and injuries per year due to impaired driving.

With conventional products liability litigation, plaintiffs must prove either that a product is unreasonably dangerous or that the manufacturer hid important information about its dangers from consumers. The risks of alcohol and driving while using cellphones are widely understood. But under a public nuisance theory, the mere fact they are made available to consumers might subject the companies that sell them to liability – and make the private lawyers representing governments that sue very rich.

Kochan of Chapman University said federal appeals courts so far have upheld the traditional understanding of public nuisance law and refused to apply it to products, most notably in lawsuits accusing oil companies of creating a public nuisance by selling products that accelerate global warming.

“The federal appeals courts have largely shown a tendency to hold back the emerging push of the use of public nuisance to solve widespread social problems,” Kochan said. “There are all kinds of things people do that lead to harm and it’s a limitless standard.”

Categories: Opioid crisis