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RESOLUTION of the City of San Leandro City Council approving and authorizing the City of San Leandro to enter into Settlement Agreements with McKesson Corporation, Cardinal Health, Inc. Amerisource Bergen Corporation, Johnson & Johnson, Janssen Pharmaceuticals, Inc. Orhto-McNeil-Janssen Pharmaceuticals, Inc., and Janssen Pharmaceuticals, Inc. to Participate and Receive Settlement Funds Derived From Multi-District Litigation in Cooperation with the California Attorney General
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WHEREAS, the United States is facing an ongoing public health crisis of opioid abuse, addiction, overdose, and death. The State of California and California local governments spend millions of dollars each year to address the direct consequences of this crisis; and
WHEREAS, since 2017, state and local governments in California and around the United States have been pursuing litigation against certain manufacturers, distributors, and retailers of opioid pharmaceuticals (the “Opioid Defendants”) in an effort to hold the Opioid Defendants financially responsible for the impact of the Opioid Epidemic; and
WHEREAS, negotiations to settle claims against several of the Opioid Defendants, specifically McKesson Corporation, Cardinal Health, Inc., AmerisourceBergen Corporation, Johnson & Johnson, Janssen Pharmaceuticals, Inc., Ortho-McNeil-Janssen Pharmaceuticals, Inc., and Janssen Pharmaceutical, Inc. (the “Settling Defendants”) have been ongoing for several years; and
WHEREAS, negotiations with the Settling Defendants have resulted in proposed nationwide settlements of state and local government claims to settle the litigation; and
WHEREAS, the proposed terms of those proposed nationwide settlements have been set forth in the Distributors Master Settlement Agreement and the J&J Master Settlement Agreement (collectively “Settlement Agreements”); 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 upon occurrence of certain events as defined in the Settlement Agreements (“California Opioid Funds”); and
WHEREAS, California local governments have engaged in extensive discussions with the California Attorney General’s Office (“AGO”) as to how the California Opioid Funds will be allocated, which has resulted in the Proposed California State-Subdivision Agreement Regarding Distribution and Use of Settlement Funds-Distributor Settlement and the Proposed California State-Subdivision Agreement Regarding Distribution and Use of Settlement Funds-Janssen Settlement (collectively the “Allocation Agreements,”) which are agreements between all of the entities identified in the Allocation Agreements; and
WHEREAS, the Allocation Agreements propose to allocate the California Opioid Funds 15% to a State Fund; 70% to local governments in an Abatement Accounts Fund; and 15% to litigating local governments in a Subdivision Fund. For the avoidance of doubt, all funds allocated to California from the Settlements will be combined pursuant to Allocation Agreements, and 15% of that total shall be allocated to the State of California (the “State of California Allocation”), 70% to the California Abatement Accounts Fund (“CA Abatement Accounts Fund Allocation”), and 15% to the California Subdivision Fund (“CA Subdivision Fund Allocation”); and
WHEREAS, the percentage from the CA Abatement Accounts Fund allocated to each eligible local government (“Eligible Local Government”) is set forth in Appendix 1 to each Allocation Agreement and provided to the Council with this Resolution. The City’s share of the CA Abatement Accounts Fund is a product of the total in the CA Abatement Accounts Fund multiplied by the City’s percentage as set forth in Appendix 1 (the “Local Allocation”); and
WHEREAS, the percentage from the CA Abatement Accounts Fund to be allocated to the City is 0.0339%, which may constitute approximately $780,000, or $43,333 a year over a period of 18 years; and
WHEREAS, the City is an Eligible Local Government; and
WHEREAS, any city that is an Eligible Local Government will be allocated its Local Allocation share only when it becomes a Participating Subdivision by signing the Participation Agreements to the Settlements.
NOW, THEREFORE, the City of San Leandro City Council hereby RESOLVES, that all of the recitals above are true, correct and incorporated herein; and that the City Council approves the settlement, and authorizes the City Attorney to execute all documents, and release the City’s claims against the Settling Defendants in exchange for the consideration set forth in the Settlement Agreements, and Allocation Agreements including taking the following measures:
1. The execution of the Participation Agreement to the Distributors Settlement Agreement and any and all documents ancillary thereto.
2. The execution of the Participation Agreement to the Janssen Settlement Agreement and any and all documents ancillary thereto.
3. The execution of the Proposed California State-Subdivision Agreement Regarding Distribution and Use of Settlement Funds- Distributor Settlement by executing the signature pages to that Allocation Agreement, substantially to the form of the agreement attached hereto.
4. The execution of the Proposed California State-Subdivision Agreement Regarding Distribution and Use of Settlement Funds- Janssen Settlement Allocation Agreements by executing the signature pages to that Allocation Agreement, substantially to the form of the agreement attached hereto.
BE IT FURTHER RESOLVED that all actions heretofore taken by the 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.