HomeMy WebLinkAboutReso 88-21 - Authorize City Manager re Natl Opioid SettlementsRESOLUTION NO. 88-21
RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF MORRO BAY, CALIFORNIA AUTHORIZING CITY OF
MORRO BAY TO ENTER INTO THE NATIONAL OPIOID SETTLEMENT
AGREEMENTS WITH MCKESSON CORPORATION CARDINAL HEALTH,
INC., AMERISOURCEBERGEN CORPORATION, JOHNSON & JOHNSON,
JANSSEN PHARMACEUTICALS, INC., ORTHO-MCNEIL-JANSSEN
PHARMACEUTICALS, INC., AND JANSSEN PHARMACEUTICA, INC.,
AGREEING TO THE TERMS OF THE MOU ALLOCATING SETTLEMENT
PROCEEDS, AND AUTHORIZING ENTRY INTO THE MOU WITH THE
ATTORNEY GENERAL
THE CITY COUNCIL
City of Morro Bay, California
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
billions of dollars each year to address the direct consequences of this crisis;
WHEREAS, since 2017, state and local governments in California and around the United
States have been pursuing litigation (the '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 nationwide as well as
the impact on cities and counties including on the City of Morro Bay ("the City");
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 Pharmaceutica Inc (the 'Settling Defendants") have been ongoing for several
years;
WHEREAS, negotiations with the Settling Defendants have resulted in proposed
nationwide settlements of state and local government claims to settle the Litigation;
WHEREAS, the proposed terms of those proposed nationwide settlements have been set
forth in the Distributors Master Settlement Agreement and the Janssen Master Settlement
Agreement (collectively "Settlement Agreements') and, in order to participate in the Settlement
Agreements, the City must enter into participation agreements with respect to each of the
Settlement Agreements ("Participation Agreements");
WHEREAS, copies of the Settlement Agreements as well as summary of the main terms
of the Settlement Agreements the deadlines for submitting the Participation Agreements to the
Settlement Agreements and the MDL Court's Order setting deadlines for any Plaintiff who
declines to enter into the Settlement Agreements, have been provided to the City Council with
this Resolution;
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
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Agreements ("California Opioid Funds");
WHEREAS, California local governments as well as the attorneys representing those local
governments 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 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;
WHEREAS, copies of the Allocation Agreements have been provided with this Resolution;
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");
WHEREAS, the funds in the CA Abatement Accounts Fund (i.e., the California Abatement
Accounts Fund Allocation) will be allocated based on an allocation model developed in connection
with the proposed negotiating class in the National Prescription Opiate Litigation (MDL No. 2804).
The percentage from the CA Abatement Accounts Fund allocated to each eligible local
government (any county or city above 10,000 in population) ("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 set forth in Appendix 1 (the ' Local Allocation");
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. The Local Allocation share for a city that is a Participating
Subdivision will be paid to the county in which the city is located, rather than to the city, so long
as (a) the county is a 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 as
defined in the Settlement Agreements.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF MORRO BAY,
CALIFORNIA, DOES HEREBY RESOLVE, DECLARE, DETERMINE AND ORDER AS
FOLLOWS:
SECTION 1. The City Council hereby approves and authorizes the City Manager 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, including, without limitation, taking the following measures:
1. The execution of the Participation Agreement to the Distributors Master Settlement
Agreement and any and all documents ancillary thereto.
The execution of the Participation Agreement to the Janssen Master Settlement
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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 thereof.
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 thereof.
SECTION 2. 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.
SECTION 3. This Resolution shall take effect immediately upon its adoption by the City
Council.
PASSED AND ADOPTED by the City Council of the City of Morro Bay at a regular meeting
thereof held on the 14th day of December 2021 by the following vote:
AYES Headding, Addis, Barton, Ford, Heller
NOES None
ABSENT: None
JOHNEADDINGrMyour
ATTEST:
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DANA SWANSON, City Clerk
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