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Product Liability Litigation Update Update - January 2023

January 31, 2023
Business Litigation Reports

On July 4, 2022, Judge David A. Faber of the United States District Court for the Southern District of West Virginia entered a bench trial verdict in favor of defendants AmerisourceBergen Drug Corporation, Cardinal Health, Inc., and McKesson Corporation, three wholesale distributors of opioids.  The plaintiffs in the case are the city of Huntington and Cabell County, both in West Virginia.  The plaintiffs asserted only one claim, public nuisance, against the distributors. As a remedy, the plaintiffs proposed an equitable “abatement plan,” which would have provided $2.5 billion to the West Virginia city and county.  The Court ruled that (1) West Virginia law does not recognize public nuisance claims based on the sale and distribution of products, (2) even if West Virginia did recognize such a claim, the plaintiffs failed to prove the elements of that claim, (3) the alleged misconduct of the distributors did not proximately cause the damages suffered by the plaintiffs, and (4) the plaintiffs’ abatement plan was not a proper remedy.

The court ruled that the sale and distribution of products cannot constitute a public nuisance under West Virginia law.  The Supreme Court of Appeals of West Virginia has not yet ruled on this issue, so the federal district court made a prediction of what the West Virginia high court would decide under Erie R.R. Co. v. Tompkins.  In predicting that the West Virginia Supreme Court of Appeals would not extend public nuisance law to the sale and distribution of products, the district court relied on the Restatement (Third) of Torts.  (The West Virginia high court has followed the Restatement (Second) of Torts in crafting their nuisance law in the past.)  The district court’s holding is inconsistent with two lower court decisions in West Virginia state court. See Brooke Cnty Comm’n v. Purdue Pharma L.P., No. 17-C-248, 2018 WL 11242293, at *7 (Marshall Cnty. Cir. Ct. Dec. 28, 2018); State ex rel. Morrisey v. AmerisourceBergen Drug Corp., No. 12-C-141, 2014 WL 12814021, at *8-*10 (Boone Cnty. Cir. Ct. Dec. 12, 2014).  The district court found the Oklahoma Supreme Court’s reasoning more persuasive.  In State ex rel. Hunter v. Johnson & Johnson, 499 P.3d 719, 721 (Okla. 2021), the Supreme Court of Oklahoma declined to extend Oklahoma public nuisance law to the manufacturing, marketing, and selling of opioids.  The district court noted that “[t]o apply the law of public nuisance to the sale, marketing and distribution of products would invite litigation against any product with a known risk of harm, regardless of the benefits conferred on the public from proper use of the product.”

The court also ruled that, even if a public nuisance claim were available, the City and County failed to prove the elements of that claim.  A public nuisance is defined as “an unreasonable interference with a right common to the general public.” Duff v. Morgantown Energy Assocs., 421 S.E.2d 253, 257 n.6 (W.Va. 1992).  The court found that the plaintiffs did not show that the distributors’ conduct interfered with a public right.  In making this finding, the court balanced the dangers of opioids against the public benefits of responsible opioid use.  The court ultimately found that the distributors shipped prescription opioid pills to licensed pharmacists so patients could access the medication they were prescribed by doctors who were acting in good faith.  The court found this conduct to be reasonable.

The court found that the distributors’ conduct did not proximately cause the damages suffered by the City and County.  In West Virginia, wrongful conduct is a proximate cause only if it “is the last negligent act contributing to the injury.” Sergent v. City of Charleston, 549 S.E.2d 311, 320 (W. Va. 2001). The court found no proximate cause because (1) it was doctors—not distributors—who determined the volume of opioids dispensed in the City and County, and (2) the diversion of opioids from their legitimate use was due to the intervening criminal acts of third parties.

Finally, the court ruled that the plaintiffs’ “abatement plan” was not a proper remedy. Abatement is an equitable remedy. Traditionally, it has taken the form of an order enjoining the defendant from continuing the nuisance-causing conduct.  The court noted that although the City and County called their remedy an “abatement plan,” the plaintiffs were really seeking “remuneration for the cost of treating the horrendous downstream harms of opioid use and abuse.”  The $2.5 billion dollars sought by the plaintiffs was not accompanied by a request for an order that the defendants stop distributing opioids (the conduct alleged to be wrongful).

Judge Faber ruled that the City of Huntington and Cabell County’s claims against three opioid distributors failed because West Virginia law did not recognize such a claim, the elements of that claim (including causation) had not been met, and the remedy sought was improper.  The impact of this case is yet to be seen.  On the one hand, the ruling is confined to the law of West Virginia and only addresses public nuisance claims. Moreover, the City and County could appeal the case to the United States Court of Appeals for the Fourth Circuit, which could either disagree with the district court’s legal conclusions or ask the West Virginia Supreme Court of Appeals to weigh in. See W. Va. R. App. P. 17 (allowing certified questions).  On the other hand, the court referenced general principles of nuisance law and remedies, and its holding was independently supported by findings of fact, which are reviewed on appeal only for clear error and which other courts may find persuasive.