Attorneys General Slam Creation of ‘Negotiation Class’ In Opioid Case “Bizarre”

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(Photo by Tim Evanson/Creative Commons)

PHOENIX – The federal appeals court in Cincinnati is being called upon to reverse an Ohio federal judge’s order that some believe undermines the ability of States, including Arizona, to negotiate a comprehensive opioid settlement.

Arizona Attorney General Mark Brnovich and 12 other attorneys general allege that no grant of legislative or constitutional authority permitted the District Court to certify a “negotiation class” to resolve multidistrict litigation against entities who played a role in the opioid crisis.

The attorneys general call the judge’s ruling bizarre. Amicus brief highlights:

This case presents a question that is both mundane and bizarre: Did the District Court err when it certified a “negotiation class” in this multidistrict litigation? The question is mundane because this Court often reviews class-certification decisions. The question is bizarre because the District Court entered its certification order in a multidistrict case that is not—or at least was not—a class action.

This multidistrict litigation involves individual suits from over 2,000 political subdivisions, including at least one from almost every State in America. Those subdivisions are seeking damages for public injuries caused by the opioid crisis. How did thousands of individual suits by thousands of individual plaintiffs turn into a class action? By decree. The District Court, apparently, concluded that it could certify the class because it had to. As it explained in an order addressing a separate issue, no other body in America is up for the challenge of addressing the opioid epidemic: “Ordinarily, the resolution of a social epidemic should be the responsibility of our other two branches of government, but these are not ordinary times.”

Consistent with this drastic-times-call-for-drastic-measures approach, the District Court told both sides early on that its “attention and time, candidly, is going to be on facilitating the settlement track.” Then, relying on the “creative thinking” of the special master appointed to oversee the litigation, the District Court devised “a new form of class action”—one involving a “negotiation class,” which will attempt to negotiate a comprehensive settlement between thousands of parties in the individual cases comprised by this multidistrict litigation. Once the District Court and special master concocted this scheme, they enlisted the plaintiffs’ attorneys to submit a motion to certify the class. Not surprisingly, the District Court certified the “negotiation class” that it invented and encouraged.

The trouble with this approach is that district courts are bound by the law even when they preside over litigation about important social issues. This Court recently observed that any “power a lower federal court exercises must have some basis in either an act of Congress or the Constitution.” That lesson applies here. As the appellants show, no grant of legislative or constitutional authority permitted the District Court to certify a negotiation class.

The amici States write to highlight one particular concern about the certified class that is of unique interest to them, and that bears on the propriety of the certification order: the proposed class threatens harm to state interests, including state sovereignty. The 2,000 political-subdivision plaintiffs are suing (at least in part) to vindicate the interests of the public at large. They are, in effect, suing as parens patriae. But political subdivisions have no inherent authority to sue in that capacity. Under our Constitution, the States themselves may allocate power within their borders as they see fit—the States themselves, not the federal courts, get to decide what their political subdivisions are empowered to do.

That reality is impossible to square with the certification order, which permits a single, nationwide class of political subdivisions to pursue a settlement without regard to whether the subdivisions have state-law authority to bring their claims. By permitting a national class of local governments to settle claims that they have no state-law authority to litigate, the District Court has created an alternative to state government; it has freed the subdivisions from state control and thus invaded state sovereignty. And if the certified class succeeds in reaching a settlement, the class-certification order will have inflicted still more damage on state interests by diverting finite opioid settlement funds to political subdivisions and away from the States.

The class’s negative impacts on state interests make certification improper. The District Court certified the class under Rule 23(b)(3). That rule permits certification only if: (1) “a class action is superior to other available methods for fairly and efficiently adjudicating the controversy”; and (2) “questions of law or fact common to class members predominate over any questions affecting only individual members.” Here, the proposed nationwide class threatens to undermine the States’ governing structures, making a class action a significantly inferior way of resolving this dispute. The only way to avoid these sovereignty concerns would be to ask, with respect to each subdivision: Does the relevant State’s law allow the political subdivision to obtain this relief? The District Court’s certification order does not allow for this—political subdivisions will be able to settle their claims without regard to their power to do so. And even if the District Court were to conduct this inquiry, investigating the manner in which dozens of States’ laws apply to thousands of political subdivisions would cause individualized questions to “predominate” over “questions of law or fact common to class members,” and the class would fail Rule 23(b)(3)’s predominance requirement.

Because the District Court improperly certified the negotiation class, this Court should reverse. The States are filing this brief under Rule 29(a)(2) to say so.

More than 2,000 political subdivisions across the country have filed individual lawsuits seeking damages for public injuries caused by the opioid crisis. In September 2019, District Judge Dan Polster certified a “negotiation class” lumping all of the individual entities together into one class and expanding the class to cover cities, counties, and towns across the country, allowing plaintiffs’ lawyers to negotiate a settlement that binds the states.

Traditionally, class members are given the option to opt out of the class after the settlement is reached. However, this newly coined “negotiation class” will require class members to opt out before a settlement is reached. And it would bind local governments that have no independent power to bring a case like this in the first place.

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