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Demanding more impact from impact litigation: lessons to be learned from multi-state opioid settlements

By Reuben Guttman and Liza Vertinsky, July 25, 2022

In the 1990s, state Attorneys General learned how to leverage their resources when they retained private counsel to sue the tobacco industry. The private attorneys worked on contingency, meaning they did not get paid unless money was recovered from the tobacco industry. For their part, the states were able to take on novel litigation and draw from private investments in legal innovation without putting taxpayer dollars at risk.

Since the Tobacco Master Settlement Agreement was signed in 1998, state Attorneys General have worked with private counsel in similar relationships to bring an array of health, safety, and environmental suits focused on health impacts. These suits have included cases against drug companies, the most notorious of which featured opioid manufacturers and distributors.

In July 2022, 52 states and territories, along with many local governments, entered into a $26 billion multijurisdictional agreement with three major pharmaceutical distributors and a pharmaceutical manufacturer to settle claims arising from their opioid business practices. This multistate opioid settlement followed earlier ones reached with the now-infamous Purdue Pharma, as well as with McKinsey Consulting, Mallinckrodt, and Insys Therapeutics, and was followed by settlements with two more opioid manufacturers. The result was a multi-state enforcement effort by Attorneys General that is the second largest in U.S. history, exceeded only by the Tobacco Master Settlement Agreement.

While the state Attorneys General who participated in these suits and settlements were quick to herald them as a major success, with more than $30 billion in settlement funds and future monitoring and restricting future opioid deliveries, it is a stretch to say these are industry-changing events. Too little was done to educate policymakers and the public about the nature and sources of industry misconduct and to address the remaining vulnerabilities in the pharmaceutical manufacturing and distribution system. The results did too little to change the market ecosystem that fueled the epidemic.

The opioid litigation, like many cases brought against pharmaceutical and device companies, challenged marketing practices that have caused products to be used in ways that place profits ahead of patients, often putting patients at risk of harm. These lawsuits exposed practices that have resulted in professional standards of care that seem to be influenced more by Wall Street promises than by medical necessity.

Yet far too often, these cases are resolved short of full fact finding — called discovery — or without a public trial and a published court decision. Multi-million-dollar opioid settlement resolutions are touted in press releases as major successes while the culprit corporations admit to nothing, simultaneously telling investors that the settlement was a business decision and will not affect the long-term bottom line. Indeed, history shows that when drug companies pay hundreds of millions of dollars — or even billions of dollars — to resolve claims of drug marketing derelictions, their price per share is not affected, or may even get a boost because investors believe the settlement was a cheap fee for a license to break the law.

As much as these cases have provided an inkling of the profit-motivated misconduct of companies that Americans depend on for health care and a safe environment, knowledge of the depth of corporate misconduct remains just that, an inkling. Confidentiality agreements — often executed to prevent delays in producing the documents required for civil litigation — keep the most sordid details secret. And when there is no trial, the public gets to learn little about identifying wrongful conduct and legislators have difficulty making laws that prevent it.

Supreme Court Justice Louis D. Brandeis famously wrote that sunshine is the best disinfectant. While recovering money for public programs is essential, state Attorneys General must do a better job of also making public the lessons learned from these opioid settlements. If the drug industry is using subtle marketing tactics to manipulate the prescribing habits of physicians, for example, the public — including legislators, regulators, the press, and even physicians — must know the details.

Impact litigation must be designed to effect changes in industry behavior. Just as the National Transportation Safety Board investigates and issues a public report when a train wreck occurs, and just as Environmental Impact Statements are required for federal projects that could significantly affect the quality of the human environment, state Attorneys General should treat corporate health and safety derelictions as deserving of detailed public reports. And they should make it clear to the attorneys involved — whether in-house or under contingency agreement — that confidentiality agreements cloaking the secrecy of wrongdoing are to be used only sparingly, to protect legitimate trade secrets that are not essential to reforming industry practices, and not to hide information that is important to the public.

In the end, the public needs to know all the facts and policymakers need to act on the facts. A simple press release announcing a seemingly high-dollar settlement doesn’t achieve either of those objectives.

