In a strategic move, the city of Baltimore chose to bypass its $90 million share from nationwide opioid settlements, instead opting for a potentially more lucrative path through litigation led by the well-regarded firm Susman Godfrey. This decision, after seven years of legal battles, resulted in the city securing over $670 million in settlements and verdicts from companies accused of fueling the opioid crisis, such as McKesson, AmerisourceBergen, CVS, and Walgreens. This approach illustrates a growing trend where cities and states engage external legal firms to manage high-stakes legal actions, often agreeing to contingency fees that are typically as high as one-third of the settlement amounts. You can read more about this legal battle here.
Such an arrangement provided Baltimore with enhanced resources to confront these legal challenges, as noted by Sara Gross, chair of the city’s affirmative litigation division. Gross highlighted that affirmative litigation allows for obtaining injunctive relief to halt ongoing misconduct and provides needed resources to address the impacts of corporate actions. A significant portion of the recovery will contribute to an opioid restitution fund, aimed at tackling the severe opioid crisis in Baltimore, which saw over 4,300 overdose deaths in the five years leading up to 2021, according to the Maryland Department of Health.
Philadelphia, Miami, and Cleveland are among other cities adopting similar strategies, turning to boutique litigation firms to handle comparable suits. Texas, for instance, achieved a notable $1.4 billion settlement in a privacy case against Meta Platforms with the assistance of two litigation firms. These collaborations, however, raise concerns about potential conflicts of interest, as evidenced by previous efforts to challenge the participation of firms like Motley Rice in nationwide opioid litigations. Such issues arise when firms simultaneously represent government entities and pursue similar claims on behalf of private clients.
While these arrangements can enable cities to pursue high stakes cases that they might otherwise lack the resources to fight, there is also a risk of diluting the collective bargaining power of states. Yet, for cities like Baltimore and Philadelphia, the tangible successes seem to outweigh potential drawbacks. Philadelphia, for instance, secured a $110 million settlement from Walgreens, demonstrating the potentially significant financial and legal impacts of these partnerships.