Gurbir S. Grewal, Attorney General of New Jersey, speaks at Seton Hall Law School

Pharmaceutical distributors and attorneys general in 39 states are among several entities that have objected to a proposal aimed at reaching a nationwide settlement of legal claims over the opioid crisis.

The objections, filed Tuesday, potentially thwart court approval of an unprecedented idea floated by lead plaintiffs attorneys in the multidistrict litigation over opioids. Among the objectors were pharmaceutical distributors and pharmacies, which, in a combined court filing, said there were too many unknowns about the proposal, which plaintiffs attorneys amended earlier this month in an attempt to garner more support.

“Defendants do not submit this opposition lightly,” wrote their lawyers. “They are acutely aware of the benefits that could accrue if a legally supportable mechanism were available to permit global settlements in this litigation. But the proposal presented in plaintiffs' motion, as currently framed, is not legally supportable.”

Objections also came from attorneys general in states including California, Connecticut, Delaware, Florida, Georgia, New Jersey, New York, Pennsylvania and Texas.

“The undersigned attorneys general respectfully submit that the amended proposal does not resolve the problems we identified regarding the original class certification motion; instead, plaintiffs continue to propose an unprecedented process that, among other problems, would make 'global peace' more, not less, difficult to achieve,” they wrote.

The proposal sets up a procedure for potentially 24,500 cities, counties and other smaller governments to settle their claims, while defendants—manufacturers and distributors of the opiate prescription painkillers, as well as pharmacies—would obtain reassurance there were no additional lawsuits out there.

Unlike in most class actions, the motion asks to certify a “negotiation” class prior to any settlement, yet lawyers would not use the class to pursue litigation. A proposed structure requires 75% of the class members vote for the deal, while a formula based on several metrics would calculate allocations for each class member.

At a hearing last month, U.S. District Judge Dan Polster of the Northern District of Ohio gave plaintiffs attorneys more time to amend their motion after several distributors and pharmacies, as well as attorneys general in 30 states, urged him to reject the idea.

They filed an amended motion July 9, and Polster has set an Aug. 6 hearing to rule on the proposal.

But distributors McKesson Corp., AmerisourceBergen Drug Corp., Cardinal Health Inc. and Prescription Supply Inc., and pharmacies including CVS and Rite Aid, all of which urged rejection last month, said the amendments still didn't appease them.

“Although plaintiffs' revised motion addresses a few of the obvious defects in their prior proposal, at its core the proposal remains unchanged,” their lawyers wrote.

Although the amended motion added 27 pages and 11 class representatives, the defendants continued to insist that Federal Rule 23 of Civil Procedure did not authorize certification of a “negotiation” class and, even if it did, the proposal would not meet the requirements given the myriad ways the opioid crisis has affected various communities.

“In short, although the new brief is longer and offers more argument about the Rule 23 factors, the treatment of those issues is ultimately still perfunctory,” they wrote.

The defendants continued to raise concerns about lengthy appeals, given the proposal's novelty, but also criticized the “completely hypothetical” formula to calculate a government's share of the settlement and a “highly complicated supermajority voting requirement that would almost certainly never be met.”

“For these and other reasons, these defendants, although respectful of the settlement process, would be unlikely to participate in settlement discussions with this class as currently proposed,” they wrote.

In addition, they wrote, there are “fundamental conflicts of interest” involving the proposed class representatives, half of whom have lawyers who represent states in separate opioid lawsuits.

In an amicus brief, the attorneys general raised many of the same concerns about the proposal, which named three representatives who would negotiate with the states over possible allocations of funds should they reach their own settlements. They continued to cite potential issues involving state sovereignty, allocation of funds and potentially excessive attorney fees, which are “contrary to the goal of providing maximum resources to abate the opioid crisis.”

Six cities in Ohio, filing their own objection, said class members with “vastly diverse and competing interests” would have inherent conflicts within the proposal, which they called a “new and dangerous model for class actions.”

Pharmaceutical manufacturers, such as Purdue Pharma and Johnson & Johnson's Janssen Pharmaceuticals, took no position on whether to approve the deal but sought, in a separate filing, to clarify the application of statutes of limitations on governments that hadn't yet filed lawsuits.