Samuel Issacharoff. Photo courtesy of NYU

A federal judge appeared likely to grant certification of a proposed class of thousands of cities and counties as a potential model to settle cases brought over the opioid crisis.

At a hearing Tuesday, lawyers for some of the pharmaceutical distributors and the states were among those who raised objections about a proposal from lead plaintiffs counsel in the multidistrict litigation to create a “negotiation” class that would encompass potentially 33,000 cities and counties. U.S. District Judge Dan Polster of the Northern District of Ohio, who has encouraged settlement from the start of the opioid litigation, pushed back against many of the objections.

“There needs to be some vehicle to provide resolution of these cases,” he said at the hearing, which took place in Cleveland. “Everyone knows that trying probably 2,500 cases now, between the federal ones and the ones in state court, first, would sink the state and federal judiciaries. But, also, the amount of private resources would be staggering, and no one would want to do that. So, there has to be a vehicle to resolve them. It doesn’t have to be one vehicle alone.”

Numerous times, Polster asked the objecting lawyers if they had any other ideas.

“No one has a monopoly on good ideas. The more ideas floated, the better,” he said.

He said he would take the matter under submission and rule “in the near future.”

Plaintiffs attorneys brought the motion June 14 for certification of the “negotiation” class, which excludes state attorneys general, some of whom have brought lawsuits in state courts across the country, as well as unions and Native American tribes.

The class certification motion is unusual because it comes prior to any settlement but, also, is not for pursuing litigation. In most cases, judges certify class actions under those two circumstances, but lead plaintiffs lawyers in the opioid multidistrict litigation insisted that the proposal fits within the confines of the Federal Rule 23 of Civil Procedure, which governs class actions.

The idea of a “negotiation” class originated in a draft 2019 law review article by Duke University School of Law professor Francis McGovern, who is one of three special masters in the case, and William Rubenstein, a professor at Harvard Law School and expert on class actions whom McGovern hired as a consultant in the settlement discussions.

After objections poured in from some distributors and pharmacies, and attorneys general in 30 states, Polster gave plaintiffs attorneys more time to garner support.

They filed an amended motion July 9.

But in renewed objections, a group of 39 state attorneys general, in an amicus brief, raised potential issues involving state sovereignty, allocation of funds, lengthy appeals and excessive attorney fees.

Distributors and pharmacies, both defendants in the cases, said the proposal was “not legally supportable.” They also pointed to “fundamental conflicts of interest” involving the proposed class representatives, half of whom have lawyers who represent states in separate opioid lawsuits.

On Tuesday, Polster said he banned all lawyers who represented both a state and a city or county from arguing or filing motions relating to the “negotiation” class proposal. “Those lawyers have a conflict at the moment because all, or most, of the state AGs are opposing this motion,” he said in court.

He also said that, if he granted the certification motion, he would appoint a neutral to represent cities and counties that had not yet filed lawsuits. He also would order that the case involve only federal claims and limit the parties to 13 “nationwide defendant families.”

Before arguments Tuesday, he asked both sides to address the strongest arguments of their opponents.

“Frankly, I don’t think any strong arguments have been made,” said plaintiffs counsel Chris Seeger of Seeger Weiss. He said many of the objections “border on frivolous.”

Class action expert Samuel Issacharoff of the New York University School of Law, who worked with lead plaintiffs attorneys on the proposal, called defendants’ concerns about absent class members “crocodile tears.” He also brushed off the idea that a voting procedure outlined in the proposal would be confusing for representatives of smaller cities and counties, which “got into office through the elective process.”

Under the plan, cities and counties would have the choice to opt out of the class, but being part of it would give them voting powers. A settlement could go forward if 75% of the class member governments voted for the deal.

Yet, Issacharoff acknowledged that the objections of the states were a “source of concern.” Under the proposal, three representatives would negotiate with attorneys general over possible allocations of funds, should they reach their own settlements.

Both he and Seeger emphasized that no one had to participate in the class.

“The answer to that is quite simple: if they don’t like this, ignore this,” Issacharoff said. “You want to go to trial? Go to trial. Good luck, have at it.”

Polster made similar remarks to Sonya Winner, a partner at Covington & Burling, who argued on behalf of the defendants who were objecting to the idea, which she called a “mirage” that would lead to a “considerable amount of confusion.”

He then asked whether she had a better idea.

“I can’t propose an alternative today,” Winner said. “That’s not what we’re here for.”

“I disagree,” he responded.

She continued to point out numerous problems with the proposal, including an allocation process that comes before lawyers have reached any settlement with actual dollars. Under the proposal, lawyers provided a calculator at www.opioidnegotiationclass.com to determine how much each government could get under a potential settlement.

“That’s the best part of the settlement. Why is that bad?” Polster asked her.

“Because it’s not true,” she said, noting that the calculations were for counties only and, according to the fine print, many small cities would get nothing.

“This is as complicated a litigation as there’s ever been, and adding another layer of complication to a class action that is not supportable, that does not follow the federal statutes, that does not even do what the plaintiffs claim it does, is wasting everyone’s time and everyone’s energy,” she said.

Paul Singer, chief of the consumer protection division of the Texas attorney general’s office, who spoke on behalf of the states, also got pushback from the judge, who disagreed that the proposal would violate state sovereignty or force states to allocate settlement funds in a certain way.

Separately, defendants filed a motion Monday to grant more time for the first federal bellwether trial over opioids, brought by two Ohio counties. That trial, scheduled for seven weeks starting Oct. 21, is “not enough time for a fair presentation of the evidence,” they wrote, given there are 45 defendant companies and $8 billion at stake.

They noted that a separate trial, in a case brought by the state of Oklahoma, which ended last month, lasted seven weeks but involved a single defendant, manufacturer Johnson & Johnson.