What's Next For Opioid Settlement Funds?
By Craig Manning | March 23, 2023
$7.2 million and change: That’s how much money is coming to northern Michigan from an early round of federal opioid lawsuit settlements. The money will help communities in an eight-county northwest Michigan region address the fallout caused by the opioid crisis, with the potential to fund everything from addiction treatment programs to prevention initiatives. It’s also the first step on a longer journey, with more money almost certainly on the way from settlements in the years to come.
While the opioid case was (and is) a national effort that has involved hundreds of players from across the country, it also has direct ties to northern Michigan. The Traverse City-based law firm Smith & Johnson Attorneys, P.C. was an integral part of the case and served as counsel of record for 36 municipalities north of Clare and across the Upper Peninsula. Both Grand Traverse County and the City of Traverse City are among the municipalities Smith & Johnson represented.
According to Tim Smith, a partner at Smith & Johnson – and the attorney who took the lead on the firm’s dealings with the opioid case – the process has been “five years of intense work.” Smith & Johnson and its clients filed their first lawsuits against opioid industry players at the end of 2017 and the case subsequently took years to work through the justice system. Per Smith, that type of slow-moving litigation is common for cases of this size and scope.
“We filed these things in a federal court in Michigan, but they all got consolidated with a federal judge in Ohio – Northern District Judge Dan Polster,” Smith says. “All the cases across the country got sent to him. This type of litigation is called an MDL, which stands for multi-district litigation. MDLs happen a lot with these types of mass tort cases, because, effectively, there's hundreds of cases across the country against the exact same defendants, alleging essentially the exact same causes of action, and seeking damages for the exact same types of injuries. So, it makes sense, from an efficiency standpoint, to get everything consolidated with a single court.”
For Smith, the consolidation led to one of the more memorable moments of his career: Standing in a courtroom in Cleveland, Ohio in early 2018, along with “hundreds of other attorneys,” hearing Judge Polster lay out exactly how the case was going to proceed.
“One of the first thing the judge told us was that, one, we were going to get this resolved,” Smith says. “And two, that these monies were going to be used solely to abate the opioid epidemic and remediate the damages that these states, counties, cities, and villages have experienced because of this epidemic.”
It took five years, but Polster’s assurances did eventually come to pass. So far, there have been four settlements with major opioid players. A trio of drug distributors – Cardinal, McKesson, and AmerisourceBergen – will collectively pay up to $21 billion to plaintiffs over 18 years. Additionally, Johnson & Johnson will pay up to $5 billion over nine years. That means $26 billion is making its way to municipalities throughout the United States to remediate the impacts of the opioid epidemic.
In accordance with Polster’s promises, the settlement restricts how plaintiffs can spend the money. A full list of approved remediation uses can be read here, but potential options include education around opioids and addiction, treatment of opioid use disorders, efforts to prevent the over-prescribing of drugs, expanded training and distribution for naloxone, and more.
$800 million in settlement funds is coming to Michigan, which has been hit hard by the opioid crisis. In 2021, a record 3,096 people died of drug overdoses in Michigan – nearly three times the number of people killed in car accidents that year. $7.2 million in payouts are headed to eight counties in northwest Lower Michigan, including Grand Traverse, Leelanau, Antrim, Kalkaska, Emmet, Charlevoix, Kalkaska, and Manistee. Other local municipalities in the area, including the City of Traverse City, will also see some settlement money.
Chris Forsyth, deputy county administrator for Grand Traverse County, says the county has thus far received $573,000 of the “just shy of $3 million” it will get from the first round of settlements.
Forsyth tells The Ticker that the county commission will likely put together some sort of committee or task force to start working toward deploying these funds. He likens the process to what happened with the American Rescue Plan Act (ARPA), which brought $18.1 million to Grand Traverse County. County commissioners were responsible for deciding how to split that money up among a variety of grant recipients, which they ultimately did last December.
“Obviously, $18 million in federal funds is different than settlement funds that are going to be spread out over the course of 18 years," Forsyth said. "But, at some point, like with ARPA, we’ll go to the board of commissioners, we’ll explain to them the funds that we’ve got and the list of opioid remediation uses, and we’ll request that we develop a plan for how those funds will be distributed.”
Marty Colburn, city manager for the City of Traverse City, confirms that the municipality has also received its first settlement payment, which he describes as “not an exorbitant sum of money,” but enough to start making a difference.
Last fall, the Traverse City Police Department became one of the first law enforcement agencies in the state to add a social worker to its staff, hiring Jennifer Campbell to the role. Campbell, Colburn says, is working primarily “to address some of the concerns with opioid use and addiction in our community, and the problems that arise out of that.” Currently, Campbell’s salary is paid for by a grant from the Michigan State Police. “But the grant is only for a couple of years, so I’ve already recommended to the city commission that we take a look at utilizing these [opioid settlement] monies to maintain that social worker position,” Colburn says.
Only time will tell how much money northern Michigan will get from the opioid settlements. Smith says that five more defendants recently proposed a global resolution settlement that would pay out “a little bit over $20 billion” to plaintiffs nationwide. Additional settlements or verdicts may follow from other defendants. Some of that money would once again be earmarked for northern Michigan communities.
“It’s been a complex process, but everything came together, and it’s going to be a tremendous amount of money for our communities up here to use,” Smith concludes. “I truly believe these funds will do a lot of good for our communities.”Comment