On November 9, 2021, the Oklahoma Supreme Court in State ex rel. Hunter v. Johnson & Johnson, No. 118474, 2021 WL 5191372 (Okla., Nov. 9, 2021), overturned a $465 million verdict against opioid manufacturer, Johnson & Johnson ("J&J"). In the 5-1 decision, the court held that the district court erred in holding J&J liable under the state's public nuisance law because the statute does not extend to the manufacturing, marketing, and selling of products. The court warned that extending public nuisance law to the manufacturing, marketing, and selling of products would allow consumers to convert product liability actions into public nuisance claims. Id. at *11. Such an expansion of public nuisance law could catalyze widespread litigation against large companies for any public health problem.
Factual and Procedural Background
Like many cities across the United States, Oklahoma has seen the effects of the over-prescription of opioids to its residents. Id. at *1. In an effort to hold large opioid manufacturers accountable, the State sued three opioid manufactures in June 2017, including J&J. Id. The State argued that J&J marketed the benefits of opioid use while downplaying the dangers in an effort to increase sales. Id. at *2. The State settled with the other manufacturers and later dismissed all claims against J&J with the exception of the public nuisance claim. Id.
The district court held a month-long bench trial on the public nuisance issue. Id. The Oklahoma public nuisance statute states, "[a] public nuisance is one which affects at the same time an entire community or neighborhood, or any considerable number of persons, although the extent of the annoyance or damage inflicted upon the individuals may be unequal." 50 Okl. St. § 2. Thus, the question before the court was whether J&J was liable for creating a public nuisance in the marketing and selling of opioids within the state. State ex rel. Hunter, No. 118474, 2021 WL 5191372 at *1.
The court returned a verdict against J&J, finding them liable for conducting "false, misleading, and dangerous marketing campaigns" about opioids. Id. at *2. In doing so, the court ordered J&J to pay $465 million to fund one year of government programs aimed at combating the opioid crisis. Id. In issuing this hefty damage award, the court did not base the amount on J&J's specific market interest of prescription opioids sold. Id. The court also did not offset the amount with the amount the State received from the settlement agreements with the other opioid manufacturers. Id.
J&J appealed the verdict and the State cross-appealed, arguing that J&J should be held liable for a higher amount to fund twenty years of the state's government programs aimed against opioid use. The Supreme Court of Oklahoma retained the appeal. Id. at *3. The issue on appeal was whether the district court correctly determined that J&J's actions in marketing and selling opioids created a public nuisance. Id.
Supreme Court of Oklahoma's Decision
Origins and History of Oklahoma Public Nuisance Law
The Oklahoma Supreme Court began its opinion by giving a history of the public nuisance doctrine going back to the twelfth century. Id. The court explained how the public nuisance theory began as a criminal remedy used to protect the rights of public property. Id. Many years later during the twentieth century, public nuisance evolved into a common law tort and was later codified by the Oklahoma Legislature. Id. at *4. In applying the state's nuisance statutes, the court has limited public nuisance liability to defendants "(1) committing crimes constituting a nuisance, or (2) causing physical injury to property or participating in an offensive activity that rendered the property uninhabitable." Id. Nuisance cases can also be brought in cases in which conduct "annoys, injures, or endangers the comfort, repose, health, or safety of others." Id. at *5. Yet, the court reminded the State that such conduct has traditionally been criminal or property-based. Id. As such, the court reasoned that applying nuisance law to the manufacturing, marketing, and selling of lawful products would be an overbroad application of the law. Id.
Oklahoma's Public Nuisance Law Does Not Cover the State's Alleged Harm
The court refused to extend the public nuisance doctrine to the State's claim that J&J's failure to warn of the dangers of opioids constitutes a public nuisance. In reaching this decision, the court identified three reasons for which the doctrine is inapplicable to product liability: (1) the manufacture and distribution of products rarely cause a violation of a public right, (2) a manufacturer does not generally have control of its product once it is sold, and (3) a manufacturer could be held perpetually liable for its products under a nuisance theory. Id. at *6.
In analyzing the first factor, the court concluded that the State failed to show a violation of a public right. The court defined a public right as a right to a public good (i.e. natural resources, public spaces). Id. The court rejected the State's argument that J&J's conduct amounted to an interference with the public right of health because prescription opioids do have beneficial uses for pain management and the rise in misuse and addiction could not have been anticipated. Id. at *7 The court distinguished J&J's conduct from cases of pollution in public water or the discharge of sewer on property, in which injury could have been anticipated. Id. Further, the court reasoned that the State's argument would promote the notion that an unreasonable interference with a public right could be shown solely by the unanticipated misuse of products by some consumers. Id. "A public right to be free from the threat that others may misuse or abuse prescription opioids—a lawful product—would hold manufacturers, distributors, and prescribers potentially liable for all types of use and misuse of prescription medications." Id. Thus, the court concluded that the State failed to show a violation of a public right in this case.
