Oklahoma Court Overturns $465M J&J Opioid Settlement, Says Drugmaker Didn't Violate Law

The Oklahoma Supreme Court has overturned a hefty lawsuit worth $465 million against drugmaker Johnson & Johnson, the Associated Press reported.

The court ruled in a 5-1 decision that District Judge Thad Balkman misinterpreted the state's public nuisance law in 2019. They also denied the state's proposal to increase the damage award for opioid damages to $9.3 billion.

Balkman had originally said that Johnson & Johnson, along with its subsidiary Janssen Pharmaceuticals, had violated Oklahoma's public nuisance law. According to the law, a nuisance is defined as "unlawfully doing an act, or omitting to perform a duty" that could result in injury, obstruction, offense, or insecurity.

"The court has allowed public nuisance claims to address discrete, localized problems, not policy problems," Justice James R. Winchester wrote in the opinion.

The final opinion defended the court's decision by saying that Johnson & Johnson stopped making opioids in 2015. Furthermore, despite being marketed in the state, their opioids only contributed to less than 1 percent of prescriptions filled in Oklahoma.

More than 4,600 people died in Oklahoma from 2007 to 2017 due to opioid overdoses. The opioid problem is still present throughout the state; according to the National Institute on Drug Abuse, Oklahoma providers wrote 79.1 prescriptions for opioids for every 100 persons in 2018. This statistic is significantly higher than the U.S. average of 51.4 prescriptions. However, the statistics also showed that deaths from prescription opioids fell in the state from 251 in 2017 to 172 in 2018.

"We recognize the opioid crisis is a tremendously complex public health issue, and we have deep sympathy for everyone affected," Johnson & Johnson said in a statement to Newsweek. "The Company's actions relating to the marketing and promotion of these important prescription pain medications were appropriate and responsible. Today the Oklahoma State Supreme Court appropriately and categorically rejected the misguided and unprecedented expansion of the public nuisance law as a means to regulate the manufacture, marketing, and sale of products, including the Company's prescription opioid medications."

For more reporting from the Associated Press, see below:

The ruling was the second blow this month to a government case that used a similar approach to try to hold drugmakers responsible for the national epidemic of opioid abuse.

It's not clear that the legal theory is in trouble with so many more cases queued up to test it.

"J&J had no control of its products through the multiple levels of distribution, including after it sold the opioids to distributors and wholesalers, which were then disbursed to pharmacies, hospitals, and physicians' offices, and then prescribed by doctors to patients," Winchester wrote.

The ruling also said the company had no control over how patients then used the products.

The high court emphasized that it was not minimizing the suffering of thousands of Oklahomans because of opioids.

"J&J no longer promotes any prescription opioids and has not done so for several years," Winchester wrote.

Nationally, opioids have been linked to more than 500,000 deaths since 2000.

The ruling comes a week after a California judge issued a tentative ruling that said local governments had not proven that Johnson & Johnson used deceptive marketing to inflate prescriptions of their painkillers, leading to a public nuisance.

Although the Oklahoma lawsuit filed by former state Attorney General Mike Hunter was the first of thousands of similar lawsuits to go to trial, the state Supreme Court's ruling doesn't necessarily spell doom for the others.

Elizabeth Burch, a University of Georgia School of Law professor who is following the opioid litigation, said other judges and juries might not decide their cases the same way.

"The question is still whether these are outliers," she said. "I don't think we have enough of a consensus on public nuisance law and where it goes and how it works."

Tobias noted state public nuisance laws vary and that the California ruling could be altered by a higher court.

The Oklahoma case was the first of its kind to go to trial, and the one in California is the only other one where a verdict was issued, as most cases have been settled before or during trials. But other opioid trials rooted in public nuisance law are happening before juries in a federal court in Cleveland and a state court in New York. And a ruling is expected soon in a trial before a judge in West Virginia.

Spokespeople for the state's current attorney general, John O'Connor did not immediately respond to a request for comment.

Earlier this year, Johnson & Johnson agreed to pay $5 billion to settle similar lawsuits across the U.S. In a related deal, the nation's three largest drug distribution companies also agreed to a $21 billion settlement over time. It's up to the companies to decide whether to move ahead as they see how many government entities join. The companies all found that enough states joined for them to survey local governments.

Burch said that the new rulings in California and Oklahoma might prompt some governments that were on the fence to join rather than risk losing on their claims in court.

Two other prominent opioid makers, Purdue Pharma and Mallinckrodt, have reached nationwide settlements through the bankruptcy process.

In dissent, Justice James E. Edmondson said he would uphold the verdict but send the case back to district court to recalculate the damages award.

Update 11/09/21, 3:17 p.m. ET: This article was updated with additional information and a statement from Johnson & Johnson.