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TO: Mayor Richard C. Irvin and City Council
FROM: Richard J. Veenstra
Corporation Counsel
DATE: December 16, 2021
SUBJECT:
National Multistate Opioid Litigation Settlement
PURPOSE:
To authorize the Corporation Counsel, to execute a joinder or other agreement on behalf of the City, to permit the City to participate in a settlement proposals or agreements being negotiated by the Illinois Attorney General against various opioid manufacturers and distributors.
BACKGROUND:
Like many local governmental entities, the City has been impacted by the "Opioid Crisis" in a variety of ways -- many of which led to the City incurring increased costs for police and fire responses as well as for various community services. Over the past several years, various counties and municipalities filed suit against various opioid manufacturers and distributors, and in some cases, physicians alleging that they knew that their products were dangerously addictive but did nothing to limit their availability or ubiquity. Lawsuits filed in federal court were consolidated as part of the multidistrict litigation (MDL) process and transferred to Ohio for disposition.
In 2018, the City evaluated the possibility of engaging special counsel to commence its own action against these manufacturers --- with the goal of maintaining the litigation entirely in state court so as to avoid consolidation as part of the MDL. Ultimately, on the advice of counsel, we opted not to pursue this course as it appeared likely that the Illinois Attorney General would intervene on behalf of all Illinois-party plaintiffs in the interest of achieving a global settlement. Ultimately, that is exactly what happened - and the General Assembly subsequently precluded further municipal suits against opioid defendants.
DISCUSSION:
The Attorney General is in the process of negotiating a settlement proposal in involving McKesson, Cardinal Health and AmerisourceBergen (“Distributors”), and manufacturer Janssen Pharmaceuticals, Inc. and its parent company Johnson & Johnson that would see Illinois receiving approximately $735 million of a overall $21 billion settlement. As part of the settlement, the Attorney General is negotiating an intrastate allocation agreement that will provide for an allocation pool of $110 million for Illinois local governments. As currently drafted, municipalities like Aurora which are not already part of the litigation will need to join the agreement before January 2, 2022 in order to receive an allocation - though the Attorney General can apparently extend this deadline. If these municipalities do not enter a joinder agreement by January 2, 2022, and the deadline is not extended, then their allocations will be shifted into a recovery fund intended for counties.
In the case of Aurora, the proposed allocation available appears to be approximately $1.2 million.
While it is possible that the proposed agreement may change, it is important that the City is able to join in this distribution agreement, and others involving litigation with other opioid defendants. At the same time, the City is not in the position to relitigate these claims nor negotiate more favorable terms than those arrived at by the Attorney General. The only plaintiffs that appear to have this ability, other than the Attorney General, are Illinois's counties comprising 60% of the State's population when acting collectively.
For this reason, and the potentially fluid nature of settlement negotiations, the City Council should authorize the Corporation Counsel to monitor the multistate opioid litigation settlement process, and when appropriate and necessary, join the City as a party to intrastate distribution agreements negotiated by the Attorney General.
IMPACT STATEMENT:
Approval of this resolution will permit the Corporation Counsel to execute the agreements necessary for the City to participate in the intrastate allocation of proceeds from national multistate opioid settlements. Failure of the City to timely join these agreements may lead to the disbursement of funds intended for the City to other taxing bodies.
RECOMMENDATIONS:
That the Council approve this Resolution,
CITY OF AURORA, ILLINOIS
RESOLUTION NO. _________
DATE OF PASSAGE ________________
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A Resolution authorizing the City's participation in intrastate allocation agreements negotiated or approved by the Illinois Attorney General as part of a national multistate opioid settlement.
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WHEREAS, the City of Aurora has a population of more than 25,000 persons and is, therefore, a home rule unit under subsection (a) of Section 6 of Article VII of the Illinois Constitution of 1970; and
WHEREAS, subject to said Section, a home rule unit may exercise any power and perform any function pertaining to its government and affairs for the protection of the public health, safety, morals, and welfare; and
WHEREAS, the Attorney General is the chief legal officer of the State of Illinois; and
WHEREAS, Section 13-226 of Code of Civil Procedure specifically authorizes the Attorney General to approve the participation of units of local government in any litigation, demand, or settlement in lieu of litigation, alleging unlawful conduct in
the manufacturing, marketing, distribution, prescription, dispensing, or other use of opioid medications subject to a national multistate opioid settlement; and
WHEREAS, pursuant to said section, the Attorney General is authorized to negotiate agreements providing for the intrastate allocation of proceeds from litigation subject to a national multistate opioid settlement, including allocations to units of local government; and
WHEREAS, the Attorney General may require municipalities to join such interstate allocation agreements subject to deadlines which may preclude normal deliberations by the City Council; and
WHEREAS, the failure of the City to timely join such agreements may result in the reallocation of funds designated for the City being disbursed to the counties in which it sits; and
WHEREAS, the City Council finds that it is in the best interest of the City that the Corporation Counsel be empowered to evaluate and when appropriate, enter into joinder agreements on behalf of the City;
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Aurora, Illinois, as follows: that the Corporation Counsel shall be and hereby is directed to evaluate the City's joinder of interstate allocation agreements negotiated by the Attorney General as part of a national multistate opioid settlement; and further
BE IT RESOLVED, that the Corporation Counsel shall be and hereby is authorized and directed to execute any intrastate joinder or other agreements negotiated by the Attorney General as part of a national multistate opioid settlement on behalf of the City when in his judgement the interests of the City so require or are advanced.