Dear USET/USET SPF Family,
As was announced yesterday, Tribal plaintiffs in the years-long, nationwide multi-district litigation against manufacturers, distributors, and retailers of prescription opioid medications have achieved two major settlements : Opioid manufacturer Johnson & Johnson has agreed to pay up to $150 million over a period of two years, while the three largest distributors of prescription opioids (AmerisourceBergen Corp., McKesson Corp., and Cardinal Health, Inc. (Distributors)) have agreed to pay up to $439,964,500 over six years to settle all filed and potential Tribal opioid-related claims against them.
All federally recognized Tribal Nations are eligible to participate in the proposed settlements, and need not file a lawsuit in order to participate. The settlements will become effective when certain participation thresholds (discussed below) are met. Settlement funds are to be used by participating Tribal Nations and organizations for opioid abatement purposes, including "“culturally appropriate activities, practices, teachings or ceremonies that may, in the judgment of a Tribe or Tribal Entity, be aimed at or supportive of remediation and abatement of the opioid crisis within a tribal community.”
Johnson & Johnson (J&J) Proposed Settlement Terms
J&J has agreed to pay a maximum of $150 million to eligible Tribal Nations and Tribal organizations over two payments. The first payment of up to $75 million will be paid 30 days after the effective date of the settlement, and the second payment of up to $75 million will be paid on the one-year anniversary of the effective date.
The settlement will become effective when 95% of litigating Tribal Nations and Tribal organizations by allocation percentage (discussed further below) elect to participate. (Non-litigating Tribal Nations may also choose whether or not to participate, but that will not affect whether the proposed settlement becomes effective.) The total amount of settlement funds available will be decreased in proportion to the allocation share of any non-participating litigating Tribal Nations.
Distributor Proposed Settlement Terms
The Distributors have agreed to pay up to $439,964,500 over a term of six years for a “global” Tribal settlement. The first payment of $62,852,071.43 will be paid within thirty days after the settlement effective date, with additional payments to be paid on July 15 of each year.
The Distributor settlement will become effective when the following two conditions are met: (1) 95% of litigating Tribal Nations and Tribal organizations by allocation percentage elect to participate; and (2) at least fourteen non-litigating Tribal Nations with a population of at least 5,000 citizens elect to participate. If these thresholds are not met, the court-appointed Tribal Leadership Committee may ask the Distributors to enter into the settlement agreement with just those Tribal Nations and Tribal organizations that wish to join, and the Distributors may, in their discretion, decide whether or not to do so.
As with the J&J terms, the total settlement amount will be decreased in proportion to the final allocation percentage of any litigating Tribal Nations that elect not to participate. With respect to non-litigating Tribal Nations, the Distributors agree to pay their shares into escrow for four years from the effective date. At that point, if at least 2/3 of the non-litigating Tribal Nations (by population) have joined the settlement, then the Distributors will continue to pay all non-litigating Tribal Nations’ shares into escrow and, on the final payment date, any unclaimed shares up to $20,000,000 will be reallocated to participating Tribal Nations and Tribal organizations. If at the four-year mark less than 2/3 of the non-litigating Tribal Nations have elected to participate, all unclaimed shares will revert to the Distributors and no further payments will be made for non-litigating, non-participating Tribal Nations.
For more information on these settlements, their terms, administration, and allocation, we enclose a memo from Hobbs Straus Dean & Walker, as well as a statement from the Tribal Leadership Committee and the order regarding settlement allocation and trust fund administration. These settlements do not fully resolve the Tribal litigation, as there are several remaining defendants, but they are the first major settlement of nationwide mass tort litigation to include Tribal Nations as a separate category of plaintiffs based on their sovereign governmental status. USET SPF will continue to monitor the settlement process and ongoing litigation, and will provide updates as they develop.
For more information, please contact Liz Malerba, USET SPF Director of Policy and Legislative Affairs, at firstname.lastname@example.org.