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Reuben Guttman, a partner with Washington, D.C.-based Guttman, Buschner & Brooks, has litigated under the False Claims Act to challenge pharmaceutical marketing practices. Liza Vertinsky is a professor of law at the University of Maryland Francis King Carey School of Law. Their article “Public-Private Litigation for Health” was published in the Utah Law Review.

Source: Article available on-line at Statnews.com.

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Webinar: Non-state actors and global environmental governance in China

Understanding China’s stance on environmental governance is more pressing than ever.  Not only is China the largest emitter of greenhouse gases in the world, it plays a crucial role in global supply chains and also faces ongoing water and biodiversity challenges.

Non-state actors such as profit-making organisations and business associations have grown in number and legitimacy in the last decade. Yet their role in Chinese governance has attracted little attention, according to the authors of Non-state actors in China and global environmental governance.

Hear from the book’s editors – prominent governance, law and international relations scholars – and senior figures from two of the book’s case studies at this upcoming webinar.

For more information visit: https://www.monash.edu/business/events/non-state-actors-and-global-environmental-governance-in-china

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GBB News: Mass. General pays $14.6 million to settle whistle-blower suit over concurrent surgeries

Boston Globe, February 18, 2022

Massachusetts General Hospital on Friday agreed to pay $14.6 million to settle a federal lawsuit alleging it fraudulently billed government insurers for surgeries performed by trainees without proper oversight because supervising surgeons were working in another operating room.

The settlement marks the third time since 2019 that the renowned Harvard-affiliated teaching hospital agreed to pay millions of dollars to resolve a claim stemming from the controversial practice known as concurrent surgery, or double-booking, in which surgeons juggle two operations simultaneously. The three out-of-court settlements total $32.7 million.

The latest claim was brought by a former MGH anesthesiologist, Dr. Lisa Wollman, who alleged that at least five orthopedic surgeons regularly kept patients under anesthesia longer than medically necessary — sometimes more than an hour longer — because the doctors were working in two operating rooms. Wollman said she repeatedly witnessed and complained about the practice from 2010 to 2015, when she left MGH and filed a federal whistle-blower suit on behalf of the US and Massachusetts governments.

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Her lawyer, Reuben Guttman, of the Washington, D.C., law firm Guttman, Buschner & Brooks, said Wollman’s suit will help set “a new standard of care in informed consent for overlapping surgeries.”

She sued under the False Claims Act, a federal law passed during the Civil War that enables a private citizen to bring a case on behalf of the federal government for fraud. She will receive about 25 to 30 percent of the settlement, Guttman said, and the rest will go to the federal and state governments.

Read more here: https://www.bostonglobe.com/2022/02/18/business/mass-general-pays-146-million-settle-suit-it-defrauded-governments-by-leaving-surgeries-unsupervised-trainees/

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Public-Private Litigation for Health

By Liza Vertinsky* & Reuben Guttman**

Public health litigation can be a powerful mechanism for addressing public health harms where alternative interventions have failed. It can draw public attention to corporate misconduct and create a public record of the actions taken and the harms done. In an ideal world, it could achieve compensation for past harms and incentivize deterrence of future misconduct. But the full public health potential of these lawsuits is rarely achieved, even when the suits are brought on behalf of federal, state, and local governments with the ostensible goal of protecting the health of the citizens. The increasing involvement of private attorneys in public litigation only adds to the challenges of using litigation to achieve public health goals.

While there are continuing debates over the desirability of litigation
partnerships between state attorneys general (AGs) and private counsel,
as a practical matter, the involvement of private law firms in public
litigation is unlikely to disappear any time soon. This Article fills a critical
gap in the literature on the privatization of public litigation by showing
why, despite their shortcomings, arrangements between state and private
lawyers have the potential to satisfy public health goals that might
otherwise remain out of reach. It provides a theory of legal research and
development to show why these arrangements are not only likely to persist
but are also most likely to occur in high-impact public health litigation.
This Article then examines how the incentives of both state AGs and
private law firms influence choices along the litigation pathway in ways
that may undermine the potential to achieve public health value. It
concludes by proposing a novel impact-based approach to public-private
litigation, providing a decision-making framework that AGs can adopt to
increase the role of public health objectives in the litigation process.

