HomeMy WebLinkAboutResolution 2023 (10) Resolution No. 10 (2023)
ST CRO Ij,,NTY RESOLUTION AUTHORIZING ST. CROIX COUNTY TO ENTER INTO
�✓ �� �' ��� THE SETTLEMENT AGREEMENTS WITH TEVA PHARMACEUTICAL
INDUSTRIES LTD., ALLERGAN FINANCE, LLC, WALGREEN CO.,
WALMART, INC., CVS HEALTH CORPORATION AND CVS
PHARMACY, INC., AGREE TO THE TERMS OF THE ADDENDUM TO
THE MOU ALLOCATING SETTLEMENT PROCEEDS, AND AUTHORIZE
ENTRY INTO THE MOU WITH THE ATTORNEY GENERAL
COVER MEMO
TO: County Board of Supervisors
FROM: Ken Witt, County Administrator
Heather Amos, Corporation Counsel, Office of Corporation Counsel
DATE: March 7, 2023
AGENDA ITEM: Resolution Authorizing St. Croix County to Enter Into the Settlement
Agreements with Teva Pharmaceutical Industries Ltd., Allergan Finance,
LLC, Walgreen Co., Walmart, Inc., CVS Health Corporation and CVS
Pharmacy, Inc., Agree to the Terms of the Addendum to the MOU
Allocating Settlement Proceeds, and Authorize Entry Into the MOU with
the Attorney General
BACKGROUND INFORMATION
This is a resolution which allows St. Croix County to enter into Settlement Agreements
with Teva Pharmaceutical Industries Ltd, Allergan Finance, LLC, Walgreen Co., Walmart,
Inc., CVS Health Corporation and CVS Pharmacy. On February 21, 2023, the
Administration Committee approved a resolution (attached) which was a shortened
version of the resolution set forth below.
On February 22, 2023, Corporation Counsel received a resolution template from Crueger
Dickinson LLC, one of the law firms representing the counties. Unfortunately, this
information was received the day after the Administration Committee meeting. Due to
the time constraints placed upon counties to obtain approval of the resolution related
to entering into settlement agreements with the various opioid distributors, Corporation
Counsel received permission from all five members of the Administration Committee to
replace the resolution language with the updated language for review and approval of
the County Board on March 7, 2023.
Resolution No. 10 (2023)
ST CRO QNTY RESOLUTION AUTHORIZING ST. CROIX COUNTY TO ENTER INTO
�✓ �� �' ��� THE SETTLEMENT AGREEMENTS WITH TEVA PHARMACEUTICAL
INDUSTRIES LTD., ALLERGAN FINANCE, LLC, WALGREEN CO.,
WALMART, INC., CVS HEALTH CORPORATION AND CVS
PHARMACY, INC., AGREE TO THE TERMS OF THE ADDENDUM TO
THE MOU ALLOCATING SETTLEMENT PROCEEDS, AND AUTHORIZE
ENTRY INTO THE MOU WITH THE ATTORNEY GENERAL
1 WHEREAS, the County Board of Supervisors previously authorized the County to enter
2 into an engagement agreement with von Briesen & Roper, s.c., Crueger Dickinson LLC and
3 Simmons Hanly Conroy LLC (the "Law Firms") to pursue litigation against certain
4 manufacturers, distributors, and retailers of opioid pharmaceuticals (the "Opioid Defendants") in
5 an effort to hold the Opioid Defendants financially responsible for the County's expenditure of
6 vast money and resources to combat the opioid epidemic;
7
8 WHEREAS, on behalf of the County, the Law Firms filed a lawsuit against the Opioid
9 Defendants;
10
11 WHEREAS, the Law Firms filed similar lawsuits on behalf of 66 other Wisconsin
12 counties and all Wisconsin cases were coordinated with thousands of other lawsuits filed against
13 the same or substantially similar parties as the Opioid Defendants in the Northern District of
14 Ohio, captioned In re: Opioid Litigation, MDL 2804 (the "Litigation");
15
16 WHEREAS, four (4) additional Wisconsin counties (Milwaukee, Dane, Waukesha, and
17 Walworth)hired separate counsel and joined the Litigation;
18
19 WHEREAS, since the inception of the Litigation, the Law Firms have coordinated with
20 counsel from around the country (including counsel for Milwaukee, Dane, Waukesha, and
21 Walworth Counties) to prepare the County's case for trial and engage in extensive settlement
22 discussions with the Opioid Defendants;
23
24 WHEREAS, the settlement discussions with Teva Pharmaceutical Industries Ltd.,
25 Allergan Finance, LLC, Walgreen Co., Walmart, Inc., CVS Health Corporation and CVS
