HomeMy WebLinkAboutNational Opioid Settlement Agreement Participation Johnson & Johnson, Janssen, Ortho-McNeil-Janssen PARTICIPATION INSTRUCTIONS
Thank you for registering your subdivision on the national settlement website and
for considering participating in the proposed Settlement Agreement with Johnson
& Johnson, Janssen Pharmaceuticals, Inc., Ortho-McNeil-Janssen Pharmaceuticals,
Inc., and Janssen Pharmaceutica, Inc. (collectively "Janssen"). This virtual
envelope contains a Participation Form including a release of claims. The
Participation Form in this envelope must be executed, without alteration, and
submitted in order for your subdivision to be considered potentially
"participating."
The sign-on period for subdivisions ends on January 2, 2022. On or after that date,
the states (in consultation with the subdivisions) and the Settling Distributors will
determine whether the subdivision participation rate is sufficient for the settlement
to move forward. If the deal moves forward, your release will become effective. If
it does not, it will not.
As a reminder, if you have not already started your review of the settlement
documentation, detailed information about the Settlements may be found at:
hgps://nationalopioidsettlement.com/. This national settlement website also
includes links to information about how the Settlements are being implemented in
your state and how settlement funds will be allocated within your state, including
information about, and links to, any applicable allocation agreement or
legislation. This website will be supplemented as additional documents are created.
If you have questions, please contact your counsel (if you have counsel on opioids
matters) or the Idaho Attorney General's Office at opioidsettlement@ag.idaho.gov.
DocuSign Envelope ID: B32E853F-1968-4770-B584-785E34E3D845
Settlement Participation Form
Governmental Entity: Meridian city State: ID
Authorized Signatory:
Address 1:
Address 2:
City, State, Zip:
Phone:
Email:
The governmental entity identified above ("Governmental Entity"), in order to obtain and in
consideration for the benefits provided to the Governmental Entity pursuant to the Settlement
Agreement dated July 21, 2021 ("Janssen Settlement"), and acting through the undersigned
authorized official, hereby elects to participate in the Janssen Settlement, release all Released
Claims against all Released Entities, and agrees as follows.
1. The Governmental Entity is aware of and has reviewed the Janssen Settlement,
understands that all terms in this Election and Release have the meanings defined
therein, and agrees that by this Election, the Governmental Entity elects to participate in
the Janssen Settlement and become a Participating Subdivision as provided therein.
2. The Governmental Entity shall, within 14 days of the Reference Date and prior to the
filing of the Consent Judgment, dismiss with prejudice any Released Claims that it has
filed.
3. The Governmental Entity agrees to the terms of the Janssen Settlement pertaining to
Subdivisions as defined therein.
4. By agreeing to the terms of the Janssen Settlement and becoming a Releasor, the
Governmental Entity is entitled to the benefits provided therein, including, if applicable,
monetary payments beginning after the Effective Date.
5. The Governmental Entity agrees to use any monies it receives through the
Janssen Settlement solely for the purposes provided therein.
6. The Governmental Entity submits to the jurisdiction of the court in the Governmental
Entity's state where the Consent Judgment is filed for purposes limited to that court's role
as provided in, and for resolving disputes to the extent provided in, the Janssen Settlement.
7. The Governmental Entity has the right to enforce the Janssen Settlement as provided
therein.
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8. The Governmental Entity, as a Participating Subdivision, hereby becomes a Releasor for
all purposes in the Janssen Settlement, including but not limited to all provisions of
Section IV (Release), and along with all departments, agencies, divisions, boards,
commissions, districts, instrumentalities of any kind and attorneys, and any person in
their official capacity elected or appointed to serve any of the foregoing and any agency,
person, or other entity claiming by or through any of the foregoing, and any other entity
identified in the definition of Releasor,provides for a release to the fullest extent of its
authority. As a Releasor, the Governmental Entity hereby absolutely, unconditionally,
and irrevocably covenants not to bring, file, or claim, or to cause, assist or permit to be
brought, filed, or claimed, or to otherwise seek to establish liability for any Released
Claims against any Released Entity in any forum whatsoever. The releases provided for
in the Janssen Settlement are intended by the Parties to be broad and shall be interpreted
so as to give the Released Entities the broadest possible bar against any liability relating
in any way to Released Claims and extend to the full extent of the power of the
Governmental Entity to release claims. The Janssen Settlement shall be a complete bar to
any Released Claim.
9. In connection with the releases provided for in the Janssen Settlement, each
Governmental Entity expressly waives, releases, and forever discharges any and
all provisions, rights, and benefits conferred by any law of any state or territory of
the United States or other jurisdiction, or principle of common law, which is
similar, comparable, or equivalent to § 1542 of the California Civil Code, which
reads:
General Release; extent. A general release does not extend to claims that
the creditor or releasing party does not know or suspect to exist in his or
her favor at the time of executing the release that, if known by him or her,
would have materially affected his or her settlement with the debtor or
released party.
A Releasor may hereafter discover facts other than or different from those which it
knows, believes, or assumes to be true with respect to the Released Claims, but each
Governmental Entity hereby expressly waives and fully, finally, and forever settles,
releases and discharges, upon the Effective Date, any and all Released Claims that may
exist as of such date but which Releasors do not know or suspect to exist, whether
through ignorance, oversight, error, negligence or through no fault whatsoever, and
which, if known, would materially affect the Governmental Entities' decision to
participate in the Janssen Settlement.
10. Nothing herein is intended to modify in any way the terms of the Janssen Settlement, to
which Governmental Entity hereby agrees. To the extent this Election and Release is
interpreted differently from the Janssen Settlement in any respect, the Janssen Settlement
controls.
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I swear under penalty of perjury that I have all necessary power and authorization to execute
this Election and Release on behalf of the Governmental Entity.
Signature:
Name: Robert E. Simison
Title: Mayor
Date: 12-7-2021
Attest: Chris Johnson, City Clerk
12-7-2021
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JANSSEN SETTLEMENT AGREEMENT
This settlement agreement dated as of July 21, 2021 (the "Agreement") sets forth the
terms of settlement between and among the Settling States, Participating Subdivisions, and
Janssen(as those terms are defined below). Upon satisfaction of the conditions set forth in
Sections II and VIII, this Agreement will be binding on the Settling States, Janssen, and
Participating Subdivisions. This Agreement will then be filed as part of Consent Judgments in
the respective courts of each of the Settling States, pursuant to the terms set forth in Section VIII.
I. Definitions
Unless otherwise specified, the following definitions apply:
1. "Abatement Accounts Fund"means a component of the Settlement Fund
described in subsection VI.E.
2. "Additional Restitution Amount"means the amount available to Settling States
listed in Exhibit N of$67,307,692.
3. "Agreement"means this agreement as set forth above, inclusive of all exhibits.
4. "Alleged Harms"means the alleged past,present, and future financial, societal,
and related expenditures arising out of the alleged misuse and abuse of opioid
products, non-exclusive examples of which are described in the documents listed
on Exhibit A, that have allegedly arisen as a result of the physical and bodily
injuries sustained by individuals suffering from opioid-related addiction, abuse,
death, and other related diseases and disorders, and that have allegedly been
caused by Janssen.
5. "Allocation Statute"means a state law that governs allocation, distribution, and/or
use of some or all of the Settlement Fund amounts allocated to that State and/or
its Subdivisions. In addition to modifying the allocation, as set forth in subsection
VI.D.2, an Allocation Statute may, without limitation, contain a Statutory Trust,
further restrict expenditure of funds, form an advisory committee, establish
oversight and reporting requirements, or address other default provisions and
other matters related to the funds. An Allocation Statute is not required to address
all three (3)types of funds comprising the Settlement Fund or all default
provisions.
6. "Annual Payment"means the total amount payable to the Settlement Fund by
Janssen on the Payment Date each year in 2023 and onward, as calculated by the
Settlement Fund Administrator pursuant to Section V. For the avoidance of doubt,
this term does not include the Additional Restitution Amount or amounts paid
pursuant to Section XI.
7. "Appropriate Official"means the official defined in subsection XIII.E.
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8. "Attorney Fee Fund"means an account consisting of funds allocated to pay
attorneys' fees and costs pursuant to the agreement on attorneys' fees and costs
attached as Exhibit R.
9. "Bar"means either(1) a ruling by the highest court of the State or the
intermediate court of appeals when not subject to further review by the highest
court of the State in a State with a single intermediate court of appeals setting
forth the general principle that no Subdivisions or Special Districts in the State
may maintain Released Claims against Released Entities, whether on the ground
of the Agreement(or the release in it) or otherwise; (2) a law barring Subdivisions
and Special Districts in the State from maintaining or asserting Released Claims
against Released Entities (either through a direct bar or through a grant of
authority to release claims and that authority is exercised in full); or(3) a
Settlement Class Resolution in the State with full force and effect. For the
avoidance of doubt, a law or ruling that is conditioned or predicated upon
payment by a Released Entity(apart from payments by Janssen incurred under the
Agreement) shall not constitute a Bar.
10. "Case-Specific Resolution"means either(1) a law barring specified Subdivisions
or Special Districts from maintaining Released Claims against Released Entities
(either through a direct bar or through a grant of authority to release claims and
that authority is exercised in full); (2) a ruling by a court of competent jurisdiction
over a particular Subdivision or Special District that has the legal effect of barring
the Subdivision or Special District from maintaining any Released Claims at issue
against Released Entities,whether on the ground of the Agreement(or the release
in it) or otherwise; or(3) in the case of a Special District, a release consistent with
Section IV below. For the avoidance of doubt, a law, ruling, or release that is
conditioned or predicated upon a post-Effective Date payment by a Released
Entity(apart from payments by Janssen incurred under the Agreement or
injunctive relief obligations incurred by it) shall not constitute a Case-Specific
Resolution.
11. "Claim"means any past, present or future cause of action, claim for relief, cross-
claim or counterclaim, theory of liability, demand, derivative claim,request,
assessment, charge, covenant, damage, debt, lien, loss,penalty,judgment, right,
obligation, dispute, suit, contract, controversy, agreement, parens patriae claim,
promise, performance, warranty, omission, or grievance of any nature whatsoever,
whether legal, equitable, statutory, regulatory or administrative, whether arising
under federal, state or local common law, statute, regulation, guidance, ordinance
or principles of equity, whether filed or unfiled, whether asserted or unasserted,
whether known or unknown, whether accrued or unaccrued, whether foreseen,
unforeseen or unforeseeable, whether discovered or undiscovered, whether
suspected or unsuspected, whether fixed or contingent, and whether existing or
hereafter arising, in all such cases, including but not limited to any request for
declaratory, injunctive, or equitable relief, compensatory,punitive, or statutory
damages, absolute liability, strict liability,restitution, subrogation, contribution,
indemnity, apportionment, disgorgement, reimbursement, attorney fees, expert
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fees, consultant fees, fines, penalties, expenses, costs or any other legal, equitable,
civil, administrative, or regulatory remedy whatsoever.
12. "Claim Over"means a Claim asserted by a Non-Released Entity against a
Released Entity on the basis of contribution, indemnity, or other claim-over on
any theory relating to a Non-Party Covered Conduct Claim asserted by a
Releasor.
13. "Compensatory Restitution Amount"means the aggregate amount of payments by
Janssen hereunder other than amounts paid as attorneys' fees and costs or
identified pursuant to subsection VI.B.2 as being used to pay attorneys' fees and
investigation costs or litigation costs.
14. "Consent Judgment"means a state-specific consent judgment in a form to be
agreed upon by the Settling States, Participating Subdivisions, and Janssen prior
to the Initial Participation Date that, among other things, (1) approves this
Agreement and(2)provides for the release set forth in Section IV, including the
dismissal with prejudice of any Released Claims that the Settling State has
brought against Released Entities.
15. "Court"means the respective court for each Settling State to which the
Agreement and the Consent Judgment are presented for approval and/or entry as
to that Settling State, or the Northern District of Ohio for purposes of
administering the Attorney Fee Fund and any related fee and cost agreements.
16. "Covered Conduct"means any actual or alleged act, failure to act,negligence,
statement, error, omission, breach of any duty, conduct, event, transaction,
agreement, misstatement, misleading statement or other activity of any kind
whatsoever from the beginning of time through the Reference Date (and any past,
present, or future consequence of any such act, failure to act,negligence,
statement, error, omission, breach of duty, conduct, event, transaction, agreement,
misstatement, misleading statement or other activity)relating in any way to (a)
the discovery, development, manufacture, packaging, repackaging, marketing,
promotion, advertising, labeling, recall, withdrawal, distribution, delivery,
monitoring, reporting, supply, sale, prescribing, dispensing, physical security,
warehousing,use or abuse of, or operating procedures relating to any Product, or
any system, plan, policy, or advocacy relating to any Product or class of Products,
including but not limited to any unbranded promotion, marketing,programs, or
campaigns relating to any Product or class of Products; (b)the characteristics,
properties, risks, or benefits of any Product; (c) the reporting, disclosure, non-
reporting or non-disclosure to federal, state or other regulators of orders for any
Product placed with any Released Entity; (d) the selective breeding, harvesting,
extracting, purifying, exporting, importing, applying for quota for, procuring
quota for, handling, promoting, manufacturing, processing,packaging, supplying,
distributing, converting, or selling of, or otherwise engaging in any activity
relating to,precursor or component Products, including but not limited to natural,
synthetic, semi-synthetic or chemical raw materials, starting materials, finished
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active pharmaceutical ingredients, drug substances, or any related intermediate
Products; or(e) diversion control programs or suspicious order monitoring related
to any Product.
17. "Designated State"means New York.
18. "Effective Date"means the date sixty(60) days after the Reference Date.
19. "Enforcement Committee"means a committee consisting of representatives of the
Settling States and of the Participating Subdivisions. Exhibit B contains the
organizational bylaws of the Enforcement Committee. Notice pursuant to
subsection XIII.O shall be provided when there are changes in membership or
contact information.
20. "Global Settlement Abatement Amount"means the abatement amount of
$4,534,615,385.
21. "Global Settlement Amount"means $5 billion, which shall be divided into the
Global Settlement Abatement Amount, the Additional Restitution Amount, and
the Global Settlement Attorney Fee Amount.
22. "Global Settlement Attorney Fee Amount"means the attorney fee amount of
$398,076,923.
23. "Incentive A"means the incentive payment described in subsection V.E.4.
24. "Incentive B"means the incentive payment described in subsection V.E.S.
25. "Incentive C"means the incentive payment described in subsection V.E.6.
26. "Incentive D"means the incentive payment described in subsection V.E.7.
27. "Incentive Payment Final Eligibility Date"means, with respect to a Settling State,
the date that is the earliest of(1)three years after the Effective Date; (2)the date
of completion of opening statements in a trial of any action brought by a
Subdivision in that State that includes a Released Claim against a Released Entity
when such date is more than two (2) years after the Effective Date; or(3) two (2)
years after the Effective Date in the event a trial of an action brought by a
Subdivision in that State that includes a Released Claim against a Released Entity
began after the Initial Participation Date but before two (2)years after the
Effective Date.
28. "Initial Participating Subdivision"means a Subdivision that meets the
requirements set forth in subsection VILD.
29. "Initial Participation Date"means the date one hundred twenty (120) days after
the Preliminary Agreement Date,unless it is extended by written agreement of
Janssen and the Enforcement Committee.
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30. "Initial Year Payment" means the total amount payable to the Settlement Fund by
Janssen on each of the two Payment Dates in 2022, as calculated by the
Settlement Fund Administrator pursuant to Section V. For the avoidance of doubt,
this term does not include the Additional Restitution Amount or amounts paid
pursuant to Section XI.
31. "Injunctive Relief Terms" means the terms described in Section III and set forth in
Exhibit P.
32. "Janssen"means Johnson& Johnson, Janssen Pharmaceuticals, Inc., Ortho-
McNeil-Janssen Pharmaceuticals, Inc., and Janssen Pharmaceutica, Inc.
33. "Later Litigating Special District'means a Special District (or Special District
official asserting the right of or for the Special District to recover for alleged
harms to the Special District and/or the people thereof) that is not a Litigating
Special District and that files a lawsuit bringing a Released Claim against a
Released Entity, or that adds such a claim to a pre-existing lawsuit, after the
Preliminary Agreement Date. It may also include a Litigating Special District
whose claims were resolved by a judicial Bar or Case-Specific Resolution which
is later revoked following the execution date of this Agreement, when such
Litigating Special District takes any affirmative step in its lawsuit other than
seeking a stay or removal.
34. "Later Litigating Subdivision"means a Subdivision (or Subdivision official
asserting the right of or for the Subdivision to recover for alleged harms to the
Subdivision and/or the people thereof) that is not a Litigating Subdivision and that
files a lawsuit bringing a Released Claim against a Released Entity, or that adds
such a claim to a pre-existing lawsuit, after the Trigger Date. It may also include a
Litigating Subdivision whose claims were resolved by a judicial Bar or Case-
Specific Resolution which is later revoked following the execution date of this
Agreement, when such Litigating Subdivision takes any affirmative step in its
lawsuit other than seeking a stay or removal.
35. "Later Participating Subdivision"means a Participating Subdivision that meets
the requirements of subsection VII.E but is not an Initial Participating
Subdivision.
36. "Litigating Special District'means a Special District(or Special District official)
that brought any Released Claims against any Released Entities on or before the
Preliminary Agreement Date that were not separately resolved prior to that date.
A list of Litigating Special Districts will be agreed to by the parties and attached
hereto as of the Preliminary Agreement Date.
37. "Litigating Subdivision"means a Subdivision (or Subdivision official asserting
the right of or for the Subdivision to recover for alleged harms to the Subdivision
and/or the people thereof)that brought any Released Claim against any Released
Entity prior to the Trigger Date that were not separately resolved prior to that
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Trigger Date. A Prior Litigating Subdivision shall not be considered a Litigating
Subdivision. Exhibit C is an agreed list of the Litigating Subdivisions. Exhibit C
will be updated(including with any corrections)periodically, and a final version
of Exhibit C will be attached hereto as of the Reference Date.
38. "National Arbitration Panel"means the panel described in subsection XII.F.
39. "National Disputes"means the disputes described in subsection XII.F.
40. "Non-Litigating Special District"means a Special District that is neither a
Litigating Special District nor a Later Litigating Special District.
41. "Non-Litigating Subdivision"means a Subdivision that is neither a Litigating
Subdivision nor a Later Litigating Subdivision.
42. "Non-Participating Subdivision"means a Subdivision that is not a Participating
Subdivision.
43. "Non-Party Covered Conduct Claim"means a Claim against any Non-Released
Entity involving, arising out of, or related to Covered Conduct (or conduct that
would be Covered Conduct if engaged in by a Released Entity).
44. "Non-Party Settlement"means a settlement by any Releasor that settles any Non-
Party Covered Conduct Claim and includes a release of any Non-Released Entity.
45. "Non-Released Entity"means an entity that is not a Released Entity.
46. "Non-Settling State"means a State that is not a Settling State.
47. "Opioid Remediation"means care, treatment, and other programs and
expenditures (including reimbursement for past such programs or expenditures
except where this Agreement restricts the use of funds solely to future Opioid
Remediation) designed to (1) address the misuse and abuse of opioid products, (2)
treat or mitigate opioid use or related disorders, or(3) mitigate other alleged
effects of the opioid abuse crisis, including on those injured as a result of the
opioid abuse crisis. Exhibit E provides a non-exhaustive list of expenditures that
qualify as being paid for Opioid Remediation. Qualifying expenditures may
include reasonable related administrative expenses.
48. "Overall Allocation Percentage"means a Settling State's percentage as set forth
in Exhibit F. The aggregate Overall Allocation Percentages of all States
(including Settling States and Non-Settling States) shall equal 100%.
49. "Participating Special District"means a Special District that executes a release
consistent with Section IV below and meets the requirements for becoming a
Participating Special District under Section VII.
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50. "Participating Subdivision"means a Subdivision that meets the requirements for
becoming a Participating Subdivision under Section VII. Participating
Subdivisions include both Initial Participating Subdivisions and Later
Participating Subdivisions. Subdivisions eligible to become Participating
Subdivisions are listed in Exhibit G. A Settling State may add additional
Subdivisions to Exhibit G at any time prior to the Initial Participation Date.
51. "Participation Tier"means the level of participation in this Agreement as
determined pursuant to subsection VIII.0 using the criteria set forth in Exhibit H.
52. "Parties"means Janssen and the Settling States (each, a"Party").
53. "Payment Date"means the date on which Janssen makes its payments pursuant to
Section V and Exhibit M.
54. "Payment Year"means the calendar year during which the applicable Initial Year
Payments or Annual Payments are due pursuant to subsection V.B. Payment Year
1 is 2022, Payment Year 2 is 2023 and so forth. References to payment"for a
Payment Year"mean the Initial Year Payments or Annual Payment due during
that year. References to eligibility"for a Payment Year"mean eligibility in
connection with the Initial Year Payments or Annual Payment due during that
year.
55. "Preliminary Agreement Date"means the date on which Janssen gives notice to
the Settling States and MDL PEC of its determination that a sufficient number of
States have agreed to be Settling States. This date shall be no more than fourteen
(14) days after the end of the notice period to States, unless it is extended by
written agreement of Janssen and the Enforcement Committee.
56. "Primary Subdivision"means a Subdivision that has a population of 30,000 or
more. A list of Primary Subdivisions in each State is provided in Exhibit I.
57. "Prior Litigating Subdivision"means a Subdivision(or Subdivision official
asserting the right of or for the Subdivision to recover for alleged harms to the
Subdivision and/or the people thereof) that brought any Released Claim against
any Released Entity prior to the Trigger Date and all such Released Claims were
separately settled or finally adjudicated prior to the Trigger Date;provided,
however, that if the final adjudication was pursuant to a Bar, such Subdivision
shall not be considered a Prior Litigating Subdivision. Notwithstanding the prior
sentence, Janssen and the State of the relevant Subdivision may agree in writing
that such Subdivision shall not be considered a Prior Litigating Subdivision.
58. "Product"means any chemical substance, whether used for medicinal or non-
medicinal purposes, and whether natural, synthetic, or semi-synthetic, or any
finished pharmaceutical product made from or with such substance, that is an
opioid or opiate, as well as any product containing any such substance. It also
includes: 1)the following when used in combination with opioids or opiates:
benzodiazepine, carisoprodol, zolpidem, or gabapentin; and 2) a combination or
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"cocktail" of any stimulant or other chemical substance prescribed, sold,bought,
or dispensed to be used together that includes opioids or opiates. For the
avoidance of doubt, "Product" does not include benzodiazepine, carisoprodol,
zolpidem, or gabapentin when not used in combination with opioids or opiates.
"Product" includes but is not limited to any substance consisting of or containing
buprenorphine, codeine, fentanyl, hydrocodone, hydromorphone, meperidine,
methadone, morphine, naloxone, naltrexone, oxycodone, oxymorphone,
tapentadol, tramadol, opium, heroin, carfentanil, any variant of these substances,
or any similar substance. "Product" also includes any natural, synthetic, semi-
synthetic or chemical raw materials, starting materials, finished active
pharmaceutical ingredients, drug substances, and any related intermediate
products used or created in the manufacturing process for any of the substances
described in the preceding sentence.
59. "Reference Date"means the date on which Janssen is to inform the Settling States
and MDL PEC of its determination whether there is sufficient resolution of claims
and potential claims at the Subdivision level to go forward with the settlement.
The Reference Date shall be thirty(30) days after the Initial Participation Date,
unless it is extended by written agreement of Janssen and the Enforcement
Committee.
60. "Released Claims"means any and all Claims that directly or indirectly are based
on, arise out of, or in any way relate to or concern the Covered Conduct occurring
prior to the Reference Date. Without limiting the foregoing, "Released Claims"
include any Claims that have been asserted against the Released Entities by any
Settling State or any of its Litigating Subdivisions or Litigating Special Districts
in any federal, state or local action or proceeding (whether judicial, arbitral, or
administrative)based on, arising out of or relating to, in whole or in part, the
Covered Conduct, or any such Claims that could be or could have been asserted
now or in the future in those actions or in any comparable action or proceeding
brought by a State, any of its Subdivisions or Special Districts, or any Releasors
(whether or not such State, Subdivision, Special District, or Releasor has brought
such action or proceeding). Released Claims also include all Claims asserted in
any proceeding to be dismissed pursuant to the Agreement, whether or not such
claims relate to Covered Conduct. The Parties intend that"Released Claims"be
interpreted broadly. This Agreement does not release Claims by private
individuals. It is the intent of the Parties that Claims by private individuals be
treated in accordance with applicable law. Released Claims is also used herein to
describe Claims brought by a Later Litigating Subdivision or other non-party
Subdivision or Special District that would have been Released Claims if they had
been brought by a Releasor against a Released Entity.
61. "Released Entities"means Janssen and(1) all of Janssen's past and present direct
or indirect parents, subsidiaries, divisions, predecessors, successors, assigns,
including Noramco, Inc. and Tasmanian Alkaloids PTY. LTD.; (2)the past and
present direct or indirect subsidiaries, divisions, and joint ventures, of any of the
foregoing; (3) all of Janssen's insurers (solely in their role as insurers with respect
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to the Released Claims); (4) all of Janssen's, or of any entity described in
subsection(1), past and present joint ventures; and (5) the respective past and
present officers, directors, members, shareholders (solely in their capacity as
shareholders of the foregoing entities), partners, trustees, agents, and employees
of any of the foregoing (for actions that occurred during and related to their work
for, or employment with, Janssen). Any person or entity described in subsections
(3)-(5) shall be a Released Entity solely in the capacity described in such clause
and shall not be a Released Entity with respect to its conduct in any other
capacity. For the avoidance of doubt, the entities listed in Exhibit Q are not
Released Entities; and provided further that any joint venture partner of Janssen
or Janssen's subsidiary is not a Released Entity unless it falls within subsections
(1)-(5) above. A list of Janssen's present subsidiaries and affiliates can be found
at https://johnsonandjohnson.gcs-web.com/static-files/f6lae5f3-ffU3-46cl-bfc9-
174947884db2. Janssen's predecessor entities include but are not limited to those
entities listed on Exhibit J. For the avoidance of doubt, any entity acquired, or
joint venture entered into, by Janssen after the Reference Date is not a Released
Entity.
