HomeMy WebLinkAboutReso 19-23 - 2023 Authorize City Manager re Natl Opioid Settlements (041123)RESOLUTION NO. 19-23
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 CVS, ALLERGAN, TEVA,
WALMART, AND WALGREENS, INCLUDING THE RELATED
PARTICIPATION AGREEMENTS; AND AGREEING TO THE TERMS OF THE
RELATED STATE -SUBDIVISION AGREEMENTS AND AUTHORIZE ENTRY
INTO THE RELATED STATE -SUBDIVISION ALLOCATION AGREEMENTS
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, 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 defendants'
unlawful conduct caused the opioid epidemic; and,
WHEREAS, on or about November 14, 2022, a proposed nationwide tentative settlement
was reached between the plaintiffs in the MDL and Walmart Inc. ("Walmart"); and,
WHEREAS, on or about November 22, 2022, a proposed nationwide tentative settlement
was reached between the plaintiffs in the MDL and Teva Pharmaceutical Industries Ltd. and all
of its respective past and present direct or indirect parents, subsidiaries, divisions, affiliates, joint
ventures, predecessors, successors, assigns, including but not limited to Teva Pharmaceuticals
USA, Inc., Actavis LLC (f/k/a Actavis Inc.), Actavis Elizabeth LLC, Actavis Kadian LLC, Actavis
Pharma, Inc. (f/k/a Watson Pharma, Inc.), Actavis Kadian LLC, Actavis Laboratories UT, Inc. (f/k/a
Watson Laboratories, Inc. — Utah), Actavis Mid Atlantic LLC, Actavis Totowa LLC, Actavis
Laboratories FL, Inc. (f/k/a Watson Laboratories, Inc. — Florida), Actavis South Atlantic LLC,
Warner Chilcott Company LLC, and Watson Laboratories, Inc., and Anda Inc. (collectively,
"Teva"); and,
WHEREAS, on or about November 22, 2022, a proposed nationwide tentative settlement
was reached between the plaintiffs in the MDL and Allergan Finance, LLC (f/k/a Actavis, Inc.,
which in turn was f/k/a Watson Pharmaceutics, Inc.) and Allergan Limited (f/k/a Allergan plc,
which, in turn, was f/k/a Actavis plc)(collectively, "Allergan"); and,
WHEREAS, on or about December 9, 2022, a proposed nationwide tentative settlement
was reached between the plaintiffs in the MDL and CVS Health Corporation and CVS Pharmacy,
Inc. and all of their past and present direct and indirect parent and subsidiaries (collectively,
"CVS"); and,
WHEREAS, on or about December 9, 2022, a proposed nationwide tentative settlement
was reached between the plaintiffs in the MDL and Walgreen Co. ("Walgreens"); and,
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WHEREAS, CVS, Teva, Walgreens, Walmart, and Allergan shall be referred in this
Resolution as "Settling Defendants"; and
WHEREAS, as part of the settlements with the Settling Defendants, local subdivisions,
including certain cities, that are not plaintiffs in the MDL may participate in the settlements in
exchange for a release of the Settling Defendants ("Participating Subdivision"); and,
WHEREAS, copies of the proposed terms of those proposed nationwide settlements have
been set forth in the Master Settlement Agreements with the Settling Defendants; and,
WHEREAS, copies of the Master Settlement Agreements have been made available to
the City Council with this Resolution ("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 and
Participating Subdivisions upon occurrence of certain events as defined in the Settlement
Agreements ("California Opioid Funds"); and,
WHEREAS, in order to become a Participating Subdivision, the City must enter into
"Participation Agreements" which allow participation in the Settlement Agreements; and,
WHEREAS, California local governments in the MDL 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
Agreements Regarding Distribution and Use of Settlement Funds ("Allocation Agreements") from
the settlements with the Settling Defendants; and,
WHEREAS, copies of the Allocation Agreements for all of the settlements with the Settling
Defendants have been made available to the City Council with this Resolution; and,
WHEREAS, the Allocation Agreements allocate the California Opioid Funds as follows:
15% to the State Fund; 70% to the Abatement Accounts Fund; and 15% to the Subdivision Fund.
For the avoidance of doubt, all funds allocated to California from the Settlement Agreements 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 Abatement Accounts Fund"), and 15% to the California
Subdivision Fund ("CA Subdivision Fund"); and,
WHEREAS, under the Settlement Agreements, certain local subdivisions that did not file
a lawsuit against the Settlement Defendants may qualify to participate in the settlements and
obtain funds from the Abatement Account Fund; and,
WHEREAS, the City is eligible to participate in the Settlement Agreements 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
01181.0001/872150.2 2
1 to the Allocation Agreements and provided to the City Council with this 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 CA 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 a Payment Date; and,
WHEREAS, it the intent of this Resolution is to authorize the City to enter into the
Settlement Agreements with the Settling Defendants by executing the Participation Agreements
and to enter into the Allocation Agreements by executing the signature pages to those
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:
A. The execution of the Participation Agreements to the Master Settlement
Agreements concerning Settling Defendants in the MDL and any and all
documents ancillary thereto.
B. The execution of the Proposed California State -Subdivision Agreement Regarding
Distribution and Use of Settlement Funds concerning Settling Defendants in the
MDL 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.
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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 111 day of April 2023 by the following vote:
AYES:
Wixom, Barton, Edwards, Ford, Landrum
NOES:
None
ABSENT:
None
ABSTAIN:
None
RECUSE:
None
CARLA WIXOM, Mayor
ATTEST:
D SWANSON, City Clerk
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