Opioid Companies in Settlement Talks Escalate Objections About Judge
Pharmaceutical distributors negotiating over a $22 billion cash settlement said they withdrew any consent to ex parte communications. The filing is the latest challenge to U.S. District Judge Dan Polster and follows the death of a key mediator in the negotiations.
March 05, 2020 at 03:51 PM
6 minute read
Negotiations over a potential global settlement of opioid lawsuits hit a roadblock this week after three pharmaceutical distributors raised concerns about the procedure in which the talks have occurred.
On Monday, Cardinal Health Inc., McKesson Corp. and AmerisourceBergen Corp., which are negotiating over a potential $22 billion cash settlement, said in a notice that they withdrew any consent of "ex parte communications," which are discussions a judge has with the parties or their lawyers outside the presence of the opposing parties. The withdrawal includes all ex parte communications involving settlement discussions, communications with special masters and "any relevant outside entities," and "any other aspect of this litigation," they wrote.
The plaintiffs' executive committee leading the multidistrict litigation, which is involved in the settlement talks, fired back on Tuesday, insisting that the defendants have waived their right to withdraw from a process that has worked for two years.
"Only now, over two years later, after these defendants have reached an incomplete deal purportedly supported by some attorneys general, opposed by many others, and considered still insufficient by the plaintiffs' executive committee, do they decide, abruptly and strategically, to cut off the very communications that were essential in getting them to this point," they wrote. "This is not the expression of any legal or ethical principal or concern. It is gamesmanship."
The move is the latest breakdown over talks to settle thousands of opioid lawsuits across the nation. A fight over legal fees also has bogged down negotiations, which include the distributors, lead lawyers in the multidistrict litigation and attorneys general from dozens of states.
The move also follows the sudden death last month of a special master in the case, Francis McGovern, a professor at Duke University School of Law, who was "deeply involved in efforts to resolve this litigation," wrote plaintiffs lawyers Paul Farrell of The Farrell Law Firm, Paul Hanly of Simmons Hanly Conroy and Joe Rice of Motley Rice.
They wrote that any "so-called 'ex parte' communications" over settlement or other matters "followed procedures carefully established by the court to ensure their ethical and procedural propriety."
"Under these circumstances, for these defendants to now seek to withdraw their consent to the court's carefully crafted procedures governing communications between the court, the special masters, and the parties, is most unfortunate and places a tremendous burden on, and creates an impediment to, the settlement discussions and resolutions of the many issues in the litigation," they wrote.
The distributors, in their notice, cited no specific instances of discussions that had excluded them but cited American Bar Association Model Rule 3.5, which states that a lawyer should not communicate ex parte with a judge "unless authorized to do so by law or court order."
"The ethics rules further prevent any lawyer, including members of the plaintiffs' executive committee, from engaging in ex parte communications with the court (including the court's special masters), in the absence of consent or authorization," wrote Washington, D.C., attorneys Mark Lynch of Covington & Burling and Enu Mainigi of Williams & Connolly, as well as Robert Nicholas of Reed Smith in Philadelphia.
Lawyers for the distributors, and the plaintiffs' executive committee, who opposed the notice, did not respond to requests for comment. A spokesman for McKesson declined to comment, and one for AmerisourceBergen said "the filing speaks for itself."
The distributors, as well as several pharmacies slated to go to trial Nov. 9, have previously challenged the decisions of U.S. District Judge Dan Polster, who is overseeing more than 2,700 lawsuits coordinated in the Northern District of Ohio.
In December, the pharmacies, which are not part of the settlement talks, asked Polster to ban ex parte communications with himself or any of the three special masters as to "substantive matters," such as discovery deadlines and trial dates, as well as settlement discussions. They cited Canon 3(A)(4)(d) of the Code of Conduct for U.S. Judges, which states that ex parte communications are allowed only if they do not address "substantive matters," and if the judge "reasonably believes that no party will gain a procedural, substantive, or tactical advantage as a result of the ex parte communication."
The rule also permits ex parte communications for settlement discussions but "with the consent of the parties."
Polster quickly deemed the motion moot, stating, "The court has always been and will continue to be mindful of its ethical obligations as set forth in the Code of Conduct for United States Judges." He said he and the special masters would not engage in settlement discussions "unless and until all parties agree and ask the Court to do so."
The distributors and pharmacies also unsuccessfully attempted to disqualify Polster last year, citing alleged bias against them. And the pharmacies have a pending petition for a writ of mandamus before the U.S. Court of Appeals for the Sixth Circuit to overrule several of Polster's decisions, including those cited in their ex parte communications motion. The U.S. Chamber of Commerce and Lawyers for Civil Justice, which both have pushed for reforms in multidistrict litigation, are among the groups that filed amicus briefs supporting the pharmacies.
Last month, Polster, at the request of the Sixth Circuit, filed a letter responding to distributors' writ petition, which he called "disingenuous," "false" and "patently frivolous."
"Litigating and settling the claims presented within the MDL presents much to manage and unravel," he wrote, insisting his rulings complied with the Federal Rules of Civil Procedure and reduced costs, inefficiency and delay. "For all of these reasons, the undersigned believes the petition for writ of mandamus is without merit and should be denied."
Polster's judicial assistant, Helen Norton, said the judge "doesn't comment on pending motions/notices filed by parties."
"The Court speaks through its docket and any actions will be through a published order," she wrote in an email.
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