Download the full paper here. (PDF, 1 MB.)

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*© 2021 Liza Vertinsky. Associate Professor, Emory Law School.
** © 2021 Reuben Guttman. Founding member of Guttman, Buschner & Brooks PLLC. This Article draws in part from Mr. Guttman’s decades of experience representing numerous whistleblowers under False Claims Acts in various states, working in partnership with state attorneys general.

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An Overlooked Front In The War On Covid19: Protecting Essential Workers

By Caroline Poplin, M.D., J.D.

A famous hockey player, Wayne Gretsky, said the key to success was: “Skate to where the puck is going, not to where it’s been.”

In this country, essential workers, who must work to keep the country going during the pandemic but often can’t work from home — first responders and health care providers, of course, but also grocery clerks, bus drivers, subway workers, utility repair people, letter carriers and warehouse workers, as well as those designated by Trump, such as workers at meat processing plants — must be shielded from the virus, not just for their own sake, but for ours.

In the last six months, we have learned much about COVID 19. It is highly contagious. It spreads in respiratory droplets when we cough, sneeze (or sing) that can travel six feet or so before falling to the ground; also by aerosols, tiny droplets mixed with the air that can linger for hours and be inhaled; it can contaminate surfaces, like door knobs. Transmission is more likely in closed, poorly ventilated spaces.

Just as problematic, the virus has an average incubation period of a bit more than a week, during which the patient has no symptoms, but is nonetheless shedding virus. Indeed, many cases of COVID 19 are so mild that people assume (or used to assume) that they had just a cold. But we know now that this virus can be lethal: more than 187,000 Americans have died so far, some under 65 without known risk factors, just eight months after the virus first appeared here.

Essential workers are in a tight spot. If they leave their job because they fear corona virus, they are barred from collecting unemployment. If they are laid off and then recalled, or if someone offers them a job and, fearing the virus, they decline, same result. If they stay home because they have symptoms, or close contact with someone sick, they don’t get paid, because they have no sick leave. Generally their wages are so low they cannot afford not to work. So some come to work despite symptoms (and of course, sick without symptoms.) If they complain, they may be fired, even though that is illegal.

Many Americans (not to mention President Trump) are impatient for the economy to re-open. Respected public health infectious disease experts like Dr. Anthony Fauci say we can manage without starting all over again in lockdown, if we are conscientious about wearing face masks, maintaining social distance of at least six feet at all times except at home (unless there are vulnerable family members), good hand hygiene, avoiding crowds and poorly ventilated indoor spaces.

But we know now that some workplaces — where thousands of workers are deemed ‘essential’ — are hotbeds of COVID19 outbreaks: meat-packing plants are the classic case. As of July 10, nearly 30,000 meatpackers were known to have been sickened by the virus, at least 100 have died and many others suffer from lingering side effects. .(There may well be more: some large employers, like Amazon, resist releasing COVID19 illness and death statistics, even to their employees.) Employers claim that they are protecting workers, but in places where people must work fast and hard, work stations are much closer than six feet and many people stand side by side, breathing hard from exertion, for hours, or must complete so many distant tasks in so few seconds that there is no time for hand washing (let alone 20 seconds as per CDC) — for these jobs, front door temperature checks and face masks are just not sufficient protection. The other precautions recommended by Dr. Fauci — at least six feet between individuals, avoiding large crowds, especially indoors, are not impossible, but they are more expensive. They would likely result in lower profits for employers, and higher prices for consumers.

Essential workers in consumer-facing workplaces — transit workers, grocery and pharmacy clerks, delivery drivers, mail carriers — also may encounter the virus often. The workplace may require masks and distancing, but sometimes customers don’t, can’t, or won’t, comply. As of May 15, more than 3865 New York transit workers had tested positive, 118 had died. As of July 23, at least 3267 postal workers were infected with the virus; 75 had died.

