Title
Staff Report for a City of San Leandro City Council Resolution authorizing the City of San Leandro to participate in the National Opioid Settlement
StaffReport
SUMMARY
Staff recommends that the City Council consider adoption of the attached Resolution (Attachment A), approving and authorizing participation in the National Opioid litigation settlement brokered by the California Attorney General and authorizing the City Attorney to execute all documents related to the resolution.
BACKGROUND
On July 22, 2021, a settlement was announced in multi-district federal litigation based in Ohio against opioid manufacturers and distributors.
The settlement was the result of litigation brought by states and cities against three pharmaceutical distributors: McKesson, Cardinal Health and Amerisource Bergen; and the opioid manufacturer, Janssen. The litigants contended that the distributors and manufacturer contributed to the national opioid crisis by ignoring signs of opioid addiction and overselling opioids. The proposed settlement will be available to all states, counties, and cities, including those that did not participate in the litigation. The opioid distributors will pay $21 billion over an 18-year period and Janssen will pay $5 billion over a 5-year period.
Under the terms of the settlement, the State of California is scheduled to receive between $2.269 billion and $2.34 billion. The settlement agreement provides a default allocation for the funds: 15% directly to the state, 70% to an abatement fund to be administered by the state, and 15% to local subdivisions that were litigants. An intrastate allocation deal has been agreed upon that adjusts this default allocation. Funds dedicated to the 70% abatement fund will be allocated directly to participating jurisdictions.
Jurisdictions that wish to participate in the settlement must opt-in prior to January 2, 2022.
DISCUSSION
The City has two options. First, the City may decide not to opt-in, in which case, it need do nothing. Second, the City may choose to opt-in to the settlement and authorize signature of the Agreement.
If the City decides to opt-in, it stands to receive 0.039% of the total amount provided to the State. This would constitute, at maximum, approximately $780,000 or $43,333 per year over a period of eighteen years. The City would be required to release future claims against the Distributors and Manufacture in exchange for settlement funds. Funds received via the settlement must be used to ameliorate the effects of the opioid crisis, and the Agreement provides that the City would be obligated to report how it spends funds received from the settlement.
RECOMMENDATION
Staff recommends that the City Council pass the attached Resolution No. 2021-XXXX, approving participation in the National Opioid Settlement and authorizing the City Attorney to execute all agreements and documents related thereto.
ATTACHMENT(S)
- Resolution Authorizing City to enter into National Opioid Settlement
- California State Subdivision Agreement - Distributors
- California State Subdivision Agreement - Janssen