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Q&A: Opioid Plaintiffs Lawyer Paul Hanly on What a Settlement Might Look Like
By ROGER PARLOFF|January 31, 2018
Paul Hanly, Jr.
Courtesy of Simmons Hanly Conroy
Quick Takeaway
  • Hanly is a co-lead plaintiffs lawyer for hundreds of municipalities suing opioid manufacturers in federal court.
  • He won a $75 million settlement from Purdue for 5,000 OxyContin users in 2007.
  • A settlement "might need to be paid out over a number of years. The problem's going to be with us for a generation."

Paul Hanly, Jr., 66, is one of three plaintiffs lawyers who has been appointed to lead the more than 430 (and counting) lawsuits in federal court that have been brought against the nation’s biggest opioid manufacturers and distributors. Most of these cases have been filed on behalf of cities or counties around the country, and name as defendants Purdue Pharma and at least four other corporate families of opioid manufacturers. Many cases also name the three leading pharmaceutical distributors, led by McKesson Corporation. The cases against the manufacturers allege misleading marketing—underplaying the drugs’ risks of addictiveness—while those against the distributors allege failure to report and forego suspicious sales. The defendants deny wrongdoing.

Hanly spent the first 20 years of his career as a mass-tort defense attorney, eventually serving as national coordinating counsel for theBritish asbestos company, Turner & Newall. In 2001, at about the time T&N went bankrupt, he formed his own firm, now known as Simmons Hanly Conroy, and began focusing on plaintiffs-side work.

Hanly sat down with TORI in mid-January, in his office in Manhattan. (TORI has also reached out to several leading defense lawyers in the litigation, and hopes, in the days ahead, one will agree to an interview.)

The following is an edited transcript.

TORI: When was your first foray into opioids?

HANLY: It was in 2003. One plaintiffs lawyer we knew had heard of an increase in increase in addiction, particularly relating to OxyContin. We came to represent more than 5,000 individuals, whom we believed had all been lawfully prescribed OxyContin. We did not take illegal users—people who had started taking the drug illegally.

And we litigated against Purdue from 2003 to end of 2006.

Where did you sue?

All over. We filed 1,400 separate cases paying—filing fees of nearly $400,000.

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As we got documents and testimony in discovery, we found this company had been engaged in criminal activity—false representations. The Justice Department got wind of what we were doing and came to us. We said: Subpoena us, and we’ll turn over the fruits of our work.  They did, and we did. The government ultimately convicted them [in May 2007] of criminal misbranding and exacted a $634.5 million fine.

Were your clients paid out of that?

No. We settled our 5,000 cases for a confidential amount on October 26, 2006. [The Wall Street Journal reported that the sum was $75 million.] 

What I didn’t realize in 2006 and 2007 was that the epidemic was then in its infancy. It matured over the next 8-10 years.

So around about 2013 people were coming to us saying, I’ve got all these folks in West Virginia and they’re all addicted. They started out injured on the job, got addicted to painkillers that were lawfully prescribed. And we just said, no.

Why?

The individual cases were extremely difficult. These were very sick people. So it was very, very time-consuming and, of course, we had 5,000. In addition, because these patients were so ill, many of them had completely forgotten their past medical histories. And when we would get into the defendants’s discovery, it often turned out that their use of OxyContin had not been their first opioid and therefore you had a causation issue. Were they addicted at the time we filed the lawsuit because of the OxyContin, or was it because they were taking methadone for years before that, and had experimented with heroin or hydrocodone or whatever it was.

When did municipalities start suing?

Nobody started doing government cases till 2014. Our first was in 2016 for Suffolk County, New York. When Suffolk came calling, we spent time discussing its experience, and it became clear that these governmental entities were really bearing the brunt of this epidemic. And we felt that these cases in a number of ways were stronger, more sympathetic, because if you’re going to try a case, and the defendants are going to make out your client to be a drug addict, that can be very challenging, right? Juries tend to put some degree of responsibility on the plaintiff.

So we felt this would be a very different situation with a county, which is hemorrhaging money, which can’t pay for school lunches because it’s spending all its money on Narcan. [The municipalities are generally seeking reimbursement for excess expenditures on hospital and emergency-room services, first-responders, foster care for addicts’ children, neonatal care for addicted babies, morgue expenses, body bags, and so on.]

Are there other plaintiffs besides municipalities in the multidistrict litigation (MDL) case? [In December a federal judicial panel ordered most federal cases against opioid manufacturers or distributors—more than 340 suits as of presstime—consolidated before U.S. District Judge Dan Aaron Polster in Cleveland.] 

There are also some suits by third party-payors. At the moment those are mainly brought by self-insured funds of some unions, but I’m quite sure that Aetna and other [health] insurers are looking very closely at this. [Other plaintiffs include Indian tribes and hospitals.]

What is Polster’s approach?

He’s essentially put a stay in place of all litigation activity because he wants to explore resolution. [Editor’s note: On March 6, in light of “various barriers” to a quick settlement, Polster partially lifted the stay, and resumed a “limited litigation track.”]

He has an excellent track record as a resolution judge. He has said it’s his goal to settle this case in 2018.

And how many cases are you personally handling?

I have about 15 in New York state courts [including one for New York City, filed in January], about 15 in Illinois state courts, and about 110 in the federal MDL.

Are you coordinating with the state attorneys general? [About 15 state AGs have filed suits in state courts, while the rest have formed a working group that is negotiating jointly.] 

One of the three lead counsel in the federal MDL litigation for municipalities is Joe Rice. [Rice was a key architect of the tobacco settlements of the late 1990s, which called for the defendants to pay about $246 billion over 25 years]. Joe represents five AGs. But the MDL leadership as a unit has not had any dealings with the AGs. [Several state attorneys general are voluntarily participating in the settlement talks before Judge Polster, according to publicly filed documents, though Polster has no jurisdiction over them.]

If you had your wish list, what would a settlement look like?

First, it would have to have a monetary component for reimbursement of the excess expenses of these counties attributable to opioid epidemic up to the date of the settlement. And maybe that would have to be paid out over some years. That might be necessary just because of the size of that number.

And then part II would have to be a forward-looking component. There would have to be a commitment—monetary and philosophical—on a going-forward basis to assist with rehab programs, and medical education programs, and patient education programs and, I don’t know, Narcan supplies, for years to come.

Because if we had a settlement today, where $200 billion or something was paid, the problem’s [still] going to be with us for a decade or a generation.

Beyond that, it’s kind of premature and I’d not be the person who would get into the details of all those programs.

It really does sound like the tobacco settlement.

Well, I think it’s a lot like tobacco in the following sense: Paying somebody money over a period of years, and a commitment by tobacco companies to education and the like, has been, apparently, remarkably successful. Addiction to cigarettes is down, lung-cancers attributable to cigarettes are apparently down. You have fewer and fewer young people taking up smoking. So I’d think it would have to be a resolution that looked something like tobacco. I can’t speak to the dollars that would be required. It would be a lot.