HomeMy WebLinkAbout8460RESOLUTION NO. 8460
AUTHORIZING THE CITY OF REDLANDS TO ENTER INTO THE
SETTLEMENT AGREEMENTS WITH CVS, TEVA, WALMART, AND
WALGREENS, AGREE TO THE TERMS OF THE RELATED STATE -
SUBDIVISION AGREEMENTS, AND AUTHORIZE ENTRY INTO THE
RELATED STATE STATE -SUBDIVISION AGREEMENTS WITH THE
ATTORNEY GENERAL
WHEREAS, the United States is facing an ongoing public health crisis of opioid abuse,
addiction, overdose, and death, forcing the State of California and California counties and cities
to spend billions of dollars each year to address the direct consequences of this crisis; and,
WHEREAS, pending in the U.S. District Court for the Northern District of Ohio is a
multidistrict litigation ("MDL") being pursued by numerous public entity plaintiffs against the
manufacturers and distributors of various opioids based on the allegation that the defendants'
unlawful conduct caused the opioid epidemic; and,
WHEREAS, on or about November 14, 2022, a proposed nationwide tentative
settlement was reached between the plaintiffs in the MDL and Walmart Inc. ("Walmart");
and,
WHEREAS, on or about November 22, 2022, aproposed nationwide tentative
settlement was reached between the plaintiffs in the MDL and Teva Pharmaceutical Industries
Ltd. and all of its respective past and present direct or indirect parents, subsidiaries,
divisions, affiliates, joint ventures, predecessors, successors, assigns, including but not
limited to Teva Pharmaceuticals USA, Inc., Actavis LLC (f/k/aActavis Inc.), Actavis
Elizabeth LLC, Actavis Kadian LLC, Actavis Pharma, Inc. (f/k/a Watson Pharma, Inc.),
Actavis Kadian LLC, Actavis Laboratories UT, Inc. (f/k/a Watson Laboratories, Inc. - Utah),
Actavis Mid Atlantic LLC, Actavis Totowa LLC, Actavis Laboratories FL, Inc. (f/k/a Watson
Laboratories, Inc. - Florida), Actavis South Atlantic LLC, Warner Chilcott Company LLC, and
Watson Laboratories, Inc., and Anda Inc. (collectively, "Teva") and,
WHEREAS, on or about November 22, 2022, a proposed nationwide tentative
settlement was reached between the plaintiffs in the MDL and Allergan Finance, LLC (f/k/a
Actavis, Inc., which in tum was f/k/a Watson Pharmaceutics, Inc.) and Allergan Limited
(f/k/a Allergan plc, which, in tum, was f/k/a Actavis plc)(collectively, "Allergan"); and,
WHEREAS, on or about December 9, 2022, aproposed nationwide tentative
settlement was reached between the plaintiffs in the MDL and CVS Health Corporation and
CVS Pharmacy, Inc. and all of their past and present direct and indirect parent and
subsidiaries (collectively, "CVS"); and
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WHEREAS, on or about December 9, 2022, a proposed nationwide tentative
settlement was reached between the plaintiffs in the MDL and Walgreen Co.
