An “agreement in principle” has been reached in the four-year-old “Baby Doe” lawsuit filed by local attorneys general to recover damages caused by pillmakers allegedly responsible for the opioid addiction epidemic.
Defendant Endo has offered $35 million to settle the lawsuit — which names two of its subsidiaries Endo Pharmaceuticals Inc. and Endo Health Solutions Inc. — as defendants. The original complaint had sought $2.4 billion in damages.
The groundbreaking civil action filed in June 2017 by three district attorneys general in Northeast Tennessee is widely known as the Sullivan Baby Doe case.
Plaintiffs include Dan E. Armstrong, of the 3rd Judicial District, which includes Greene County; 2nd Judicial District Attorney General Barry Staubus and 1st Judicial District Attorney General Kenneth Baldwin.
A trial to determine damages was scheduled to begin Monday in Sullivan County Circuit Court before Chancellor E.G. Moody.
Endo Pharmaceuticals issued a news release Thursday stating an “agreement in principal” was reached to settle the case originally captioned as Staubus V. Purdue Pharma.
Plaintiffs also include an infant listed as Baby Doe, by and through a guardian ad litem.
The case is named for a baby born addicted to opiates in 2015 at Holston Valley Medical Center. Plaintiffs allege drug manufacturers are responsible for the opioid epidemic in Northeast Tennessee.
The Baby Doe case now includes claims by nine counties in eastern Tennessee, along with 18 cities and towns within those counties, and one individual plaintiff.
Moody set the July 26 trial date following an April ruling granting default judgment on liability in favor of plaintiffs, but reserved the determination of damages for trial. Moody entered a default judgment on liability as a sanction for alleged discovery improprieties by Endo.
“The settlement, which remains subject to final approval by certain plaintiffs and the execution of definitive documentation, would fully and finally resolve the case in exchange for a total payment by Endo of $35 million to be apportioned among all 28 plaintiffs in their discretion,” the Endo news release said.
The damages trial is adjourned until Aug. 2 to allow the remaining plaintiff approvals to be obtained, the release said.
“The settlement will include no admission of wrongdoing, fault or liability of any kind by Endo, and the settlement value should not be extrapolated to any other opioid-related cases or claims,” the release said.
The plaintiffs are represented by the Nashville law firm of Branstetter, Stranch & Jennings. Lead attorney Gerard Stranch addressed the agreement Thursday.
“We are pleased that after four-plus years of litigation that we have been able to reach an agreement in principle with Endo, and are grateful to the communities of Northeast Tennessee for their support in this landmark prosecution,” Stranch said.
Further comment can’t be made “until all matters concerning participating cities and counties have been finalized, which we anticipate happening in the coming week,” Stranch said.
Armstrong, district attorney general for the 3rd Judicial District that includes Greene County, said Thursday he “could neither confirm nor deny the accuracy of the contents of that (Endo) release.”
The Sullivan Baby Doe suit was filed in Sullivan County Circuit Court. The original complaint listed prescription opioid manufacturer Purdue Pharma, L.P., along with Mallinckrodt PLC, Endo Pharmaceuticals, a “pill mill” doctor and other convicted opioid dealers as defendants. Purdue Pharma and Mallinckrodt have since declared bankruptcy. Damages against those companies continue to be pursued in appropriate courts.
“As part of the national scrutiny brought to bear on opioid producers and distributors, due in part to Sullivan Baby Doe’s arguments, Purdue and Mallinckrodt have both declared bankruptcy, with claims proceeding against them in related courts. Endo remains the only active corporate defendant,” a recent news release from the Branstetter law firm said.
The possible settlement of the Baby Doe case comes on the heels of an announcement Wednesday by Tennessee Attorney General Herbert Slatery III of a “historic $26 billion agreement that will bring desperately needed relief to people across the country struggling with opioid addiction.”
The agreement, between about 15 states, local governments and the nation’s three major pharmaceutical distributors, along with opioid manufacturer and marketer Johnson & Johnson, “would resolve investigations and litigation over the companies’ roles in creating and fueling the opioid epidemic,” a news release from Slatery said.
The agreement also requires “significant industry changes that will help prevent this type of crisis from happening again,” the release said.
Statery and North Carolina Attorney General Josh Stein were the primary negotiators in the agreement, which includes Cardinal, McKesson, and AmerisourceBergen. The agreement reached by Tennessee and other participating states is not related to the Baby Doe litigation.
The Baby Doe lawsuit said that pharmaceutical companies reaped huge profits from aggressively marketing and distributing opioid painkillers, including Purdue Pharma, Mallincrodt and Endo.
Opioid-related overdoses and addiction remain an ongoing crises for families, law enforcement, healthcare providers and local governments that devote millions of dollars in resources to attack the epidemic.
More than 67,000 drug overdose deaths were attributed to opioids nationwide in 2020, according to a Centers for Disease Control and Prevention study.
Fatal drug overdoses in Tennessee during 2020 numbered more than 3,100, an increase of more than 44 percent over 2019, preliminary CDC data shows.
In Tennessee’s Northeast Region, which includes Greene, Washington, Unicoi, Carter, Hawkins, Hancock, Johnson, and Sullivan counties, there were 107 fatal drug overdoses and 801 non-fatal outpatient overdose visits in 2019. Health officials have said most were caused by opioids and the emergence of drugs containing fentanyl, a powerful synthetic narcotic often mixed with street drugs to increase potency.
Staubus characterized Sullivan County several years ago as “ground zero” in the state’s opioid epidemic.
Stranch said in April that plaintiffs in the Baby Doe lawsuit were eager to go to trial and settle the case on behalf of suffering communities in the region.
“The court has found that Endo knowingly participated in the illegal drug market in violation of Tennessee’s Drug Dealer Liability Act,” he said. “We look forward to presenting to a jury the amount of damage that this illegal conduct has caused to the governmental plaintiffs and to Baby Doe, and we will be asking for more than $2.4 billion in damages.”
In December 2020, the Tennessee Supreme Court issued a ruling stating that the Drug Dealer Liability Act applies to companies that knowingly participate in the illegal drug market, a decision that allowed the Baby Doe lawuits to move forward.
Stranch told the Associated Press in December that “by its decision, the court has helped ensure that the opioid producers who flooded our communities with pills will face a jury of citizens where they will have to explain their reprehensible conduct.”