62. "Releasors"means (1) each Settling State; (2) each Participating Subdivision; and
(3)without limitation and to the maximum extent of the power of each Settling
State's Attorney General and/or Participating Subdivision to release Claims, (a)
the Settling State's and Participating Subdivision's departments, agencies,
divisions,boards, commissions, Subdivisions, districts, instrumentalities of any
kind and attorneys, including its Attorney General, and any person in their official
capacity whether elected or appointed to serve any of the foregoing and any
agency,person, or other entity claiming by or through any of the foregoing, (b)
any public entities, public instrumentalities, public educational institutions,
unincorporated districts, fire districts, irrigation districts, water districts, law
enforcement districts, emergency services districts, school districts, hospital
districts and other Special Districts in a Settling State, and(c) any person or entity
acting in a parens patriae, sovereign, quasi-sovereign, private attorney general, qui
tam, taxpayer, or other capacity seeking relief on behalf of or generally applicable
to the general public with respect to a Settling State or Subdivision in a Settling
State, whether or not any of them participate in the Agreement. The inclusion of a
specific reference to a type of entity in this definition shall not be construed as
meaning that the entity is not a Subdivision. In addition to being a Releasor as
provided herein, a Participating Subdivision shall also provide the Subdivision
Settlement Participation Form or the Election and Release Form referenced in
Section VII providing for a release to the fullest extent of the Participating
Subdivision's authority, which shall be attached as an exhibit to the Agreement.
Each Settling State's Attorney General represents that he or she has or has
obtained(or will obtain no later than the Initial Participation Date) the authority
set forth in the Representation and Warranty subsection of Section IV.
63. "Revocation Event"means with respect to a Bar, Settlement Class Resolution, or
Case-Specific Resolution, a legislative amendment or a revocation, rescission,
reversal, overruling, or interpretation that in any way limits the effect of such Bar,
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Settlement Class Resolution, or Case-Specific Resolution on Released Claims or
any other action or event that otherwise deprives the Bar, Settlement Class
Resolution or Case-Specific Resolution of force or effect in any material respect.
64. "Settlement Class Resolution"means a class action resolution in a court of
competent jurisdiction in a Settling State with respect to a class of Subdivisions
and Special Districts in that State that(1) conforms with that Settling State's
statutes, case law, and/or rules of procedure regarding class actions; (2) is
approved and entered as an order of a court of competent jurisdiction in that State
and has become final as defined in"State-Specific Finality"; (3) is binding on all
Non-Participating Subdivisions and Special Districts in that State (other than opt
outs as permitted under the next sentence); (4)provides that all such Non-
Participating Subdivisions or Special Districts may not bring Released Claims
against Released Entities,whether on the ground of the Agreement(or the
releases herein) or otherwise; and(5) does not impose any costs or obligations on
Janssen other than those provided for in the Agreement, or contain any provision
inconsistent with any provision of the Agreement. If applicable state law requires
that opt-out rights be afforded to members of the class, a class action resolution
otherwise meeting the foregoing requirements shall qualify as a Settlement Class
Resolution unless Subdivisions collectively representing more than 1% of the
total population of all of that State's Subdivisions listed in Exhibit G opt out. In
seeking certification of any Settlement Class, the applicable State and
Participating Subdivisions shall make clear that certification is sought solely for
settlement purposes and shall have no applicability beyond approval of the
settlement for which certification is sought. Nothing in this Agreement constitutes
an admission by any Party that class certification would be appropriate for
litigation purposes in any case.
65. "Settlement Fund"means the interest-bearing fund established under the
Agreement into which all payments by Janssen are made other than amounts paid
as attorneys' fees and costs or identified pursuant to subsection VI.B.2 as being
used to pay attorneys' fees and costs. The Settlement Fund comprises the
Abatement Accounts Fund, State Fund, and Subdivision Fund.
66. "Settlement Fund Administrator"means the entity that determines the Annual
Payments (including calculating Incentive Payments pursuant to Section V) and
any amounts subject to suspension or offset pursuant to Sections V and IX),
determines the Participation Tier, and administers and distributes amounts into the
Settlement Fund. The duties of the Settlement Fund Administrator shall be
governed by this Agreement. Prior to the Initial Participation Date, the Parties
shall agree to selection and removal processes for and a detailed description of the
Settlement Fund Administrator's duties, including a detailed mechanism for
paying the Settlement Fund Administrator's fees and costs, all of which shall be
appended to the Agreement as Exhibit L.
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67. "Settlement Fund Escrow"means the interest-bearing escrow fund established
pursuant to this Agreement to hold disputed or suspended payments made under
this Agreement.
68. "Settlement Payment Schedule"means the schedule of payments attached to this
Agreement as Exhibit M. A revised Settlement Payment Schedule will be
substituted for Exhibit M after any offsets, reductions, or suspensions under
Sections V and IX are determined.
69. "Settling State"means any State that has entered the Agreement.
70. "Special District"means a formal and legally recognized sub-entity of a State that
is authorized by State law to provide one or a limited number of designated
functions, including but not limited to school districts, fire districts, healthcare &
hospital districts, and emergency services districts. Special Districts do not
include sub-entities of a State that provide general governance for a defined area
that would qualify as a Subdivision.
71. "State"means any state of the United States of America, the District of Columbia,
American Samoa, Guam, the Northern Mariana Islands, Puerto Rico, and the U.S.
Virgin Islands. Additionally, the use of non-capitalized"state"to describe
something (e.g., "state court") shall also be read to include parallel entities in
commonwealths, territories, and the District of Columbia (e.g., "territorial court").
72. "State Fund"means a component of the Settlement Fund described in subsection
VI.C.
73. "State-Specific Finality" means, with respect to the Settling State in question:
a. the Agreement and the Consent Judgment have been approved and entered
by the Court as to Janssen, including the release of all Released Claims
against Released Entities as provided in this Agreement;
b. for all lawsuits brought by the Settling State against Released Entities for
Released Claims, either previously filed or filed as part of the entry of the
Consent Judgment, the Court has stated in the Consent Judgment or
otherwise entered an order finding that all Released Claims against
Released Entities asserted in the lawsuit have been resolved by agreement;
and
C. (1) the time for appeal or to seek review of or permission to appeal from
the approval and entry as described in subsection (a) hereof and entry of
such order described in subsection (b) hereof has expired; or(2) in the
event of an appeal, the appeal has been dismissed or denied, or the
approval and entry described in(a)hereof and the order described in
subsection (b)hereof have been affirmed in all material respects (to the
extent challenged in the appeal) by the court of last resort to which such
appeal has been taken and such dismissal or affirmance has become no
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longer subject to further appeal (including, without limitation, review by
the United States Supreme Court).
74. "State-Subdivision Agreement"means an agreement that a Settling State reaches
with the Subdivisions in that State regarding the allocation, distribution, and/or
use of funds allocated to that State and to Participating Subdivisions in that State.
A State-Subdivision Agreement shall be effective if approved pursuant to the
provisions of Exhibit O or if adopted by statute. Preexisting agreements
addressing funds other than those allocated pursuant to this Agreement shall
qualify if the approval requirements of Exhibit O are met. A State and its
Subdivisions may revise, supplement, or refine a State-Subdivision Agreement if
approved pursuant to the provisions of Exhibit O or if adopted by statute.
75. "Statutory Trust"means a trust fund established by state law to receive funds
allocated to a State's Abatement Accounts Fund and restrict their expenditure to
Opioid Remediation purposes subject to reasonable administrative expenses. A
State may give a Statutory Trust authority to allocate one or more of the three
Settlement Funds, but this is not required.
76. "Subdivision"means a formal and legally recognized sub-entity of a State that
provides general governance for a defined area, including a county,parish, city,
town, village, or similar entity. Unless otherwise specified, "Subdivision"
includes all functional counties and parishes and other functional levels of sub-
entities of a State that provide general governance for a defined area. Historic,
non-functioning sub-entities of a State (such as Connecticut counties) are not
Subdivisions, unless the entity has filed a lawsuit that includes a Released Claim
against a Released Entity in a direct,parens patriae, or any other capacity. For
purposes of this Agreement, the term Subdivision does not include Special
Districts. A list of Subdivisions by state will be agreed to prior to any Subdivision
sign-on period.
77. "Subdivision Allocation Percentage"means for Subdivisions in a Settling State
that are eligible to receive an allocation from the Subdivision Fund pursuant to
subsection VI.0 or subsection VI.D, the percentage as set forth in Exhibit G. The
aggregate Subdivision Allocation Percentage of all Subdivisions receiving a
Subdivision Allocation Percentage in each State shall equal 100%. Immediately
upon the effectiveness of any State-Subdivision Agreement, Allocation Statute,
Statutory Trust, or voluntary redistribution allowed by subsection VI.D.3 (or upon
the effectiveness of an amendment to any State-Subdivision Agreement,
Allocation Statute, Statutory Trust, or voluntary redistribution allowed by
subsection VI.D.3)that addresses allocation from the Subdivision Fund, or upon
any, whether before or after the Initial Participation Date, Exhibit G will
automatically be amended to reflect the allocation from the Subdivision Fund
pursuant to the State-Subdivision Agreement, Allocation Statute, Statutory Trust,
or voluntary redistribution allowed by Section V.D.3. The Subdivision Allocation
Percentages contained in Exhibit G may not change once notice is distributed
pursuant to subsection VII.A, except upon the effectiveness of any State-
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Subdivision Agreement, Allocation Statute, Statutory Trust, or voluntary
redistribution allowed by subsection VI.D.3 (or upon the effectiveness of an
amendment to any State-Subdivision Agreement, Allocation Statute, Statutory
Trust, or voluntary redistribution allowed by subsection VI.D.3) that addresses
allocation from the Subdivision Fund. For the avoidance of doubt, no Subdivision
not listed on Exhibit G shall receive an allocation from the Subdivision Fund and
no provision of this Agreement shall be interpreted to create such an entitlement.
78. "Subdivision Fund"means a component of the Settlement Fund described in
subsection VI.C.
79. "Subdivision Settlement Participation Form"means the form attached as Exhibit
K that Participating Subdivisions must execute and return to the Settlement Fund
Administrator, and which shall (1)make such Participating Subdivisions
signatories to this Agreement, (2) include a full and complete release of any and
of such Subdivision's claims, and(3) require the prompt dismissal with prejudice
of any Released Claims that have been filed by any such Participating
Subdivision.
80. "Threshold Motion"means a motion to dismiss or equivalent dispositive motion
made at the outset of litigation under applicable procedure. A Threshold Motion
must include as potential grounds for dismissal, any applicable Bar or the relevant
release by a Settling State or Participating Subdivision provided under this
Agreement and, where appropriate under applicable law, any applicable
limitations defense.
81. "Trigger Date"means, in the case of a Primary Subdivision, the Reference Date,
or, in the case of all other Subdivisions, the Preliminary Agreement Date.
II. Participation by States and Condition to Preliminary Agreement
A. Notice to States. On July 22, 2021 this Agreement shall be distributed to all States. The
States' Attorneys General shall then have a period of thirty (30) days to decide whether to
become Settling States. States that determine to become Settling States shall so notify the
National Association of Attorneys General and Janssen and shall further commit to
obtaining any necessary additional State releases prior to the Reference Date. This notice
period may be extended by written agreement of Janssen and the Enforcement
Committee.
B. Condition to Preliminary Agreement. Following the notice period set forth in subsection
II.A above, Janssen shall determine on or before the Preliminary Agreement Date
whether, in its sole discretion, enough States have agreed to become Settling States to
proceed with notice to Subdivisions as set forth in Section VII below. If Janssen
determines that this condition has been satisfied, and that notice to the Litigating
Subdivisions should proceed, it will so notify the Settling States by providing notice to
the Enforcement Committee and Settlement Fund Administrator on the Preliminary
Agreement Date. If Janssen determines that this condition has not been satisfied, it will so
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notify the Settling States by providing notice to the Enforcement Committee and
Settlement Fund Administrator, and this Agreement will have no further effect and all
releases and other commitments or obligations contained herein will be void.
C. Later Joinder by States. After the Preliminary Agreement Date, a State may only become
a Settling State with the consent of Janssen, in its sole discretion. If a State becomes a
Settling State more than sixty (60) days after the Preliminary Agreement Date, but on or
before January 1, 2022, the Subdivisions and Special Districts in that State that become
Participating Subdivisions and Participating Special Districts within ninety(90) days of
the State becoming a Settling State shall be considered Initial Participating Subdivisions
or Initial Participating Special Districts. A State may not become a Settling State after
January 1, 2022.
III. Iniunctive Relief
A. Entry of Injunctive Relief. As part of the Consent Judgment, the Parties agree to the
injunctive relief terms attached as Exhibit P.
IV. Release
A. Scope. As of the Effective Date, the Released Entities will be released and forever
discharged from all of the Releasors' Released Claims. Each Settling State (for itself and
its Releasors) and Participating Subdivision(for itself and its Releasors) will, on or
before the Effective Date, absolutely, unconditionally, and irrevocably covenant not to
bring, file, or claim, or to cause, assist in bringing, or permit to be brought, filed, or
claimed, or to otherwise seek to establish liability for any Released Claims against any
Released Entity in any forum whatsoever. The releases provided for in the Agreement are
intended by the Parties to be broad and shall be interpreted so as to give the Released
Entities the broadest possible bar against any liability relating in any way to Released
Claims and extend to the full extent of the power of each Settling State and its Attorney
General to release claims. The Release shall be a complete bar to any Released Claim.
B. Claim Over and Non-Party Settlement.
1. Statement of Intent. It is the intent of the Parties that:
a. Released Entities should not seek contribution or indemnification (other
than pursuant to an insurance contract) from other parties for their
payment obligations under this Settlement Agreement;
b. the payments made under this Settlement Agreement shall be the sole
payments made by the Released Entities to the Releasors involving,
arising out of, or related to Covered Conduct(or conduct that would be
Covered Conduct if engaged in by a Released Entity);
C. Claims by Releasors against non-Parties should not result in additional
payments by Released Entities, whether through contribution,
indemnification or any other means; and
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d. the Settlement meets the requirements of the Uniform Contribution
Among Joint Tortfeasors Act and any similar state law or doctrine that
reduces or discharges a released party's liability to any other parties.
e. The provisions of this subsection IV.B are intended to be implemented
consistent with these principles. This Agreement and the releases and
dismissals provided for herein are made in good faith.
2. Contribution/Indemnity Prohibited. No Released Entity shall seek to recover for
amounts paid under this Agreement based on indemnification, contribution, or
any other theory from a manufacturer,pharmacy, hospital, pharmacy benefit
manager, health insurer, third-parry vendor, trade association, distributor, or
health care practitioner, provided that a Released Entity shall be relieved of this
prohibition with respect to any entity that asserts a Claim-Over against it. For the
avoidance of doubt, nothing herein shall prohibit a Released Entity from
recovering amounts owed pursuant to insurance contracts.
3. Non-Party Settlement. To the extent that, on or after the Reference Date, any
Releasor enters into a Non-Party Settlement, including in any bankruptcy case or
through any plan of reorganization (whether individually or as a class of
creditors), the Releasor will include (or in the case of a Non-Party Settlement
made in connection with a bankruptcy case, will cause the debtor to include),
unless prohibited from doing so under applicable law, in the Non-Party Settlement
a prohibition on contribution or indemnity of any kind substantially equivalent to
that required from Janssen in subsection IV.13.2, or a release from such Non-
Released Entity in favor of the Released Entities (in a form equivalent to the
releases contained in this Agreement) of any Claim-Over. The obligation to obtain
the prohibition and/or release required by this subsection is a material term of this
Agreement.
4. Claim-Over. In the event that any Releasor obtains a judgment with respect to
Non-Party Covered Conduct against a Non-Released Entity that does not contain
a prohibition like that in subsection IV.13.3, or any Releasor files a Non-Party
Covered Conduct Claim against a non-Released Entity in bankruptcy or a
Releasor is prevented for any reason from obtaining a prohibition/release in a
Non-Party Settlement as provided in subsection IV.13.3, and such Non-Released
Entity asserts a Claim-Over against a Released Entity, that Releasor and Janssen
shall take the following actions to ensure that the Released Entities do not pay
more with respect to Covered Conduct to Releasors or to Non-Released Entities
than the amounts owed under this Settlement Agreement by Janssen:
a. Janssen shall notify that Releasor of the Claim-Over within sixty(60) days
of the assertion of the Claim-Over or sixty(60) days of the Effective Date
of this Settlement Agreement, whichever is later;
b. Janssen and that Releasor shall meet and confer concerning the means to
hold Released Entities harmless and ensure that it is not required to pay
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more with respect to Covered Conduct than the amounts owed by Janssen
under this Settlement Agreement;
C. That Releasor and Janssen shall take steps sufficient and permissible under
the law of the State of the Releasor to hold Released Entities harmless
from the Claim-Over and ensure Released Entities are not required to pay
more with respect to Covered Conduct than the amounts owed by Janssen
under this Settlement Agreement. Such steps may include,where
permissible:
(1) Filing of motions to dismiss or such other appropriate motion by
Janssen or Released Entities, and supported by Releasors, in
response to any claim filed in litigation or arbitration;
(2) Reduction of that Releasor's Claim and any judgment it has
obtained or may obtain against such Non-Released Entity by
whatever amount or percentage is necessary to extinguish such
Claim-Over under applicable law,up to the amount that Releasor
has obtained, may obtain, or has authority to control from such
Non-Released Entity;
(3) Placement into escrow of funds paid by the Non-Released Entities
such that those funds are available to satisfy the Claim-Over;
(4) Return of monies paid by Janssen to that Releasor under this
Settlement Agreement to permit satisfaction of a judgment against
or settlement with the Non-Released Entity to satisfy the Claim-
Over;
(5) Payment of monies to Janssen by that Releasor to ensure it is held
harmless from such Claim-Over,up to the amount that Releasor
has obtained, may obtain, or has authority to control from such
Non-Released Entity;
(6) Credit to Janssen under this Settlement Agreement to reduce the
overall amounts to be paid under the Settlement Agreement such
that it is held harmless from the Claim-Over; and
(7) Such other actions as that Releasor and Janssen may devise to hold
Janssen harmless from the Claim Over.
d. The actions of that Releasor and Janssen taken pursuant to paragraph (c)
must, in combination, ensure Janssen is not required to pay more with
respect to Covered Conduct than the amounts owed by Janssen under this
Settlement Agreement.
e. In the event of any dispute over the sufficiency of the actions taken
pursuant to paragraph(c), that Releasor and Janssen may seek review by
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the National Arbitration Panel,provided that, if the parties agree, such
dispute may be heard by the state court where the relevant Consent
Judgment was filed. The National Arbitration Panel shall have authority to
require Releasors to implement a remedy that includes one or more of the
actions specified in paragraph (c) sufficient to hold Released Entities fully
harmless. In the event that the panel's actions do not result in Released
Entities being held fully harmless, Janssen shall have a claim for breach of
this Settlement Agreement by Releasors, with the remedy being payment
of sufficient funds to hold Janssen harmless from the Claim-Over. For the
avoidance of doubt, the prior sentence does not limit or eliminate any
other remedy that Janssen may have.
5. To the extent that the Claim-Over is based on a contractual indemnity, the
obligations under subsection IV.13.4 shall extend solely to a Non-Party Covered
Conduct Claim against a pharmacy, clinic, hospital or other purchaser or
dispenser of Products, a manufacturer that sold Products, a consultant, and/or a
pharmacy benefit manager or other third-party payor. Janssen shall notify the
Settling States, to the extent permitted by applicable law, in the event that any of
these types of Non-Released Entities asserts a Claim-Over arising out of
contractual indemnity against it.
C. General Release. In connection with the releases provided for in the Agreement, each
Settling State (for itself and its Releasors) and Participating Subdivision expressly
waives, releases, and forever discharges any and all provisions, rights, and benefits
conferred by any law of any state or territory of the United States or other jurisdiction, or
principle of common law, which is similar, comparable, or equivalent to § 1542 of the
California Civil Code, which reads:
General Release; extent.A general release does not extend to
claims that the creditor or releasing party does not know or suspect
to exist in his or her favor at the time of executing the release that,
if known by him or her, would have materially affected his or her
settlement with the debtor or released party.
A Releasor may thereafter discover facts other than or different from those which it
knows, believes, or assumes to be true with respect to the Released Claims, but each
Settling State (for itself and its Releasors) and Participating Subdivision hereby expressly
waives and fully, finally, and forever settles, releases, and discharges, upon the Effective
Date, any and all Released Claims that may exist as of such date but which Releasors do
not know or suspect to exist, whether through ignorance, oversight, error, negligence or
through no fault whatsoever, and which, if known, would materially affect the Settling
States' decision to enter into the Agreement or the Participating Subdivisions' decision to
participate in the Agreement.
D. Res Judicata. Nothing in the Agreement shall be deemed to reduce the scope of the res
judicata or claim preclusive effect that the settlement memorialized in the Agreement,
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and/or any Consent Judgment or other judgment entered on the Agreement, gives rise to
under applicable law.
E. Representation and Warranty. The signatories hereto on behalf of their respective
Settling States and its Participating Subdivisions expressly represent and warrant that
they will obtain on or before the Effective Date (or have obtained)the authority to settle
and release, to the maximum extent of the State's power, all Released Claims of(1)their
respective Settling States; (2) all past and present executive departments, state agencies,
divisions, boards, commissions and instrumentalities with the regulatory authority to
enforce state and federal controlled substances acts; (3) any of their respective Settling
State's past and present executive departments, agencies, divisions, boards, commissions
and instrumentalities that have the authority to bring Claims related to Covered Conduct
seeking money (including abatement and/or remediation) or revocation of a
pharmaceutical distribution license; and(4) any Participating Subdivisions. For the
purposes of clause (3) above, executive departments, agencies, divisions, boards,
commissions, and instrumentalities are those that are under the executive authority or
direct control of the State's Governor. Also, for the purposes of clause (3), a release from
a State's Governor is sufficient to demonstrate that the appropriate releases have been
obtained.
F. Effectiveness. The releases set forth in the Agreement shall not be impacted in any way
by any dispute that exists, has existed, or may later exist between or among the Releasors.
Nor shall such releases be impacted in any way by any current or future law,regulation,
ordinance, or court or agency order limiting, seizing, or controlling the distribution or use
of the Settlement Fund or any portion thereof, or by the enactment of future laws, or by
any seizure of the Settlement Fund or any portion thereof.
G. Cooperation. Releasors (i)will not encourage any person or entity to bring or maintain
any Released Claim against any Released Entity and(ii) will reasonably cooperate with
and not oppose any effort by a Released Entity to secure the prompt dismissal of any and
all Released Claims.
H. Non-Released Claims. Notwithstanding the foregoing or anything in the definition of
Released Claims, the Agreement does not waive, release or limit any criminal liability,
Claims for any outstanding liability under any tax or securities law, Claims against
parties who are not Released Entities, Claims by private individuals and any claims
arising under the Agreement for enforcement of the Agreement.
V. Monetary Relief and Payments
A. Structure of Payments
1. All payments under this Section V shall be made into the Settlement Fund, except
that where specified, they shall be made into the Settlement Fund Escrow. The
Settlement Fund shall be allocated and used only as specified in Section VI.
2. Janssen shall pay into the Settlement Fund the sum of Four Billion, Five Hundred
Thirty-Four Million, Six Hundred Fifteen Thousand, Three Hundred Eighty-Five
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Dollars ($4,534,615,385) minus (1) the offsets and credits specified in subsection
V.0 below, (2) any unearned incentive payments under subsection V.E below,
and(3) any adjustments under Section IX below.
3. The payments to the Settlement Fund shall be divided into base and incentive
payments as provided in subsections V.D and V.E below.
B. Payment Process
1. Except as otherwise provided in this Agreement, Janssen shall make two Initial
Year Payments and nine (9)Annual Payments. The Initial Year Payments will
consist of base payments. The first Annual Payment shall consist of incentive
payments and subsequent Annual Payments shall each consist of base and
incentive payments. The amount of all Initial Year Payments and Annual
Payments shall be determined by the Settlement Fund Administrator applying
Section V and Exhibit M. The Payment Date for the first Initial Year Payment
shall be no later than ninety (90) days after the Effective Date. The Payment Date
for the second Initial Year Payment shall be no later than July 15, 2022. The
Payment Date for the first Annual Payment shall be no later than one year and
sixty days following the Effective Date; the Payment Date for the second Annual
Payment shall be no later than two years and sixty days following the Effective
Date, and so forth,until all Annual Payments are made.
2. All data relevant to the determination of each such payment shall be submitted to
the Settlement Fund Administrator sixty(60) days prior to the Payment Date for
each payment. Prior to the Initial Participation Date, the Parties will include an
exhibit to the Agreement setting forth in detail the process for submitting such
data to the Settlement Fund Administrator prior to each Payment Date. The
Settlement Fund Administrator shall then determine the Initial Year Payment or
Annual Payment and the amount to be paid to each Settling State and its
Participating Subdivisions, consistent with the provisions in Exhibit L, by:
a. determining, for each Settling State, the amount of base and incentive
payments to which the State is entitled by applying the criteria in this
Section;
b. applying any reductions, suspensions, or offsets required by Sections V
and IX; and
C. determining the total amount owed by Janssen to all Settling States and
Participating Subdivisions.
3. The Settlement Fund Administrator shall then allocate the Initial Year Payment or
Annual Payment pursuant to Section VI among the Settling States, among the
separate types of funds for each Settling State (if applicable), and among the
Participating Subdivisions.
