BLOUNTVILLE — In a sweeping ruling in favor of a multi-county lawsuit against pharmaceutical companies that produce opioids, a judge granted a summary judgment against those companies, but delayed any decision on monetary damages.
In the ruling, filed in Sullivan County Circuit Court on Tuesday afternoon, Chancellor E.G. Moody granted a default judgment against Endo Health Solutions Inc. and Endo Pharmaceuticals Inc. in the case of Staubus vs. Purdue, widely recognized as the “Sullivan Baby Doe” suit.
Moody’s ruling did not assess damages in the case, but said that will be determined at a later date with a damages trial. The judgment details a dozen false statements Endo’s attorneys made to the court, describes a “coordinated strategy between Endo and its counsel to … interfere with the administration of justice,” and holds the companies liable for damages sought, an amount that totals $2.4 billion.
Moody imposed sanctions for defendant Endo Health Solutions Inc. and Endo Pharmaceuticals Inc. and reserved issuing a final judgment pending a damages trial. A date for that damages trial could be set during a hearing scheduled for Thursday, Second Judicial District Attorney General Barry Staubus said.
The 31-page judgment goes into great detail about the lawsuit.
“It is obvious that monetary sanctions are not sufficient. Endo and its attorneys have not shown any remorse, admitted their wrongdoing or apologized to opposing counsel or to the court for their actions,” Moody wrote.
“Although this is a harsh sanction, justice demands it under the circumstances,” Moody’s order reads in part. “Anything less would make a mockery of the attorneys who play by the rules and the legal system.”
Staubus compared the fight to the biblical David and Goliath.
“For years we have worked to hold major opioid producers and distributors accountable for the long-term damage they have caused in our Tennessee communities,” Staubus said. “We understood from the start that seeking justice for those babies who were born drug-dependent and the rural areas that these companies victimized would constitute a fight on the level of David versus Goliath. All those harmed by this epidemic will now see Goliath face justice.”
The Sullivan Baby Doe suit was originally filed June 13, 2017, by the district attorneys general of Tennessee’s First, Second and Third Judicial Districts in Sullivan County Circuit Court in Kingsport. The complaint originally listed prescription opioid manufacturer Purdue Pharma, L.P. and its related companies, along with Mallinckrodt PLC, Endo Pharmaceuticals, a doctor and convicted opioid dealers as defendants.
As part of the national scrutiny brought to bear on opioid producers and distributors, due in part to Sullivan Baby Doe’s arguments, Purdue and Mallinckrodt have both declared bankruptcy, with claims proceeding against them in related courts. Endo remains the only active corporate defendant.
A partner in the law firm representing Baby Doe and participating cities and counties also weighed in on the ruling.
“After a four-year fight in which Endo has tried to delay, derail and subvert justice, the court has laid bare Endo’s attempts to put their thumb on the scale of justice,” said J. Gerard Stranch IV, managing partner of Branstetter, Stranch & Jennings. “The Court laid out their deceptive and predatory actions for the public to see. This includes a dozen false statements made by Endo and their attorneys and what the court describes as a ‘coordinated strategy to interfere with the administration of justice.’ As a result, Endo will finally be forced to account for their role in the widespread misery they have knowingly caused in rural counties throughout Northeast Tennessee, which have suffered devastating rates of addiction, overdose deaths and babies being born drug-dependent.
“We look forward to putting our $2.4 billion damage case to a jury and ultimately seeing funds returned directly to these small communities, which have borne the brunt of Endo’s focus on financial gain.”
Moody’s order granting default judgement cites as legal standard a section of Tennessee Rules of Civil Procedure under which “the trial court is expressly authorized to dismiss an action for failure to abide by discovery rules or court orders.”
The order also lists circumstances the Tennessee Court of Appeals had identified in which a default judgment is warranted and circumstance under which it is not.
“Endo has met all the criteria in favor of granting a default judgment and it has failed to meet any of the criteria for not granting a default judgment,” Moody wrote.
Discovery, in legal proceedings, is the process of plaintiffs and defendants sharing information (such as witnesses and evidence) each side will present at trial.
Nearly a year ago, the court had already held Endo and its lawyers in contempt of court for failing to produce documents in response to plaintiffs’ discovery requests.
Some key points regarding discovery from Moody’s order:
• “The court is especially concerned about the many false statements to plaintiffs’ counsel and to the court by the Endo defendants’ attorneys in the course of the discovery process.”
• Noting that Endo “repeatedly tried to characterize its discovery misconduct as a simple ‘misunderstanding’ between plaintiffs’ counsel and defense counsel” in the discovery process, Moody’s order states “the record demonstrates otherwise. It is clear to the court that Endo and its counsel at Arnold & Porter willfully withheld responsive records and many of the records that Endo knowingly withheld were highly relevant.”
• “It is apparent that Endo intended to defend itself at trial by touting its anti-diversion measures, while simultaneously depriving plaintiffs of evidence that would have undercut that defense. Accordingly, the court finds that Endo willfully withheld this information during the discovery phase to gain a litigation advantage at trial.”
• “The court further finds that Endo and its attorneys’ false statements violated the Tennessee Rules of Civil Procedure and the Tennessee Rules of Professional Conduct.”
• Later in the order, Moody wrote it is clear “Endo and its attorneys have still not learned their lesson. It appears to the court that Endo and its attorneys, after delaying trail, have resorted to trying to improperly corrupt the record.”
• The order states “it is obvious monetary sanctions are not sufficient,” regarding what it outlines as Endo’s pattern of discovery misconduct.
• “Endo and its attorneys have not shown any remorse, admitted their wrongdoing or apologized to opposing counsel or the court for their actions,” the order states. “For all these reasons, the court hearby enters a default judgement in favor of plaintiffs.”
• Additional sanctions issued by the court include awarding plaintiff costs and fees.
• Moody’s order requires attorneys for the plaintiffs to identify, within 15 days, the attorneys for the defendants “who made the false statements” referred to in the order. The order requires each of the Arnold & Porter attorneys who are partners or shareholders and who have been admitted pro hac vice in the case to show cause why their pro hac vice admissions should not be revoked.
Pro hac vice is a legal term used to indicate a lawyer has been allowed to participate in a case in a particular jurisdiction where the lawyer otherwise is not been admitted to practice.