Oklahoma Judge Shaves $107 Million Off Opioid Decision Against Johnson & Johnson | KALW

Oklahoma Judge Shaves $107 Million Off Opioid Decision Against Johnson & Johnson

Nov 15, 2019
Originally published on November 21, 2019 1:13 pm

Updated on Nov. 21 at 4 p.m. ET

A global megacorporation best known for Band-Aids and baby powder is now on the hook for about $107 million less than originally anticipated over its role in Oklahoma's opioid crisis.

In a judgment filed Friday, state District Judge Thad Balkman revised an earlier ruling against Johnson & Johnson and told the drugmaker to make a onetime payment of $465 million — not the $572 million he had originally ordered.

Balkman's original ruling on Aug. 26 caused confusion among attorneys on both sides over his calculations and whether the $572 million represented the final amount or just one installment in a larger payment plan.

So on Friday, he revised that number. The roughly $107 million shaved off the August judgment appears to correct a math error that Balkman has acknowledged making. At a hearing last month, he said he had set aside $107.6 million to support programs treating addiction in babies exposed to opioids in the womb — when really he meant to set aside roughly $107,600.

"That'll be the last time I use that calculator," he deadpanned at that hearing.

His judgment is one answer to two central questions in this case and thousands of other litigation efforts connected to the country's opioid addiction crisis: Are drugmakers liable for the effects of the highly addictive opioid medications they produce? And if so, how much money should they owe to help combat those effects?

In the Oklahoma case, the first state lawsuit to make it to trial, the answer to the first question was yes — Johnson & Johnson and its subsidiary Janssen Pharmaceuticals were found liable for overly aggressive and deceptive marketing practices that helped lead to thousands of overdose deaths.

But Balkman's answer on the matter of money proved to be more ambiguous.

Defense attorney Steven Brody addresses the court during a hearing last month in Norman, Okla.
Chris Landsberger / The Oklahoman

The state's attorneys had originally asked for more than $17 billion over three decades — or roughly 30 times the amount they actually got in the Aug. 26 order. At the time, Balkman said that the state "did not present sufficient evidence of the amount of time and costs necessary, beyond year one, to abate the opioid crisis."

At a hearing last month, attorneys for the state said the judge should continue to review every year whether the public nuisance — which is what Johnson & Johnson was technically accused of causing — has been resolved. And in a brief filed with the court, Oklahoma Gov. Kevin Stitt, along with leaders in both chambers of the state Legislature, stipulated that the company should be on the hook for payments at least 20 years — not the state's taxpayers.

"It is not for the legislature to divert Oklahoman's [sic] tax dollars, already desperately needed elsewhere, to cover the costs of abating the opioid crisis the Court found Johnson & Johnson caused," they wrote in their brief.

Johnson and Johnson's lawyers have argued that a yearly plan was never brought up during the trial, and that creating one would violate state law. The drug giant also asked to receive credit for the state's pretrial settlements with fellow drug companies Purdue Pharma and Teva Pharmaceuticals, which would have reduced the judgment against them by another $355 million.

In his judgment Friday, Balkman rejected that proposal.

In a statement shared with NPR, Johnson & Johnson said it plans to appeal the judgment "because it is neither supported by the facts nor the law."

"We recognize the opioid crisis is a tremendously complex public health issue and have deep sympathy for everyone affected," the company said. "We do not believe litigation is the answer and are continuing to work with partners to find solutions."

Even though his side won, Oklahoma Attorney General Mike Hunter announced Thursday that he also planned to appeal the decision because the $465 million payment isn't enough to fix the state's public health crisis.

"It is crystal clear under Oklahoma law that once a company is found liable for causing a public nuisance, it must pay what it takes to clean it up until the nuisance is gone," he said in a statement.

Elizabeth Birch, a law professor at the University of Georgia, says the state has little to lose by appealing. "If they are going to be tied up in an appeal, then there's not much to lose in terms of cross-appealing if they think that they can push for a stronger bargaining position," she said.