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4. As soon as possible,but no later than fifty(50) days prior to the Payment Date for
each payment and following the determination described in subsection V.B.2, the
Settlement Fund Administrator shall give notice to Janssen, the Settling States,
and the Enforcement Committee of the amount of the Initial Year Payment or
Annual Payment, the amount to be received by each Settling State, the amount to
be received by the separate types of funds for each Settling State (if applicable),
and the amount to be received by each Settling State's Participating Subdivisions.
5. Within twenty-one (21) days of the notice provided by the Settlement Fund
Administrator, any party may dispute, in writing, the calculation of the Initial
Year Payment or Annual Payment, or the amount to be received by a Settling
State and/or its Participating Subdivisions. Such disputing party must provide a
written notice of dispute to the Settlement Fund Administrator, the Enforcement
Committee, any affected Settling State, and Janssen identifying the nature of the
dispute, the amount of money that is disputed, and the Settling State(s) affected.
6. Within twenty-one (21) days of the sending of a written notice of dispute, any
affected party may submit a response, in writing, to the Settlement Fund
Administrator, the Enforcement Committee, any affected Settling State, and
Janssen identifying the basis for disagreement with the notice of dispute.
7. If no response is filed, the Settlement Fund Administrator shall adjust the amount
calculated consistent with the written notice of dispute, and Janssen shall pay the
adjusted amount as the Initial Year Payment or Annual Payment on the Payment
Date. If a written response to the written notice of dispute is timely sent to the
Settlement Fund Administrator, the Settlement Fund Administrator shall notify
Janssen of the preliminary amount to be paid, which shall be the greater of the
amount originally calculated by the Settlement Fund Administrator or the amount
that would be consistent with the notice of dispute,provided, however that in no
circumstances shall the preliminary amount to be paid be higher than the
maximum amount of base and incentive payments for that payment as set forth in
Exhibit M. For the avoidance of doubt, a transfer of suspended payments from the
Settlement Fund Escrow does not count toward determining whether the amount
to be paid is higher than the maximum amount of base and incentive payments for
that payment as set forth in Exhibit M.
8. The Settlement Fund Administrator shall place any disputed amount of the
preliminary amount paid by Janssen into the Settlement Fund Escrow and shall
disburse any undisputed amount to each Settling State and its Participating
Subdivisions receiving direct allocations within fifteen (15) days of the Payment
Date or at such later time as directed by each Settling State.
9. Disputes described in this subsection(other than those for which no response is
filed under subsection V.B.6) shall be resolved in accordance with the terms of
Section XII.
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10. The process described in this subsection V.B shall also apply to accelerated
payments made pursuant to Incentive A under subsection V.E.4.
11. For the avoidance of doubt, Subdivisions not listed on Exhibit G shall not receive
an allocation from the Subdivision Fund.
C. Offsets for Non-Settling States and Credits
1. An offset equal to Four Billion, Five Hundred Thirty-Four Million, Six Hundred
Fifteen Thousand, Three Hundred Eighty-Five Dollars ($4,534,615,385)times the
percentage allocation assigned to each Non-Settling State in Exhibit F shall be
deducted from the total amount to be paid by Janssen to the Settlement Fund
under subsection V.A.2 above.
2. In addition to the offset, a credit of Two Hundred and Seventy Million Dollars
($270,000,000) shall be deducted from the maximum Settlement Fund amount to
be paid by Janssen under subsection V.A.2 above and applied to the payment
amounts as specified by Exhibit M. For the avoidance of doubt, the base
payments and maximum incentive payment amounts shown on Exhibit M already
reflect the deduction of the offset.
3. Notwithstanding any other provision of this Agreement or any other agreement, in
the event that: (1) Janssen enters into an agreement with any Settling State that
resolves with finality such Settling State's Claims consistent with Section IV of
this Agreement and such agreement has an effective date prior to the Effective
Date of this Agreement(such agreement, a"State-Specific Agreement") and(2)
pursuant to the terms of the State-Specific Agreement, any payments, or any
portion thereof, made by Janssen thereunder are made in lieu of any payments (for
the avoidance of doubt, including the Additional Restitution Amount), or any
portion thereof, to be made under this Agreement and Janssen makes such a
payment pursuant to the State-Specific Agreement, then Janssen will reduce any
payments allocable to such Settling State (whether made to the Settlement Fund
Escrow or the Settlement Fund) made pursuant to this Agreement to the extent
such amount was already paid pursuant to the terms of the State-Specific
Agreement. This provision includes but is not limited to any corresponding
amounts already paid to the Qualified Settlement Fund established under the
Agreement between Janssen and the State of New York dated June 25, 2021.
4. Non-Settling States shall not be eligible for any payments or have any rights in
connection with this Agreement. Accordingly, the stated maximum dollar
amounts of the payments specified in Exhibit M are reduced by the aggregate
Overall Allocation Percentage of Non-Settling States as set forth in Exhibit F.
D. Base Payments
1. Janssen shall make base payments into the Settlement Fund totaling One Billion,
Nine Hundred Forty-Two Million, Three Hundred Forty-Six Thousand, One
Hundred Fifty-Five Dollars ($1,942,346,155) minus the offsets and credits
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specified in subsection V.0 above. The base payments will be paid in accordance
with the payment schedule specified by Exhibit M, subject to potential
acceleration and potential deductions as provided herein.
2. The base payments will be allocated by Settling State proportionate to each
Settling State's assigned percentages in Exhibit F, adjusted for any Non-Settling
States.
3. If a State qualifies for Incentive A (described below), Janssen will accelerate the
base payment schedule so that the State receives its Payment Year 1-3 base
payment allocations and full Payment Year 1-3 Incentive A payment amounts
within ninety(90) days of notice, on or after the Effective Date, of the Bar's
implementation. Payment Year 4-9 payments are made annually and cannot be
accelerated.
4. The exemplar payment schedule in Exhibit M does not account for deductions for
offsets or unearned incentives, which will be separately calculated for each
payment.
E. Incentive Payments
I. Janssen shall make incentive payments into the Settlement Fund potentially
totaling up to Two Billion, Three Hundred Twenty-Two Million, Two Hundred
Sixty-Nine Thousand, Two Hundred Thirty Dollars ($2,322,269,230), consisting
of$2,109,038,461 for Incentive A(or, alternatively up to $2,109,038,461 for
combined Incentives B and C if Incentive A is not achieved) and $213,230,769
for Incentive D, prior to being adjusted for credits if every State is a Settling State
and were to satisfy the requirements specified below to earn its maximum
incentive amount. The incentive payments will be paid in accordance with the
payment schedule in Exhibit M, subject to potential acceleration and potential
deductions as provided herein.
2. The maximum incentive amount for any Settling State shall be $2,322,269,230
times the percentage allocation assigned that Settling State in Exhibit F.
3. A Settling State may qualify to receive incentive payments in addition to base
payments if, as of the Incentive Payment Final Eligibility Date, it meets the
incentive eligibility requirements specified below. Settling States may qualify for
incentive payments in four ways. If a Settling State qualifies for"Incentive A," it
will become entitled to receive the maximum Incentive A payment allocable to
the State as stated in subsection V.E.1. If a Settling State does not qualify for
Incentive A, it can alternatively qualify for"Incentive B" and/or"Incentive C."A
Settling State can qualify for"Incentive D"regardless of whether it qualifies for
another incentive payment. The Incentive Payment Final Eligibility Date is not
relevant to Incentive D.
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4. Incentive A:Accelerated Incentive Payment for Full Participation.
a. A Settling State shall receive an accelerated Incentive A payment
allocable to the State for full participation as described in subsection
V.E.4.b.
b. A State qualifies for Incentive A by: (1) complete participation in the form
of releases consistent with Section IV above from all Litigating
Subdivisions and Litigating Special Districts,Non-Litigating Subdivisions
with population over 10,000, and Non-Litigating Covered Special Districts
(as defined in subsection V.E.7.e); (2) a Bar; or(3) a combination of
approaches in clauses (1)-(2)that achieves the same level of resolution of
Subdivision and Special District claims (e.g., a law barring future
litigation combined with full joinder by Litigating Subdivisions and
Litigating Special Districts). For purposes of Incentive A, a Subdivision or
Special District is considered a"Litigating Subdivision" or"Litigating
Special District" if it has brought Released Claims against Released
Entities on or before the Reference Date; all other Subdivisions and
Special Districts are considered"Non-Litigating."For purposes of
Incentive A,Non-Litigating Special Districts shall not include a Special
District with any of the following words or phrases in its name: mosquito,
pest, insect, spray, vector, animal, air quality, air pollution, clean air,
coastal water, tuberculosis, and sanitary.
C. Qualification for Incentive A entitles the qualifying Settling State to
expedited payment of base payments and incentive payments for Payment
Years 1-3, which Janssen shall pay into the Settlement Fund within ninety
(90) days after receiving notice from the Settlement Fund Administrator
that a State has qualified for Incentive A, but in no event less than ninety
(90) days from the Effective Date. Base and incentive payments for
Payment Years 4-9 will not be expedited.
d. If a Settling State qualifies for Incentive A after receiving an incentive
payment under Incentives B or C, described below, the Settling State's
payments under Incentive A will equal the remainder of its total Incentive
A payments less any payments previously received under Incentives B or
C. A Settling State that receives all of its maximum incentive allocation
under Incentive A shall not receive additional incentive payments under
Incentives B or C.
e. A Settling State that is not eligible for Incentive A as of the Incentive
Payment Final Eligibility Date shall not be eligible for Incentive A for that
Payment Year or any subsequent Payment Years.
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5. Incentive B:Early Participation or Released Claims by Litigating Subdivisions
and Litigating Special Districts.
a. If a Settling State does not qualify for Incentive A, it may still qualify to
receive up to 60% of its total potential Incentive A payment allocation
under Incentive B.
b. A Settling State can qualify for an Incentive B payment if Litigating
Subdivisions and Litigating Special Districts collectively representing at
least 75% of the Settling State's litigating population are either
Participating Subdivisions or have their claims resolved through Case-
Specific Resolutions.
(1) A Settling State's litigating population is the sum of the population
of all Litigating Subdivisions and Litigating Special Districts. A
Settling State's litigating population shall include all Litigating
Subdivisions and Litigating Special Districts whose populations
overlap in whole or in part with other Litigating Subdivisions and
Litigating Special Districts, for instance in the case of a Litigating
Special District, city, or township contained within a county.
(2) For example, if a Litigating Special District and a city that is a
Litigating Subdivision are located within a county that is a
Litigating Subdivision, then each of their individual populations
would be added together to determine the total litigating
population. Special District populations shall be counted in the
manner set forth in subsection XIII.B. If each qualifies as a
Litigating Subdivision or Litigating Special District and the county
has a population of 10, the City has a population of 8, and the
Special District has a population of 1, the total litigating population
would be 19.
C. The following time periods apply to Incentive B payments:
(1) Period 1: Zero to two hundred ten(210) days after the Effective
Date.
(2) Period 2: Two hundred eleven(211) days to one year after the
Effective Date.
(3) Period 3: One year and one day to two years after the Effective
Date.
d. Within Period 1: If Litigating Subdivisions and Litigating Special Districts
collectively representing at least 75% of a Settling State's litigating
population are Participating Subdivisions or have their claims resolved
through Case-Specific Resolutions during Period 1, a sliding scale will
determine the share of the funds available under Incentive B, with a
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maximum of 60% of the Settling State's total potential incentive payment
allocation available. Under that sliding scale, if Litigating Subdivisions
and Litigating Special Districts collectively representing 75% of a Settling
State's litigating population become Participating Subdivisions or achieve
Case-Specific Resolution status by the end of Period 1, a Settling State
will receive 50% of the total amount available to it under Incentive B. If
more Litigating Subdivisions and Litigating Special Districts become
Participating Subdivisions or achieve Case-Specific Resolution status, the
Settling State shall receive an increased percentage of the total amount
available to it under Incentive B as shown in the table below.
Participation or Case-Specific Incentive B Award
Resolution Levels (As percentage of total
(As percentage of litigating amount available to State
population) under Incentive B
75% 50%
76% 52%
77% 54%
78% 56%
79% 58%
80% 60%
85% 70%
90% 80%
95% 90%
100% 100%
e. Within Period 2: If a Settling State did not qualify for an Incentive B
payment in Period 1,but Litigating Subdivisions and Litigating Special
Districts collectively representing at least 75% of the Settling State's
litigating population become Participating Subdivisions or achieve Case-
Specific Resolution status by the end of Period 2, then the Settling State
qualifies for 75% of the Incentive B payment it would have qualified for
in Period 1.
f. Within Period 3: If a Settling State did not qualify for an Incentive B
payment in Periods 1 or 2, but Litigating Subdivisions and Litigating
Special Districts collectively representing at least 75% of the Settling
State's litigating population become Participating Subdivisions or achieve
Case-Specific Resolution status by the end of Period 3, then the Settling
State qualifies for 50% of the Incentive B payment it would have qualified
for in Period 1.
g. A Settling State that receives the Incentive B payment for Periods 1 and/or
2 can receive additional payments if it secures participation from
additional Litigating Subdivisions and Litigating Special Districts (or
Case-Specific Resolutions of their claims) during Periods 2 and/or 3.
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Those additional payments would equal 75% (for additional participation
or Case-Specific Resolutions during Period 2) and 50% (for additional
participation or Case-Specific Resolutions during Period 3) of the amount
by which the increased litigating population levels would have increased
the Settling State's Incentive B payment if they had been achieved in
Period 1.
h. If Litigating Subdivisions and Litigating Special Districts that have
become Participating Subdivisions or achieved Case-Specific Resolution
status collectively represent less than 75% of a Settling State's litigating
population by the end of Period 3, the Settling State shall not receive any
Incentive B payment.
i. If there are no Litigating Subdivisions or Litigating Special Districts in a
Settling State, and that Settling State is otherwise eligible for Incentive B,
that Settling State will receive its full allocable share of Incentive B.
j. Incentives earned under Incentive B shall accrue after each of Periods 1, 2,
and 3. After each period, the Settlement Fund Administrator shall conduct
a look-back to assess which Settling States vested an Incentive B payment
in the preceding period. Based on the look-back, the Settlement Fund
Administrator will calculate the incentives accrued under Incentive B for
the period;provided that the percentage of Incentive B for which a
Settling State is eligible as of the Incentive Payment Final Eligibility Date
shall cap its eligibility for that Payment Year and all subsequent Payment
Years.
6. Incentive C: Early Participation of Subdivisions
a. If a Settling State does not qualify for Incentive A, it may still qualify to
receive up to 40% of its total potential Incentive A payment allocation
under Incentive C,which has two parts.
(1) Part 1: Under Incentive C, Part 1, a Settling State can receive up to
75% of its Incentive C allocation. A Settling State can qualify for a
payment under Incentive C, Part 1 only if Primary Subdivisions
(whether Litigating Primary Subdivisions or Non-Litigating
Primary Subdivisions as of the Reference Date) representing at
least 60% of the Settling State's Primary Subdivision population
become Participating Subdivisions or achieve Case-Specific
Resolution status.
(2) A Settling State's Primary Subdivision population is the sum of the
population of all Primary Subdivisions (whether Litigating Primary
Subdivisions or Non-Litigating Primary Subdivisions as of the
Reference Date). Because Subdivisions include Subdivisions
whose populations overlap in whole or in part with other
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Subdivisions, for instance in the case of a city or township
contained within a county, the Settling State's Primary Subdivision
population is greater than Settling State's total population. (Special
Districts are not relevant for purposes of Incentive C calculations.)
(3) A sliding scale will determine the share of the funds available
under Incentive C, Part 1 to Settling States meeting the minimum
60%threshold. Under that sliding scale, if a Settling State secures
participation or Case-Specific Resolutions from Primary
Subdivisions representing 60% of its total Primary Subdivision
population, it will receive 40% of the total amount potentially
available to it under Incentive C, Part 1. If a Settling State secures
participation or Case-Specific Resolutions from Primary
Subdivisions representing more than 60% of its Primary
Subdivision population,the Settling State shall be entitled to
receive a higher percentage of the total amount potentially
available to it under Incentive C, Part 1, on the scale shown in the
table below. If there are no Primary Subdivisions, and that Settling
State is otherwise eligible for Incentive C, that Settling State will
receive its full allocable share of Incentive C, Part 1.
Participation or Case-Specific Incentive C Award
Resolution Levels (As percentage of total
(As percentage of total Primary amount available to State
Subdivision population) under Incentive C, Part 1
60% 40%
70% 45%
80% 50%
85% 55%
90% 60%
91% 65%
92% 70%
93% 80%
94% 90%
95% 100%
b. Part 2: If a Settling State qualifies to receive an incentive under Incentive
C, Part 1, the State can also qualify to receive an additional incentive
amount equal to 25% of its total potential Incentive C allocation by
securing 100%participation of the ten(10) largest Subdivisions by
population in the Settling State. (Special Districts are not relevant for
purposes of this calculation.) If a Settling State does not qualify for any
amount under Incentive C, Part 1, it cannot qualify for Incentive C, Part 2.
C. Incentives earned under Incentive C shall accrue on an annual basis up to
three years after the Effective Date. At one, two, and three years after the
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Item#11.
Effective Date, the Settlement Fund Administrator will conduct a look-
back to assess which Subdivisions had agreed to participate or had their
claim resolved through a Case-Specific Resolution that year. Based on the
look-back, the Settlement Fund Administrator will calculate the incentives
accrued under Incentive C for the year;provided that the percentage of
Incentive C for which a Settling State is eligible as of the Incentive
Payment Final Eligibility Date shall cap its eligibility for that Payment
Year and all subsequent Payment Years.
7. Incentive D:Release of Payments if No Qualifying Special District Litigation.
a. $213,230,769 shall be available for potential Incentive D payments
according to the terms specified in this subsection V.E.7.
b. If, within five years of the Reference Date, a Covered Special District files
litigation against any Released Entity, Janssen shall,within thirty (30)
days of Janssen being served, provide notice of the litigation to the
Settling State in which the Covered Special District sits, which shall file a
motion to intervene in the litigation and use its best efforts to obtain either
dismissal of the litigation in cooperation with Janssen, or a release
consistent with Section IV of the Special District's Claims.
C. A Settling State shall receive its allocation of the Incentive D payment if,
within five years after the Effective Date (the "look-back date"), no
Covered Special District within the Settling State has filed litigation which
has survived a Threshold Motion and remains pending as of the look-back
date,unless the dismissal after the litigation survived the Threshold
Motion is conditioned or predicated upon payment by a Released Entity
(apart from payments by Janssen incurred under the Agreement or
injunctive relief obligations incurred by it).
d. Prior to the look-back date, a Released Entity shall not enter into a
settlement with a Covered Special District unless the State in which the
Covered Special District sits consents to such a settlement or unreasonably
withholds consent of such a settlement.
e. "Covered Special Districts" are school districts, healthcare/hospital
districts, and fire districts, subject to the following population thresholds:
(1) For school districts, the K-12 student enrollment must be 25,000 or
0.12% of a State's population, whichever is greater;
(2) For fire districts, the district must cover a population of 25,000, or
0.20% of a State's population if a State's population is greater than
18 million. If not easily calculable from state data sources and
agreed to between the State and Janssen, a fire district's population
is calculated by dividing the population of the county or counties a
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fire district serves by the number of fire districts in the county or
counties.
(3) For healthcare/hospital districts, the district must have at least 125
hospital beds in one or more hospitals rendering services in that
district.
VI. Allocation and Use of Settlement Funds
A. Components of Settlement Fund. The Settlement Fund shall be comprised of an
Abatement Accounts Fund, a State Fund, and a Subdivision Fund for each Settling
State. The payments under Section V into the Settlement Fund shall be initially
allocated among those three (3) sub-funds and distributed and used as provided below
or as provided for by a State-Subdivision Agreement(or other State-specific allocation
of funds). Unless otherwise specified herein, payments placed into the Settlement
Fund do not revert back to Janssen.
B. Use of Settlement Payments.
1. It is the intent of the Parties that the payments disbursed from the Settlement Fund
to Settling States and Participating Subdivisions listed in Exhibit G be for Opioid
Remediation, subject to limited exceptions that must be documented in
accordance with subsection VI.B.2. In no event may less than 86.5% of Janssen's
maximum amount of payments pursuant to Sections V, X, and XI over the
entirety of all Payment Years (but not any single Payment Year)be spent on
Opioid Remediation.
2. While disfavored by the Parties, a Settling State or Participating Subdivision
listed on Exhibit G may use monies from the Settlement Fund(that have not been
restricted by this Agreement solely to future Opioid Remediation) for purposes
that do not qualify as Opioid Remediation. If, at any time, a Settling State or a
Participating Subdivision listed on Exhibit G uses any monies from the Settlement
Fund for a purpose that does not qualify as Opioid Remediation, such Settling
State or Participating Subdivision shall identify such amounts and report to the
Settlement Fund Administrator and Janssen how such funds were used, including
if used to pay attorneys' fees, investigation costs, litigation costs, or costs related
to the operation and enforcement of this Agreement, respectively. It is the intent
of the Parties that the reporting under this subsection VI.B.2 shall be available to
the public. For the avoidance of doubt, (a) any amounts not identified under this
subsection VI.B.2 as used to pay attorneys' fees, investigation costs, or litigation
costs shall be included in the"Compensatory Restitution Amount" for purposes of
subsection VI.F and(b) Participating Subdivisions not listed on Exhibit G or
Participating Special Districts that receive monies from the Settlement Fund
indirectly may only use such monies from the Settlement Fund for purposes that
qualify as Opioid Remediation.
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Item#11.
C. Allocation of Settlement Fund. The allocation of the Settlement Fund allows for
different approaches to be taken in different states, such as through a State-Subdivision
Agreement. Given the uniqueness of States and their Subdivisions, Settling States and
Participating Subdivisions are encouraged to enter into State-Subdivision Agreements
in order to direct the allocation of their portion of the Settlement Fund. As set out
below, the Settlement Fund Administrator will make an initial allocation to three (3)
state-level sub-funds. The Settlement Fund Administrator will then, for each Settling
State and its Participating Subdivisions listed on Exhibit G, apply the terms of this
Agreement and any relevant State-Subdivision Agreement, Statutory Trust, Allocation
Statute, or voluntary redistribution of funds as set out below before disbursing the
funds.
1. Base Payments. The Settlement Fund Administrator will allocate base payments
under subsection V.D among the Settling States in proportion to their respective
Overall Allocation Percentages. Base payments for each Settling State will then
be allocated 15%to its State Fund, 70%to its Abatement Accounts Fund, and
15%to its Subdivision Fund. Amounts may be reallocated and will be distributed
as provided in subsection VI.D.
2. Incentive Pam. The Settlement Fund Administrator will treat incentive
payments under subsection V.E on a State-specific basis. Incentive payments for
which a Settling State is eligible under subsection V.E will be allocated 15%to its
State Fund, 70%to its Abatement Accounts Fund, and 15%to its Subdivision
Fund. Amounts may be reallocated and will be distributed as provided in
subsection VI.D.
3. Application of Adjustments. If a reduction, offset, or suspension under Section IX
applies with respect to a Settling State, the reduction, offset, or suspension shall
be applied proportionally to all amounts that would otherwise be apportioned and
distributed to the State Fund, the Abatement Accounts Fund, and the Subdivision
Fund for that State.
4. Settlement Fund Administrator. Prior to the Initial Participation Date, Janssen and
the Enforcement Committee will agree to a detailed mechanism consistent with
the foregoing for the Settlement Fund Administrator to follow in allocating,
apportioning, and distributing payments, which shall be appended hereto as
Exhibit L.
5. Settlement Fund Administrator Costs. Any costs and fees associated with or
arising out of the duties of the Settlement Fund Administrator as described in
Exhibit L with regard to Janssen's payments to the Settlement Fund shall be paid
out of interest accrued on the Settlement Fund and from the Settlement Fund
should such interest prove insufficient.
D. Settlement Fund Reallocation and Distribution. As set forth below, within a particular
Settling State's account, amounts contained in the Settlement Fund sub-funds may be
reallocated and distributed per a State-Subdivision Agreement or other means. If the
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Item#11.
apportionment of amounts is not addressed and controlled under subsections VI.D.1-2,
then the default provisions of subsection VI.D.4 apply. It is not necessary that a State-
Subdivision Agreement or other means of allocating funds pursuant to subsections
VI.D.1-2 address all of the Settlement Fund sub-funds. For example, a Statutory Trust
might only address disbursements from a Settling State's Abatement Accounts Fund.
1. Distribution by State-Subdivision Agreement. If a Settling State has a State-
Subdivision Agreement, amounts apportioned to that State's State Fund,
Abatement Accounts Fund, and Subdivision Fund under subsection VI.0 shall be
reallocated and distributed as provided by that agreement. Any State-Subdivision
Agreement entered into after the Preliminary Agreement Date shall be applied
only if it requires: (1) that all amounts be used for Opioid Remediation, except as
allowed by subsection VI.B.2, and(2)that at least 70% of amounts be used solely
for future Opioid Remediation (references to "future Opioid Remediation"
include amounts paid to satisfy any future demand by another governmental entity
to make a required reimbursement in connection with the past care and treatment
of a person related to the Alleged Harms). For a State-Subdivision Agreement to
be applied to the relevant portion of an Initial Year Payment or an Annual
Payment, notice must be provided to Janssen and the Settlement Fund
Administrator at least sixty(60) days prior to the Payment Date.
2. Distribution by Allocation Statute. If a Settling State has an Allocation Statute
and/or a Statutory Trust that addresses allocation or distribution of amounts
apportioned to such State's State Fund, Abatement Accounts Fund, and/or
Subdivision Fund and that, to the extent any or all such sub-funds are addressed,
requires (1) all amounts to be used for Opioid Remediation, except as allowed by
subsection VI.B.2, and (2) at least 70% of all amounts to be used solely for future
Opioid Remediation, then, to the extent allocation or distribution is addressed, the
amounts apportioned to that State's State Fund, Abatement Accounts Fund, and
Subdivision Fund under subsection VI.0 shall be allocated and distributed as
addressed and provided by the applicable Allocation Statute or Statutory Trust.
