HomeMy WebLinkAboutResolution 2024 (31)ST. C ROIX -'- U.NTY
RESOLUTION NO.31 (2024)
Authorizing St. Croix County to Enter Into the Settlement Agreement with The Kroger
Co. and Agree to the Terms of Addendum Two to the MOU Allocating Settlement Proceeds
1 WHEREAS, the St. Croix County Board of Supervisors previously authorized the County
2 to enter into an engagement agreement with von Briesen & Roper, s.c., Crueger Dickinson LLC
3 and 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; and
7
8 WHEREAS, on behalf of St. Croix County, the Law Firms filed a lawsuit against the
9 Opioid Defendants; and
10
11 WHEREAS, the Law Firms filed similar lawsuits on behalf of 66 other Wisconsin counties
12 and all Wisconsin cases were coordinated with thousands of other lawsuits filed against the same
13 or substantially similar parties as the Opioid Defendants in the Northern District of Ohio, captioned
14 In re: Opioid Litigation, MDL 2804 (the "Litigation"); and
15
16 WHEREAS, four (4) additional Wisconsin counties (Milwaukee, Dane, Waukesha, and
17 Walworth) hired separate counsel and joined the Litigation; and
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; and
23
24 WHEREAS, the settlement discussions with The Kroger Co. (the "Settling Defendant")
25 resulted in a tentative agreement as to settlement terms pending agreement from the County and
26 other plaintiffs involved in the Litigation; and
27
28 WHEREAS, copies of the settlement agreement relating to the Settling Defendant
29 ("Settlement Agreement") representing the terms of the tentative settlement agreement with the
30 Settling Defendant has been made available at https://nationalopioidsettlement.com/wp-
31 content/uploads/2024/05/Kroger-Multistate-Settlement-Agreement-Circulated-to-States-March-
32 25-2024.pdf; and
33
34 WHEREAS, the Settlement Agreement provides, among other things, for the payment of
35 certain sums to Participating Subdivisions (as defined in the Settlement Agreement) upon the
36 occurrence of certain events detailed in the Settlement Agreement; and
37
38 WHEREAS, St. Croix County is a Participating Subdivision in the Settlement Agreement
39 and has the opportunity to participate in the benefits associated with the Settlement Agreement
40 provided St. Croix County (a) approves the Settlement Agreement; (b) approves the Addendum
41 Two to the Memorandum of Understanding allocating proceeds from the Settlement Agreement
42 ("MOU") among the various Wisconsin Participating Subdivisions, a copy of which is attached to
43 this Resolution ("Addendum Two"); and (c) the Legislature's Joint Committee on Finance
44 approves the terms of the Settlement Agreement; and
45
46 WHEREAS, pursuant to Section 12 of the State -Local MOU entered into between the
47 Wisconsin Participating Subdivisions and the Attorney General of the State of Wisconsin ("State-
48 Local MOU"), the Attorney General has provided notice that the terms of the State -Local MOU
49 shall apply to the Settlement Agreement and all proceeds of such Settlement Agreement; and
50
51 WHEREAS, 2021 Wisconsin Act 57 created Section 165.12 of the Wisconsin Statutes
52 relating to the settlement of all or part of the Litigation; and
53
54 WHEREAS, pursuant to Wis. Stat. § 165.12(2), the Legislature's Joint Committee on
55 Finance is required to approve the Settlement Agreement; and
56
57 WHEREAS, pursuant to Wis. Stat. § 165.12(2), the proceeds from any settlement of all or
58 part of the Litigation are distributed 70% to local governments in Wisconsin that are parties to the
59 Litigation and 30% to the State; and
60
61 WHEREAS, Wis. Stat. § 165.12(4)(b)2. provides the proceeds from the Settlement
62 Agreement must be deposited in a segregated account (the "Opioid Abatement Account") and may
63 be expended only for approved uses for opioid abatement as provided in the Settlement
64 Agreement; and
65
66 WHEREAS, Wis. Stat. § 165.12(7) bars claims from any Wisconsin local government
67 against the Opioid Defendants filed after June 1, 2 02 1; and
68
69 WHEREAS, the definition of Participating Subdivisions in the Settlement Agreement
70 recognizes a statutory bar on claims such as that set forth in Wis. Stat. § 165.12(7) and, as a result,
71 the only Participating Subdivisions in Wisconsin are those counties and municipalities that were
72 parties to the Litigation (or otherwise actively litigating a claim against one, some, or all of the
73 Opioid Defendants) as of June 1, 2021; and
74
75 WHEREAS, the Legislature's Joint Committee on Finance is not statutorily authorized or
76 required to approve the allocation of proceeds of the Settlement Agreement among Wisconsin
77 Participating Subdivisions; and
78
79 WHEREAS, the Wisconsin Participating Subdivisions previously negotiated and
80 approved the allocation of proceeds among themselves, which allocation is reflected in Exhibit A
81 to the MOU, which is an agreement between all of the entities identified in the Allocation MOU
82 as to how the proceeds payable to those entities under the Settlement Agreements will be allocated;
83 and
84
85 WHEREAS, St. Croix County and all other Wisconsin Participating Subdivisions agreed
86 to and entered into that certain Addendum to the MOU ("Addendum One") that provided for
87 allocation of settlement proceeds from previous settlements with certain pharmacies and
88 manufacturers according to the same percentages as that provided in the MOU; and
89
90 WHEREAS, St. Croix County has been informed as to the deadlines related to the
91 effective dates of the Settlement Agreement, the ramifications associated with the County's refusal
92 to enter into the Settlement Agreement, the form of Addendum Two and an overview of the process
93 for finalizing the Settlement Agreements and such information, together with additional resources
94 related to the settlement can be found at https://nationalopioidsettlement.com/kroger-co-
95 settlement/; and
96
97 WHEREAS, St. Croix County, by this Resolution, shall deposit the proceeds of the
