Public Nuisance Strategy Effective In J&J Opioid Case

and on Bloomberg dot com slash podcasts. Johnson and Johnson shares rose as much as five point four per cent after an Oklahoma judge ordered the company to pay far less than some investors had expected in the first trial by a state seeking compensation for the public health crisis spawned by opioid pain killers. Bloomberg News legal reporter Jeff Feely is on the line with us with what this might mean going forward. Jeff, glad to have you with us. One eye opener for me. Judge Thad Bachman ruled J

and J created a temporary public nuisance. That's really how we characterized this. Yes, public nuisance is basically a doctor and that says if somebody creates a harm that affects the community that you know, you can be responsible for it.

He found that the nuisance that was created was not a permanent one, you know, a dam or something like that that you know damns up a river, but instead a nuisance that can be abated over a short period of time, and that's of course treatment of opioid related stuff.

And there was talk of a duping of doctors. Yes, the the idea is that J and J, through its marketing tactics, basically dupe doctors into believing that it was fine too um prescribe opioids for ailments that weren't approved, you know, ailments such as pain relief for dental procedures, regular arthritis, you know, things like that. Opioids were not created for that purpose. They were created as a you know,

treat serious pain. And of course the allegation is that J and J came up with the you know, this expansion so it could boost its profits. So what is this likely to mean for J and J and UH other drug companies going forward. Well, the the award that was handed down, which was equivalent of one year's worth of extra resources to combat the opioid problem in Oklahoma,

was far less than the state had asked for. The state had asked for a maximum of seventeen point five billion to boost resources over the course of thirty years. One of the other significant points about the ruling, however, is that For the first time, the U. S. Court has endorsed the idea that that governments can use this public nuisance theory to hold companies accountable for their marketing

and sales practices. This is the first time it's been done, and there are at least forty five other lawsuits by states and more than two thousand lawsuits by cities and counties that are relying on the same theory to you know, hopefully in their mind, hold opioid makers and distributors liable for their mishandling of these drugs. Now, how does this ring up? What was the states asking for? What had

been anticipated? And what does Jane j pay? The state had asked the idea of public nuisances that you know you've got you've harmed the community, so you have to find a way to remedy the harm. The state had produced three different plans to remedy the harms created by jan Ja's over aggressive marketing of opioids. There was a twenty year plan, a twenty five year plan, and a

thirty year plan. The third year plan, again, the maximum that they had sought would have been seventeen point five billion. The amount that the judge awarded was something like three or four percent of that of that request. So J and J will have to pay five hundred and seventy two million, which is again the equivalent of one year's extra resources for more treatment, more policing, cover hospital costs, all tied to the fall out of opioid addictions. Yeah,

and so what's next in in this opioid prosecution? What's next is the first federal case of the consolidated cases before Judge Polster in Cleveland is set to go to trial October twenty one before a jury in Cleveland. Don't forget the Oklahoma case was a non jury case was heard by the judge himself. This will be the first jury trial first, you know, the first panel to consider UH opioid makers and distributors liability for the crisis. So is this then seen as a victory for the drug companies?

Where where does it come down? Well, it's a victory for the drug companies, specifically J and J in terms of the amount of money that they're required to pay. Again, it's a little bit of a pyric victory because the judge did find that this public nuisance theory is valid and can be used all the other states and cities and counties are planning to use that, So that's more ammunition for them going forward with more confidence that that

theory will fly at trial. Again, we don't have no idea what the appellate courts in Oklahoma think about this theory, and we won't for years probably now. There there had been arguments during this trial that the J and J was something of a of a kingpin in this crisis. How was that portrayed? J and J at one point on a couple of companies that grew and processed opium, which is used in opioids, you know, as part of as the pain the painkilling ingredient. Ah, they sold those

companies a couple of years ago. But the Oklahoma Attorney General made the argument that J and J had a stake in every company's opioid painkiller that was marketed in the in the state because they provided the active pharmaceutical ingredient for that drug. So that's why they were colorfully

tagged as the kingpin. Of course, the J and J folks, you know, I thought that was totally out of bounds, using you know, drug cartel language to describe a company that operates under FDA regulation and as the world largest prodserve healthcare goods. And is there any indication that there are going to be a lot more cases or will this be wrapped up fairly soon? This will not be

wrapped up fairly soon. There are settlement talks going on both with the states attorneys general and the consolidated cases before Judge Poster in Cleveland. Those talks are not progressing very quickly from what I can tell, and I suspect we're going to see lots of trials come next year and our thanks to Bloomberg's Bloomberg News legal reporter Jeff Feeley joining us on the line on the opioid trial.

Thanks for listening to the Bloomberg Law Podcast. You can subscribe and listen to the show on Apple podcast, SoundCloud, and on bloomberg dot com slash podcast. I'm June Brosso. This is Bloomberg