For the avoidance of doubt, an Allocation Statute or Statutory Trust need not
address all three (3) sub-funds that comprise the Settlement Fund, and if the
applicable Allocation Statute or Statutory Trust does not address distribution of
all or some of these three (3) sub-funds, the applicable Allocation Statute or
Statutory Trust does not replace the default provisions in subsection VI.D.4 of any
such unaddressed fund. For example, if an Allocation Statute or Statutory Trust
that meets the requirements of this subsection VI.D.2 only addresses funds
restricted to abatement, then the default provisions in this Agreement concerning
allocation among the three (3) sub-funds comprising the Settlement Fund and the
distribution of the State Fund and Subdivision Fund for that State would still
apply, while the distribution of the applicable State's Abatement Accounts Fund
would be governed by the qualifying Allocation Statute or Statutory Trust.
3. Voluntary Redistribution. A Settling State may choose to reallocate all or a
portion of its State Fund to its Abatement Accounts Fund. A Participating
Subdivision listed on Exhibit G may choose to reallocate all or a portion of its
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allocation from the Subdivision Fund to the State's Abatement Accounts Fund or
to another Participating Subdivision or Participating Special District. For a
voluntary redistribution to be applied to the relevant portion of an Initial Year
Payment or an Annual Payment, notice must be provided to the Settling
Distributors and the Settlement Fund Administrator at least sixty(60) days prior
to the Payment Date.
4. Distribution in the Absence of a State-Subdivision Agreement, Allocation Statute,
or Statutory Trust. If subsections VI.D.1-2 do not apply, amounts apportioned to
that State's State Fund, Abatement Accounts Fund, and Subdivision Fund under
subsection VI.0 shall be distributed as follows:
a. Amounts apportioned to that State's State Fund shall be distributed to that
State.
b. Amounts apportioned to that State's Abatement Accounts Fund shall be
distributed consistent with subsection VI.E. Each Settling State shall
submit to the Settlement Fund Administrator a designation of a lead state
agency or other entity to serve as the single point of contact for that
Settling State's funding requests from the Abatement Accounts Fund and
other communications with the Settlement Fund Administrator. The
designation of an individual entity is for administrative purposes only and
such designation shall not limit funding to such entity or even require that
such entity receive funds from this Agreement. The designated entity shall
be the only entity authorized to request funds from the Settlement Fund
Administrator to be disbursed from that Settling State's Abatement
Accounts Fund. If a Settling State has established a Statutory Trust then
that Settling State's single point of contact may direct the Settlement Fund
Administrator to release the State's Abatement Accounts Fund to the
Statutory Trust.
C. Amounts apportioned to that State's Subdivision Fund shall be distributed
to Participating Subdivisions in that State listed on Exhibit G per the
Subdivision Allocation Percentage listed in Exhibit G. Subsection VII.I
shall govern amounts that would otherwise be distributed to Non-
Participating Subdivisions listed in Exhibit G.
d. Special Districts shall not be allocated funds from the Subdivision Fund,
except through a voluntary redistribution allowed by subsection VI.D.3. A
Settling State may allocate funds from its State Fund or Abatement
Accounts Fund for Special Districts.
5. Restrictions on Distribution. No amounts may be distributed from the Subdivision
Fund contrary to Section VII, i.e., no amounts may be distributed directly to Non-
Participating Subdivisions or to Later Participating Subdivisions in excess of what
is permissible under subsection VII.E. Amounts allocated to the Subdivision Fund
that cannot be distributed by virtue of the preceding sentence shall be distributed
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into the sub-account in the Abatement Accounts Fund for the Settling State in
which the Subdivision is located, unless those payments are redirected elsewhere
by a State-Subdivision Agreement described in subsection VI.D.1 or by an
Allocation Statute or a Statutory Trust described in subsection VI.D.2.
E. Provisions Regarding Abatement Accounts Fund.
1. State-Subdivision Agreement, Allocation Statute, and Statutory Trust Fund
Provisions. A State-Subdivision Agreement, Allocation Statute, or Statutory Trust
may govern the operation and use of amounts in that State's Abatement Accounts
Fund so long as it complies with the requirements of subsection VI.D.1 or VI.D.2
as applicable, and all direct payments to Subdivisions comply with subsections
VILE-H.
2. Absence of a State-Subdivision Agreement, Allocation Statute, or Statutory Trust.
In the absence of a State-Subdivision Agreement, Allocation Statute, or Statutory
Trust that addresses distribution, the Abatement Accounts Fund will be used
solely for future Opioid Remediation and the following shall apply with respect to
a Settling State:
a. Regional Remediation.
(1) At least 50% of distributions for remediation from a State's
Abatement Accounts Fund shall be annually allocated and tracked
to the regional level. A Settling State may allow the Advisory
Committee established pursuant to subsection VI.E.2.d to define its
regions and assign regional allocations percentages. Otherwise, a
Settling State shall (1) define its initial regions,which shall consist
of one (1) or more Subdivisions and which shall be designated by
the State agency with primary responsibility for substance abuse
disorder services employing, to the maximum extent practical,
existing regions established in that State for opioid abuse treatment
or other public health purposes; and(2) assign initial regional
allocation percentages to the regions based on the Subdivision
Allocation Percentages in Exhibit G and an assumption that all
Subdivisions listed on Exhibit G will become Participating
Subdivisions.
(2) This minimum regional expenditure percentage is calculated on the
Settling State's initial Abatement Accounts Fund allocation and
does not include any additional amounts a Settling State has
directed to its Abatement Accounts Fund from its State Fund, or
any other amounts directed to the fund. A Settling State may
dedicate more than 50% of its Abatement Accounts Fund to the
regional expenditure and may annually adjust the percentage of its
Abatement Accounts Fund dedicated to regional expenditures as
long as the percentage remains above the minimum amount.
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(3) The Settling State (1)has the authority to adjust the definition of
the regions, and(2)may annually revise the percentages allocated
to each region to reflect the number of Subdivisions in each region
that are Non-Participating Subdivisions.
b. Subdivision Block Grants. Certain Subdivisions listed on Exhibit G shall
be eligible to receive regional allocation funds in the form of a block grant
for future Opioid Remediation. A Participating Subdivision listed on
Exhibit G eligible for block grants is a county or parish (or in the case of
States that do not have counties or parishes that function as political
subdivisions, a city) that(1) does not contain a Litigating Subdivision or a
Later Litigating Subdivision for which it has the authority to end the
litigation through a release, bar, or other action; (2) either(i) has a
population of 400,000 or more or(ii) in the case of California has a
population of 750,000 or more; and(3) has funded or otherwise managed
an established health care or treatment infrastructure (e.g.,health
department or similar agency). Each Subdivision listed on Exhibit G
eligible to receive block grants shall be assigned its own region.
C. Small States. Notwithstanding the provisions of subsection VI.E.2.a,
Settling States with populations under four(4) million that do not have
existing regions described in subsection VI.E.2.a shall not be required to
establish regions. However, such a Settling State that contains one (1) or
more Subdivisions listed on Exhibit G eligible for block grants under
subsection VI.E.2.b shall be divided regionally so that each block-grant
eligible Subdivision listed on Exhibit G is a region and the remainder of
the state is a region.
d. Advisory Committee. The Settling State shall designate an Opioid
Settlement Remediation Advisory Committee (the "Advisory Committee")
to provide input and recommendations regarding remediation spending
from that Settling State's Abatement Accounts Fund. A Settling State may
elect to use an existing advisory committee or similar entity (created
outside of a State-Subdivision Agreement or Allocation Statute); provided,
however, the Advisory Committee or similar entity shall meet the
following requirements:
(1) Written guidelines that establish the formation and composition of
the Advisory Committee, terms of service for members,
contingency for removal or resignation of members, a schedule of
meetings, and any other administrative details;
(2) Composition that includes at least an equal number of local
representatives as state representatives;
(3) A process for receiving input from Subdivisions and other
communities regarding how the opioid crisis is affecting their
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communities, their abatement needs, and proposals for abatement
strategies and responses; and
(4) A process by which Advisory Committee recommendations for
expenditures for Opioid Remediation will be made to and
considered by the appropriate state agencies.
3. Abatement Accounts Fund Reporting. The Settlement Fund Administrator shall
track and assist in the report of remediation disbursements as agreed to among the
Parties.
F. Nature of Payment. Janssen, the Settling States, the Participating Subdivisions, and the
Participating Special Districts, acknowledge and agree that notwithstanding anything to
the contrary in this Agreement, including, but not limited to, the scope of the Released
Claims:
1. Janssen has entered into this Agreement to avoid the delay, expense,
inconvenience, and uncertainty of further litigation;
2. The Settling States, the Participating Subdivisions, and the Participating Special
Districts sought compensatory restitution(within the meaning of 26 U.S.C. §
162(f)(2)(A)) as damages for the Alleged Harms allegedly suffered by the Settling
States and Participating Subdivisions;
3. By executing this Agreement the Settling States,the Participating Subdivisions,
and the Participating Special Districts certify that: (a)the Compensatory
Restitution Amount is no greater than the amount, in the aggregate, of the Alleged
Harms allegedly suffered by the Settling States and Participating Subdivisions;
and(b)the portion of the Compensatory Restitution Amount received by each
Settling State or Participating Subdivision is no greater than the amount of the
Alleged Harms allegedly suffered by such Settling State or Participating
Subdivision;
4. The payment of the Compensatory Restitution Amount by Janssen constitutes,
and is paid for, compensatory restitution (within the meaning of 26 U.S.C. §
162(f)(2)(A)) for alleged damage or harm (as compensation for alleged damage or
harm arising out of alleged bodily injury) allegedly caused by Janssen;
5. The Compensatory Restitution Amount is being paid as compensatory restitution
(within the meaning of 26 U.S.C. § 162(f)(2)(A)) in order to restore, in whole or
in part, the Settling States and Participating Subdivisions to the same position or
condition that they would be in had the Settling States and Participating
Subdivisions not suffered the Alleged Harms;
6. For the avoidance of doubt: (a) no portion of the Compensatory Restitution
Amount represents reimbursement to any Settling State, Participating
Subdivision, Participating Special District, or other person or entity for the costs
of any investigation or litigation, (b) the entire Compensatory Restitution Amount
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is properly characterized as described in subsection VI.F, and(c)no portion of the
Compensatory Restitution Amount constitutes disgorgement or is properly
characterized as the payment of statutory or other fines,penalties,punitive
damages, other punitive assessments, or attorneys' fees; and
7. New York, on behalf of all Settling States, Participating Subdivisions, and
Participating Special Districts (the "Form 1098-F Filer") shall complete and file
Form 1098-F with the Internal Revenue Service on or before February 28 (March
31 if filed electronically) of the year following the calendar year in which the
order entering this Agreement becomes binding. On the Form 1098-F, the Form
1098-F Filer shall identify the entire Compensatory Restitution Amount received
by the Form 1098-F Filer as remediation/restitution. The Form 1098-F Filer shall
also, on or before January 31 of the year following the calendar year in which the
order entering this Agreement becomes binding, furnish Copy B of such Form
1098-F (or an acceptable substitute statement) to Janssen.
VII. Participation by Subdivisions and Special Districts
A. Notice. No later than fifteen(15) days after the Preliminary Agreement Date, the Settling
States, with the cooperation of Janssen, shall send individual written notice of the
opportunity to participate in this Agreement and the requirements of participation to all
Subdivisions in the Settling States of this Agreement that are (1) Litigating Subdivisions
or(2)Non-Litigating Subdivisions listed on Exhibit G as eligible to become Participating
Subdivisions. Janssen's share of costs of the written notice to such Subdivisions shall be
advanced by Janssen and deducted from its initial settlement payment. Notice shall also
be provided simultaneously to counsel of record for Litigating Subdivisions and Non-
Litigating Subdivisions listed on Exhibit G as eligible to become Participating
Subdivisions. The Settling States,with the cooperation of Janssen,will also provide
general notice reasonably calculated to alert Non-Litigating Subdivisions listed on
Exhibit G in the Settling States to this Agreement, the opportunity to participate in it and
the requirements for participation. Such notice may include publication and other
standard forms of notification, as well as notice to national state and county organizations
such as the National Association of Counties and the National League of Cities. The
notice will include that the deadline for becoming an Initial Participating Subdivision is
the Initial Participation Date. Nothing contained herein shall preclude a Settling State
from providing further notice to or otherwise contacting any of its Subdivisions about
becoming a Participating Subdivision, including beginning any of the activities described
in this paragraph prior to the Preliminary Agreement Date.
B. Requirements for Becoming a Participating Subdivision: Non-Litigating Subdivisions. A
Non-Litigating Subdivision in a Settling State that is listed on Exhibit G may become a
Participating Subdivision by returning an executed Subdivision Settlement Participation
Form specifying (1)that the Subdivision agrees to the terms of this Agreement pertaining
to Subdivisions, (2)that the Subdivision releases all Released Claims against all Released
Entities, (3)that the Subdivision agrees to use monies it receives, if any, from the
Settlement Fund pursuant to the applicable requirements of Section VI, and (4) that the
Subdivision submits to the jurisdiction of the court where the Consent Judgment is filed
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for purposes limited to that court's role under the Agreement. The required Subdivision
Settlement Participation Form is attached as Exhibit K.
C. Requirements for Becoming a Participating Subdivision:Litigating Subdivisions/Later
Litigating Subdivisions. A Litigating Subdivision or Later Litigating Subdivision in a
Settling State may become a Participating Subdivision by returning an executed
Subdivision Settlement Participation Form to the Settlement Fund Administrator and
upon prompt dismissal of its legal action. A Settling State may require each Litigating
Subdivision in that State to specify on the Subdivision Settlement Participation Form
whether its counsel has waived any contingency fee contract with that Participating
Subdivision and intends to seek fees according to Exhibit R. The Settlement Fund
Administrator shall provide quarterly reports of this information to the parties organized
by Settling State. Except for trials begun before the Initial Participation Date, a Litigating
Subdivision or a Later Litigating Subdivision may not become a Participating
Subdivision after the completion of opening statements in a trial of a legal action it
brought that includes a Released Claim against a Released Entity.
D. Initial Participating Subdivisions. A Subdivision qualifies as an Initial Participating
Subdivision if it meets the applicable requirements for becoming a Participating
Subdivision set forth in subsections VII.B or VII.0 by the Initial Participation Date.
Provided however, all Subdivision Settlement Participation Forms shall be held by the
Settlement Fund Administrator until Janssen provides the notice in subsection VIII.B that
it intends to proceed with the settlement, at which time the obligations created by such
forms become effective.
E. Later Participating Subdivisions. A Subdivision that is not an Initial Participating
Subdivision may become a Later Participating Subdivision by meeting the applicable
requirements for becoming a Participating Subdivision after the Initial Participation Date
and agreeing to be subject to the terms of a State-Subdivision Agreement(if any) or any
other structure adopted or applicable pursuant to subsections VI.D or VI.E. The following
provisions govern what a Later Participating Subdivision can receive (but do not apply to
Initial Participating Subdivisions):
1. A Later Participating Subdivision shall not receive any share of any base or
incentive payments paid to the Subdivision Fund that were due before it became a
Participating Subdivision.
2. A Later Participating Subdivision that becomes a Participating Subdivision after
July 15, 2022 shall receive 75% of the share of future base or incentive payments
that it would have received had it become a Later Participating Subdivision before
that date (unless the Later Participating Subdivision is subject to subsections
VII.E.3 or VII.E.4 below).
3. A Later Participating Subdivision that, after the Initial Participation Date,
maintains a lawsuit for a Released Claim(s) against a Released Entity and has
judgment entered against it on every such Claim before it became a Participating
Subdivision(other than a consensual dismissal with prejudice) shall receive 50%
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of the share of future base or incentive payments that it would have received had
it become a Later Participating Subdivision prior to such judgment;provided,
however, that if the Subdivision appeals the judgment and the judgment is
affirmed with finality before the Subdivision becomes a Participating Subdivision,
the Subdivision shall not receive any share of any base payment or incentive
payment.
4. A Later Participating Subdivision that becomes a Participating Subdivision while
a Bar or Case-Specific Resolution involving a different Subdivision exists in its
State shall receive 25% of the share of future base or incentive payments that it
would have received had it become a Later Participating Subdivision without such
Bar or Case-Specific Resolution.
F. No Increase in Payments. Amounts to be received by Later Participating Subdivisions
shall not increase the payments due from Janssen.
G. Ineligible Subdivisions. Subdivisions in Non-Settling States and Prior Litigating
Subdivisions are not eligible to be Participating Subdivisions.
H. Non-Participating Subdivisions. Non-Participating Subdivisions shall not directly receive
any portion of any base or incentive payments, including from the State Fund and direct
distributions from the Abatement Accounts Fund; however, a Settling State may choose
to fund future Opioid Remediation that indirectly benefits Non-Participating
Subdivisions.
I. Unpaid Allocations to Later Participating and Non-Participating Subdivisions. Any base
payment and incentive payments allocated pursuant to subsection VI.D to a Later
Participating or Non-Participating Subdivision that cannot be paid pursuant to this
Section VII, will be allocated to the Abatement Accounts Fund for the Settling State in
which the Subdivision is located, unless those payments are redirected elsewhere by a
State-Subdivision Agreement or by a Statutory Trust.
J. Requirements for Becoming a Participating Special District:Non-Litigating Special
Districts. A Non-Litigating Special District may become a Participating Special District
by either executing a release consistent with Section IV or by having its claims
extinguished by operation of law or released by a Settling State.
K. Requirements for Becoming a Participating Special District:Litigating Special
Districts/Later Litigating Special Districts. A Litigating Special District or Later
Litigating Special District in a Settling State may become a Participating Special District
by either executing a release consistent with Section IV and upon prompt dismissal of its
legal action or by having its claims extinguished by operation of law or released by a
Settling State.
L. Initial Participating Special Districts. A Special District qualifies as an Initial
Participating Special District if it meets the applicable requirements for becoming a
Participating Special District by the Initial Participation Date.
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M. Later Participating Special Districts. A Special District that is not an Initial Participating
Special District may become a Later Participating Special District by meeting the
applicable requirements for becoming a Participating Special District after the Initial
Participation Date and agreeing to be subject to the terms of any agreement reached by
the applicable Settling State with Initial Participating Special Districts. A Later
Participating Special District shall not receive any share of any base or incentive
payments paid to the Settlement Fund that were due before it became a Participating
Special District.
VIII. Condition to Effectiveness of Agreement and Filing of Consent Judgment
A. Determination to Proceed With Settlement. Janssen will determine on or before the
Reference Date whether there has been a sufficient resolution of the Claims of the
Litigating Subdivisions in the Settling States (through participation under Section VII,
Case-Specific Resolution(s), and Bar(s))to proceed with this Agreement. The
determination shall be in the sole discretion of Janssen and may be based on any criteria
or factors deemed relevant by Janssen.
B. Notice by Janssen. On or before the Reference Date, Janssen shall inform the Settling
States and MDL PEC of its determination pursuant to subsection VIII.A. If Janssen
determines to proceed, the Parties will proceed to file the Consent Judgments. If Janssen
determines not to proceed, this Agreement will have no further effect and all releases
(including those given by Participating Subdivisions) and other commitments or
obligations contained herein will be void.
C. Determination of the Participation Tier.
1. On the Reference Date,provided that Janssen determines to proceed with this
Agreement, the Settlement Fund Administrator shall determine the Participation
Tier. The criteria used to determine the Participation Tier are set forth in Exhibit
H. Any disputes as to the determination of the Participation Tier shall be decided
by the National Arbitration Panel.
2. The Participation Tier shall be redetermined by the Settlement Fund
Administrator annually as of the Payment Date,beginning with Payment Year 1,
pursuant to the criteria set forth in Exhibit H.
3. After Payment Year 3,the Participation Tier cannot move higher, unless this
restriction is waived by Janssen.
4. In the event that a Participation Tier redetermination moves the Participation Tier
higher, and that change is in whole or in part as a result of the post-Reference
Date enactment of a Bar and there is later a Revocation Event with respect to that
Bar, then on the next Payment Date that is at least one hundred eighty (180) days
after the Revocation Event, the Participation Tier shall move down to the
Participation Tier that would have applied had the Bar never been enacted, unless
the Bar is reinstated or all Subdivisions affected by the Revocation Event become
Participating Subdivisions within one hundred eighty(180) days of the
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Revocation Event. This is the sole circumstance in which, on a nationwide basis,
the Participation Tier can move down.
5. In the event that there is a post-Reference Date Revocation Event with respect to a
Bar that was enacted in a Settling State prior to the Reference Date, then, on the
next Payment Date that is at least one hundred eighty(180) days after the
Revocation Event, unless the Bar is reinstated or all Subdivisions affected by the
Revocation Event become Participating Subdivisions within one hundred eighty
(180) days of the Revocation Event, the Participation Tier shall decrease—solely
for the State in which the Revocation Event occurred—to the Participation Tier
commensurate with the percentage of Litigating Subdivisions in that State that are
Participating Subdivisions and the percentage of Non-Litigating Subdivisions that
are both Primary Subdivisions and Participating Subdivisions, according to the
criteria set forth in Exhibit H, except that the calculations shall be performed as to
that State alone. For the avoidance of doubt and solely for the calculation in this
subparagraph, the Settling States Column of Exhibit H shall play no role. This is
the sole circumstance in which one Settling State will have a different
Participation Tier than other Settling States.
6. The redetermination of the Participation Tier under subsection VIII.C.2 shall not
affect payments already made or suspensions or offsets already applied.
IX. Potential Payment Adjustments
A. Later Litigating Subdivisions.
1. If a Later Litigating Subdivision in a Settling State with a population above
10,000 brings a lawsuit or other legal proceeding against Released Entities
asserting Released Claims, Janssen shall, within thirty (30) days of the lawsuit or
other legal proceeding being served on Janssen,provide notice of the lawsuit or
other legal proceeding to the Settlement Fund Administrator and the Settling State
in which the Later Litigating Subdivision sits and provide the Settling State an
opportunity to intervene in the lawsuit or other legal proceeding. A Released
Entity shall not enter into a settlement with a Later Litigating Subdivision unless
the State in which the Later Litigating Subdivision sits consents to such a
settlement or unreasonably withholds consent to such a settlement.
2. If no Participation Tier applies and the Later Litigating Subdivision's lawsuit or
other legal proceeding survives a Threshold Motion before Janssen makes its last
settlement payment to the Settling State, the following shall apply:
a. Janssen will, from the date of the entry of the order denying the Threshold
Motion and so long as the lawsuit or other legal proceeding is pending, be
entitled to a suspension of the following payments it would otherwise owe
the Settling State in which the Later Litigating Subdivision is located: (1)
all remaining incentive payments to the relevant state; and(2) the last two
scheduled base payments, if not already paid (the "Suspended Payments").
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Item#11.
b. For each Payment Year that Janssen is entitled to a suspension of
payments, the Settlement Fund Administrator shall calculate the
Suspended Payments applicable to the next Payment due from Janssen.
The Suspended Payments shall be paid into the Settlement Fund Escrow
account.
3. If a Participation Tier applies at the time the Threshold Motion is denied, Janssen
will be entitled to a suspension of the following percentages of Suspended
Payments depending on the applicable Tier-75% for Tier 1, 50% for Tier 2, 35%
for Tier 3, and 25% for Tier 4. Otherwise, the requirements of subsection IX.A.2
apply.
4. If the Released Claim is resolved with finality without requirement of payment by
a Released Entity, the placement of any remaining balance of the Suspended
Payments into the Settlement Fund Escrow shall cease and the Settlement Fund
Administrator shall immediately transfer amounts in the Settlement Fund Escrow
on account of the suspension to the Settling State at issue and its Participating
Subdivisions listed on Exhibit G. The lawsuit will not cause further suspensions
unless the Released Claim is reinstated upon further review, legislative action, or
otherwise.
5. If the Released Claim is resolved with finality on terms requiring payment by a
Released Entity (e.g., if the lawsuit in which the Released Claim is asserted
results in a judgment against Janssen or a settlement with Janssen), the Settlement
Fund Administrator will transfer the amounts in the Settlement Fund Escrow on
account of the suspension to Janssen necessary to satisfy 75% of the payment
obligation of the Released Entity to the relevant Later Litigating Subdivision. The
Settlement Fund Administrator shall immediately transfer any remaining balance
in the Settlement Fund Escrow on account of the suspension to the Settling State
at issue and its Participating Subdivisions listed on Exhibit G. If the amount to be
transferred to Janssen exceeds the amounts in the Settlement Fund Escrow on
account of the suspension, Janssen shall receive a dollar-for-dollar offset for the
excess amount against its obligation to pay any remaining payments that would be
apportioned to the Settling State at issue and to its Participating Subdivisions
listed on Exhibit G.
B. Settlement Class Resolution Opt Outs. If a Settling State is eligible for Incentive A on the
basis of a Settlement Class Resolution, and a Primary Subdivision that opted out of the
Settlement Class Resolution maintains a lawsuit asserting a Released Claim against a
Released Entity, the following shall apply. If the lawsuit asserting a Released Claim
either survives a Threshold Motion or has an unresolved Threshold Motion fewer than
sixty(60) days prior to the scheduled start of a trial involving a Released Claim, and is
resolved with finality on terms requiring payment by the Released Entity, Janssen shall
receive a dollar-for-dollar offset for the amount paid against its obligation to make
remaining Incentive A payments that would be apportioned to that State or Participating
Subdivisions listed on Exhibit G. For the avoidance of doubt, an offset shall not be
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applicable under this subsection if it is applicable under subsection IX.A with respect to
the Subdivision at issue.