26 Pharmacy, Inc.. (the "Settling Defendants") resulted in a tentative agreement as to settlement
27 terms pending agreement from the County and other plaintiffs involved in the Litigation;
28
29 WHEREAS, copies of the various settlement agreements relating to the Settling
30 Defendants (collectively "Settlement Agreements") representing the terms of the tentative
31 settlement agreements with the Settling Defendants have been provided with this Resolution;
32
33 WHEREAS, the Settlement Agreements provide, among other things, for the payment of
34 certain sums to Participating Subdivisions (as defined in the Settlement Agreements) upon the
35 occurrence of certain events detailed in the Settlement Agreements;
36
37 WHEREAS, the County is a Participating Subdivision in the Settlement Agreements and
38 has the opportunity to participate in the benefits associated with the Settlement Agreement
39 provided the County (a) approves the Settlement Agreements; (b) approves the Memorandum of
40 Understanding allocating proceeds from the Settlement Agreements among the various
41 Wisconsin Participating Subdivisions, a copy of which is attached to this Resolution (the
42 "Allocation MOU"); (c) approves the Memorandum of Understanding with the Wisconsin
43 Attorney General regarding allocation of settlement proceeds, a copy of which is attached to this
44 Resolution (the "AG MOU"); and(d) the Legislature's Joint Committee on Finance approves the
45 terms of the Settlement Agreements and the AG MOU;
46
47 WHEREAS, 2021 Wisconsin Act 57 created Section 165.12 of the Wisconsin Statutes
48 relating to the settlement of all or part of the Litigation;
49
50 WHEREAS, pursuant to Wis. Stat. § 165.12(2), the Legislature's Joint Committee on
51 Finance is required to approve the Settlement Agreements and the AG MOU;
52
53 WHEREAS, pursuant to Wis. Stat. § 165.12(2), the proceeds from any settlement of all
54 or part of the Litigation are distributed 70% to local governments in Wisconsin that are parties to
55 the Litigation and 30% to the State;
56
57 WHEREAS, Wis. Stat. § 165.12(4)(b)2. provides the proceeds from the Settlement
58 Agreement must be deposited in a segregated account (the "Opioid Abatement Account") and
59 may be expended only for approved uses for opioid abatement as provided in the Settlement
60 Agreements;
61
62 WHEREAS, Wis. Stat. § 165.12(7) bars claims from any Wisconsin local government
63 against the Opioid Defendants filed after June 1, 2021;
64
65 WHEREAS, the definition of Participating Subdivisions in the Settlement Agreements
66 recognizes a statutory bar on claims such as that set forth in Wis. Stat. § 165.12(7) and, as a
67 result, the only Participating Subdivisions in Wisconsin are those counties and municipalities
68 that were parties to the Litigation (or otherwise actively litigating a claim against one, some, or
69 all of the Opioid Defendants) as of June 1, 2021;
70
71 WHEREAS, the Legislature's Joint Committee on Finance is not statutorily authorized
72 or required to approve the allocation of proceeds of the Settlement Agreements among
73 Wisconsin Participating Subdivisions;
74
75 WHEREAS, the Law Firms have engaged in extensive discussions with counsel for all
76 other Wisconsin Participating Subdivisions resulting in the proposed Allocation MOU, which is
77 an agreement between all of the entities identified in the Allocation MOU as to how the proceeds
78 payable to those entities under the Settlement Agreements will be allocated;
79
80 WHEREAS, the proposed Addendum to the MOU ("Addendum") provided with this
81 Resolution provides for allocation of settlement proceeds among the Wisconsin Participating
82 Subdivisions according to the same percentages as that provided in the previously-approved
83 MOU allocating the settlement proceeds of the settlements involving McKesson Corporation,
84 Cardinal Health, Inc., AmerisourceBergen Corporation, Johnson & Johnson, Janssen
