CHARLESTON, W.Va. (AP) – A federal appeals court on Tuesday overturned a landmark West Virginia ruling that rejected a U.S. drug distributor's attempt to seek compensation for the influx of prescription painkillers into opioid-hit areas.
The Fourth Circuit Court of Appeals in Richmond, Virginia, ruled that a lower court judge was wrong to say that West Virginia's public nuisance law does not apply to cases involving the distribution of opioids.
“West Virginia law allows public nuisance abatement to include a requirement that the defendant pay money to fund the elimination of the resulting public harm,” the Fourth Circuit said. “West Virginia has long positioned abatement as an equitable remedy.”
The ruling remanded the case to U.S. District Court in Charleston for “further proceedings consistent with the principles expressed in this opinion.”
Thousands of state and local governments are suing over the opioid crisis. The lawsuit relied heavily on claims that the companies posed a public nuisance by failing to monitor where their powerful prescriptions ended up. Most of the lawsuits were settled as part of a series of nationwide deals that could be worth more than $50 billion. However, there was no conclusive trend in the outcomes of those who went to trial.
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In July 2022, U.S. District Judge David Faber ruled in favor of three major U.S. drug distributors accused by Cabell County and the city of Huntington of creating a public health crisis by distributing 81 million pills in the county over an eight-year period. AmerisourceBergen Drug Co., Cardinal Health Inc. and McKesson Corp. were also accused of ignoring signs that Cabell County was being ravaged by addiction.
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Faber said the West Virginia Supreme Court has applied public nuisance laws only in cases of conduct that interferes with public property or resources. He said expanding laws to cover the marketing and sale of opioids is “inconsistent with the history and traditional concept of nuisance.”
Last year, a federal appeals court sent a certifying inquiry to the state Supreme Court, which read: “Under West Virginia common law, can a situation caused by the distribution of a controlled substance constitute a public nuisance and, if so, what are the elements of such a public nuisance claim?”
A state judge declined to answer. A 3-2 opinion in May sent the case back to federal court.
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“We hold that the West Virginia Supreme Court does not preclude as a matter of law any common law claim for public nuisance caused by the distribution of controlled substances,” the Fourth Circuit wrote Tuesday. “We therefore necessarily conclude that the district court erred in holding that a public nuisance claim based on the distribution of opioids was itself legally insufficient under West Virginia law.”
In arguments before the state Supreme Court earlier this year on the certification issue, Steve Ruby, an attorney for the companies, called the plaintiffs' argument for extending public nuisance laws to opioid manufacturers “radical.” If allowed, he said, “there would be an avalanche of activist lawsuits.”
The appeals court previously noted that the West Virginia Class Action Commission, which resolves complex cases in state court, has concluded in multiple cases that the distribution of opioids “may form the basis of public nuisance claims under West Virginia common law.”
In his 2022 ruling, Faber also said the plaintiffs presented no evidence that the defendants distributed controlled substances to entities that lacked proper registration with the U.S. Drug Enforcement Administration or state pharmacy boards. He said the defendants also had suspicious surveillance systems in place as required by the Controlled Substances Act.
But the Fourth Circuit ruled Tuesday that lower courts had “misunderstood distributors' obligations” under the Controlled Substances Act.
The plaintiffs were seeking more than $2.5 billion to be earmarked for opioid use prevention, treatment, and education over 15 years.
Cabell County, home to 93,000 residents along the Ohio River, had 1,059 emergency responses to suspected overdoses in 2021, far more than in each of the previous three years, and at least 162 people died.
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