C. Revoked Bar, Settlement Class Resolution, or Case-Specific Resolution.
1. If Janssen made a payment as a result of the existence of a Bar, Settlement Class
Resolution, or Case-Specific Resolution in a Settling State, and that Bar,
Settlement Class Resolution, or Case-Specific Resolution is subject to a
Revocation Event, Janssen shall receive a dollar-for-dollar offset against its
obligation to make remaining payments that would be apportioned to that State or
Participating Subdivisions listed on Exhibit G. This offset will be calculated as
the dollar amount difference between(1) the total amount of incentive payments
paid by Janssen during the time the Bar, Settlement Class Resolution, or Case-
Specific Resolution subject to the Revocation Event was in effect, and(2) the
total amount of Incentive Payments that would have been due from Janssen
during that time without the Bar, Settlement Class Resolution, or Case-Specific
Resolution subject to the Revocation Event being in effect. The amount of
incentive payments that would have been due, referenced in (2) above, will be
calculated based on considering any Subdivision that provides a release within
one hundred eighty(180) days after the Revocation Event as having been a
Participating Subdivision(in addition to all other Participating Subdivisions)
during the time that the Bar, Settlement Class Resolution, or Case-Specific
Resolution subject to the Revocation Event was in effect. If a Revocation Event
causes a Settling State to no longer qualify for Incentive D, the Settling State shall
return to Janssen all payments made under Incentive D.
2. Notwithstanding anything to the contrary in paragraph 1 above, if a Bar or Case-
Specific Resolution is reinstated by the Settling State, either through the same or
different means as the initial Bar or Case-Specific Resolution, Janssen's right to
an offset is extinguished and any amounts withheld to offset amounts paid on
account of the revoked, rescinded, reversed, or overruled Bar or Case-Specific
Resolution shall be returned to the Settling State, less and except any incentive
payments that would have been paid during the period in which the Bar or Case-
Specific Resolution was revoked, rescinded, reversed, or overruled.
X. Additional Restitution Amount
A. Additional Restitution Amount. Pursuant to the schedule set forth below and subject to the
reduction specified in subsection X.B below, Janssen shall pay an Additional Restitution
Amount to the Settling States listed in Exhibit N. Such funds shall be paid on the
schedule set forth on Exhibit M on the Payment Date for each relevant Payment Year to
such Settling States as allocated by the Settlement Fund Administrator pursuant to
Exhibit N.
Payment Year 1 $15,384,615.38
Payment Year 2 $26,923,076.92
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Item#11.
Payment Year 3 $25,000,000.00
B. Reduction ofAdditional Restitution Amount. In the event that any Non-Settling State
appears on Exhibit N, the amounts owed by Janssen pursuant to this Section X shall be
reduced by the allocation set forth on Exhibit N for any such Non-Settling States.
C. Use of Funds. All funds paid as an Additional Restitution Amount shall be part of the
Compensatory Restitution Amount, shall be used for Opioid Remediation, except as
allowed by subsection VI.B.2, and shall be governed by the same requirements as
specified in subsection VI.F.
XI. Plaintiffs' Attorneys' Fees and Costs
A. The Agreement on Attorneys' Fees, Expenses and Costs is set forth in Exhibit R and
incorporated herein by reference. The Agreement on the State Outside Counsel Fee Fund
and Agreement on the State Cost Fund Administration are set forth in Exhibit U and
Exhibit S, respectively, and are incorporated herein by reference.
XII. Enforcement and Dispute Resolution
A. Enforceability. The terms of the Agreement and Consent Judgment applicable to or in a
Settling State will be enforceable solely by that Settling State and Janssen. Settling States
or Participating Subdivisions shall not have enforcement rights with respect either to the
terms of this Agreement that apply only to or in other States or to any Consent Judgment
entered into by another Settling State. Participating Subdivisions shall not have
enforcement rights against Janssen with respect to the Agreement or any Consent
Judgment except as to payments that would be allocated to the Subdivision Fund or
Abatement Accounts Fund pursuant to Section VI;provided, however, that each Settling
State shall allow Participating Subdivisions in that State to notify it of any perceived
violations of the Agreement or Consent Judgment.
B. Jurisdiction. Janssen consents to the jurisdiction of the court in which the Consent
Judgment is filed, limited to resolution of disputes identified in subsection XII.F.2 for
resolution in the court in which the Consent Judgment is filed.
C. Specific Terms Dispute Resolution.
1. Any dispute that is addressed by the provisions set forth in the Injunctive Relief
terms in Exhibit P shall be resolved as provided therein.
2. In the event Janssen believes the 86.5%threshold established in subsection VI.B.1
is not being satisfied, any Party may request that Janssen and the Enforcement
Committee meet and confer regarding the use of funds under subsection VI.B.1.
The completion of such meet-and-confer process is a precondition to further
action regarding any such dispute. Further action concerning subsection VI.B.1
shall: (i)be limited to Janssen seeking to reduce its Annual Payments by no more
than 5% of the difference between the actual amount of Opioid Remediation and
the 86.5%threshold established in subsection VI.B.1; (ii) only reduce Annual
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Payments to those Settling States and its Participating Subdivisions that are below
the 86.5%threshold established in subsection VI.B.1; and(iii)not reduce Annual
Payments restricted to future Opioid Remediation.
D. State-Subdivision Enforcement.
1. A Participating Subdivision shall not have enforcement rights against a Settling
State in which it is located with respect to the Agreement or any Consent
Judgment except: (1) as provided for in a State-Subdivision Agreement,
Allocation Statute, or Statutory Trust with respect to intrastate allocation; or(2) in
the absence of a State-Subdivision Agreement, Allocation Statute, or Statutory
Trust, as to allegations that: (a) the Settling State's use of Abatement Accounts
Fund monies were not used for uses similar to or in the nature of those uses
contained in Exhibit E; or(b) a Settling State failed to pay funds directly from the
Abatement Accounts Fund to a Participating Subdivision eligible to receive a
block grant pursuant to subsection VI.E.2.b.
2. A Settling State shall have enforcement rights against a Participating Subdivision
located in its territory: (1) as provided for in a State-Subdivision Agreement,
Allocation Statute, or Statutory Trust; or(2) in the absence of a State-Subdivision
Agreement, Allocation Statute, or Statutory Trust, as to allegations that the uses
of Abatement Accounts Fund monies by Participating Subdivisions listed on
Exhibit G were not for uses similar to or in the nature of those uses contained in
Exhibit E.
3. As between Settling States and Participating Subdivisions, the above rights are
contractual in nature and nothing herein is intended to limit, restrict, change, or
alter any other existing rights under law.
E. Subdivision Payment Enforcement. A Participating Subdivision shall have the same right
as a Settling State pursuant to subsection XII.F.4.a(4) to seek resolution of any failure by
Janssen to make its required base and/or incentive payments in a Payment Year.
F. Other Dispute Resolution Terms.
1. Except as provided in subsection XII.C, the parties to a dispute shall promptly
meet and confer in good faith to resolve any dispute. If the parties cannot resolve
the dispute informally, and unless otherwise agreed in writing, they shall follow
the remaining provisions of this subsection XII.F to resolve the dispute.
2. Except as provided in subsections XII.0 and XII.F.4, disputes not resolved
informally shall be resolved in either the court that entered the relevant Consent
Judgment or, if no Consent Judgment was entered, a state or territorial court with
jurisdiction located wherever the seat of state government is located. State court
proceedings shall be governed by the rules and procedures of the forum. For the
avoidance of doubt, disputes to be resolved in state court include, but are not
limited to, the following:
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a. disputes concerning whether expenditures qualify for Opioid Remediation;
b. disputes between a Settling State and Participating Subdivisions located in
such Settling State as provided by subsection XII.D, except to the extent
the State-Subdivision Agreement provides for other dispute resolution
mechanisms. For the avoidance of doubt, disputes between a Settling State
and any Participating Subdivision shall not be considered National
Disputes;
C. whether this Agreement and relevant Consent Judgment are binding under
state law;
d. the extent of the Attorney General's or other participating entity's
authority under state law, including the extent of the authority to release
claims;
e. whether the requirements of a Bar, a Case-Specific Resolution, State-
Specific Finality, Later Litigating Subdivision, Litigating Subdivision, or a
Threshold Motion have been met; and
£ all other disputes not specifically identified in subsections XII.0 and
XII.F.4.
3. Any Party may request that the National Arbitration Panel provide an
interpretation of any provision of the settlement that is relevant to the state court
determination, and the National Arbitration Panel shall make reasonable best
efforts to supply such interpretation within the earlier of thirty(30) days or the
time period required by the state court proceedings. Any Party may submit that
interpretation to the state court to the extent permitted by, and for such weight
provided by, the state court's rules and procedures. If requested by a Party, the
National Arbitration Panel shall request that its interpretation be accepted in the
form of an amicus curiae brief, and any attorneys' fees and costs for preparing
any such filing shall be paid for by the requesting Party.
4. National Disputes involving a Settling State, Participating Subdivision, and/or
Janssen shall be resolved by a National Arbitration Panel.
a. "National Disputes" are disputes that are exceptions to subsection
XII.F.2's presumption of resolution in state courts because they involve
issues of interpretation of Agreement terms applicable to all Settling States
without reference to a particular State's law. Disputes between a State and
any Participating Subdivisions shall not be considered National Disputes.
National Disputes are limited to the following:
(1) the amount of offset and/or credit attributable to Non-Settling
States and Tribes;
(2) issues involving the scope and definition of"Product";
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(3) interpretation and application of the terms "Covered Conduct" and
"Released Entities";
(4) disputes over a given year's payment or the payment of the
Additional Restitution Amount to all Settling States (for the
avoidance of doubt, disputes between a Settling State and Janssen
over the amounts owed to only that State shall not be considered
National Disputes);
(5) questions regarding the performance and/or removal of the
Settlement Fund Administrator;
(6) disputes involving liability of successor entities;
(7) disputes that require a determination of sufficient Subdivision and
Special District participation to qualify for Incentives A, B, C, or
D, as well as disputes over qualification for Participation Tiers;
(8) disputes that require interpretation of Agreement terms (i)that
concretely affect four(4) or more Settling States; and(ii) do not
turn on unique definitions and interpretations under State law; and
(9) any dispute subject to resolution under subsection XII.F.2 but for
which all parties to the dispute agree to arbitration before the
National Arbitration Panel under the provisions of this subsection
XII.F.4.
b. The "National Arbitration Panel" shall be comprised of three (3)neutral
arbitrators. One (1) arbitrator shall be chosen by Janssen, one (1) arbitrator
shall be chosen by the Enforcement Committee with due input from
Participating Subdivisions, and the third arbitrator shall be agreed upon by
the first two (2) arbitrators. The membership of the National Arbitration
Panel is intended to remain constant throughout the term of this
Agreement, but in the event that replacements are required, the retiring
arbitrator shall be replaced by the party that selected him/her.
(1) The National Arbitration Panel shall make reasonable best efforts
to decide all matters within one hundred eighty(180) days of
filing, and in no event shall it take longer than one (1)year.
(2) The National Arbitration Panel shall conduct all proceedings in a
reasonably streamlined process consistent with an opportunity for
the parties to be heard. Issues shall be resolved without the need
for live witnesses where feasible, and with a presumption in favor
of remote participation to minimize the burdens on the parties.
(3) To the extent allowed under state law, a Settling State,
Participating Subdivision, and(at any party's request)the National
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Arbitration Panel may certify to an appropriate state court any
question of state law. The National Arbitration Panel shall be
bound by a final state court determination of such a certified
question. The time period for the arbitration shall be tolled during
the course of the certification process.
(4) The arbitrators will give due deference to any authoritative
interpretation of state law, including any declaratory judgment or
similar relief obtained by a Settling State, Participating
Subdivision, or Janssen on a state law issue.
(5) The decisions of the National Arbitration Panel shall be binding on
Settling States, Participating Subdivisions, Janssen, and the
Settlement Fund Administrator. In any proceeding before the
National Arbitration Panel involving a dispute between a Settling
State and Janssen whose resolution could prejudice the rights of a
Participating Subdivision(s) or Participating Special District(s) in
that Settling State, such Participating Subdivision(s) or
Participating Special District(s) shall be allowed to file a statement
of view in the proceeding.
C. Nothing herein shall be construed so as to limit or otherwise restrict a
State from seeking injunctive or other equitable relief in state court to
protect the health, safety, or welfare of its citizens.
d. Each party shall bear its own costs in any arbitration or court proceeding
arising under this subsection XII.F. The costs for the arbitrators on the
National Arbitration Panel shall be divided and paid equally by the
disputing sides for each individual dispute, e.g., a dispute between Janssen
and Setting States/Participating Subdivisions shall be split 50%by Janssen
and 50%by the Settling States/Participating Subdivisions that are parties
to the dispute; a dispute between a Settling State and a Participating
Subdivision shall be split 50%by the Settling State and 50%by any
Participating Subdivisions that are party to the dispute.
5. Prior to initiating an action to enforce pursuant to this subsection XII.F, the
complaining party must:
a. Provide written notice to the Enforcement Committee of its complaint,
including the provision of the Consent Judgment and/or Agreement that
the practice appears to violate, as well as the basis for its interpretation of
the disputed provision. The Enforcement Committee shall establish a
reasonable process and timeline for obtaining additional information from
the involved parties;provided, however, that the date the Enforcement
Committee establishes for obtaining additional information from the
parties shall not be more than forty-five (45) days following the notice.
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The Enforcement Committee may advise the involved parties of its views
on the complaint and/or seek to resolve the complaint informally.
b. Wait to commence any enforcement action until thirty(30) days after the
date that the Enforcement Committee establishes for obtaining additional
information from the involved parties.
6. If the parties to a dispute cannot agree on the proper forum for resolution of the
dispute under the provisions of subsections XII.F.2 or XII.F.4, a committee
comprising the Enforcement Committee and sufficient representatives of Janssen
such that the members of the Enforcement Committee have a majority of one (1)
member will determine the forum where the dispute will be initiated within
twenty-eight (28) days of receiving notification of the dispute relating to the
proper forum. The forum identified by such committee shall be the sole forum for
determining where the dispute shall be heard, and the committee's identification
of such forum shall not be entitled to deference by the forum selected.
G. No Effect. Nothing in this Agreement shall be interpreted to limit the Settling State's
Civil Investigative Demand("CID") or investigative subpoena authority, to the extent
such authority exists under applicable state law and the CID or investigative subpoena is
issued pursuant to such authority, and Janssen reserves all of its rights in connection with
a CID or investigative subpoena issued pursuant to such authority.
XIII. Miscellaneous
A. No Admission. Janssen does not admit liability or wrongdoing. Neither this Agreement
nor the Consent Judgments shall be considered, construed, or represented to be (1) an
admission, concession, or evidence of liability or wrongdoing or(2) a waiver or any
limitation of any defense otherwise available to Janssen.
B. Population of Subdivisions. The population figures for Subdivisions shall be the
published U.S. Census Bureau's population estimates for July 1, 2019, released May
2020. These population figures shall remain unchanged during the term of this
Agreement.
C. Population of Special Districts. For any purpose in this Agreement in which the
population of a Special District is used, other than the use of"Covered Special District":
(a) School Districts' population will be measured by the number of students enrolled who
are eligible under the Individuals with Disabilities Education Act("IDEA") or
Section 504 of the Rehabilitation Act of 1973; (b) Health Districts' and Hospital
Districts' population will be measured at 25% of discharges; and (c) all other Special
Districts' (including Fire Districts' and Library Districts')population will be measured at
10% of the population served.
D. Population Associated with Sheriffs. For any purpose in this Agreement in which the
population associated with a lawsuit by a sheriff is used, the population will be measured
at 20% of the capacity of the jail(s) operated by the sheriff.
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E. Tax Reporting and Cooperation.
1. Upon request by Janssen, the Settling States, Participating Subdivisions, and
Participating Special Districts agree to perform such further acts and to execute
and deliver such further documents as may be reasonably necessary for Janssen to
establish the statements set forth in subsection VI.E.3 to the satisfaction of their
tax advisors, their independent financial auditors, the Internal Revenue Service, or
any other governmental authority, including as contemplated by Treasury
Regulations Section 1.162-2 1(b)(3)(ii) and any subsequently proposed or
finalized relevant regulations or administrative guidance.
2. Without limiting the generality of subsection VI.C.1, each Settling State,
Participating Subdivision, and Participating Special District shall cooperate in
good faith with Janssen with respect to any tax claim, dispute, investigation, audit,
examination, contest, litigation, or other proceeding relating to this Agreement.
3. The Designated State, on behalf of all Settling States, Participating Subdivisions,
and Participating Special Districts, shall designate one of its officers or employees
to act as the "appropriate official"within the meaning of Treasury Regulations
Section 1.6050X-1(f)(1)(ii)(B) (the "Appropriate Official").
4. For the avoidance of doubt, neither Janssen nor the Settling States, Participating
Subdivisions, and Participating Special Districts make any warranty or
representation to any Settling jurisdiction or Releasor as to the tax consequences
of the payment of the Compensatory Restitution Amount(or any portion thereof).
F. No Third-Party Beneficiaries. Except as expressly provided in this Agreement, no portion
of this Agreement shall provide any rights to, or be enforceable by, any person or entity
that is not a Settling State or Released Entity. No Settling State may assign or otherwise
convey any right to enforce any provision of this Agreement.
G. Calculation. Any figure or percentage referred to in this Agreement shall be carried to
seven decimal places.
H. Construction. None of the Parties and no Participating Subdivision shall be considered to
be the drafter of this Agreement or of any of its provisions for the purpose of any statute,
case law, or rule of interpretation or construction that would or might cause any provision
to be construed against the drafter of this Agreement. The headings of the provisions of
this Agreement are not binding and are for reference only and do not limit, expand, or
otherwise affect the contents or meaning of this Agreement.
I. Cooperation. Each Party and each Participating Subdivision agrees to use its best efforts
and to cooperate with the other Parties and Participating Subdivisions to cause this
Agreement and the Consent Judgments to become effective, to obtain all necessary
approvals, consents and authorizations, if any, and to execute all documents and to take
such other action as may be appropriate in connection herewith. Consistent with the
foregoing, each Party and each Participating Subdivision agrees that it will not directly or
indirectly assist or encourage any challenge to this Agreement or any Consent Judgment
Page 790
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Item#11.
by any other person, and will support the integrity and enforcement of the terms of this
Agreement and the Consent Judgments.
J. Entire Agreement. This Agreement, its exhibits and any other attachments, including the
attorneys' fees and cost agreement in Exhibit R, embodies the entire agreement and
understanding between and among the Parties and Participating Subdivisions relating to
the subject matter hereof and supersedes (1) all prior agreements and understandings
relating to such subject matter, whether written or oral and(2) all purportedly
contemporaneous oral agreements and understandings relating to such subject matter.
K. Execution. This Agreement may be executed in counterparts and by different signatories
on separate counterparts, each of which shall be deemed an original, but all of which
shall together be one and the same Agreement. One or more counterparts of this
Agreement may be delivered by facsimile or electronic transmission with the intent that it
or they shall constitute an original counterpart hereof. One or more counterparts of this
Agreement may be signed by electronic signature.
L. Good Faith and Voluntary Entry. Each Party warrants and represents that it negotiated
the terms of this Agreement in good faith. Each of the Parties and signatories to this
Agreement warrants and represents that it freely and voluntarily entered into this
Agreement without any degree of duress or compulsion. The Parties state that no promise
of any kind or nature whatsoever(other than the written terms of this Agreement)was
made to them to induce them to enter into this Agreement.
M. No Prevailing Party. The Parties each agree that they are not the prevailing parry in this
action, for purposes of any claim for fees, costs, or expenses as prevailing parties arising
under common law or under the terms of any statute, because the Parties have reached a
good faith settlement. The Parties each further waive any right to challenge or contest the
validity of this Agreement on any ground, including,without limitation, that any term is
unconstitutional or is preempted by, or in conflict with, any current or future law.
N. Non-Admissibility. The settlement negotiations resulting in this Agreement have been
undertaken by the Parties and by certain representatives of the Participating Subdivisions
in good faith and for settlement purposes only, and no evidence of negotiations or
discussions underlying this Agreement shall be offered or received in evidence in any
action or proceeding for any purpose. This Agreement shall not be offered or received in
evidence in any action or proceeding for any purpose other than in an action or
proceeding arising under or relating to this Agreement.
O. Notices. All notices or other communications under this Agreement shall be in writing
(including but not limited to electronic communications) and shall be given to the
recipients indicated below:
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Item#11.
1. For the Attorney(s) General:
Ashley Moody,
Attorney General
State of Florida
The Capitol,
PL-01
Tallahassee, FL 32399
Josh Stein, Attorney General
North Carolina Department of Justice
Attn: Daniel Mosteller
PO Box 629
Raleigh,NC 27602
Dmosteller@ncdoj.gov
2. For the Plaintiffs' Executive Committee:
Paul F. Farrell
Farrell Law
P.O. Box 1180
Huntington, VW 25714-1180
Jayne Conroy
Simmons Hanly Conroy LLC
112 Madison Avenue, 7th Floor
New York,NY 10016-7416
JConroy@simmonsfirm.com
Joseph F. Rice
Motley Rice LLC
28 Bridgeside Blvd.
Mount Pleasant, SC 29464
jrice@motleyrice.com
Peter Mougey
Levin Papantonio Rafferty
316 South Baylen St.
Pensacola, FL 32502
pmougey@levinlaw.com
Paul J. Geller
Robbins Geller Rudman&Dowd LLP
120 East Palmetto Park Road
Boca Raton, FL 33432
PGeller@rgrdlaw.com
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3. For Janssen:
Charles C. Lifland
O'Melveny&Myers LLP
400 South Hope Street, 18th Floor Los Angeles, CA 90071
Phone: (213)430-6000
clifland@omm.com
Daniel R. Suvor
O'Melveny&Myers LLP
400 South Hope Street, 18th Floor Los Angeles, CA 90071
Phone: (213)430-6000
dsuvor@omm.com
Any Party or the Plaintiffs' Executive Committee may change or add the contact
information of the persons designated to receive notice on its behalf by notice given
(effective upon the giving of such notice) as provided in this subsection.
P. No Waiver. The waiver of any rights conferred hereunder shall be effective only if made
by written instrument executed by the waiving Party or Parties. The waiver by any Party
of any breach of this Agreement shall not be deemed to be or construed as a waiver of
any other breach, whether prior, subsequent, or contemporaneous, nor shall such waiver
be deemed to be or construed as a waiver by any other Party.
Q. Preservation of Privilege. Nothing contained in this Agreement or any Consent
Judgment, and no act required to be performed pursuant to this Agreement or any
Consent Judgment, is intended to constitute, cause, or effect any waiver(in whole or in
part) of any attorney-client privilege, work product protection, or common interest/joint
defense privilege, and each Party agrees that it shall not make or cause to be made in any
forum any assertion to the contrary.
R. Successors. This Agreement shall be binding upon, and inure to the benefit of, Janssen
and its respective successors and assigns. Janssen shall not sell the majority of its voting
stock or substantially all its assets without obtaining the acquiror's agreement that it will
constitute a successor with respect to Janssen's obligations under this Agreement.
S. Modification, Amendment, Alteration. After the Reference Date, any modification,
amendment, or alteration of this Agreement by the Parties shall be binding only if
evidenced in writing signed by Janssen along with the signatures of at least thirty-seven
(37) of those then-serving Attorneys General of the Settling States along with a
representation from each Attorney General that either: (1)the advisory committee or
similar entity established or recognized by that Settling State (either pursuant to
subsection VI.E.2, by a State-Subdivision Agreement, or by statute)voted in favor of the
modification, amendment, or alteration of this Agreement including at least one
Participating Subdivision-appointed member; or(2) in States without any advisory
committee, that 50.1% of the Participating Subdivisions by population expressed
approval of the modification, amendment, or alteration of this Agreement in writing.
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Provided, however, in the event the modification, amendment, or alteration relates to
injunctive relief, interstate allocation between the Settling States, intrastate allocation in a
particular Settling State, or fees or costs of Settling States and Participating Subdivisions,
then every Settling State and each Participating Subdivision affected by that
modification, amendment, or alteration must assent in writing. Provided further that, in
the event the modification, amendment, or alteration relates to injunctive relief,then such
amendment, modification, or alteration of injunctive relief against Janssen will not be
effective unless and until any Consent Judgment is modified by a court of competent
jurisdiction, except as otherwise provided by the Injunctive Terms.
T. Termination.
1. Unless otherwise agreed to by Janssen and the Settling State in question, this
Agreement and all of its terms (except subsection XIII.N and any other non-
admissibility provisions,which shall continue in full force and effect) shall be
canceled and terminated with respect to the Settling State, and the Agreement and
all orders issued by the courts in the Settling State pursuant to the Agreement
shall become null and void and of no effect if one or more of the following
conditions applies:
a. A Consent Judgment approving this Agreement without modification of
any of the Agreement's terms has not been entered as to the Settling State
by a court of competent jurisdiction on or before one hundred eighty(180)
days after the Effective Date; or
b. This Agreement or the Consent Judgment as to that Settling State has been
disapproved by a court of competent jurisdiction to which it was presented
for approval and/or entry (or, in the event of an appeal from or review of a
decision of such a court to approve this Agreement and the Consent
Judgment, by the court hearing such appeal or conducting such review),
and the time to appeal from such disapproval has expired, or, in the event
of an appeal from such disapproval, the appeal has been dismissed or the
disapproval has been affirmed by the court of last resort to which such
appeal has been taken and such dismissal or disapproval has become no
longer subject to further appeal (including, without limitation, review by
the United States Supreme Court).
2. If this Agreement is terminated with respect to a Settling State and its
Participating Subdivisions for whatever reason pursuant to subsection XIII.T.1,
then:
a. An applicable statute of limitation or any similar time requirement
(excluding any statute of repose) shall be tolled from the date the Settling
State signed this Agreement until the later of the time permitted by
applicable law or for one year from the date of such termination, with the
effect that Janssen and the Settling State in question shall be in the same
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Item#11.
position with respect to the statute of limitation as they were at the time
the Settling State filed its action; and
b. Janssen and the Settling State and its Participating Subdivisions in
question shall jointly move the relevant court of competent jurisdiction for
an order reinstating the actions and claims dismissed pursuant to the terms
of this Agreement governing dismissal, with the effect that Janssen and the
Settling State and its Participating Subdivisions in question shall be in the
same position with respect to those actions and claims as they were at the
time the action or claim was stayed or dismissed.