Unlike classic occupational injuries — carpal tunnel syndrome, broken bones, etc. — with COVID19, what starts at work doesn’t necessarily stay at work. Those infected at work take the virus wherever they go: we have now seen how quickly and stealthily the virus spreads through communities. And it works both ways: as employers remind everyone, the virus can start in the community and come to the factory. Customers who reject precautions can infect service employees and other customers — like bus drivers and their passengers. Either way — the virus doesn’t care — if the employer doesn’t take adequate precautions as required by his or her particular workplace, in a short time, a few infected workers can spread the infection to hundreds of others in the plant and the community.

Employers are the only ones with the knowledge and the means to take adequate precautions, including widespread, routine testing of asymptomatic as well as symptomatic workers, even complete shutdown for deep cleaning if necessary. Some companies I’m sure, are doing the right thing, but with others reluctant to supply any information to public authorities and employees, about how many have tested positive and who (so contact tracing is possible), it’s hard to know. Some employers insist on a doctor’s note, or a positive test obtained by the employee, to excuse him or her from work.

The situation is especially fraught because people of color make up a disproportionate share of essential employees, and they are particularly vulnerable to the virus: some have more pre-existing conditions, or limited access to health care, crowded, often multigenerational, housing conditions, poverty, limited English. The victims of COVID in the U.S. are disproportionately people of color.

The virus is the hockey puck — we must focus attention where we expect outbreaks to occur. If we continue to play catch-up, lockdowns will be more frequent and extensive.

Bad corporate behavior, which the President encourages (“the virus is under control, let get the economy roaring!!”), endangers not just essential workers, but all of us.

The failure to take all necessary precautions where COVID spreads easily is about money: profit for the employer, customer satisfaction, without risk to either companies or consumers. The people forced to risk their lives, every day, are poorly paid, inadequately protected, employees.

I don’t want anyone to risk their life for my convenience, or to enhance employers’ profits.

But this is not just my preference: it is the law in this country.

Americans have been concerned about worker safety since Upton Sinclair published his novel, The Jungle (exposing conditions in meatpacking plants!), in 1906. In 1911 Wisconsin was the first state to pass a workers’ compensation statute, which required employers to carry no-fault insurance for injury or illness contracted at work. By 1949, all the states had passed such laws, obviating the need to prove employer negligence every time a worker was injured. (Our systems were modeled on one designed by Chancellor Otto von Bismarck of Prussia in 1884.) In1936, Congress passed the National Labor Relations Act, a key part of the New Deal. That law authorized unions elected by workers to negotiate with employers about wages and working conditions.

Employers have vigorously and successfully fought these measures in the courts from then until now, seriously weakening them.

In 1970, Congress tried again. It passed, and President Nixon signed, the Occupational Safety and Health Act, which required employers to provide safe workplaces. The Act simultaneously created the Occupational Safety and Health Agency to enforce the law, by issuing standards for particular industries or hazards, investigating employee complaints, and sanctioning employers for violations. (States with a State plan approved by OSHA, with standards as high or higher than federal standards, can also take enforcement action.)

The language of the statute is crystal clear. In Section 5(a), Congress says:“ Each employer:

(1)Shall furnish to each of his employees employment and a place of employment which are free from recognized hazards that are causing or likely to cause death or physical harm to his employees;

(2)Shall comply with occupational safety and health standards promulgated under this Act.”

This statutory provision is known as the General Duty Clause.

In OSHA’s handbook, “Worker’s Rights”, the Agency explains: “Employers must find and correct safety and health problems. OSHA further requires that employers try to eliminate or reduce hazards first by making feasible changes in working conditions — switching to safer chemicals, enclosing processes to trap harmful fumes, or using ventilation systems to clear the air are examples of effective ways to get rid of or minimize risks — rather than just relying on personal protective equipment [PPE] such as masks, gloves or earplugs.”(OSHA 3021-OGR 2017)

As of July 22, U.S. OSHA had received 6,832 complaints about failure to adequately protect workers against COVID19. State agencies received 17,013 complaints, including (but not limited to) insufficient PPE, non-compliance with the CDC’s limited guidance referenced in OSHA guidelines. As of June 9, Eugene Scalia, Secretary of Labor (and son of the late Justice) was forced to admit to Congress that since the onset of the virus, OSHA had issued only a single COVID 19 citation –to a Georgia nursing home for “failing to report the hospitalization of 6 employees within 24 hours” — categorized as the lowest level infraction — and fined the facility $6500. As of June 30, OSHA apparently closed 5522 complaints without any action — apparently without any investigation. (The reason the dates are all different is that information is scattered and scarce on the internet.) We will see what OSHA does with this one, filed by the National Nurses Union on August 24 against hospital system HCA (a for-profit Fortune 500 company for 25 years).

