Former Tennessee Attorney General Herbert Slatery claimed victory in his final days for a $450 million national settlement with Ireland-based drugmaker Endo International, yet five years ago he had tried to derail legal efforts in Northeast Tennessee that led to a $35 million settlement that's netting more money for nine counties than the Endo deal brought for the entire state.
The settlement negotiated by district attorneys general and their outside counsel went directly to local governments for opioid abuse prevention and treatment.
From the outset, the district attorneys used an aggressive approach, and outside counsel prepared to go to trial -- taking 50 to 60 depositions, causing Endo to refuse to cooperate, according to Sullivan County District Attorney Barry Staubus.
"And I don't think the attorney general, I don't think their (office's) mindset was the same," Staubus says.
(READ MORE: Whitfield County Commission approves opioid settlement resolution)
Dubbed Sullivan Baby Doe for a child born addicted to opioids, the $2.4 billion lawsuit's outcome netted proceeds for the baby's care and $21 million for nine counties in Northeast Tennessee, after Sullivan County Chancellor E.G. Moody found Endo egregiously refused to share information necessary for the plaintiffs to prepare for trial.
In comparison, the entire state of Tennessee could get an estimated $7.1 million to $11.7 million – depending on when it's paid – from the most recent national settlement with Endo negotiated by the Tennessee Attorney General's Office, which led 30 states and the District of Columbia in reaching the deal.
With Endo filing for Chapter 11 bankruptcy, the amount could be further muddied and, ultimately, part of the final award would go to the state government, potentially leaving even less for counties and cities in East and Middle Tennessee to divvy up for opioid addiction treatment or services.
According to a default judgment ordered by Moody, the plaintiffs introduced enough expert testimony to support their $2.4 billion claim for damages against the drug maker, which it proved knew too many opioids were flooding the market. Endo's own records show that 75% of abuse of a reformulated type of Opana ER that some people were injecting took place in Tennessee as the company aggressively marketed opioids to prescribers, according to the document.
(READ MORE: EXPLAINER: Where do US opioid trials, settlements stand?)
But as the group of DA's pursued the case with Nashville-based Branstetter, Stranch & Jennings, the Attorney General's Office tried to assert its authority and take them all out of the equation.
According to spokeswoman Samantha Fisher, the Attorney General's Office intervened "to defend the constitutionality of the statute, which we do whenever statutes are challenged."
She said the East Tennessee district attorneys pursued the Drug Dealer Liability Act, which was a different strategy than the Attorney General's Office took in its case. Fisher said that the state's case is likely to be dismissed because of the bankruptcy but that the proposed settlement "would allow Tennessee and other states and local governments to recover millions."
Slatery, who left office last week at the end of his term, objected to the use of trial attorneys.
In an op-ed published last week in the Memphis Commercial Appeal, Slatery wrote that the Tennessee Attorney General's Office refuses to use private-contingency fee lawyers in opioid cases, contending they've received millions of dollars in legal fees.
He acknowledged that the state hired outside counsel in a lawsuit against Walgreens -- but paid hourly fees billed at a reduced rate. To use an outside law firm, the attorney general must have the governor's approval as well as the eyes of the governor, secretary of state and attorney general on the fee invoices, he wrote.
It's not clear whether the philosophy of the Attorney General's Office will change.
Slatery's replacement, Jonathan Skrmetti, his chief deputy attorney general from 2018 to 2021, managed 160 attorneys and served as a negotiator in a $26 billion multi-state opioid settlement. He's been Gov. Bill Lee's chief counsel since December 2021. Skrmetti was on staff through much of the Baby Doe case as Slatery tried to take over the case.
(READ MORE: Tennessee to receive $46.7 million in federal funding to combat opioid crisis)
However, district attorneys – representing local governments who filed suit against Endo and other major pharmaceutical companies in 2017 – argued that their strategy would net more money from the industry, enabling local governments to provide more services to battle the opioid crisis.
Led by Staubus, DAs in Northeast Tennessee fended off the effort by Slatery to scuttle the lawsuit they filed against pharmaceutical giants that led to the $35 million settlement in 2021.
The group of DAs felt they were in the best position to take on the case and win the biggest award, according to Staubus, money that wouldn't have to go through "Nashville" and could directly target the region's opioid problem, which was substantial.
From 2006 through 2014, more than 416 million pain pills were supplied to the nine-county area in Northeast Tennessee, 138.4 million to Sullivan County alone, 76.1 million to Washington County and 74.7 million to Hamblen County.
After four years of litigation and bankruptcies by Purdue Pharma and Mallinckrodt PLC -- the latter of which manufactures and distributes the opioid Roxycodone -- the DAs won a settlement with Endo in Sullivan Baby Doe (originally Staubus vs. Purdue).
Once legal fees and the court-sealed amount set aside for Baby Doe were distributed, local governments in three Northeast Tennessee received the $21 million, much of which they are planning to use to outfit an opioid treatment center at a former state prison in Carter County. The Washington County Commission this week approved using $1.9 million for the facility where people addicted to opioids could seek treatment, rehabilitation, vocational and job training and help in finding jobs and, possibly, reconnecting with families. Other funds are going toward drug recovery courts.
Staubus stands by the decision to take on the pharmaceutical industry without the Attorney General's Office, saying they are "vindicated" by the settlement amounts.
"I felt like we could get more money because we were focused. We had a game plan that was far more aggressive, and I felt like we had excellent attorneys leading the charge," Staubus says.
Staubus and District Attorneys Dan Armstrong and Ken Baldwin from Northeast Tennessee championed the case and, led by the Nashville-based law firm, obtained the settlement when the chancellor determined that Endo defaulted by not sharing information pertinent for trial.
Endo didn't want to produce documents showing its sales force and managers hedged on the illicit diversion of opioids by pill mills and other prescribers. It finally provided 400,000 pages of proof after a court-ordered deadline of Feb. 14, 2020, for presenting evidence.
In short, the chancellor found Endo in contempt and determined the company lost the case before it could go to trial and the only decision was to set the damages, forcing the drug producer to settle. The district attorneys took the money before Endo could file bankruptcy.
Staubus, an appointee of former Gov. Bill Haslam who since won election to the post, stops short of criticizing Slatery, pointing out only that the Attorney General's Office felt it had the jurisdiction and was in the best position to lead the litigation and decide where the money would go.
Read more at TennesseeLookout.com.