3. Unless Janssen and the Enforcement Committee agree otherwise, this Agreement,
with the exception of the Injunctive Relief Terms that have their own provisions
on duration, shall terminate as to all Parties as of the Payment Date for Payment
Year 9,provided that Janssen has performed its payment obligations under the
Agreement as of that date. Notwithstanding any other provision in this
Agreement, all releases under this Agreement will remain effective despite any
termination under this paragraph.
U. Governing Law. Except(1) as otherwise provided in the Agreement or(2) as necessary,
in the sole judgment of the National Arbitration Panel, to promote uniformity of
interpretation for matters within the scope of the National Arbitration Panel's authority,
this Agreement shall be governed by and interpreted in accordance with the respective
laws of the Settling State,without regard to the conflict of law rules of such Settling
State, that is seeking to enforce the Agreement against Janssen or against which Janssen
is seeking enforcement. Notwithstanding any other provision in this subsection on
governing law, any disputes relating to the Settlement Fund Escrow shall be governed by
and interpreted in accordance with the law of the state where the escrow agent has its
primary place of business.
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EXHIBIT A
Alleged Harms
The following export reports that were filed in connection with the case captioned In re National
Prescription Opiate Litigation, No. 1-17-and-02804 (N.D. Ohio):
1. Expert report of Professor David Cutler, dated March 25, 2019.
2. Expert report of Dr. Jeffrey B. Liebman, dated March 25, 2019.
3. Expert report of Professor Thomas McGuire regarding damages to Bellwethers, dated
March 25, 2019.
4. Report of Professor Thomas McGuire regarding public nuisance, dated March 25, 2019.
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Item#11.
EXHIBIT B
Enforcement Committee Organization Bvlaws
ARTICLE I
These bylaws constitute the code of rules adopted by the Settling States and Participating
Subdivisions for the creation of an Enforcement Committee(the"Committee")to exist and operate
during the term of the Agreement in connection with Janssen and shall control the regulation and
management of the Committee's affairs.
ARTICLE II
Purpose
The Committee is organized for the sole purpose of evaluating and taking such action as deemed
reasonable, necessary, and appropriate by the members of the Committee on the matters
delegated to the Committee under that certain Settlement Agreement between the Settling States
and Janssen dated July 21, 2021.
ARTICLE III
Members of the Committee
(1) Number of Members
The Committee will consist of seventeen (17) members (the "Members"). Upon majority
resolution of the Committee, the number of Members may be increased or decreased from
time to time,but in no event shall a decrease have the effect of decreasing the total number
of Members to less than seven Members.
(2) Initial Members
The Committee initially will consist of eleven Settling State Members and six Participating
Subdivision Members; three of the Participating Subdivisions shall be counties and three
shall be municipalities. The initial Settling State Members are representatives from:
Connecticut,Delaware,Florida,Georgia,Massachusetts,New York,North Carolina,Ohio,
Pennsylvania, Tennessee, and Texas. The initial Participating Subdivision Members are:
(a) Bexar County, Texas; (b) Broward County, Florida; (c) Chicago, Illinois; (d)
Cincinnati, Ohio; (e) Nashville, Tennessee; and (f) Nassau County, New York. Until the
Reference Date contained in the Settlement Agreement,the Participating Subdivisions may
designate their outside counsel to serve as their representative. After the Reference Date,
an employee or official of the Participating Subdivision must be the designated as the
representative of the Participating Subdivision.
(3) Term of Members
The term of office for Members of the Committee will be until the end of the term of the
Settlement Agreement, nine (9) years, unless and until a Member withdraws or resigns
from the Committee.
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Item#11.
(4) Resignation
Any Member may resign at any time by delivering written notice to the Chairperson of the
Committee. Such resignation shall take effect upon receipt or, if later, at the time specified
in the notice.
(5) Removal
(a) Any Member may be removed without cause, at any time, by a majority of the entire
Committee, at a Regular or Special Meeting called for that purpose. Any Member under
consideration of removal must first be notified about the consideration by written notice at
least five days prior to the meeting at which the vote takes place.
(b) In the event that any Member is not a Settling State or a Participating Subdivision or
the Member subsequently becomes a Later Litigating Subdivision, the Member shall be
removed immediately without notice or vote of the Committee.
(6) Vacancies
In the event of a vacancy, the Members of the same type (Settling State or Participating
Subdivision) shall select another Settling State or Participating Subdivision to fill that
Member's position.
(7) Compensation
Members shall not receive any salaries or other compensation for their services, but, by
resolution of the Committee, may be reimbursed for any actual expenses incurred in the
performance of their duties for the Committee, as long as a majority of disinterested
Members approve the reimbursement. Any reimbursement shall be sought from the
Settlement Fund Administrator.
ARTICLE IV
Conflicts of Interest and Code of Ethics
If a Member, agent, or employee of the Committee has a conflict of interest, he or she may not
participate in a vote, discussion, or decision about the matter. Each Member shall follow any
applicable state or local law with respect to conflicts, gifts, and ethics.
ARTICLE V
Committee Meetings
(1) Place of Meetings
Meetings of the Committee will be held at any place that the Chairperson may designate,
including by telephonic or electronic means.
(2) Regular Meetings
Regular meetings of the Committee shall be held as deemed necessary by the Chairperson
or any three members.
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Item#11.
(3) Notice of Meetings
Written notice of the date, time,place and subject of each meeting must be provided to the
Members at least 72 hours before the scheduled time of the meeting, except when there is
an emergency or urgent public necessity.
(4) Quorum
A majority of the incumbent Members (not counting vacancies) shall constitute a quorum
for the purposes of convening a meeting or conducting business.
(5) Voting and Proxy
When it is necessary to vote on any matter before the Committee, Members may vote by
electronic means as provided in these Bylaws. Proxy voting is permitted. In order for a
matter to pass, the matter must have a majority vote of Members present and must have at
least one vote from a Settling State Member and a Participating Subdivision Member. In
the event that there is a Quorum,but no Settling State or Participating Subdivision Member
is present, then a matter may pass with a simple majority vote.
(6) Minutes
The Committee shall prepare and keep minutes. The minutes must state the subject of each
deliberation and indicate each vote, order, decision, or other action taken.
ARTICLE VI
Officers
(1) Roster of Officers
The Committee shall have a Chairperson, a Vice Chairperson, and a Secretary. The
Committee may have at its discretion, such other officers as may be appointed by the
Members of the Committee. One person may hold two or more offices, except those
serving as Chairperson.
(2) Election and Removal of Officers
All officers shall serve two-year terms. The election shall be conducted at the first meeting
of the fiscal year. Officers shall remain in office until their successors have been selected.
Officers may serve consecutive terms without limit. The election of officers shall be by
majority vote of the Members of the Committee attending the meeting.
(3) Vacancies
If a vacancy occurs during the term of office for any elected officer, the Members of the
Committee shall elect a new officer to fill the remainder of the term as soon as practical,
by majority vote of Members present.
(4) Chairperson
The Chairperson will supervise and control the affairs of the Committee and shall exercise
such supervisory powers as may be given him/her by the Members of the Committee. The
Chairperson will perform all duties incident to such office and such other duties as may be
provided in these bylaws or as may be prescribed from time to time by the Committee. The
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Item#11.
Chairperson shall preside at all meetings and shall exercise parliamentary control in
accordance with Robert's Rules of Order.
(5) Vice Chairperson
The Vice Chairperson shall act in place of the Chairperson in the event of the Chairperson's
absence, inability, or refusal to act, and shall exercise and discharge such other duties as
may be required by the Committee. The Vice Chairperson shall serve as the
parliamentarian and interpret any ambiguities of the bylaws.
(6) Secretary
The Secretary will keep and maintain all records related to the Committee and take minutes
of all meetings.
(7) Records
All elected officers and committee chairpersons shall relinquish their records to the
Chairperson immediately upon the completion of their term of office or completion of a
project.
(8) Resignation
An officer may resign the office while not resigning membership from the Committee, by
submitting a letter to the Chairperson.Vacancies occurring in any office shall be appointed
for the remainder of the term.
ARTICLE VII
Duties
(1) Prior to the Reference Date
The Committee shall be responsible for any additional negotiations with Janssen,
including, but not limited to, negotiating extensions of any periods created by the
Settlement Agreement.
(2) After the Enforcement Date
The Committee shall establish procedures for the receipt of notices that a dispute exists
concerning the Agreement and review of such disputes, pursuant to Section XII of the
Agreement. Members may engage with Janssen, Settling States, and Participating
Subdivisions attempting to resolve any dispute without further action by the Committee.
The Committee may request additional information from Janssen, Settling States, and
Participating Subdivisions to the extent the Committee believes such information is
necessary to understand, resolve, or provide advice related to a dispute. The Committee
shall endeavor to provide advice relative to the dispute no later than 60 days after receipt
of notice.
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ARTICLE VIII
Rules of Procedure
The proceedings and business of the Committee shall be governed by Robert's Rules of Order
unless otherwise waived by the Committee.
ARTICLE IX
Operations
(1) Records
The Committee will keep correct and complete records and will also keep minutes of the
proceedings of the Committee meetings and Committees. The Committee will keep such
records at its principal place of business at a place designated by the Chairperson.
All elected officers and committee chairpersons shall relinquish their records to the
Chairperson, immediately upon the completion of their term of office.
(2) Inspection of Books and Records
The minutes of a meeting are public records and shall be available for public inspection
and copying on request to the Committee's Chairperson or the Chairperson's designee.
(3) Amendments
The bylaws may be amended at any time by a vote of a majority of Members present and
must have at least one vote from a Settling State Member and a Participating Subdivision
Member. In the event that there is a Quorum, but no Settling State or Participating
Subdivision Member is present, then a matter may pass with a simple majority vote.
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EXHIBIT C
Liti!atin2 Subdivision List
[Will be added by Janssen prior to Preliminary Agreement Date]
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EXHIBIT D
[Intentionally Omitted]
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EXHIBIT E
List of Opioid Remediation Uses
Schedule A
Core Strategies
States and Qualifying Block Grantees shall choose from among the abatement strategies listed in
Schedule B. However,priority shall be given to the following core abatement strategies ("Core
Strategies").
A. NALOXONE OR OTHER FDA-APPROVED DRUG TO
REVERSE OPIOID OVERDOSES
1. Expand training for first responders, schools, community
support groups and families; and
2. Increase distribution to individuals who are uninsured or
whose insurance does not cover the needed service.
B. MEDICATION-ASSISTED TREATMENT ("MAT")
DISTRIBUTION AND OTHER OPIOID-RELATED
TREATMENT
1. Increase distribution of MAT to individuals who are
uninsured or whose insurance does not cover the needed
service;
2. Provide education to school-based and youth-focused
programs that discourage or prevent misuse;
3. Provide MAT education and awareness training to
healthcare providers, EMTs, law enforcement, and other
first responders; and
4. Provide treatment and recovery support services such as
residential and inpatient treatment, intensive outpatient
treatment, outpatient therapy or counseling, and recovery
housing that allow or integrate medication and with other
support services.
1 As used in this Schedule A,words like"expand,""fund,""provide"or the like shall not indicate a preference for
new or existing programs.
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C. PREGNANT & POSTPARTUM WOMEN
1. Expand Screening, Brief Intervention, and Referral to
Treatment("SBIRT') services to non-Medicaid eligible or
uninsured pregnant women;
2. Expand comprehensive evidence-based treatment and
recovery services, including MAT, for women with co-
occurring Opioid Use Disorder("OUD") and other
Substance Use Disorder("SUD")/Mental Health disorders
for uninsured individuals for up to 12 months postpartum;
and
3. Provide comprehensive wrap-around services to individuals
with OUD, including housing, transportation,job
placement/training, and childcare.
D. EXPANDING TREATMENT FOR NEONATAL
ABSTINENCE SYNDROME ("NAS")
1. Expand comprehensive evidence-based and recovery
support for NAS babies;
2. Expand services for better continuum of care with infant-
need dyad; and
3. Expand long-term treatment and services for medical
monitoring of NAS babies and their families.
E. EXPANSION OF WARM HAND-OFF PROGRAMS AND
RECOVERY SERVICES
1. Expand services such as navigators and on-call teams to
begin MAT in hospital emergency departments;
2. Expand warm hand-off services to transition to recovery
services;
3. Broaden scope of recovery services to include co-occurring
SUD or mental health conditions;
4. Provide comprehensive wrap-around services to individuals
in recovery, including housing, transportation,job
placement/training, and childcare; and
5. Hire additional social workers or other behavioral health
workers to facilitate expansions above.
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F. TREATMENT FOR INCARCERATED POPULATION
1. Provide evidence-based treatment and recovery support,
including MAT for persons with OUD and co-occurring
SUD/MH disorders within and transitioning out of the
criminal justice system; and
2. Increase funding for jails to provide treatment to inmates
with OUD.
G. PREVENTION PROGRAMS
1. Funding for media campaigns to prevent opioid use (similar to
the FDA's "Real Cost" campaign to prevent youth from
misusing tobacco);
2. Funding for evidence-based prevention programs in schools;
3. Funding for medical provider education and outreach regarding
best prescribing practices for opioids consistent with the 2016
CDC guidelines, including providers at hospitals (academic
detailing);
4. Funding for community drug disposal programs; and
5. Funding and training for first responders to participate in pre-
arrest diversion programs,post-overdose response teams, or
similar strategies that connect at-risk individuals to behavioral
health services and supports.
H. EXPANDING SYRINGE SERVICE PROGRAMS
1. Provide comprehensive syringe services programs with
more wrap-around services, including linkage to OUD
treatment, access to sterile syringes and linkage to care and
treatment of infectious diseases.
I. EVIDENCE-BASED DATA COLLECTION AND
RESEARCH ANALYZING THE EFFECTIVENESS OF THE
ABATEMENT STRATEGIES WITHIN THE STATE
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Schedule B
Approved Uses
Support treatment of Opioid Use Disorder(OUD) and any co-occurring Substance Use Disorder
or Mental Health(SUD/MH) conditions through evidence-based or evidence-informed programs
or strategies that may include, but are not limited to, the following:
PART ONE: TREATMENT
A. TREAT OPIOID USE DISORDER(OUD)
Support treatment of Opioid Use Disorder("OUD") and any co-occurring Substance Use
Disorder or Mental Health ("SUD/MH") conditions through evidence-based or evidence-
informed programs or strategies that may include, but are not limited to, those that:2
l. Expand availability of treatment for OUD and any co-occurring SUD/MH conditions,
including all forms of Medication-Assisted Treatment("MAT') approved by the U.S.
Food and Drug Administration.
2. Support and reimburse evidence-based services that adhere to the American Society
of Addiction Medicine ("ASAM") continuum of care for OUD and any co-occurring
SUD/MH conditions.
3. Expand telehealth to increase access to treatment for OUD and any co-occurring
SUD/MH conditions, including MAT, as well as counseling, psychiatric support, and
other treatment and recovery support services.
4. Improve oversight of Opioid Treatment Programs ("OTPs") to assure evidence-based
or evidence-informed practices such as adequate methadone dosing and low threshold
approaches to treatment.
5. Support mobile intervention, treatment, and recovery services, offered by qualified
professionals and service providers, such as peer recovery coaches, for persons with
OUD and any co-occurring SUD/MH conditions and for persons who have
experienced an opioid overdose.
6. Provide treatment of trauma for individuals with OUD (e.g., violence, sexual assault,
human trafficking, or adverse childhood experiences) and family members (e.g.,
surviving family members after an overdose or overdose fatality), and training of
health care personnel to identify and address such trauma.
7. Support evidence-based withdrawal management services for people with OUD and
any co-occurring mental health conditions.
2 As used in this Schedule B,words like"expand,""fund,""provide"or the like shall not indicate a preference for
new or existing programs.
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8. Provide training on MAT for health care providers, first responders, students, or other
supporting professionals, such as peer recovery coaches or recovery outreach
specialists, including telementoring to assist community-based providers in rural or
underserved areas.
9. Support workforce development for addiction professionals who work with persons
with OUD and any co-occurring SUD/MH conditions.
10. Offer fellowships for addiction medicine specialists for direct patient care, instructors,
and clinical research for treatments.
11. Offer scholarships and supports for behavioral health practitioners or workers
involved in addressing OUD and any co-occurring SUD/MH or mental health
conditions, including, but not limited to, training, scholarships, fellowships, loan
repayment programs, or other incentives for providers to work in rural or underserved
areas.
12. Provide funding and training for clinicians to obtain a waiver under the federal Drug
Addiction Treatment Act of 2000 ("DATA 2000") to prescribe MAT for OUD, and
provide technical assistance and professional support to clinicians who have obtained
a DATA 2000 waiver.
13. Disseminate web-based training curricula, such as the American Academy of
Addiction Psychiatry's Provider Clinical Support Service—Opioids web-based
training curriculum and motivational interviewing.
14. Develop and disseminate new curricula, such as the American Academy of Addiction
Psychiatry's Provider Clinical Support Service for Medication—Assisted Treatment.
B. SUPPORT PEOPLE IN TREATMENT AND RECOVERY
Support people in recovery from OUD and any co-occurring SUD/MH conditions
through evidence-based or evidence-informed programs or strategies that may include,
but are not limited to, the programs or strategies that:
1. Provide comprehensive wrap-around services to individuals with OUD and any co-
occurring SUD/MH conditions, including housing,transportation, education,job
placement,job training, or childcare.
2. Provide the full continuum of care of treatment and recovery services for OUD and
any co-occurring SUD/MH conditions, including supportive housing, peer support
services and counseling, community navigators, case management, and connections
to community-based services.
3. Provide counseling, peer-support, recovery case management and residential
treatment with access to medications for those who need it to persons with OUD and
any co-occurring SUD/MH conditions.
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4. Provide access to housing for people with OUD and any co-occurring SUD/MH
conditions, including supportive housing, recovery housing, housing assistance
programs, training for housing providers, or recovery housing programs that allow or
integrate FDA-approved mediation with other support services.
5. Provide community support services, including social and legal services, to assist in
deinstitutionalizing persons with OUD and any co-occurring SUD/MH conditions.
6. Support or expand peer-recovery centers, which may include support groups, social
events, computer access, or other services for persons with OUD and any co-
occurring SUD/MH conditions.
7. Provide or support transportation to treatment or recovery programs or services for
persons with OUD and any co-occurring SUD/MH conditions.
8. Provide employment training or educational services for persons in treatment for or
recovery from OUD and any co-occurring SUD/MH conditions.
9. Identify successful recovery programs such as physician, pilot, and college recovery
programs, and provide support and technical assistance to increase the number and
capacity of high-quality programs to help those in recovery.
10. Engage non-profits, faith-based communities, and community coalitions to support
people in treatment and recovery and to support family members in their efforts to
support the person with OUD in the family.
11. Provide training and development of procedures for government staff to appropriately
interact and provide social and other services to individuals with or in recovery from
OUD, including reducing stigma.
12. Support stigma reduction efforts regarding treatment and support for persons with
OUD, including reducing the stigma on effective treatment.
13. Create or support culturally appropriate services and programs for persons with OUD
and any co-occurring SUD/MH conditions, including new Americans.
14. Create and/or support recovery high schools.
15. Hire or train behavioral health workers to provide or expand any of the services or
supports listed above.
C. CONNECT PEOPLE WHO NEED HELP TO THE HELP THEY NEED
(CONNECTIONS TO CARE)
Provide connections to care for people who have—or are at risk of developing OUD
and any co-occurring SUD/MH conditions through evidence-based or evidence-informed
programs or strategies that may include, but are not limited to, those that:
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1. Ensure that health care providers are screening for OUD and other risk factors and
know how to appropriately counsel and treat(or refer if necessary) a patient for OUD
treatment.
2. Fund SBIRT programs to reduce the transition from use to disorders, including
SBIRT services to pregnant women who are uninsured or not eligible for Medicaid.
3. Provide training and long-term implementation of SBIRT in key systems (health,
schools, colleges, criminal justice, and probation), with a focus on youth and young
adults when transition from misuse to opioid disorder is common.
4. Purchase automated versions of SBIRT and support ongoing costs of the technology.
5. Expand services such as navigators and on-call teams to begin MAT in hospital
emergency departments.
6. Provide training for emergency room personnel treating opioid overdose patients on
post-discharge planning, including community referrals for MAT, recovery case
management or support services.
7. Support hospital programs that transition persons with OUD and any co-occurring
SUD/MH conditions, or persons who have experienced an opioid overdose, into
clinically appropriate follow-up care through a bridge clinic or similar approach.
8. Support crisis stabilization centers that serve as an alternative to hospital emergency
departments for persons with OUD and any co-occurring SUD/MH conditions or
persons that have experienced an opioid overdose.
9. Support the work of Emergency Medical Systems, including peer support specialists,
to connect individuals to treatment or other appropriate services following an opioid
overdose or other opioid-related adverse event.
10. Provide funding for peer support specialists or recovery coaches in emergency
departments, detox facilities, recovery centers, recovery housing, or similar settings;
offer services, supports, or connections to care to persons with OUD and any co-
occurring SUD/MH conditions or to persons who have experienced an opioid
overdose.
11. Expand warm hand-off services to transition to recovery services.
12. Create or support school-based contacts that parents can engage with to seek
immediate treatment services for their child; and support prevention, intervention,
treatment, and recovery programs focused on young people.
13. Develop and support best practices on addressing OUD in the workplace.
14. Support assistance programs for health care providers with OUD.
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15. Engage non-profits and the faith community as a system to support outreach for
treatment.
16. Support centralized call centers that provide information and connections to
appropriate services and supports for persons with OUD and any co-occurring
SUD/MH conditions.
D. ADDRESS THE NEEDS OF CRIMINAL JUSTICE-INVOLVED PERSONS
Address the needs of persons with OUD and any co-occurring SUD/MH conditions who
are involved in, are at risk of becoming involved in, or are transitioning out of the
criminal justice system through evidence-based or evidence-informed programs or
strategies that may include, but are not limited to, those that:
1. Support pre-arrest or pre-arraignment diversion and deflection strategies for persons
with OUD and any co-occurring SUD/MH conditions, including established strategies
such as:
1. Self-referral strategies such as the Angel Programs or the Police Assisted
Addiction Recovery Initiative ("PAARI");
2. Active outreach strategies such as the Drug Abuse Response Team("DART')
model;
3. "Naloxone Plus" strategies, which work to ensure that individuals who have
received naloxone to reverse the effects of an overdose are then linked to
treatment programs or other appropriate services;
4. Officer prevention strategies, such as the Law Enforcement Assisted
Diversion("LEAD") model;
5. Officer intervention strategies such as the Leon County, Florida Adult Civil
Citation Network or the Chicago Westside Narcotics Diversion to Treatment
Initiative; or
6. Co-responder and/or alternative responder models to address OUD-related
911 calls with greater SUD expertise.
2. Support pre-trial services that connect individuals with OUD and any co-occurring
SUD/MH conditions to evidence-informed treatment, including MAT, and related
services.
3. Support treatment and recovery courts that provide evidence-based options for
persons with OUD and any co-occurring SUD/MH conditions.
4. Provide evidence-informed treatment, including MAT, recovery support, harm
reduction, or other appropriate services to individuals with OUD and any co-
occurring SUD/MH conditions who are incarcerated in jail or prison.
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5. Provide evidence-informed treatment, including MAT, recovery support, harm
reduction, or other appropriate services to individuals with OUD and any co-
occurring SUD/MH conditions who are leaving jail or prison or have recently left jail
or prison, are on probation or parole, are under community corrections supervision, or
are in re-entry programs or facilities.
6. Support critical time interventions ("CTI"), particularly for individuals living with
dual-diagnosis OUD/serious mental illness, and services for individuals who face
immediate risks and service needs and risks upon release from correctional settings.
7. Provide training on best practices for addressing the needs of criminal justice-
involved persons with OUD and any co-occurring SUD/MH conditions to law
enforcement, correctional, or judicial personnel or to providers of treatment, recovery,
harm reduction, case management, or other services offered in connection with any of
the strategies described in this section.
E. ADDRESS THE NEEDS OF PREGNANT OR PARENTING WOMEN AND
THEIR FAMILIES, INCLUDING BABIES WITH NEONATAL ABSTINENCE
SYNDROME
Address the needs of pregnant or parenting women with OUD and any co-occurring
SUD/MH conditions, and the needs of their families, including babies with neonatal
abstinence syndrome ("NAS"), through evidence-based or evidence-informed programs
or strategies that may include, but are not limited to, those that:
1. Support evidence-based or evidence-informed treatment, including MAT, recovery
services and supports, and prevention services for pregnant women--or women who
could become pregnant—who have OUD and any co-occurring SUD/MH conditions,
and other measures to educate and provide support to families affected by Neonatal
Abstinence Syndrome.
2. Expand comprehensive evidence-based treatment and recovery services, including
MAT, for uninsured women with OUD and any co-occurring SUD/MH conditions for
up to 12 months postpartum.
3. Provide training for obstetricians or other healthcare personnel who work with
pregnant women and their families regarding treatment of OUD and any co-occurring
SUD/MH conditions.
4. Expand comprehensive evidence-based treatment and recovery support for NAS
babies; expand services for better continuum of care with infant-need dyad; and
expand long-term treatment and services for medical monitoring of NAS babies and
their families.
5. Provide training to health care providers who work with pregnant or parenting women
on best practices for compliance with federal requirements that children born with
NAS get referred to appropriate services and receive a plan of safe care.
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6. Provide child and family supports for parenting women with OUD and any co-
occurring SUD/MH conditions.
7. Provide enhanced family support and child care services for parents with OUD and
any co-occurring SUD/MH conditions.
8. Provide enhanced support for children and family members suffering trauma as a
result of addiction in the family; and offer trauma-informed behavioral health
treatment for adverse childhood events.
9. Offer home-based wrap-around services to persons with OUD and any co-occurring
SUD/MH conditions, including, but not limited to,parent skills training.