85 Pharmaceuticals, Inc., Ortho-McNeil-Janssen Pharmaceuticals, Inc., and Janssen Pharmaceuitca,
86 Inc.;
87
88 WHEREAS, there is provided with this Resolution a summary of the essential terms of
89 the Settlement Agreements, the deadlines related to the effective dates of the Settlement
90 Agreements, the ramifications associated with the County's refusal to enter into the Settlement
91 Agreements, the form of the Addendum, the form of the AG MOU, and an overview of the
92 process for finalizing the Settlement Agreements;
93
94 WHEREAS, the County, by this Resolution, shall deposit the proceeds of the Settlement
95 Agreements consistent with the terms of this Resolution and Wis. Stat. § 165.12(4)(b);
96
97 WHEREAS, pursuant to the County's engagement agreement with the Law Firms, the
98 County shall pay up to an amount equal to 25% of the proceeds from successful resolution of all
99 or part of the Litigation, whether through settlement or otherwise, plus the Law Firms' costs and
100 disbursements, to the Law Firms as compensation for the Law Firms' efforts in the Litigation
101 and any settlement;
102
103 WHEREAS, the Law Firms anticipate making application to the national fee fund
104 established in the Settlement Agreements seeking payment, in whole or part, of the fees, costs,
105 and disbursements owed the Law Firms pursuant to the engagement agreement with the County;
106
107 WHEREAS, it is anticipated the amount of any award from the fee fund established in
108 the Settlement Agreements will be insufficient to satisfy the County's obligations under the
109 engagement agreement with the Law Firms;
110
ill WHEREAS, the County, by this Resolution, and pursuant to the authority granted the
112 County in the applicable Order emanating from the Litigation in relation to the Settlement
113 Agreements and payment of attorney fees, shall authorize and direct the escrow agent
114 responsible for the receipt and distribution of the proceeds from the Settlement Agreements to
115 establish an account for the purpose of segregating funds to pay the fees, costs, and
116 disbursements of the Law Firms owed by the County (the "Attorney Fees Account") in order to
117 fund a local "backstop" for payment of the fees, costs, and disbursements of the Law Firms;
118
119 WHEREAS, in no event shall payments to the Law Finns out of the Attorney Fees
120 Account and the fee fund established in the Settlement Agreements exceed an amount equal to
121 25% of the amounts allocated to the County in the Addendum;
122
123 WHEREAS, the intent of this Resolution is to authorize the County to enter into the
124 Settlement Agreements, the Addendum, and the AG MOU, establish the County's Opioid
125 Abatement Account, and establish the Attorney Fees Account; and
126
127 WHEREAS, the County, by this Resolution, shall authorize the County's corporation
128 counsel to finalize and execute any escrow agreement and other document or agreement
129 necessary to effectuate the Settlement Agreements and the other agreements referenced herein;
130
131 NOW, THEREFORE, BE IT RESOLVED: the County Board of Supervisors hereby
132 approves:
133
134 1. The execution of the Settlement Agreements and any and all documents ancillary
135 thereto and authorizes the County Administrator or designee to execute same.
136
137 2. The final negotiation and execution of the Addendum in form substantially
138 similar to that presented with this Resolution and any and all documents ancillary
139 thereto and authorizes the County Administrator or designee to execute same
140 upon finalization provided the percentage share identified as allocated to the
141 County is substantially similar to that identified in the Addendum provided to the
142 Board with this Resolution.
143
144 3. The final negotiation and execution of the AG MOU in form substantially similar
145 to that presented with this Resolution and any and all documents ancillary thereto
146 and authorizes the County Administrator or designee to execute same.
