Brief of Amicus Curiae – Supreme Court of Oklahoma: District Court Case No. CJ-2017-816

INTEREST OF AMICUS CURIAE

The Competitive Enterprise Institute (“CEI”) is a non-profit public policy organization dedicated to advancing the principles of limited government, free enterprise, and individual liberty. CEI regularly participates in public interest litigation, as litigant or amicus, where fundamental due process and other basic constitutional rights are threatened. The cases in which it participates include lawsuits challenging the constitutionality of dubious statutes, questionable interstate agreements, onerous regulations, and government overreach. Allowing the district court’s judgment to stand in this case would have profound national consequences that run counter to CEI’s core mission of protecting free enterprise and the basic rights enshrined in the Constitution of the United States.

SUMMARY OF ARGUMENT

On November 15, 2019, the District Court of Cleveland County, Oklahoma entered an unprecedented judgment for $465 million (reduced from over $572 million) against Johnson & Johnson and its wholly-owned Janssen subsidiaries (hereinafter “J&J”) for what it calls “an abatement of a public nuisance.” As that judgment rested explicitly on a novel version of “public nuisance,” the case by design did not provide compensation for any individual case of death or bodily injuries from the defendants’ action. Any such private actions are not precluded by this judgment, and those suits, depending on the applicable law, could easily result in billions of dollars of additional damages in Oklahoma alone. The $465 million payment for abatement represents only a first installment to the state of Oklahoma for its collective steps to deal with a nationwide problem. The State also claimed, without explaining how or why, that an appropriate abatement plan would take at least twenty years to implement. The district court, however, refused to consider these out years by insisting that “…the State did not present sufficient evidence of the amount of time and costs necessary, beyond year one, to abate the Opioid Crisis.” Final Judgement (FJ) at 30 ¶ 2. There is a potential of further penalties from future legislative or court action for those out years, such that the instant case is the tip of a legal iceberg. At this very moment, there is a nationwide lawsuit filed in Ohio, which also is host to about 200 other lawsuits brought by such states as California, Illinois, Ohio, and West Virginia.

To get some sense of the magnitude of this decision, the population of Oklahoma is just short of four million people, which constitutes about 1.2 percent of the national population of just over 330 million people. Yet this judgment was entered against only one defendant in that State for one year’s public losses, the vast majority of which arose from opioids manufactured by others.  There is nothing in either the decision of the District Court or in any of the relevant papers which suggests that the opioid situation in Oklahoma is materially different from that in many other states, including those involved in the nationwide action in Ohio.  Yet if every state imposed that one-time payment of $465 million proportionally to population, the resulting penalty would total about $38.8 billion nationwide for that first year alone, which over time could lead to a cumulative cost in the hundreds of billions. As a result of the district court’s woefully elementary and flawed understanding of the public nuisance doctrine, states could divert a large part of the pharmaceutical sector’s revenue needed for product research and development into untested policy programs devised entirely by courts as policy-making bodies.

That ominous prospect, which raises a serious separation-of-powers problem, depends entirely upon a basic error in the district court’s understanding of the public nuisance doctrine. Far from its origins in common rights of the public to land and water, the district court’s rule is a misapplication of straightforward misrepresentation and products liability law, which if faithfully applied could succeed on the facts of the case.

The root difficulty is that the State of Oklahoma has morphed itself into a collective plaintiff that purports to act on behalf of all of its citizens in pursuing this public nuisance case.  In fact, the state is a wholly inappropriate plaintiff in this instance because it is not suing for harms to its common property, or to any rights held by the public at large, as the law of public nuisance uniformly requires. Instead, it sues as a disguised guardian for all individuals who are fully capable of bringing tort actions on their own for any substantial injuries they suffered. The interposition of the state as a plaintiff has made it all too easy for the district court to lump together this large collection of diverse individuals into a single entity that somehow has suffered an ill-defined public harm for which enormous damages are awarded.

This false aggregation of individual claims, under the banner of the State of Oklahoma, has allowed the district court to cobble together a weird theory of public nuisance liability as though J&J through its sale and promotion of its products stands somehow responsible for all of these diffuse social harms.  The public liability is imposed even for those losses suffered by parties who never consumed or used its products, let alone knew or relied on the representations that the defendants made at different times to different groups of injured parties, all of whom used different products.  That form of collective liability is also wholly at odds with the entire Anglo-American tradition of vicarious tort liability that holds individuals and firms responsible for the discrete harms that they have caused, and not for global harms that were caused by unrelated parties.