10. Provide support for Children's Services—Fund additional positions and services,
including supportive housing and other residential services, relating to children being
removed from the home and/or placed in foster care due to custodial opioid use.
PART TWO: PREVENTION
F. PREVENT OVER-PRESCRIBING AND ENSURE APPROPRIATE
PRESCRIBING AND DISPENSING OF OPIOIDS
Support efforts to prevent over-prescribing and ensure appropriate prescribing and
dispensing of opioids through evidence-based or evidence-informed programs or
strategies that may include, but are not limited to, the following:
1. Funding medical provider education and outreach regarding best prescribing practices
for opioids consistent with the Guidelines for Prescribing Opioids for Chronic Pain
from the U.S. Centers for Disease Control and Prevention, including providers at
hospitals (academic detailing).
2. Training for health care providers regarding safe and responsible opioid prescribing,
dosing, and tapering patients off opioids.
3. Continuing Medical Education(CME) on appropriate prescribing of opioids.
4. Providing Support for non-opioid pain treatment alternatives, including training
providers to offer or refer to multi-modal, evidence-informed treatment of pain.
5. Supporting enhancements or improvements to Prescription Drug Monitoring
Programs ("PDMPs"), including,but not limited to, improvements that:
1. Increase the number of prescribers using PDMPs;
2. Improve point-of-care decision-making by increasing the quantity, quality, or
format of data available to prescribers using PDMPs, by improving the
interface that prescribers use to access PDMP data, or both; or
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3. Enable states to use PDMP data in support of surveillance or intervention
strategies, including MAT referrals and follow-up for individuals identified
within PDMP data as likely to experience OUD in a manner that complies
with all relevant privacy and security laws and rules.
6. Ensuring PDMPs incorporate available overdose/naloxone deployment data,
including the United States Department of Transportation's Emergency Medical
Technician overdose database in a manner that complies with all relevant privacy and
security laws and rules.
7. Increasing electronic prescribing to prevent diversion or forgery.
8. Educating dispensers on appropriate opioid dispensing.
G. PREVENT MISUSE OF OPIOIDS
Support efforts to discourage or prevent misuse of opioids through evidence-based or
evidence-informed programs or strategies that may include,but are not limited to, the
following:
1. Funding media campaigns to prevent opioid misuse.
2. Corrective advertising or affirmative public education campaigns based on evidence.
3. Public education relating to drug disposal.
4. Drug take-back disposal or destruction programs.
5. Funding community anti-drug coalitions that engage in drug prevention efforts.
6. Supporting community coalitions in implementing evidence-informed prevention,
such as reduced social access and physical access, stigma reduction—including
staffing, educational campaigns, support for people in treatment or recovery, or
training of coalitions in evidence-informed implementation, including the Strategic
Prevention Framework developed by the U.S. Substance Abuse and Mental Health
Services Administration("SAMHSA").
7. Engaging non-profits and faith-based communities as systems to support prevention.
8. Funding evidence-based prevention programs in schools or evidence-informed school
and community education programs and campaigns for students, families, school
employees, school athletic programs,parent-teacher and student associations, and
others.
9. School-based or youth-focused programs or strategies that have demonstrated
effectiveness in preventing drug misuse and seem likely to be effective in preventing
the uptake and use of opioids.
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10. Create or support community-based education or intervention services for families,
youth, and adolescents at risk for OUD and any co-occurring SUD/MH conditions.
11. Support evidence-informed programs or curricula to address mental health needs of
young people who may be at risk of misusing opioids or other drugs, including
emotional modulation and resilience skills.
12. Support greater access to mental health services and supports for young people,
including services and supports provided by school nurses,behavioral health workers
or other school staff, to address mental health needs in young people that (when not
properly addressed) increase the risk of opioid or another drug misuse.
H. PREVENT OVERDOSE DEATHS AND OTHER HARMS (HARM REDUCTION)
Support efforts to prevent or reduce overdose deaths or other opioid-related harms
through evidence-based or evidence-informed programs or strategies that may include,
but are not limited to, the following:
1. Increased availability and distribution of naloxone and other drugs that treat
overdoses for first responders, overdose patients, individuals with OUD and their
friends and family members, schools, community navigators and outreach workers,
persons being released from jail or prison, or other members of the general public.
2. Public health entities providing free naloxone to anyone in the community.
3. Training and education regarding naloxone and other drugs that treat overdoses for
first responders, overdose patients,patients taking opioids, families, schools,
community support groups, and other members of the general public.
4. Enabling school nurses and other school staff to respond to opioid overdoses, and
provide them with naloxone, training, and support.
5. Expanding, improving, or developing data tracking software and applications for
overdoses/naloxone revivals.
6. Public education relating to emergency responses to overdoses.
7. Public education relating to immunity and Good Samaritan laws.
8. Educating first responders regarding the existence and operation of immunity and
Good Samaritan laws.
9. Syringe service programs and other evidence-informed programs to reduce harms
associated with intravenous drug use, including supplies, staffing, space,peer support
services, referrals to treatment, fentanyl checking, connections to care, and the full
range of harm reduction and treatment services provided by these programs.
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10. Expanding access to testing and treatment for infectious diseases such as HIV and
Hepatitis C resulting from intravenous opioid use.
11. Supporting mobile units that offer or provide referrals to harm reduction services,
treatment, recovery supports, health care, or other appropriate services to persons that
use opioids or persons with OUD and any co-occurring SUD/MH conditions.
12. Providing training in harm reduction strategies to health care providers, students,peer
recovery coaches, recovery outreach specialists, or other professionals that provide
care to persons who use opioids or persons with OUD and any co-occurring SUD/MH
conditions.
13. Supporting screening for fentanyl in routine clinical toxicology testing.
PART THREE: OTHER STRATEGIES
I. FIRST RESPONDERS
In addition to items in section C, D and H relating to first responders, support the
following:
1. Education of law enforcement or other first responders regarding appropriate
practices and precautions when dealing with fentanyl or other drugs.
2. Provision of wellness and support services for first responders and others who
experience secondary trauma associated with opioid-related emergency events.
J. LEADERSHIP, PLANNING AND COORDINATION
Support efforts to provide leadership,planning, coordination, facilitations, training and
technical assistance to abate the opioid epidemic through activities,programs, or
strategies that may include, but are not limited to, the following:
1. Statewide, regional, local or community regional planning to identify root causes of
addiction and overdose, goals for reducing harms related to the opioid epidemic, and
areas and populations with the greatest needs for treatment intervention services, and
to support training and technical assistance and other strategies to abate the opioid
epidemic described in this opioid abatement strategy list.
2. A dashboard to (a) share reports, recommendations, or plans to spend opioid
settlement funds; (b)to show how opioid settlement funds have been spent; (c)to
report program or strategy outcomes. or(d) to track, share or visualize key opioid- or
health-related indicators and supports as identified through collaborative statewide,
regional, local or community processes.
3. Invest in infrastructure or staffing at government or not-for-profit agencies to support
collaborative, cross-system coordination with the purpose of preventing
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overprescribing, opioid misuse, or opioid overdoses, treating those with OUD and any
co-occurring SUD/MH conditions, supporting them in treatment or recovery,
connecting them to care, or implementing other strategies to abate the opioid
epidemic described in this opioid abatement strategy list.
4. Provide resources to staff government oversight and management of opioid abatement
programs.
K. TRAINING
In addition to the training referred to throughout this document, support training to abate
the opioid epidemic through activities,programs, or strategies that may include, but are
not limited to, those that:
1. Provide funding for staff training or networking programs and services to improve the
capability of government, community, and not-for-profit entities to abate the opioid
crisis.
2. Support infrastructure and staffing for collaborative cross-system coordination to
prevent opioid misuse, prevent overdoses, and treat those with OUD and any co-
occurring SUD/MH conditions, or implement other strategies to abate the opioid
epidemic described in this opioid abatement strategy list(e.g., health care, primary
care, pharmacies, PDMPs, etc.).
L. RESEARCH
Support opioid abatement research that may include,but is not limited to, the following:
1. Monitoring, surveillance, data collection and evaluation of programs and strategies
described in this opioid abatement strategy list.
2. Research non-opioid treatment of chronic pain.
3. Research on improved service delivery for modalities such as SBIRT that
demonstrate promising but mixed results in populations vulnerable to opioid use
disorders.
4. Research on novel harm reduction and prevention efforts such as the provision of
fentanyl test strips.
5. Research on innovative supply-side enforcement efforts such as improved detection
of mail-based delivery of synthetic opioids.
6. Expanded research on swift/certain/fair models to reduce and deter opioid misuse
within criminal justice populations that build upon promising approaches used to
address other substances (e.g., Hawaii HOPE and Dakota 24/7).
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7. Epidemiological surveillance of OUD-related behaviors in critical populations,
including individuals entering the criminal justice system, including,but not limited
to approaches modeled on the Arrestee Drug Abuse Monitoring ("ADAM') system.
8. Qualitative and quantitative research regarding public health risks and harm reduction
opportunities within illicit drug markets, including surveys of market participants
who sell or distribute illicit opioids.
9. Geospatial analysis of access barriers to MAT and their association with treatment
engagement and treatment outcomes.
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EXHIBIT F
List of States and Overall Allocation Percentages
Alabama 1.6491291250%
Alaska 0.2619596435%
American Samoa 0.0174609943%
Arizona 2.3755949882%
Arkansas 0.9713856799%
California 9.9213830698%
Colorado 1.6616291219%
Connecticut 1.3399918096%
Delaware 0.4951498892%
District of Columbia 0.2078293111%
Florida 7.0259134409%
Georgia 2.7882080114%
Guam 0.0513089852%
Hawaii 0.3443244815%
Idaho 0.5297889112%
Illinois 3.3263363702%
Indiana 2.2168933059%
Iowa 0.7611448951%
Kansas 0.8077259480%
Kentucky 2.1047890943%
Louisiana 1.5229786769%
Maine 0.5651006743%
Maryland 2.1106090494%
Massachusetts 2.3035761083%
Michigan 3.4020234989%
Minnesota 1.2972597706%
Mississippi 0.8942157086%
Missouri 2.0056475170%
Montana 0.3457758645%
N. Mariana Islands 0.0188110001%
Nebraska 0.4313919963%
Nevada 1.2547155559%
New Hampshire 0.6311550689%
New Jersey 2.7551354545%
New Mexico 0.8623532836%
New York 5.3903813405%
North Carolina 3.2502525994%
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North Dakota 0.1878951417%
Ohio 4.3567051408%
Oklahoma 0.3053135060%
Oregon 1.4309172888%
Pennsylvania 4.5882419559%
Puerto Rico 0.7295764154%
Rhode Island 0.4942737092%
South Carolina 1.5905629933%
South Dakota 0.2193860923%
Tennessee 2.6881474977%
Texas 6.2932157196%
Utah 1.1945774957%
Vermont 0.2876050633%
Virgin Islands 0.0343504215%
Virginia 2.2801150757%
Washington 2.3189040182%
West Virginia 1.1438786260%
Wisconsin 1.7582560561%
Wyoming 0.1987475390%
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EXHIBIT G
Subdivisions Eligible to become Participating Subdivisions and Default Subdivision Fund
Allocation Percentages
The Subdivisions set forth on this Exhibit G are eligible to become Participating Subdivisions.
By default, the Subdivisions set forth on this Exhibit G shall include: (1) all Litigating
Subdivisions; (2) all counties and parishes in States with functional counties or parishes; (3) all
Subdivisions that are the highest level of general purpose government in States without
functional counties or parishes; and(4) all other Subdivisions with a population of 10,000 or
greater. A State may elect to add any additional Subdivisions to this Exhibit G at any time prior
to the Initial Participation Date.
Immediately upon the effectiveness of any State-Subdivision Agreement, Allocation Statute,
Statutory Trust, or voluntary redistribution allowed by subsection VI.D.3 (or upon the
effectiveness of an amendment to any State-Subdivision Agreement, Allocation Statute,
Statutory Trust, or voluntary redistribution allowed by subsection VI.D.3) that addresses
allocation from the Subdivision Fund, whether before or after the Initial Participation Date, this
Exhibit G will automatically be amended to reflect the allocation from the Subdivision Fund
pursuant to the State-Subdivision Agreement, Allocation Statute, Statutory Trust, or voluntary
redistribution allowed by subsection VI.D.3.
For the avoidance of doubt, inclusion on this Exhibit G shall not create any claim for any amount
of the Settlement Fund, and no such amounts shall be allocated or distributed to any Subdivision
included herein if such Subdivision does not otherwise meet all requirements to receive any such
funds pursuant to the Agreement.
The Parties recognize the benefits of remediation funds reaching all communities, including
through direct payments from the Subdivision Fund. However, to promote efficiency in the use
of such funds and avoid administratively-burdensome disbursements that would be too small to
add a meaningful abatement response, certain Subdivisions do not receive a direct allocation
from the Subdivision Fund. However, such Subdivisions will benefit from Opioid Remediation
in their community, and are eligible to receive direct benefits from the Abatement Accounts
Fund in their State. All settlement funds, whether allocated to a Settling State, an Abatement
Accounts Fund or a Subdivision listed on this Exhibit G can be used for Opioid Remediation in
communities not listed herein.
As provided by subsection VI.D.4.c, the Allocation Percentages shown below apply to
distribution of each Settling State's Subdivision Fund in the absence of a State-Subdivision
Agreement, Allocation Statute, or Statutory Trust. The allocation that would have otherwise
gone to Subdivisions not listed below as receiving a direct allocation shall be (1) directed to the
county or parish in which such Subdivision is located in Settling States with functional counties
or parishes if the relevant county or parish is a Participating Subdivision or(2) to the highest-
level general purpose government in which such Subdivision is located in Settling States without
functional counties or parishes if the relevant highest-level general purpose government is a
Participating Subdivision. Where the relevant county,parish or highest-level General Purpose
Government is not a Participating Subdivision, allocations of General Purpose Subdivisions not
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Item#11.
listed below as eligible to become Participating Subdivisions shall be allocated pursuant to
subsection VII L The redirecting of funds described in this paragraph is intended to promote the
efficient use of Opioid Remediation funds while keeping, where possible, local control of the
distribution of those funds.
This Exhibit G will be updated with Subdivisions eligible to become Participating Subdivisions
pursuant to subsection I.77.
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EXHIBIT H
Participation Tier Determination*
Participation Settling States as Percentage of Litigating Percentage of Non-
Tier of the Payment Subdivisions that Are Litigating Subdivisions
Date (beginning Participating with Populations over
in Payment Year Subdivisions and/or 10,000 that Are
1) Subdivisions Subject to Participating Subdivisions
a Bar, Case-Specific and/or Subdivisions
Resolution, or Subject to a Bar, Case-
Settlement Class Specific Resolution, or
Resolution in effect as of Settlement Class
the Payment Date resolution in effect as of
(beginning in Payment the Payment Date
Year 1) (beginning in Payment
Year 1)
1 44 95% 90%
2 45 96% 96%
3 46 97% 97%
4 48 98% 97%
* The following conditions apply to the determination of Participation Tiers:
1. For the sole purpose of the Participation Tier determination under this Exhibit, the States
used to calculate each criterion (including the percentages of Litigating and Non-
Litigating Subdivisions in Settling States that are Participating Subdivisions) will include
each of the 50 states in the United States, excluding the District of Columbia, American
Samoa, Guam, the Northern Mariana Islands, Puerto Rico, and the U.S. Virgin Islands.
2. Assessment of Subdivision participation percentage will be national in scope.
3. For purposes of determining Participation Tiers, "Litigating Subdivisions" includes
Special Districts that have brought any Released Claims against any Released Entities.
Special Districts shall have their population measured as set forth in subsection XIII.C.
4. The percentage of Litigating Subdivisions and percentage of Non-Litigating Subdivisions
with populations over 10,000 will be calculated as follows: Each Litigating Subdivision
and each Non-Litigating Subdivision with a population over 10,000 in the States used to
calculate the Participation Tier will be assigned a metric reflecting both population and
severity(the "Population-Severity Metric"). The Population-Severity Metric shall be the
Subdivision's population plus the Subdivision's population multiplied by the severity
factor for the State of the Subdivision (the severity factors for each State are attached as
Exhibit T hereto) and then divided in two, thus giving 50%weight to each of population
and population multiplied by the severity factor. The denominator for each percentage
shall be the sum total of the Population-Severity Metric for all the Subdivisions in the
relevant category (Litigating Subdivisions or Non-Litigating Subdivisions with
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Item#11.
populations over 10,000) in the Settling States, notwithstanding that persons may be
included within the population(and therefore the Population-Severity Metric) of more
than one Subdivision. The numerator will be the sum total of the Population-Severity
Metrics of all Subdivisions in the relevant category of Subdivision(i.e., Litigating
Subdivisions or Non-Litigating Subdivisions with populations over 10,000) in the
Settling States that are either Participating Subdivisions or are subject to a Bar, Case-
Specific Resolution, or Settlement Class Resolution, notwithstanding that persons may be
included within the population of more than one Subdivision. For the avoidance of doubt,
Subdivisions in Non-Settling States are excluded from both the denominator and
numerator of the calculations for the percentage of Litigating Subdivisions and
percentage of Non-Litigating Subdivisions with populations over 10,000.
5. When the Participation Tier is redetermined annually, Later Participating Subdivisions
described in Section VII.E.3 or Section VII.E.4 shall not be included as Participating
Subdivisions, and for Subdivisions subject to a Bar, Case-Specific Resolution, or
Settlement Class Resolution to be included, the Bar, Case-Specific Resolution, or
Settlement Class Resolution must have been in effect both as of the relevant Payment
Date and for the entire period since the prior Payment Date.
6. Subdivisions with populations over 10,000 are listed on Exhibit I.
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EXHIBIT I
Primary Subdivisions and Subdivisions over 10,000
[Distributor Agreement Exhibit I to be inserted]
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EXHIBIT J
Janssen Predecessors and Former Affiliates
The following includes a non-exclusive list of Janssen's predecessors and former
affiliates:
1. Janssen Pharmaceutica, Inc.
2. Janssen Pharmaceutica N.V.
3. Janssen-Cilag Manufacturing, LLC
4. Janssen Global Services, LLC
5. Janssen Ortho LLC
6. Janssen Products, LP
7. Janssen Research &Development, LLC
8. Janssen Supply Group, LLC
9. Janssen Scientific Affairs, LLC
10. JOM Pharmaceutical Services, Inc.
11. OMJ Pharmaceuticals, Inc.
12. Ortho-McNeil Finance Co.
13. Ortho-McNeil Pharmaceutical
14. Ortho-McNeil-Janssen Pharmaceuticals
15. Ortho-McNeil Pharmaceutical Services Division
16. Ortho-McNeil Neurologic
17. Patriot Pharmaceuticals, LLC
18. Pricara, Ortho-McNeil-Janssen Pharmaceuticals
19. Alza Corp.
20. Alza Development Corp.
21. Janssen Supply Chain, Alza Corp.
22. Noramco, Inc.
23. Tasmanian Alkaloids PTY LTD.
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Item#11.
EXHIBIT K
Settlement Participation Form
Governmental Entity: State:
Authorized Official:
Address 1:
Address 2:
City, State, Zip:
Phone:
Email:
The governmental entity identified above ("Governmental Entity"), in order to obtain and in
consideration for the benefits provided to the Governmental Entity pursuant to the Settlement
Agreement dated July 21, 2021 ("Janssen Settlement"), and acting through the undersigned
authorized official, hereby elects to participate in the Janssen Settlement, release all Released
Claims against all Released Entities, and agrees as follows.
1. The Governmental Entity is aware of and has reviewed the Janssen Settlement,
understands that all terms in this Election and Release have the meanings defined therein,
and agrees that by this Election, the Governmental Entity elects to participate in the
Janssen Settlement and become a Participating Subdivision as provided therein.
2. The Governmental Entity shall, within 14 days of the Reference Date and prior to the
filing of the Consent Judgment, dismiss with prejudice any Released Claims that it has
filed.
3. The Governmental Entity agrees to the terms of the Janssen Settlement pertaining to
Subdivisions as defined therein.
4. By agreeing to the terms of the Janssen Settlement and becoming a Releasor, the
Governmental Entity is entitled to the benefits provided therein, including, if applicable,
monetary payments beginning after the Effective Date.
5. The Governmental Entity agrees to use any monies it receives through the Janssen
Settlement solely for the purposes provided therein.
6. The Governmental Entity submits to the jurisdiction of the court in the Governmental
Entity's state where the Consent Judgment is filed for purposes limited to that court's role
as provided in, and for resolving disputes to the extent provided in, the Janssen
Settlement.
7. The Governmental Entity has the right to enforce the Janssen Settlement as provided
therein.
8. The Governmental Entity, as a Participating Subdivision, hereby becomes a Releasor for
all purposes in the Janssen Settlement, including but not limited to all provisions of
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Item#11.
Section IV(Release), and along with all departments, agencies, divisions, boards,
commissions, districts, instrumentalities of any kind and attorneys, and any person in
their official capacity elected or appointed to serve any of the foregoing and any agency,
person, or other entity claiming by or through any of the foregoing, and any other entity
identified in the definition of Releasor, provides for a release to the fullest extent of its
authority. As a Releasor, the Governmental Entity hereby absolutely, unconditionally,
and irrevocably covenants not to bring, file, or claim, or to cause, assist or permit to be
brought, filed, or claimed, or to otherwise seek to establish liability for any Released
Claims against any Released Entity in any forum whatsoever. The releases provided for
in the Janssen Settlement are intended by the Parties to be broad and shall be interpreted
so as to give the Released Entities the broadest possible bar against any liability relating
in any way to Released Claims and extend to the full extent of the power of the
Governmental Entity to release claims. The Janssen Settlement shall be a complete bar to
any Released Claim.
9. In connection with the releases provided for in the Janssen Settlement, each
Governmental Entity expressly waives, releases, and forever discharges any and all
provisions, rights, and benefits conferred by any law of any state or territory of the
United States or other jurisdiction, or principle of common law, which is similar,
comparable, or equivalent to § 1542 of the California Civil Code, which reads:
General Release; extent. A general release does not extend to claims that
the creditor or releasing party does not know or suspect to exist in his or
her favor at the time of executing the release that, if known by him or her,
would have materially affected his or her settlement with the debtor or
released party.
A Releasor may hereafter discover facts other than or different from those which it
knows, believes, or assumes to be true with respect to the Released Claims, but each
Governmental Entity hereby expressly waives and fully, finally, and forever settles,
releases and discharges, upon the Effective Date, any and all Released Claims that may
exist as of such date but which Releasors do not know or suspect to exist, whether
through ignorance, oversight, error, negligence or through no fault whatsoever, and
which, if known, would materially affect the Governmental Entities' decision to
participate in the Janssen Settlement.
10. Nothing herein is intended to modify in any way the terms of the Janssen Settlement, to
which Governmental Entity hereby agrees. To the extent this Election and Release is
interpreted differently from the Janssen Settlement in any respect, the Janssen Settlement
controls.
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I have all necessary power and authorization to execute this Election and Release on behalf of
the Governmental Entity.
Signature:
Name: Robert E. Simison
Title: Mayor
Date: 12-7-2021
Attest: Chris Johnson, City Clerk
12-7-2021
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Item#11.
EXHIBIT L
Settlement Fund Administrator
This Exhibit L will be appended to the Agreement prior to the Initial Participation Date pursuant
to subsection I.66.
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Item#11.
EXHIBIT M
Settlement Payment Schedule
Suspension Atty Fee,
Payment Costs& Incentives Incentive D
#/Year Additional Base A, B& C (Lookback Credit Total
Applies to: Restitution (maximum) Payment)
Amount
Payment
1 None $103,244,576 $282,175,271 --- --- $14,580,153 $400,000,000
ED+90
days
Payment
2 None --- $658,320,615 --- --- --- $658,320,615
July 2022
Payment
3 Bonus $93,629,192 --- $526,905,161 --- $71,145,032 $691,679,385
July 2023
Payment
4 Bonus $93,629,191 $259,273,971 $549,768,597 --- $47,328,241 $950,000,000
July 2024
Payment
5 Bonus $43,720,414 $262,463,219 $634,274,384 --- $59,541,983 $1,000,000,000
July 2025
Payment
6 Bonus $43,720,414 $105,720,216 $54,325,273 --- $12,900,764 $216,666,667
July 2026
Payment Bonus&
7 lookback $43,720,414 $63,074,061 $54,325,273 $42,646,154 $12,900,765 $216,666,667
July 2027
Payment Bonus&
8 lookback $43,720,414 $63,074,060 $54,325,272 $42,646,154 $12,900,766 $216,666,666
July 2028
Payment Bonus&
9 lookback --- $82,748,246 $78,371,501 $42,646,154 $12,900,766 $216,666,667
July 2029
Payment Base bonus
10 & lookback --- $82,748,248 $78,371,500 $42,646,154 $12,900,765 $216,666,667
July 2030
Payment Base bonus
11 &lookback --- $82,748,248 $78,371,500 $42,646,153 $12,900,765 $216,666,666
July 2031
Total $465,384,615 $1,942,346,155 $2,109,038,461 1 $213,230,769 1 $270,000,000 1 $5,000,000,000
NOTES:
1. Any adjustments to attorneys' fees and costs will be addressed in the separate attorneys'
fees and costs agreement.
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Item#11.
2. The attorneys' fees and costs included in the schedule include the Additional Restitution
Amount, which will be paid in lieu of attorneys' fees to Settling States listed on Exhibit
N.
3. Any offsets under Section V would also be deducted from the base, Incentive B & C
maximum, and Incentive D lookback payments and applied proportionately to all
payments.
4. Accelerated payments for Incentive A would adjust figures for base and Incentive B & C
payments.
5. The dates of payments shown on the schedule are approximate, and will be determined
by subsection V.B.1.
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Item#11.
