As legal battles in the opioid epidemic continue to play out in various courthouses throughout the country and the first jury trial in this battle awaits, another Goliath has fallen!
Ironically, the fatal blow was self-inflicted. On April 6, Chancellor E.G. Moody, the judge presiding over the Sullivan Baby Doe class action in Sullivan County, issued a default judgment against Endo Pharmaceuticals.
What does this mean legally? It means the litigants go directly to a jury trial on damages only.
You read that right: There are no liability issues to be decided. The next phase is a jury trial solely on damages – in a case where the plaintiffs have asked for $2.4 billion!
How did Endo get in this position?
Well, the Sullivan Baby Doe lawsuit was originally filed June 13, 2017, and named a baby born with neonatal abstinence syndrome as a plaintiff. Opioid manufacturers Purdue Pharma, LP, Mallinckrodt PLC, Endo Pharmaceuticals and others were named as defendants. It was truly a David vs. Goliath scenario.
The lawsuit claimed the defendants were liable for damages under Tennessee’s Drug Dealer Liability Act (i.e., they facilitated the over-prescription and diversion of controlled substances and, as a drug dealer, can be held accountable for their actions).
Over time, the weight of many other lawsuits against Purdue Pharma and Mallinckrodt contributed to them filing for bankruptcy, leaving Endo as the remaining Goliath in the Sullivan Baby Doe case.
The lawsuit has been active for almost four years now. That might seem like a long time, but sometimes there are valid reasons for lawsuits to take years to reach their conclusion. (For example, there are voluminous documents to review, or many witnesses to meet with, or unexpected events like COVID-19, to name just a few.)
But in his April 6 ruling, Chancellor Moody moved the Sullivan Baby Doe lawsuit closer to conclusion because of what he described as a “coordinated strategy to interfere with the administration of justice.”
Evidence the chancellor noted in support of his ruling included:
A prior ruling wherein he held Endo and its lawyers in contempt of court for failing to produce documents in response to written requests from Baby Doe’s lawyers.
His concern about many false statements made to Baby Doe’s counsel and to the court by the Endo defendants’ lawyers during the course of the discovery process.
His finding that Endo “repeatedly tried to characterize its discovery misconduct as a simple ‘misunderstanding’ between plaintiffs’ counsel and defense counsel in the discovery process,” but that the record demonstrated otherwise.
His finding that “Endo and its counsel at Arnold & Porter willfully withheld responsive records” and “many of the records that Endo knowingly withheld were highly relevant.”
His finding “that Endo intended to defend itself at trial by touting its anti-diversion measures, while simultaneously depriving plaintiffs of evidence that would have undercut that defense.”
Ultimately, Chancellor Moody found “that Endo willfully withheld this information during the discovery phase to gain a litigation advantage at trial.”
He also determined “that Endo and its attorneys’ false statements violated the Tennessee Rules of Civil Procedure and the Tennessee Rules of Professional Conduct.”
Chancellor Moody has required Baby Doe’s lawyers to identify, within 15 days, the attorneys for the defendants “who made the false statements” referred to in his order.
The chancellor has also required each of the Arnold & Porter attorneys, who are partners or shareholders and who have been admitted from outside Tennessee via the pro hac vice process, to show cause why their pro hac vice admissions should not be revoked in the case.
Will the chancellor’s ruling be appealed? Yes. The company has indicated that it plans to appeal the orders in the case, calling them “procedurally, factually and legally deficient.”
The trial on damages has now been set for July 26, 2021. Will it proceed in the face of an appeal of the chancellor’s ruling? Not likely. An appeal could place the damages trial on hold.
Will the Tennessee Board of Professional Responsibility get involved and review the conduct of the attorneys? Possibly – and no attorney wants a board investigation with the potential for discipline of their license hanging over their head. The potential fallout from this aspect alone is enormous!
So another Goliath has fallen in the opioid wars, and while a default judgment is rare, Chancellor Moody’s ruling serves as a refreshing reminder that in every lawsuit, candor to the judge and the litigants must be the standard operating procedure for the lawyer and their client.
Perhaps more importantly, the chancellor’s ruling reminds us that there are judges who will recognize misconduct when they see it and who have the courage and decisiveness to call it what it is. The integrity of our legal system depends on it.
Alix Michel and David Ward are the co-founders of Michel & Ward, P.C., a general practice law firm in Chattanooga. Michel devotes a considerable amount of time to raising awareness of the prescription drug diversion epidemic and has presented on various aspects of drug diversion to many groups. Ward also focuses on drug and pharmaceutical issues in his practice and has spoken to various groups about the problems associated with prescribing opioids for everyday pain and potential solutions.