OSHA has issued no specific standard for COVID19 in any workplace, and apparently does not plan to. It has issued “guidance” and “recommendations”, but as the Agency makes clear, in the first sentence of its COVID19 booklet: “[t]his guidance is not a standard or regulation, and it creates no new legal obligations…The recommendations are advisory in nature…”.

However, the General Duty Clause should still be available. To cite an employer, the Agency needs to show: (1) the employer failed to keep the workplace free of a hazard to which the employees were exposed; (2) the hazard was recognized; (3) the hazard was causing or was likely to cause death or serious physical harm; and (4) there was a feasible and useful method to correct the hazard.

Except in some circumstances for the last requirement, COVID19 seems to fill the bill easily.

Deborah Berkowitz, formerly chief of staff, then senior policy advisor, at OSHA, explained to NPR that “Secretary Scalia has said over and over again — that I don’t think they really believe that the government has a role here. They believe in real limited government.” The Agency expects employers to comply voluntarily. It says “it will exercise discretion about whether to pursue enforcement actions if companies undertake “good faith efforts” to comply with existing regulations.” (“Existing regulations” for COVID are the general regulations applicable to all businesses.) OSHA’s single citation, of a recordkeeping violation at that, tells us that despite thousands of complaints, thousands of sick workers, and a significant number of worker deaths, the Agency is satisfied with the level of employer compliance.

Congressional Republicans, don’t want to take any chances, however: they say they won’t sign another COVID relief bill without an employer liability shield. They “know” worker lawsuits about catching COVID are all frivolous. Speaker of the House Nancy Pelosi instead wants to protect workers, and the rest of us, since we know that what starts at work doesn’t stay at work. The House COVID 19 bill would require OSHA to issue emergency standards for corona virus in the workplace.

Employers would have to fund the required measures, of course, not taxpayers. Companies could pass the costs on to consumers, which would also be fair. And a responsible Federal government would help, using the Defense Production Act (DPA) (which the Trump administration has used before) to require American industry to produce all the PPE, COVID tests, reagents, swabs, gowns etc. the country needs to control the pandemic, for a fair price — cost plus a reasonable profit. The government would sell the equipment at cost to any company, government institution (first responders, schools) or other group that needed it. As Governor Cuomo noted, when we go to war, we don’t require each state to provide its own tanks.

The government can, and should, organize independent labs to speed up the results of the tests — like the electricity grid, says Dr. Atul Gawande.
This is why we have government. It was Abraham Lincoln who said that the” legitimate purpose of government is to do for a community of people, whatever they need to have done, but cannot do…for themselves…in their individual capacities.” American companies and healthcare providers — eight months in — are still short of necessary COVID19 supplies.

Anyone who thinks the free market can handle anything, even a war or a national pandemic, more efficiently than a responsible federal government working with state and local partners, has not been paying attention.
President Trump pays no attention to anything except his reelection. As for the 187,000 (and counting) COVID deaths, all he says is “It is what it is,” by which he means, change the subject, don’t you care about violence in the streets?

We need employers to adequately protect our essential workers, voluntarily if possible, by force of law if necessary. And this needs to happen quickly. The federal government must help. That will help all of us stay safe.

We say our essential employees are heroes. They should be treated as such, not like disposable equipment.

Source: https://poplin.medium.com/an-overlooked-front-in-the-war-on-covid19-protecting-essential-workers-32a86031189e

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Carline Poplin, M.D., J.D., graduated from Yale Law School and practiced law with the FDA and the EPA. Currently Of Counsel & Medical Director at Guttman, Buschner, & Brooks PLLC.