by Jon Guze
Senior Fellow, Legal Studies, John Locke Foundation
That’s how attorney Margaret A. Little characterizes the likely outcome of a lawsuit brought by a group of state attorneys general against the pharmaceutical industry. In a recent post at the Law and Liberty blog, she explains why she fears the lawsuit is headed towards “a swift global settlement modelled on the tobacco settlement of the 1990s”:
The result will inflict lasting damage on our constitutional order and do virtually nothing to solve the opioid crisis. Opioid abusers, just like smokers in the infamous tobacco settlement, stand to receive nothing. A single unelected federal judge will have feigned to have “solved” opioids, levied billions in unlegislated taxation, made drugs more costly and harder to secure for non-abusers while leading abusers to turn to heroin and fentanyl, and filled state and local coffers with revenue-by-judiciary while richly endowing trial lawyer barons – hand-picked by the judge – with billions in public funds. A swift education of the American public about this abuse of the judicial process is in order, not a swift settlement. …
[The] process, known as regulation by litigation, has three legs:
1. Alliances with coalitions of government officials that sell their enforcement powers en masse to private lawyers in exchange for campaign contributions who are then awarded lucrative – and unlawful – contingency fee deals;
2. Amassing of lawsuits at every level of government, state, local, municipal, county, tribal and foreign; and,
3. Demonization of the targets through a concerted lobbying, public relations and media campaign that generates public hysteria and exerts crippling pressure on stock price.
The aim is not to go to trial on these legally unprecedented claims, but rather to overwhelm the targets with industry-busting costs, bad PR and depression of stock price.
Regulation by litigation brings the wrong political actors to the table. Unlike in legislative hearings, opioid abusers, medical, public health, taxpayers and government officials on the front line of this crisis are utterly unrepresented. Instead the political interests of ambitious state attorneys general and the monetary interests of their donors, the trial bar, will prevail. …
In short, if such a global settlement ensues and follows the template of the tobacco settlement, the American public will have had foisted upon it a billion-dollar wealth transfer financed by all Americans. This unlegislated tax increase constitutes a judge-imposed hike to already stratospheric health care costs, and a scandalous transfer of billions of dollars in attorney’s fees doled out to the politically powerful trial bar by state attorneys general who are their prime recipients of pay-to-play campaign contributions.
These initiatives are not unstoppable. Their purveyors like to portray them as so – “too big to fail” was used to describe the tobacco Master Settlement Agreement. Public understanding, outrage, and swift judicial and legislative muscle is called for to stop this gravy train for the trial bar and state governments bloated by these raids on industry – and thus grown flaccid in exercising fiscal discipline at a time when steep health care costs are already adversely affecting the economy, productivity and the general welfare of those unknowingly taxed to finance these unlawful, unconstitutional and unethical deals.