("Walgreens");and,
WHEREAS, CVS, Teva, Walgreens, Walmart, and Allergan shall be referred in
this Resolution as "Settling Defendants"; and
WHEREAS, as part of the settlements with the Settling Defendants, local subdivisions,
including certain cities, that are not plaintiffs in the MDL may participate in the settlements in
exchange for a release of the Settling Defendants; and,
WHEREAS, copies of the proposed terms of those proposed nationwide settlements
have been set forth in the Master Settlement Agreements with the Settling Defendants; and,
WHEREAS, copies of the Master Settlement Agreements have been provided to the
City Council with this Resolution; and,
WHEREAS, the Settlement Agreements provide, among other things, for the payment
of a certain sum to settling government entities in California including to the State of California
and Participating Subdivisions upon occurrence of certain events as defined in the Settlement
Agreements ("California Opioid Funds"); and,
WHEREAS, California local governments in the MDL have engaged in extensive
discussions with the State Attorney General's Office ("AGO") as to how the California
Opioid Funds will be allocated, which has resulted in the Proposed California State -
Subdivision Agreements Regarding Distribution and Use of Settlement Funds ("Allocation
Agreements") from the settlements with the Settling Defendants; and,
WHEREAS, copies of the Allocation Agreements for all of the settlements with the
Settling Defendants have been provided with this Resolution; and,
WHEREAS, the Allocation Agreements allocate the California Opioid Funds as
follows: 15% to the State Fund; 70% to the Abatement Accounts Fund; and 15% to the
Subdivision Fund. For the avoidance of doubt, all funds allocated to California from the
Settlements shall be combined pursuant to the Allocation Agreements, and 15% of total from
each settlement shall be allocated to the State of California (the "State of California
Allocation"), 70% to the California Abatement Accounts. Fund ("CA Abatement Accounts
Fund"), and 15% to the California Subdivision Fund ("CA Subdivision Fund"); and,
WHEREAS, under the Master Settlement Agreements, certain local subdivisions that
did not file a lawsuit against the Settlement Defendants may qualify to participate in the
settlements and obtain funds from the Abatement Account Fund; and,
WHEREAS, the City is eligible to participate in the Settlement and become a CA
Participating Subdivision; and,
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WHEREAS, the funds in the CA Abatement Accounts Fund (the 70% allocation) will
be allocated based on the allocation model developed in connection with the proposed
negotiating class in the National Prescription Opiate Litigation (MDL No. 2804), as
adjusted to reflect only those cities and counties that are eligible, based on population or
litigation status, to become a CA Participating Subdivision (those above 10,000 in
population). The percentage from the CA Abatement Accounts Fund allocated to each CA
Participating Subdivision is set forth in Appendix 1 to the Allocation Agreements and
provided to the City Council with this Resolution. The City's share of the CA Abatement
Accounts Fund will be a product of the total in the CA Abatement Accounts Fund
multiplied by the City's percentage set forth in Appendix 1 of the Allocation Agreements
(the "Local Allocation"); and,
WHEREAS, a CA Participating Subdivision that is a city will be allocated its Local
Allocation share as of the date on which it becomes a Participating Subdivision. The Local
Allocation share for a city that is a CA Participating Subdivision will be paid to the county in
which the city is located, unless the city elects to take a direct election of the settlement funds,
so long as: (a) the county is a CA Participating Subdivision, and (b) the city has not advised the
Settlement Fund Administrator that it requests direct payment at least 60 days prior to a
Payment Date; and,
WHEREAS, it the intent of this Resolution is to authorize the City to enter into the
Master Settlement Agreements with the Settling Defendants by executing the Participation
Agreements and to enter into the Allocation Agreements by executing the signature pages to
those agreements.
NOW, THEREFORE, BE IT RESOLVED: the City Council hereby approves and
authorizes to settle and release the City's claims against the Settling Defendants in exchange for
the consideration set forth in the Settlement Agreements, Allocation Agreements and all
exhibits thereto.
BE IT FURTHER RESOLVED that all actions heretofore taken by the City Council and
other appropriate public officers and agents of the City with respect to the matters contemplated
under this Resolution are hereby ratified, confirmed and approved.
ADOPTED, SIGNED, AND APPROVED this 4th day of April, 2023
ATTEST:
nne Donaldson, City Clerk
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Eddie Tejeda, Mayor
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I, Jeanne Donaldson, City Clerk of the City of Redlands, hereby certify that the foregoing resolution
was duly adopted by the City Council at a regular meeting thereof held on the 4th day of April,
2023, by the following vote:
AYES: Councilmembers Barich, Guzman -Lowery, Saucedo; Mayor Tejeda
NOES: None
ABSENT: Councilmember Davis
ABSTAINED: None
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Jefe Donaldson, City Clerk
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