NASHVILLE, Tenn. — A drug manufacturer announced Thursday that it has reached a $35 million agreement that would settle a Tennessee lawsuit by local governments and a child born dependent to opioids over the company's role in the opioid epidemic, though steps remain to finalize the deal.
The announcement by Endo would resolve the northeast Tennessee lawsuit by nine counties, 18 cities and towns and the plaintiff known as "Baby Doe" on the eve of a trial that was set to start Monday over how much to award the plaintiffs.
A judge already ruled the opioid firm was liable in April without holding a civil trial over its role in the epidemic, a rare default judgment he said he entered because of a "coordinated strategy" by the company and its attorneys to delay proceedings, deprive plaintiffs of information and interfere with the administration of justice.
The settlement still requires some of the plaintiffs to approve of it and trial proceedings are adjourned until Aug. 2 amid that process, the company said. In its news release, Endo said the settlement involving two of its subsidiaries "will include no admission of wrongdoing, fault or liability of any kind by Endo, and the settlement value should not be extrapolated to any other opioid-related cases or claims."
This week, governments announced potential settlements to opioid lawsuits with the nation's three biggest drug distribution companies and drugmaker Johnson & Johnson that could be worth up to $26 billion, depending on how many jurisdictions sign on. Tennessee Attorney General Herbert Slatery was one of the lead negotiators in the settlement.
Other companies, including OxyContin maker Purdue Pharma, are close to nationwide settlements, too. But lawsuits are proceeding against regional drug wholesalers, pharmacies and manufacturers like Endo that have not reached settlements.
Gerard Stranch, who represents the plaintiffs in the Tennessee case against Endo, said he anticipated that "all matters concerning participating cities and counties" will be finalized in the coming week.
"We are pleased that after four-plus years of litigation that we have been able to reach an agreement in principle with Endo, and are grateful to the communities of Northeast Tennessee for their support in this landmark prosecution," Stranch said in a statement.
Endo, which has a U.S. headquarters in Pennsylvania, is the last remaining active corporate defendant in the 2017 lawsuit after Mallinckrodt and Purdue Pharma filed for bankruptcy. The lawsuit argued the company is liable under the Tennessee's Drug Dealer Liability Act, a strategy the state Supreme Court said is allowed in a December 2020 opinion in a similar case.
The same Supreme Court ruling said local prosecutors could no longer be plaintiffs in similar cases.
The plaintiffs sued for $2.4 billion. The judge, Sullivan County Circuit Court Chancellor E.G. Moody, wrote that they have "expert testimony that supports that amount."
Moody wrote that the company willfully withheld records during legal discovery to gain an edge at trial, also citing a dozen falsehoods from Endo's legal team as the case played out.
The judge said the company produced almost 400,000 documents after the discovery period closed, despite saying in February 2020 that it had not withheld anything. Many of the records that the company knowingly withheld were highly relevant and in some cases directly contradict testimony by Endo's witnesses, the judge wrote.
At the time of the default judgment, the company called the judge's orders in the case "procedurally, factually, and legally deficient."
Geoff Mulvihill in Cherry Hill, New Jersey, contributed to this report.