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Good News for Distributors and Manufacturers: Court Holds Municipalities to Higher Pleading Standards in Lawsuits in Comparison to Claims Brought by States and the Federal Government

With lawsuits brought by municipalities against opioid manufacturers and distributors exploding across the country in nearly every state, a recent court ruling gives municipalities pause, providing both relief and clarity to the industry. Last week, the Superior Court in the Judicial District of Hartford dismissed a suit brought by Connecticut municipalities against opioid manufacturers and distributors (including Purdue Pharma, L.P., Teva Pharmaceuticals USA, Inc., Johnson & Johnson, McKesson Corporation, Cardinal Health, Inc., and Amerisource Bergen Corporation). In its January 8, 2019 Decision, the Court stated that without proof that the defendants directly caused the cities’ financial losses (e.g., those costs relating to: addicts’ social and medical needs, the presence of extra emergency-responders, and those arising out of drug related crimes), the plaintiff cities simply “have no claims at all,” and lacked standing to bring the suits. The Court further stated that allowing these types of suits in which only indirect and attenuated harms are alleged, “…would lead to a wildly complex and ultimately bogus system…” of apportioning liability and damages.

The Court clarified the law and explained the different pleading standards for claims brought by municipalities versus claims brought by States or the Federal Government, all of which benefits manufacturers. In contrast to statutes which permit states and the federal government to bring enforcement actions, cities are provided no such authority. Municipalities need to “meet the ordinary burdens of individual civil plaintiffs.” This means that the cities needed to prove that those that are being sued “directly caused them the financial losses they seek to recoup,” whereas states and the federal government do not. The Court’s Memorandum of Decision hinted, “[t]his means that from a causation standpoint government law enforcement agencies like the state are better situated than cities to sue allegedly corrupt drug companies.”  

This ruling provides a massive roadblock to the litany of lawsuits brought by municipalities nationwide. If a city, or any other entity, has filed suit against a manufacturer or distributor alleging an indirect or attenuated harm, there may be defenses available. Contact Frier Levitt today to speak to an attorney.