HomeMy WebLinkAbout8631RESOLUTION NO. 8631
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF REDLANDS RATIFYING
THE CITY OF REDLANDS' ENTRY INTO THE SETTLEMENT WITH THE KROGER
COMPANY AND ITS SUBSIDIARIES RELATED TO THE MULTIDISTRICT LITIGATION
AGAINST MANUFACTURERS AND DISTRIBUTORS CONTRIBUTING TO THE OPIOID
EPIDEMIC; AND AUTHORIZE THE CITY MANAGER TO EXECUTE ALL RELATED
DOCUMENTS IN CONNECTION WITH THE SETTLEMENT
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 defendant's
unlawful conduct caused the opioid epidemic; and,
WHEREAS, the City of Redlands previously approved entry into the settlement with
McKesson Corporation, Johnson & Johnson, and Janssen Pharmaceuticals in 2021 and CVS,
Walmart, Walgreens, Teva and Allergan in 2023;
WHEREAS, on or about March 22, 2024, a settlement was reached between the plaintiffs
in the MDL and The Kroger Company ("Kroger"), a defendant in the MDL; and,
WHEREAS, on or about March 22, 2024, a settlement was reached between the plaintiffs
in the MDL and Kroger and all of its respective past and present direct or indirect parents,
subsidiaries, division, affiliates, joint ventures, predecessors, successors, assigns, including but not
limited to Kroger; and,
WHEREAS, as part of the settlement with the Settling States, local subdivisions, including
certain cities, that are not plaintiffs in the MDL may participate in the settlements in the exchange
for a release of the Settling Defendant; and,
WHEREAS, copies of the terms of the nationwide settlement has been set forth in the
Kroger Settlement Agreement with the Settling Defendants; and,
WHEREAS, copies of the Kroger Settlement Agreement has been provided to the City
Council with this Resolution; and,
WHEREAS, the Settlement Agreement provides, among other things, payment of a certain
sum to settling government entities in California including the State of California and Participating
Subdivisions upon occurrence of certain events as defined in the Settlement Agreement ("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 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,
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WHEREAS, the Allocation Agreement allocates the California Opioid Funds as follows:
15% to the State Fund; 70% to the Abatement 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 Subdivision Fund"); and,
WHEREAS, under the Kroger Settlement Agreement, certain local subdivisions that did not
file a lawsuit against the Settlement Defendant may qualify to participate in the settlement 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,
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 Agreement provided to the City Council with the 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 California 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 Payment Date; and,
WHEREAS, the intent of this Resolution is to ratify the City's entry into Kroger Settlement
and authorize the City Manager to authorize the City to enter into the Kroger Settlement Agreement
with the Settling Defendant 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 by the City Council of the City of Redlands as
follows:
Section 1. The Recitals set forth above are true and correct and are incorporated by reference in
this Resolution.
Section 2. That all actions taken on August 7, 2024 by the Fire Department staff with respect to
1) the execution of the Subdivision Participation and Release Form and 2) Proposed California
State Subdivision Agreement regarding Distribution and Use of Settlement Funds — Kroger
Settlement are hereby ratified, confirmed and approved.
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Section 3. The City Manager is hereby authorized to execute any and all documents consistent
with and in furtherance of the City Council's approval of the Kroger Settlement.
ADOPTED, SIGNED AND APPROVED THIS 17t" day of SE
Eddie Tejeda, Mayor
ATTEST:
fewirne Donaldson, City Clerk
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I, Jeanne Donaldson, City Clerk, City of Redlands, hereby certify that the foregoing resolution was
duly adopted by the City Council at a regular meeting thereof held on the 17'h day of September,
2024, by the following vote:
AYES: Councilmembers Barich, Davis, Guzman -Lowery, Saucedo; Mayor Tejeda
NOES:
ABSENT:
ABSTAIN:
Je Donaldson, City Clerk
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