3.4 Opioid Settlement
Request for
City Council Action
DEPARTMENT INFORMATION
ORIGINATING DEPARTMENT REQUESTOR: MEETING DATE:
Administration City Attorney Kendall December 13, 2021
PRESENTER(s) REVIEWED BY: ITEM #:
Consent City Administrator/Finance Director Flaherty 3.4 – Opioid Settlement
STRATEGIC VISION
MEETS: THE CITY OF OTSEGO:
X Is a strong organization that is committed to leading the community through innovative
communication.
Has proactively expanded infrastructure to responsibly provide core services.
Is committed to delivery of quality emergency service responsive to community needs and
expectations in a cost-effective manner.
Is a social community with diverse housing, service options, and employment opportunities.
Is a distinctive, connected community known for its beauty and natural surroundings.
AGENDA ITEM DETAILS
RECOMMENDATION:
City staff is recommending that the City Council adopt a Resolution authorizing opioid settlement.
ARE YOU SEEKING APPROVAL OF A CONTRACT? IS A PUBLIC HEARING REQUIRED?
No No
BACKGROUND/JUSTIFICATION:
For several years, state and local governments have been in civil litigation with manufacturers and
distributors of prescription opioids related to the opioid crisis. The lawsuits largely allege facts that the
pharmaceutical industry has promoted opioid use to treat chronic pains at unprecedented rates, while
ignoring or downplaying the addictive properties of opioids and ignoring evidence of over-prescription and
misuse. The lawsuit allege that this activity resulted in mass addiction in opioid use and other illegal drugs,
crime, rising health care and insurance premiums, and other costs borne by public entities, including cities.
While jurisdictions impacts are unique, counties have largely experienced severe impacts on social services
(such as child protection) and public health programming and cities have experienced impacts in public
safety.
The State of Minnesota and 26 Minnesota counties and 7 cities filed suit against a variety of opioid
manufacturers and distributors. The political subdivisions filed their lawsuits in Federal District Court,
which the federal court system consolidated in a Multi-District Litigation action in Ohio. Several of the
companies have filed for bankruptcy since the onset of litigation (e.g., Purdue Pharma).
There are two proposed nationwide settlements (“Opioid Litigation Settlements”) intended to resolve all
litigation brought by state and local governments four entities: McKesson, Cardinal Health and
Amerisource Bergen (Settling “Distributors”), and Janssen Pharmaceutical/Johnson & Johnson (“Settling
Manufacturer”).
The total settlement amount for both settlements is $26 billion. Importantly, in addition to monetary
payments to abate the opioid epidemic, the settlements contain injunctive relief provisions designed to
target opioid marketing and sale and distribution practices.
The negotiating parties structured the monetary component to incentivize states to promote local
government participation (for both litigating and non-litigating cities). The projected settlement amount
for Minnesota is $50 million+. The more political subdivisions participate, however, the greater the
amount of funds that flow to Minnesota and participating subdivisions. The process requires all entities
participating in the settlement to sign on by January 2, 2022. If the City participates in the Opioid Litigation
Settlements, it will be releasing all potential claims against the Settling Distributors and Settling
Manufacturer. The Minnesota Attorney General’s Office has notified all eligible cities of the settlement
agreement and our office has encouraged City staff to register on the settlement website preliminarily.
Please note that that the State and political subdivisions are working through the allocation that will occur
when settlement money flows to the state, and are anticipating drafting a Memorandum of Understanding
(“MOU”) by early December. The Attorney General’s office is consulting with various stakeholders,
including litigating entities, public health officials, the League of Minnesota Cities, the Coalition of Greater
Minnesota Cities, and the Association of Minnesota Counties. All stakeholders are working cooperatively to
create a framework that will allow work for the state and local governments, foster collaboration and
accountability, and be available to focus on the areas where the most harm is occurring. The City may or
may not get a direct allocation pursuant to the MOU. Our office might have an update at the time of the
meeting on this process. While this process is important, it is not advisable that this holds up approval of
the settlement.
In order for staff to initiate formal settlement approval, the City Council must approve participation in the
settlement agreement. From our perspective, there is no downside for the City. Staff and legal counsel
recommend approval of a resolution approving the settlement agreement.
SUPPORTING DOCUMENTS ATTACHED:
• Resolution 2021-89
POSSIBLE MOTION
PLEASE WORD MOTION AS YOU WOULD LIKE IT TO APPEAR IN THE MINUTES:
Motion to adopt Resolution 2021-89 authorizing participation in a national prescription opioid settlement.
BUDGET INFORMATION
FUNDING: BUDGETED:
N/A
N/A
1
CITY OF OTSEGO
COUNTY OF WRIGHT
STATE OF MINNESOTA
RESOLUTION NO: 2021-89
AUTHORIZING PARTICIPATION IN A
NATIONAL PRESCRIPTION OPIOID SETTLEMENT
WHEREAS, the State of Minnesota and numerous Minnesota cities and counties, are engaged in
nationwide civil litigation against manufacturers and distributors of prescription opioids related to the
opioid crisis (“Prescription Opioid Litigation”); and
WHEREAS, state governments have negotiated proposed nation-wide settlements (“Opioid Litigation
Settlements”) with some defendants, i.e., distributors McKesson, Cardinal Health and Amerisource
Bergen (collectively, “Settling Distributors”), and manufacturer Janssen Pharmaceutical, Inc., and its
parent company, Johnson & Johnson (collectively “Settling Manufacturer”); and
WHEREAS, the amount of settlement funds to be received by the State of Minnesota and its political
subdivisions is directly tied to participation by local government entities in the Opioid Litigation
Settlements; and
WHEREAS, the City of Otsego may be entitled to receive funds under the Opioid Litigation Settlements;
and
WHEREAS, it is in the best interests of the State of Minnesota and the residents of the City of Otsego,
and the County of Wright, that the City participate in the Opioid Litigation Settlements
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF OTSEGO, MINNESOTA:
1. Participation in the Opioid Litigation Settlements promotes the public health, safety, and welfare of
the residents of the City of Otsego.
2. City Staff is hereby authorized to execute all necessary documents to ensure City participation in the
Opioid Litigation Settlements, including the Participation Agreement and accompanying Release.
2
ADOPTED by the Otsego City Council this 13th day of December, 2021.
MOTION BY:
SECONDED BY:
IN FAVOR:
OPPOSED:
CITY OF OTSEGO
__________________________________
Jessica L. Stockamp, Mayor
ATTEST:
__________________________________
Audra Etzel, City Clerk