In an unusual turn of events, Oklahoma Gov. Kevin Stitt and leaders of the state Legislature filed an amicus brief Friday opposing a position taken by Attorney General Mike Hunter in his pending settlement with opioid manufacturer Teva Pharmaceuticals.
Hunter and his contracted attorneys argued Monday in Cleveland County District Court that the proposed Teva settlement should not be subject to a state statute directing that monies obtained by Oklahoma’s attorney general be “paid first to the State Treasury.” Instead, Hunter’s attorneys argue the $85 million Teva settlement should be held by the court and that the statute — amended by legislators in May to emphasize their position — does not apply.
“This is a nuisance case. There are no damage claims in this at all,” Whitten Burrage attorney Michael Burrage said during Monday’s status conference. “And so if you look at the statute, it applies to negotiated settlements or compromises. That’s not what we have here.”
House Majority Whip Terry O’Donnell (R-Catoosa) has been critical of Hunter’s first settlement in the state’s opioid lawsuit — a $270 million agreement with Purdue Pharma directing the creation of a new nonprofit entity that would receive most of the funding and support the OSU Center for Wellness and Recovery, an entity with programs for opioid treatment. Frustration with the Purdue settlement spurred lawmakers to pass the new language on settlements in HB 2751, which O’Donnell carried.
“It is a little surprising after the legislation,” O’Donnell said Friday of Burrage and Hunter’s argument. “We thought it was very clear what the Legislature had in mind with respect to any proceeds from the judgment or settlement or any recovery of that sort.”
In the hearing Monday, Hunter spoke after Burrage and said the Legislature would be involved in enabling whatever abatement plan is authorized by presiding Judge Thad Balkman, should he rule that remaining defendant Johnson & Johnson caused a public nuisance by marketing opioids irresponsibly.
Hunter strikes settlement with Teva Pharmaceuticals by Tres Savage
“It’s not the intention of the attorney general’s office to in any way go around the Legislature or the governor,” Hunter said. “They’re going to be important partners here. Our goal with regard to crafting the proposed settlement and the consent decree was to try to harmonize your authority over this case with the clear power of the Legislature and the governor.”
Hunter said the proposed Teva settlement was crafted with the intent of avoiding “some kind of constitutional crisis.”
“But at the end of the day, it’s going to be critical through this process to work with the Legislature and the governor because it’s clear to me that there’s going to have to be enabling legislation at some point in order for this abatement process to be deployed the way it needs to be,” Hunter told Balkman.
O’Donnell, an attorney, said he was not sure why Hunter and his attorneys oppose sending the Teva settlement dollars to the State Treasury.
“I’d be speculating as to what his motives might be, but that would put him in charge of a whole hell of a lot of money,” O’Donnell said. “I did hear about the hearing on Monday, and I thought, ‘Well, he doesn’t understand the spirit behind the law we just clarified.'”
Stitt, McCall and Treat passed law to avoid ‘ambiguity’
The amicus brief filed Friday by Stitt, House Speaker Charles McCall (R-Atoka) and Senate President Pro Tempore Greg Treat (R-OKC) places Oklahoma in an unusual position. As attorney general, Hunter typically represents and defends the Legislature against challenges to the laws it passes. With Hunter’s contracted attorney arguing against application of the new statute and Stitt, McCall and Treat filing their brief asking that it be followed, Oklahoma’s interest in the matter is essentially split between itself.
“The State of Oklahoma, as represented by the above-named elected officials, has always taken the above statute to clearly mean that monies resulting from any litigation filed on behalf of the State of Oklahoma shall be paid into the treasury,” Stitt, McCall and Treat said in their brief. “Following a previous settlement in this case, pursuant to which the bulk of the settlement proceeds are not being paid to the State Treasury, and to ensure that there was no ambiguity going forward with respect to future settlements in this case, or any other case, the Legislature passed the Act which was intended to make as clear as possible that all proceeds from the settlement of any lawsuit, whatever the cause of action, were to be paid directly to the State Treasury.”
Alex Gerszewski, Hunter’s communications director, said the attorney general and his team had been in court all Friday.
“We’re reviewing it,” he said of the amicus brief.
Details of the Teva settlement have not been made public so far, something Balkman said would be necessary.
“I’m not going to be approving any settlement agreement that’s not presented first in a public filing,” Balkman said Monday. “I think that’s important that that’s public.”
Balkman is scheduled to hold another status conference at 1 p.m. Monday wherein he could set a date for additional briefing or hearings. He could also direct the Teva settlement parties — especially the disagreeing state leaders — to reach their own agreement.
Calls to spokespeople for Stitt and Treat were not immediately returned Friday by publication of this story. Jason Sutton, communications director for McCall, referred comment to the court filing (embedded below).
Hunter’s preference in the matter appeared to be illuminated by Burrage’s answer to a question from Balkman toward the end of Monday’s hearing.
“Does the state envision a court-ordered abatement plan specific for Teva and exclusive of any future recovery, or are you wanting to park that and see how this trial (with Johnson & Johnson) turns out?” Balkman asked.
Burrage said he and Hunter preferred the latter of the two options.
“In other words, I mean, it’s certainly up to the court, but I would think that nothing would be done until the case is over with, one way or another,” Burrage said.
Also Friday, attorneys representing multiple Oklahoma cities and counties filed a motion to intervene regarding the Teva settlement.
Those attorneys asked the court “to disclose and make public the proposed settlement agreement and consent judgment and to request that the court allocate a fair proportion of the $85 million Teva settlement directly to cities and counties that will bear some responsibility for carrying out the services necessary to execute the abatement plan that the court is being request to enter.”