147
148 4. The execution by the County Administrator or designee of any additional
149 documents or agreements for the receipt and disbursement of the proceeds of the
150 Settlement Agreements as referenced in the Addendum.
151
152 BE IT FURTHER RESOLVED: all proceeds from the Settlement Agreements not
153 otherwise directed to the Attorney Fees Account shall be deposited in the County's Opioid
154 Abatement Account. The Opioid Abatement Account shall be administered consistent with the
155 terms of this Resolution, Wis. Stat. § 165.12(4), and the Settlement Agreements.
156
157 BE IT FURTHER RESOLVED: the County hereby authorizes the establishment of an
158 account separate and distinct from any account containing funds allocated or allocable to the
159 County which shall be referred to by the County as the "Attorney Fees Account." An escrow
160 agent shall deposit a sum equal to up to, but in no event exceeding, an amount equal to 20% of
161 the County's proceeds from the Settlement Agreements into the Attorney Fees Account. If the
162 payments to the County are not enough to fully fund the Attorney Fees Account as provided
163 herein because such payments are made over time, the Attorney Fees Account shall be funded by
164 placing up to, but in no event exceeding, an amount equal to 20% of the proceeds from the
165 Settlement Agreements attributable to Local Governments (as that term is defined in the
166 Allocation MOU) into the Attorney Fees Account for each payment. Funds in the Attorney Fees
167 Account shall be utilized to pay the fees, costs, and disbursements owed to the Law Firms
168 pursuant to the engagement agreement between the County and the Law Firms provided,
169 however, the Law Firms shall receive no more than that to which they are entitled under their fee
170 contract when considering the amounts paid the Law Firms from the fee fund established in the
171 Settlement Agreements and allocable to the County. The Law Firms may make application for
172 payment from the Attorney Fees Account at any time and the County shall cooperate with the
173 Law Firms in executing any documents necessary for the escrow agent to make payments out of
174 the Attorney Fees Account.
175
176 BE IT FURTHER RESOLVED that all actions theretofore taken by the Board of
177 Supervisors and other appropriate public officers and agents of the County with respect to the
178 matters contemplated under this Resolution are hereby ratified, confirmed and approved.
Legal—Fiscal—Administrative Approvals:
Legal Note:
Fiscal Impact: These settlements will produce revenue to the County over a period of years in
amounts which are not yet determined. Based on a comparison with previous
settlements involving distributors, annual payments under these settlements may be
in the range of$167,000 to$315,000 per year over ten or more years.This revenue
will be placed in the Opioid Abatement Account and must be spent on opioid
abatement measures as allowed by the settlement agreements,with expenditures
subject to future County Board approval.
Qll' ��PJAH RAI
Neat er U1,0s,Corporation Counsel 2/15/ 023 2/16/2023
K€ AAM��� ON ,dmin(Wr r 2/16/2023
02/21/23 Administration Committee RECOMMENDED
......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... .........
RESULT: RECOMMENDED [UNANIMOUS]
MOVER: Scott Counter, Vice-Chair
SECONDER: Bob Feidler, Supervisor
AYES: Carah Koch, Bob Feidler, Scott Counter
EXCUSED: Bob Long, Paul Berning
Vote Confirmation.
Carah Koc Administration, ;lair 2/22/2023
St. Croix County Board of Supervisors Action:
Roll Call -Vote Requirement— Majority of Supervisors Present
RESULT: ADOPTED [UNANIMOUS]
MOVER: Carah Koch, Supervisor
SECONDER: Lisa Lind, Supervisor
AYES: Lind, Anderson, Long, Leaf, Koch, Adams, Berning, Ottino, Feidler, Ostness,
Counter, Hansen, Sherley, Carlson, Barcalow, Swanepoel, VanSomeren, Ramberg
This Resolution was Adopted by the St. Croix County Board of Supervisors on March 7, 2023
Christine Hines, County Clerk