As to the second factor, the court reasoned that J&J did not have control over the manner in which opioids were used once they were sold. Id. at *8. "A product manufacturer's responsibility is to put a lawful, non-defective product into the market. There is no common law tort duty to monitor how a consumer uses or misuses a product after it is sold." Id. The court reasoned that J&J had no control over its products once they were sold through the multiple levels of distribution which included distributors, wholesalers, pharmacies, hospitals and doctors' offices. Id. Without control, J&J could also not abate or fix the nuisance. Here, the court attacked the remedy of monetary sanctions imposed by the district court. Id. at *9. Though, the amount awarded to the State was intended to go to the State's abatement plan to combat opioid addiction, the court did not find this to be a suitable remedy. The court reasoned that the abatement program would not stop the promoting or selling of opioids. Id. Therefore, the court rejected the monetary damage award as it did not address the alleged nuisance. Id.
In addressing the third and final factor, the court plainly rejected the imposition of liability for public nuisance in this case, because J&J could be held continuously liable for its products. Id. J&J's products entered the stream of commerce more than twenty years ago. Id. The court reasoned that imposing liability under a public nuisance cause of action here would subject manufacturers to endless liability and would sidestep the statute of limitations in traditional tort law. Id.
This Court Will Not Extend Oklahoma Public Nuisance Law to the Manufacturing, Marketing, And Selling of Prescription Opioids
In sum, the court, held that it will not extend the state's public nuisance law to J&J's conduct in the manufacturing, marketing and selling of prescription opioids. The court dug its heels into the common law criminal and property-based limitations that have shaped the state's public nuisance doctrine. Without these limitations, the court warned that businesses could be held boundlessly liable for the manufacturing, marketing or selling of products, i.e. "will a sugar manufacturer or the fast food industry be liable for obesity, will an alcohol manufacturer be liable for psychological harms, or will a car manufacturer be liable for health hazards from lung disease to dementia or for air pollution." Id. at *11. Though the court does tip its hat to the State's novel theory of extending public nuisance liability for the marketing and selling of a legal product, the court remained unconvinced. Instead, the court advised that this is an issue that could be more appropriately addressed by the legislature, rather than the courts.
There is a growing trend in which courts are reluctant to apply public nuisance law to opioid-manufacturer cases. This case comes on the heels of a recent tentative decision from a California superior court in which the court also rejected the plaintiffs' argument that defendants, J&J, Endo Pharmaceuticals, Teva Pharmaceuticals, and Allerfan PLC, created a public nuisance by manufacturing and selling opioids. People v. Purdue Pharma, No. 30-2014-00725287-CU-BT-CXC (Cal. Super. Nov. 9, 2021). Prior to these decisions, North and South Dakota courts have also rejected public nuisance claims against the same defendants for the same alleged conduct. See State ex rel. Stenehjem v. Purdue Pharma, L.P., No. 08-2018-cv-01300, 2019 WL 2245743, at *13 (N.D. Dist. Ct. May 10, 2019) (rejecting the public nuisance claim because public nuisance law does not apply to cases involving a sale of goods); see also State ex rel. Ravnsborg v. Purdue Pharma L.P., No. 32CIV18-000065 (S.D. Cir. Ct. Jan. 13, 2021) (rejecting the public nuisance claim as applied to the sale of good and holding that defendants did not have control of the instrumentality of the nuisance when the damage occurred).
These decisions mark a shift in the landscape of opioid litigation, casting doubt on the use of the public nuisance doctrine as applied to the manufacturers of these drugs. Another important aspect of this ruling is the questionable ability of plaintiffs to receive monetary damage awards to redress harm in these cases. The Oklahoma Supreme Court expressed skepticism in this approach and encouraged redress to be handled by public policy rather than the courts. If plaintiffs continue to allege that that the manufacturing and selling of opioids constitutes a public nuisance, it may become increasingly difficult to prove that the appropriate redress is something other than an injunction on such manufacturing and selling.
As it stands, it is not clear whether these cases are outliers or a projection of a growing national trend. Given differences in states' public nuisance doctrines, cases certainly could come out on the other side. As more cases are set to go to trial in the coming months, it will be instructive on how courts view this doctrine and its applicability to opioid-related cases.
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