HomeMy WebLinkAbout7491RESOLUTION NO. 7491
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ARCADIA
CALIFORNIA AUTHORIZING THE CITY MANAGER TO ENTER INTO THE
SETTLEMENT AGREEMENTS WITH DISTRIBUTORS OF OPIOIDS,
WALGREENS CO., WALMART, INC., AND CVS HEALTH
CORPORATION/CVS PHARMACY INC., AND OPIOID MANUFACTURERS
TEVA PHARMACEUTICAL INDUSTRIALS LTD., AND ALLERGAN
FINANCE LLC/ALLERGAN LIMITED, AGREE TO THE TERMS OF THE
STATE -SUBDIVISION AGREEMENTS, AND AUTHORIZE ENTRY INTO
THE STATE -SUBDIVISION AGREEMENTS WITH THE ATTORNEY
GENERAL
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
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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
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; and
WHEREAS, copies of the proposed terms of those proposed nationwide
settlements have been set forth in the Master Settlement Agreements with the Settling
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Defendants; and
WHEREAS, copies of the Master Settlement Agreements are on file with the City
Clerk; 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, 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, 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
Settlements 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 Master 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 and become a CA
Participating Subdivision; and
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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 1 to the Allocation Agreements. 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
Master 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 ARCADIA,
CALIFORNIA, DOES FIND, DETERMINE AND RESOLVE AS FOLLOWS:
SECTION 1. The above recitals are true and correct and are incorporated herein
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by this reference.
SECTION 2. The City Manager is authorized to settle 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 but not limited to taking
the following measures:
1. The execution of the Participation Agreements with the Settling Defendants
and any and all documents ancillary thereto.
2. The execution of the Proposed California State -Subdivision Agreement
Regarding Distribution and Use of Settlement Funds with the Settling
Defendants by executing the signature pages to those Allocation Agreements.
3. Notify the Settlement Fund Administrator that the City requests a direct
payment under the Allocation Agreements at least 60 days prior to the
Payment Date in the Settlement Agreements.
SECTION 3. CEQA. That the City Council finds this Resolution is not subject to
the California Environmental Quality Act ("CEQA") in that the activity is covered by the
general rule that CEQA applies only to projects which have the potential for causing a
significant effect on the environment. Where it can be seen with certainty, as in this
case, that there is no possibility that the activity in question may have a significant effect
on the environment, the activity is not subject to CEQA.
SECTION 4. Severability. If any provision of this Resolution or the application
thereof to any person or circumstance is held invalid, such invalidity shall not affect other
provisions or applications, and to this end the provisions of this Resolution are declared
to be severable.
SECTION 5. Effective Date. This Resolution shall become effective immediately.
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SECTION 6. The City Clerk shall certify to the adoption of this Resolution.
Passed, approved and adopted this 4th day of April, 2023.
ayor of the City od Arcadia
ATTEST:
City ClejV
APPROVED AS TO FORM:
e � 01 �// /I /_ - __ __ -
Michael J. Maurer
City Attorney
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES) SS:
CITY OF ARCADIA )
I, GENE GLASCO, City Clerk of the City of Arcadia, hereby certifies that the
foregoing Resolution No. 7491 was passed and adopted by the City Council of the City of
Arcadia, signed by the Mayor and attested to by the City Clerk at a regular meeting of said
Council held on the 4th day of April, 2023 and that said Resolution was adopted by the
following vote, to wit:
AYES: Cao, Kwan, Wang, Verlato, and Cheng
NOES: None
ABSENT: None
VA
Ci Clerk oft City of Arcadia