What's happening in the Oklahoma case is also of great interest to state attorneys general — the vast majority of whom have brought cases of their own against Johnson & Johnson and other drug companies. At the federal level, more than 2,500 lawsuits filed by local and other governments against drugmakers, distributors and pharmacies have been folded into one massive federal case now being overseen in the Northern District of Ohio.

That consolidated case very nearly saw its first trial last month, before the courtroom drama was derailed by an 11th-hour settlement between the remaining defendants and the two Ohio counties involved in the bellwether proceedings. Despite that settlement, U.S. District Judge Dan Polster, who is overseeing the massive case, is expected to schedule new trials in the coming year.

Back in Oklahoma, it will be up to state officials and lawmakers to decide how to actually use any money the state gets from Johnson & Johnson. The federal government is trying to claw back a portion of Oklahoma's $270 million settlement with Purdue, which could further decrease the amount the state ultimately receives.

Lawyers for Johnson & Johnson say they will appeal the ruling. The case will likely head to the Oklahoma State Supreme Court.

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AUDIE CORNISH, HOST:

Today a judge in Oklahoma revised the amount of money that opioid manufacturer Johnson & Johnson owes the state. The new figure is 465 million, more than a hundred million dollars less than the original order. Reporter Jackie Fortier covered the entire seven-week trial over the summer.

Welcome back.

JACKIE FORTIER, BYLINE: Thanks, Audie.

CORNISH: Give us the background here.

FORTIER: Well, in August, Oklahoma Judge Thad Balkman found Johnson & Johnson and its subsidiary, Janssen Pharmaceuticals, liable for helping fuel the state's opioid crisis. In his initial judgment, he said that the state had proven that the companies had caused a public nuisance by deceptively and aggressively marketing both their drugs and opioids in general. Initially, he ordered Johnson & Johnson to pay 572 million to pay for the health and addiction costs. But that was far less than what the state's lawyers were asking for.

CORNISH: Why would the judge turn around and say, actually, it's a hundred million dollars less? Like, why would he reduce the number?

FORTIER: Well, the judge realized he'd made a mistake. At a hearing last month, he said that he had set aside $107.6 million for one portion of the opioid treatment plan when he really meant to set aside about $107,000. So, basically, he added some extra zeros.

CORNISH: Either way, when will Oklahoma get this 465 million from Johnson & Johnson?

FORTIER: It'll probably be a while. Oklahoma probably won't see that money until after it goes through the appeals process. This case is likely to head to the state supreme court.

CORNISH: Oklahoma has already settled with other drug companies for millions of dollars. What is the state going to do with all this money?

FORTIER: You're right. Purdue Pharmaceuticals was the first to settle late last March for $270 million. The majority of that money is going to go to an opioid research center at Oklahoma State University. Generic opioid manufacturer Teva Pharmaceuticals also settled right before the trial. That was for a lot less - $85 million. State lawmakers will get to decide how that money is spent. It's expected to go to opioid use treatment. But even though it sounds like a lot of money, you know, the state was asking for more than $17 billion during the trial, so it's really just a drop in the bucket.

CORNISH: This is the first case to go to trial that found an opioid manufacturer liable for their role in the public health crisis. But that doesn't mean there aren't more lawsuits, right? I mean, I heard there are thousands.

FORTIER: Yeah. At the federal level, there's more than 2,500 lawsuits filed by the municipalities all over the country against drugmakers, distributors and pharmacies. That's been folded into one massive federal case that's being overseen in the northern district of Ohio. That consolidated case was derailed, really, at the last minute by a settlement between the remaining defendants and the two Ohio counties. Despite that settlement, U.S. District Judge Dan Polster, who's overseeing that massive case - he's expected to schedule new trials next year.

CORNISH: That was Jackie Fortier, reporter with State Impact Oklahoma.

Thanks for your reporting.

FORTIER: Thanks. Transcript provided by NPR, Copyright NPR.