98 Settlement Agreement consistent with the terms of this Resolution and Wis. Stat. § 165.12(4)(b);
99 and
100
101 WHEREAS, pursuant to St. Croix County's engagement agreement with the Law Firms,
102 St. Croix County shall pay up to an amount equal to 25% of the proceeds from successful resolution
103 of all or part of the Litigation, whether through settlement or otherwise, plus the Law Firms' costs
104 and disbursements, to the Law Firms as compensation for the Law Firms' efforts in the Litigation
105 and any settlement; and
106
107 WHEREAS, the Law Firms anticipate making application to the national fee fund
108 established in the Settlement Agreement seeking payment, in whole or part, of the fees, costs, and
109 disbursements owed the Law Firms pursuant to the engagement agreement with St. Croix County;
110 and
111
112 WHEREAS, it is anticipated the amount of any award from the fee fund established in the
113 Settlement Agreements will be insufficient to satisfy St. Croix County's obligations under the
114 engagement agreement with the Law Firms; and
115
116 WHEREAS, St. Croix County, by this Resolution, and pursuant to the authority granted
117 the County in the applicable Order emanating from the Litigation in relation to the Settlement
118 Agreement and payment of attorney fees, shall authorize and direct the escrow agent responsible
119 for the receipt and distribution of the proceeds from the Settlement Agreement to establish an
120 account for the purpose of segregating funds to pay the fees, costs, and disbursements of the Law
121 Firms owed by St. Croix County (the "Attorney Fees Account") in order to fund a local "backstop"
122 for payment of the fees, costs, and disbursements of the Law Firms; and
123
124 WHEREAS, in no event shall payments to the Law Firms out of the Attorney Fees
125 Account and the fee fund established in the Settlement Agreement exceed an amount equal to 25%
126 of the amounts allocated to St. Croix County by virtue of the Addendum Two (Exhibit A to the
127 MOU); and
128
129 WHEREAS, the intent of this Resolution is to authorize St. Croix County to enter into the
130 Settlement Agreement, the Addendum Two, establish St. Croix County's Opioid Abatement
131 Account, and establish the Attorney Fees Account; and
132
133 WHEREAS, St. Croix County, by this Resolution, shall authorize the County's
134 corporation counsel to finalize and execute any other document or agreement necessary to
135 effectuate the Settlement Agreement and the other agreements referenced herein.
136
137 NOW, THEREFORE, BE IT RESOLVED that the St. Croix County Board of
138 Supervisors hereby approves:
139
140 1. The execution of the Settlement Agreement and any and all documents ancillary
141 thereto and authorizes the Board Chair or designee to execute same.
142
143 2. The final negotiation and execution of Addendum Two in form substantially similar
144 to that presented with this Resolution and any and all documents ancillary thereto
145 and authorizes the Board Chair or designee to execute same upon finalization
146 provided the percentage share identified as allocated to St. Croix County is
147 substantially similar to that identified in the Addendum Two provided to the Board
148 with this Resolution.
149
150 3. The execution by the Board Chair or designee of any additional documents or
151 agreements for the receipt and disbursement of the proceeds of the Settlement
152 Agreement.
153
154 BE IT FURTHER RESOLVED all proceeds from the Settlement Agreement not
155 otherwise directed to the Attorney Fees Account shall be deposited in St. Croix County's Opioid
156 Abatement Account. The Opioid Abatement Account shall be administered consistent with the
157 terms of this Resolution, Wis. Stat. § 165.12(4), and the Settlement Agreement.
158
159 BE IT FURTHER RESOLVED that St. Croix County hereby authorizes the
160 establishment of an account separate and distinct from any account containing funds allocated or
161 allocable to St. Croix County which shall be referred to by the County as the "Attorney Fees
162 Account." An escrow agent shall deposit a sum equal to up to, but in no event exceeding, an
163 amount equal to 20% of St. Croix County's proceeds from the Settlement Agreement into the
164 Attorney Fees Account. If the payments to St. Croix County are not enough to fully fund the
165 Attorney Fees Account as provided herein because such payments are made over time, the
166 Attorney Fees Account shall be funded by placing up to, but in no event exceeding, an amount
167 equal to 20% of the proceeds from the Settlement Agreement attributable to Local Governments
168 (as that term is defined in the MOU) into the Attorney Fees Account for each payment. Funds in
169 the Attorney Fees Account shall be utilized to pay the fees, costs, and disbursements owed to the
170 Law Firms pursuant to the engagement agreement between St. Croix County and the Law Firms
171 provided, however, the Law Firms shall receive no more than that to which they are entitled under
172 their fee contract when considering the amounts paid the Law Firms from the fee fund established
173 in the Settlement Agreement and allocable to St. Croix County. The Law Firms may make
174 application for payment from the Attorney Fees Account at any time and St. Croix County shall
175 cooperate with the Law Firms in executing any documents necessary for the escrow agent to make
176 payments out of the Attorney Fees Account.
177
178 BE IT FURTHER RESOLVED that all actions heretofore taken by the St. Croix County
179 Board of Supervisors and other appropriate public officers and agents of St. Croix County with
180 respect to the matters contemplated under this Resolution are hereby ratified, confirmed and
181 approved.
182
St. Croix County Board of Supervisors Action:
This Resolution was ADOPTED by the St. Croix County Board of Supervisors on S 4 e ;tb dLq
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Bob Long, Co d Chair Christine Hines, County Clerk