EXHIBIT N
Additional Restitution Amount Allocation
Alabama 2.1169269268%
Alaska 0.3443798454%
American Samoa 0.0219613287%
Arizona 2.9452135100%
California 13.1510781360%
Colorado 2.1897380150%
Connecticut 1.7275419499%
Delaware 0.6508743856%
District of Columbia 0.2811929384%
Georgia 3.7040606512%
Guam 0.0665280480%
Hawaii 0.4710748102%
Illinois 4.3924998997%
Indiana 2.7750263890%
Iowa 1.0610119129%
Kansas 1.0960862986%
Louisiana 2.0857625133%
Maine 0.7470015721%
Maryland 2.6658205590%
Massachusetts 2.9180077435%
Michigan 4.3144215263%
Minnesota 1.7616910858%
Missouri 2.5748706956%
Montana 0.4612247807%
N. Mariana Islands 0.0240110183%
Nebraska 0.5931074216%
New York 8.4314865530%
North Carolina 4.1880762974%
North Dakota 0.2646479540%
Oregon 1.8098698760%
Pennsylvania 5.6817646992%
Rhode Island 0.6444665757%
South Carolina 2.0610356358%
Tennessee 3.3570652958%
Texas 10.8573789344%
Utah 1.5481963920%
Vermont 0.3893298238%
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Item#11.
Virgin Islands 0.0453295506%
Virginia 3.0182689455%
Wisconsin 2.2927931680%
Wyoming 0.2691763371%
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Item#11.
EXHIBIT O
Adoption of a State-Subdivision Agreement
A State-Subdivision Agreement shall be applied if it meets the requirements of Section
VI and is approved by the State and by the State's Subdivisions as follows:
1. Requirements for Approval. A State-Subdivision Agreement shall be deemed as agreed to
when it has been approved by the State and either(a) Subdivisions whose aggregate "Population
Percentages," determined as set forth below, total more than sixty percent(60%), or(b)
Subdivisions whose aggregate Population Percentages total more than fifty percent(50%)
provided that these Participating Subdivisions also represent fifteen percent (15%) or more of the
State's counties or parishes (or, in the case of Settling States whose counties and parishes do not
function as local governments, 15% of or more of the Settling State's non-county Subdivisions),
by number.
2. Approval Authority. Approval by the State shall be by the Attorney General. Approval by a
Subdivision shall be by the appropriate official or legislative body pursuant to the required
procedures for that Subdivision to agree to a legally binding settlement.
3. Population Percentage Calculation. For purposes of this Exhibit O only, Population
Percentages shall be determined as follows: For States with functional counties or parishes', the
Population Percentage of each county or parish shall be deemed to be equal to (a) (1) 200% of
the population of such county or parish, minus (2) the aggregate population of all Primary
Incorporated Municipalities located in such county or parish, divided by (b) 200% of the State's
population. A "Primary Incorporated Municipality"means a city, town, village or other
municipality incorporated under applicable state law with a population of at least 25,000 that is
not located within another incorporated municipality. The Population Percentage of each Primary
Incorporated Municipality shall be equal to its population(including the population of any
incorporated or unincorporated municipality located therein) divided by 200% of the State's
population;provided that the Population Percentage of a Primary Incorporated Municipality that
is not located within a county shall be equal to 200% of its population(including the population
of any incorporated or unincorporated municipality located therein) divided by 200% of the
State's population. For all States that do not have functional counties or parishes, the Population
Percentage of each non-county Subdivision (including any incorporated or unincorporated
municipality located therein), shall be equal to its population divided by the State's population.
4. Preexisting Agreements and Statutory Provisions. A State may include with the notice to its
Subdivisions an existing agreement, a proposed agreement, or statutory provisions regarding the
distribution and use of settlement funds and have the acceptance of such an agreement or
statutory provision be part of the requirements to be an Initial Participating Subdivision.
' Certain states do not have counties or parishes that have functional governments,including:Alaska,Connecticut,
Massachusetts,Rhode Island,and Vermont.
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Item#11.
5. Revised Agreements. A State-Subdivision Agreement that has been revised, supplemented, or
refined shall be applied if it meets the requirements of Section VI and is approved by the State
and by the State's Subdivisions pursuant to the terms above.
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Item#11.
EXHIBIT P
Iniunctive Relief
A. Definitions Specific to this Exhibit
1. "Cancer-Related Pain Care"means care that provides relief from pain resulting
from a patient's active cancer or cancer treatment as distinguished from treatment
provided during remission.
2. "Janssen"means Johnson& Johnson, Janssen Pharmaceuticals, Inc., Ortho-
McNeil-Janssen Pharmaceuticals, Inc., and Janssen Pharmaccutica, Inc.
(collectively, "Janssen"), including all of their subsidiaries,predecessors,
successors, current officers, directors, employees, representatives, agents,
affiliates, parents, and assigns acting on behalf of Janssen in the United States.
3. "End-of-Life Care"means care for persons with a terminal illness or at high risk
for dying in the near future in hospice care, hospitals, long-term care settings, or
at home.
4. "Health Care Provider" means any U.S.-based physician or other health care
practitioner who is licensed to provide health care services or to prescribe
pharmaceutical products and any medical facility,practice,hospital, clinic, or
pharmacy.
5. "In-Kind Support"means payment or assistance in the form of goods,
commodities, services, or anything else of value.
6. "Lobby" and"Lobbying" shall have the same meaning as "lobbying activities"
and"lobbying contacts"under the federal lobbying disclosure act, 2 U.S.C.
§ 1602 et seq., and any analogous state or local provisions governing the person
or entity being lobbied. As used in this document, "Lobby" and"Lobbying"
include Lobbying directly or indirectly, through grantees or Third Parties.
7. "Opioid(s)"means all naturally occurring, synthetic, or semisynthetic substances
that interact with opioid receptors and act like opium. For the avoidance of doubt,
the term"Opioid(s)" does not include Imodium.
8. "Opioid Product(s)"means all current and future medications containing Opioids
approved by the U.S. Food&Drug Administration(FDA) and listed by the DEA
as Schedule II, III, or IV drugs pursuant to the federal Controlled Substances Act
(including but not limited to buprenorphine, codeine, fentanyl, hydrocodone,
hydromorphone, meperidine, methadone, morphine, oxycodone, oxymorphone,
tapentadol, and tramadol). The term"Opioid Products(s)" shall not include (i)
methadone and other substances when used exclusively to treat opioid abuse,
addiction, or overdose; or(ii)raw materials, immediate precursors, and/or active
pharmaceutical ingredients (APIs)used in the manufacture or study of Opioids or
Opioid Products, but only when such materials, immediate precursors, and/or
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Item#11.
APIs are sold or marketed exclusively to DEA-licensed manufacturers or DEA-
licensed researchers.
9. "OUD"means opioid use disorder defined in the Diagnostic and Statistical
Manual of Mental Disorders, Fifth Edition (DSM-5), as updated or amended.
10. "Product(s)for the Treatment of Opioid-Induced Side Effects"means any over-
the-counter or prescription remedy used to treat those side effects identified on the
FDA label for any Opioid Product, except that, for purposes of the Agreement,
Product(s) for the Treatment of Opioid-Induced Side Effects shall not include
products that treat OUD or respiratory depression.
11. "Promote," "Promoting," "Promotion," and"Promotional"means dissemination
of information or other practices intended or reasonably anticipated to increase
sales,prescriptions, or that attempts to influence prescribing practices in the
United States. These terms shall not include the provision of scientific
information or data in response to unsolicited requests from Health Care
Providers or payors as allowed in subsection C.2.e-h.
12. "Third Party(ies)"means any person or entity other than Janssen or a government
entity.
13. "Treatment of Pain"means the provision of therapeutic modalities to alleviate or
reduce pain.
14. "Unbranded Information"means any information that does not identify a specific
branded or generic product.
B. Ban on Selling and Manufacturing Opioids
1. Janssen shall not manufacture or sell any Opioids or Opioid Products for
distribution in the United States. Janssen represents that prior to the Effective
Date, it de-listed all of its Opioid Products and no longer ships any of them to or
within the United States. Janssen shall provide notice to the Settling States when
the last of the inventory Janssen has shipped has expired.
2. Notwithstanding subsection B.1, above, Janssen may continue to manufacture
Nucynta and Nucynta ER(collectively"Nucynta") in accordance with the terms
of its April 2, 2015 contract with Depomed, Inc., rights to which were assigned to
Collegium Pharmaceutical, Inc. ("Collegium") on February 13, 2020, so long as
Janssen is not Promoting Nucynta, or selling Nucynta to anyone other than
Collegium. Janssen shall not extend, amend, or otherwise alter the terms of its
April 2, 2015 contract or enter into any similar agreement related to Nucynta or
any other Opioid or Opioid Product. For the term of its April 2, 2015 contract, or
until the expiration of subsection B.1,whichever is shorter, Janssen shall make an
annual report to the Settling States showing the amount of Nucynta manufactured
in accordance with the April 2, 2015 contract.
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Item#11.
C. Ban on Promotion
1. Janssen shall not engage in Promotion of Opioids or Opioid Products including
but not limited to, by:
a. Employing or contracting with sales representatives or other persons to
Promote Opioids or Opioid Products to Health Care Providers or patients,
or to persons involved in determining the Opioid Products included in
formularies;
b. Using speakers, key opinion leaders, thought leaders, lecturers, and/or
speaking events for Promotion of Opioids or Opioid Products;
C. Sponsoring, or otherwise providing financial support or In-Kind Support
to medical education programs for Promotion of Opioids-or Opioid
Products;
d. Creating, sponsoring, operating, controlling, or otherwise providing
financial support or In-Kind Support to any website, network, and/or
social or other media account for the Promotion of Opioids or Opioid
Products;
e. Creating, sponsoring, distributing, or otherwise providing financial
support or In-Kind Support for materials Promoting Opioids or Opioid
Products, including but not limited to brochures, newsletters,pamphlets,
journals,books, and guides;
f. Creating, sponsoring, or otherwise providing financial support or In-Kind
Support for advertisements that Promote Opioids or Opioid Products,
including but not limited to internet advertisements or similar content, and
providing hyperlinks or otherwise directing internet traffic to
advertisements; and
g. Engaging in internet search engine optimization or other techniques
designed to Promote Opioids or Opioid Products by improving rankings or
making content appear among the top results in an internet search or
otherwise be more visible or more accessible to the public on the internet.
2. Notwithstanding subsection C.1 directly above, Janssen may:
a. Maintain a corporate website;
b. Maintain a website for any Opioid Product that contains principally the
following content: the FDA-approved package insert, medication guide,
and labeling, and a statement directing patients or caregivers to speak with
a licensed Health Care Provider;
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C. Provide information or support the provision of information as expressly
required by law or any state or federal government agency with
jurisdiction in [State];
d. Provide the following by mail, electronic mail, on or through Janssen's
corporate or product websites or through other electronic or digital
methods: FDA-approved package insert, medication guide, approved
labeling for Opioid Products, or other prescribing information for Opioid
Products that are published by a state or federal government agency with
jurisdiction in [State];
e. Provide scientific and/or medical information in response to an unsolicited
request by a Health Care Provider consistent with the standards set forth in
the FDA's Draft Guidance for Industry,Responding to Unsolicited
Requests for Off-Label Information About Prescription Drugs and
Medical Devices (Dec. 2011) as updated or amended by the FDA, and
Guidance for Industry, Good Reprint Practices for the Distribution of
Medical Journal Articles and Medical or Scientific Reference Publications
on Unapproved New Uses of Approved Drugs and Approved or Cleared
Medical Devices (Jan. 2009) as updated or amended by the FDA;
f. Provide a response to any unsolicited question or request from a patient or
caregiver, directing the patient or caregiver to the FDA-approved labeling
or to speak with a licensed Health Care Provider without describing the
safety or effectiveness of Opioids or any Opioid Product or naming any
specific provider or healthcare institution; or directing the patient or
caregiver to speak with their insurance carrier regarding coverage of an
Opioid Product;
g. Provide Health Care Economic Information, as defined at 21 U.S.C. §
352(a), to a payor, formulary committee, or other similar entity with
knowledge and expertise in the area of health care economic analysis
consistent with standards set forth in the FDA's Draft Questions and
Answers Guidance for Industry and Review Staff,Drug and Device
Manufacturer Communications With Payors, Formulary Committees, and
Similar Entities (Jan. 2018), as updated or amended by the FDA;
h. Provide information relating solely to the pricing of any Opioid Product;
i. Sponsor or provide financial support or In-Kind Support for an accredited
or approved continuing medical education program required by either an
FDA-approved Risk Evaluation and Mitigation Strategy (REMS)program
or other federal or state law or regulation applicable in [State] through an
independent Third Party, which shall be responsible for the program's
content without the participation of Janssen; and
j. Provide information in connection with patient support information on co-
pay assistance and managing pain in End-of-Life Care and/or Cancer-
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Related Pain Care relating to the use of Opioids for managing such pain,
as long as the information identifies Janssen as the source of the
information.
3. Janssen shall not engage in the Promotion of Products for the Treatment of
Opioid-Induced Side Effects, including but not limited to:
a. Employing or contracting with sales representatives or other persons to
Promote Products for the Treatment of Opioid-Induced Side Effects to
Health Care Providers or patients;
b. Using speakers,key opinion leaders, thought leaders, lecturers, and/or
speaking events to Promote Products for the Treatment of Opioid-Induced
Side Effects;
C. Sponsoring, or otherwise providing financial support or In-Kind Support
to medical education programs that Promote Products for the Treatment of
Opioid-Induced Side Effects;
d. Creating, sponsoring, or otherwise providing financial support or In-Kind
Support for advertisements that Promote Products for the Treatment of
Opioid-Induced Side Effects, including but not limited to internet
advertisements or similar content, and providing hyperlinks or otherwise
directing internet traffic to advertisements.
4. Notwithstanding subsection C.3 directly above, Janssen may Promote Products
for the Treatment of Opioid-Induced Side Effects so long as such Promotion does
not associate the product with Opioids or Opioid Products.
5. Treatment of Pain
a. Janssen shall not, either through Janssen or through Third Parties, engage
in any conduct that Promotes the Treatment of Pain, except that Janssen
may continue to Promote the Treatment of Pain with branded non-
Opioids, including Tylenol and Motrin.
b. Janssen shall not, either through Janssen or through Third Parties, engage
in any conduct that Promotes the concept that pain is undertreated, except
in connection with Promoting the use of branded non-Opioids, including
Tylenol and Motrin, for the Treatment of Pain.
C. Janssen shall not disseminate Unbranded Information, including
Unbranded Information about a medical condition or disease state, that
contains links to branded information about Opioid Products or that
otherwise Promotes Opioids or Opioid Products.
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6. Notwithstanding subsection C.5 above:
a. Janssen may Promote or provide educational information about the
Treatment of Pain with non-Opioids or therapies such as acetaminophen or
non-steroidal anti-inflammatory drugs (NSAIDs), including Promoting or
providing educational information about such non-Opioids or therapies as
alternatives to Opioid use, or as part of multimodal therapy which may
include Opioid use, so long as such non-Opioid Promotional or
educational information does not Promote Opioids or Opioid Products.
b. Janssen may provide educational information about the Treatment of Pain
related to medical procedures involving devices manufactured or sold by
Janssen, including educational information about Opioids or Opioid
Products, so long as such information does not Promote Opioids or Opioid
Products.
7. The Promotional conduct prohibited in subsection C is not prohibited insofar as it
relates to the Promotion of Opioids or Opioid Products for Cancer-Related Pain
Care or End-of-Life Care only, and so long as Janssen is identified as the sponsor
or source of such Promotional conduct.
D. No Financial Reward or Discipline Based on Volume of Opioid Sales
1. Janssen shall not provide financial incentives to its sales and marketing
employees or discipline its sales and marketing employees based upon sales
volume or sales quotas for Opioid Products;
2. Janssen shall not offer or pay any remuneration (including any kickback, bribe, or
rebate) directly or indirectly, to any person in return for the prescribing, sale, use,
or distribution of an Opioid Product; and
3. Janssen's compensation policies and procedures shall ensure compliance with the
Agreement.
E. Ban on Funding/Grants to Third Parties
1. Janssen shall not directly or indirectly provide financial support or In-Kind
Support to any Third Party that primarily engages in conduct that Promotes
Opioids, Opioid Products, or Products for the Treatment of Opioid-Induced Side
Effects (subject to subsections C.2, CA, and C.6), including educational programs
or websites that Promote Opioids, Opioid Products, or Products for the Treatment
of Opioid-Induced Side Effects, excluding financial support otherwise required by
the Agreement, a court order, or by a federal or state agency.
2. Janssen shall not create, sponsor, provide financial support or In-Kind Support to,
or otherwise operate or control any medical society or patient advocacy group that
primarily engages in conduct that Promotes Opioids, Opioid Products, or Products
for the Treatment of Opioid-Induced Side Effects.
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3. Janssen shall not provide links to any Third Party website or materials or
otherwise distribute materials created by a Third Party for the purpose of
Promoting Opioids, Opioid Products, or Products for the Treatment of Opioid-
Induced Side Effects (subject to subsections C.2, CA, and C.6).
4. Janssen shall not use, assist, or employ any Third Party to engage in any activity
that Janssen itself would be prohibited from engaging in pursuant to the
Agreement. To the extent Janssen supports trade groups engaged in Lobbying,
Janssen shall stipulate that such support not be used for any purpose prohibited by
the Agreement.
5. Janssen shall not enter into any contract or agreement with any person or entity or
otherwise attempt to influence any person or entity in such a manner that has the
purpose or foreseeable effect of limiting the dissemination of information
regarding the risks and side effects of using Opioids.
6. Janssen shall not compensate or support Health Care Providers or organizations to
advocate for formulary access or treatment guideline changes for the purpose of
increasing access to any Opioid Product through third-party payors, i.e., any
entity, other than an individual, that pays or reimburses for the dispensing of
prescription medicines, including but not limited to managed care organizations
and pharmacy benefit managers.
7. No officer or management-level employee of Janssen may concurrently serve as a
director,board member, employee, agent, or officer of any entity that primarily
engages in conduct that Promotes Opioids, Opioid Products, or Products for the
Treatment of Opioid-Induced Side Effects. For the avoidance of doubt, nothing in
this provision shall preclude an officer or management-level employee of Janssen
from concurrently serving on the board of a hospital.
8. Janssen shall play no role in appointing persons to the board, or hiring persons to
the staff, of any entity that primarily engages in conduct that Promotes Opioids,
Opioid Products, or Products for the Treatment of Opioid-Induced Side Effects.
For the avoidance of doubt, nothing in this paragraph shall prohibit Janssen from
fully and accurately responding to unsolicited requests or inquiries about a
person's fitness to serve as an employee or Board member at any such entity.
F. Lobbying Restrictions
1. Janssen shall not Lobby for the enactment of any federal, state, or local legislative
or regulatory provision that:
a. Encourages or requires Health Care Providers to prescribe Opioids or
sanctions Health Care Providers for failing to prescribe Opioids or failing
to treat pain with Opioids;
b. Has the effect of limiting access to any non-Opioid alternative pain
treatments; or
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C. Pertains to the classification of any Opioid or Opioid Product as a
scheduled drug under the Controlled Substances Act.
2. Janssen shall not Lobby against the enactment of any federal, state or local
legislative or regulatory provision that supports:
a. The use of non-pharmacologic therapy and/or non-Opioid pharmacologic
therapy to treat chronic pain over or instead of Opioid use, including but
not limited to third party payment or reimbursement for such therapies;
b. The use and/or prescription of immediate release Opioids instead of
extended release Opioids when Opioid use is initiated, including but not
limited to third parry reimbursement or payment for such prescriptions;
C. The prescribing of the lowest effective dose of an Opioid, including but
not limited to third parry reimbursement or payment for such prescription;
d. The limitation of initial prescriptions of Opioids to treat acute pain;
e. The prescribing and other means of distribution of naloxone to minimize
the risk of overdose, including but not limited to third party
reimbursement or payment for naloxone;
f. The use of urine testing before starting Opioid use and annual urine testing
when Opioids are prescribed, including but not limited to third party
reimbursement or payment for such testing;
g. Evidence-based treatment(such as using medication-assisted treatment
with buprenorphine or methadone in combination with behavioral
therapies) for OUD, including but not limited to third party reimbursement
or payment for such treatment; or
h. The implementation or use of Opioid drug disposal systems.
3. Janssen shall not Lobby against the enactment of any federal, state or local
legislative or regulatory provision expanding the operation or use of PDMPs,
including but not limited to provisions requiring Health Care Providers to review
PDMPs when Opioid use is initiated and with every prescription thereafter.
4. Notwithstanding the foregoing restrictions in subsections F.1-3, the following
conduct is not restricted:
a. Challenging the enforcement of or suing for declaratory or injunctive
relief with respect to legislation, rules, or regulations referred to in
subsection F.1;
b. Communications made by Janssen in response to a statute, rule,
regulation, or order requiring such communication;
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C. Communications by a Janssen representative appearing before a federal or
state legislative or administrative body, committee, or subcommittee as a
result of a mandatory order or subpoena commanding that person to
testify;
d. Responding, in a manner consistent with the Agreement, to an unsolicited
request for input on the passage of legislation or the promulgation of any
rule or regulation when such request is submitted in writing specifically to
Janssen from a government entity directly involved in the passage of that
legislation or promulgation of that rule or regulation; or
e. Lobbying for or against provisions of legislation or regulation that address
other subjects in addition to those identified in subsections F.1-3, so long
as the company does not support specific portions of such legislation or
regulation covered by subsection F.1 or oppose specific portions of such
legislation or regulation covered by subsections F.2-3.
5. Janssen shall provide notice of the prohibitions in subsection F to all employees
engaged in Lobbying; shall incorporate the prohibitions in subsection F into
trainings provided to Janssen employees engaged in Lobbying; and shall certify to
the Settling States that it has provided such notice and trainings to Janssen
employees engaged in Lobbying.
G. Ban on Prescription Savings Programs
1. Janssen shall not directly or indirectly offer any discounts, coupons, rebates, or
other methods which have the effect of reducing or eliminating a patient's co-
payments or the cost of prescriptions (e.g., free trial prescriptions) for any Opioid
Product.
2. Janssen shall not directly or indirectly provide financial support to any Third
Party for discounts, coupons, rebates, or other methods which have the effect of
reducing or eliminating a patient's co-payments or the cost of prescriptions (e.g.,
free trial prescriptions) for any Opioid Product.
3. Janssen shall not directly or indirectly assist patients, Health Care Providers, or
pharmacies with the claims and/or prior authorization process required for third-
party payors to approve payment for any Opioid Product.
H. General Terms
1. Janssen shall not make any written or oral statement about Opioids or any Opioid
Product that is unfair, false, misleading, or deceptive as defined under the law of
[State]. For purposes of this paragraph, "Opioid Product" shall also include
methadone and other substances when used exclusively to treat opioid abuse,
addiction, or overdose.
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2. Janssen shall not represent that Opioids or any Opioid Product(s)have approvals,
characteristics, uses, benefits, or qualities that they do not have. For purposes of
this paragraph, "Opioid Product" shall also include methadone and other
substances when used exclusively to treat opioid abuse, addiction, or overdose.
3. For the avoidance of doubt, the Agreement shall not be construed or used as a
waiver or limitation of any defense otherwise available to Janssen in any action,
and nothing in the Agreement is intended to or shall be construed to prohibit
Janssen in any way whatsoever from taking legal or factual positions with regard
to any Opioid Product(s) in defense of litigation or other legal proceedings.
4. Upon the request of the [State] Attorney General, Janssen shall provide the [State]
Attorney General with copies of the following, within thirty (30) calendar days of
the request:
a. Any litigation or civil or criminal law enforcement subpoenas or Civil
Investigative Demands relating to Janssen's Opioid Product(s); and
b. Warning or untitled letters issued by the FDA regarding Janssen's Opioid
Product(s) and all correspondence between Janssen and the FDA related to
such letters.
5. The Agreement applies to conduct that results in the Promotion of Opioids or
Opioid Products, or the Treatment of Pain inside the United States.
6. Janssen will enter into the Agreement solely for the purpose of settlement, and
nothing contained therein may be taken as or construed to be an admission or
concession of any violation of law, rule, or regulation, or of any other matter of
fact or law, or of any liability or wrongdoing, all of which Janssen expressly
denies. No part of the Agreement, including its statements and commitments,
shall constitute evidence of any liability, fault, or wrongdoing by Janssen. The
Agreement is not intended for use by any third party for any purpose, including
submission to any court for any purpose.
7. Nothing in the Agreement shall be construed to limit or impair Janssen's ability
to:
a. Communicate its positions and respond to media inquiries concerning
litigation, investigations,reports or other documents or proceedings
relating to Janssen or its Opioid Products.
b. Maintain a website explaining its litigation positions and responding to
allegations concerning its Opioid Products, including the website,
www.factsaboutourprescriptionopioids.com.
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I. Compliance with All State Laws and Regulations Relating to the Sale, Promotion,
and Distribution of Any Opioid Product
1. Janssen shall comply with all applicable state laws and regulations that relate to
the sale, promotion, distribution, and disposal of Opioids or Opioid Products,
including conduct permitted by subsection B.2,provided that nothing in this
paragraph requires Janssen to violate federal law or regulations, including but not
limited to:
a. [State] Controlled Substances Act, including all guidance issued by the
applicable state regulator(s);
b. [State] Consumer Protection Laws;
C. [State] laws, regulations, and guidelines related to opioid prescribing,
distribution, and disposal; and
d. [State Specific Laws].
J. Clinical Data Transparency
1. Janssen agrees to continue sharing clinical trial data under the Yale University
Open Data Access (YODA) Project to allow researchers qualified under the
program to access the company's proprietary data under the terms of the project.
2. In the event Yale University discontinues or withdraws from the YODA Project
agreement with Janssen, Janssen shall make its clinical research data regarding
Opioids and Opioid Products, and any additional clinical research data that
Janssen sponsors and controls regarding Opioids and Opioid Products, available
to an independent entity that is the functional equivalent of the YODA Project
under functionally equivalent terms.
K. Enforcement
1. For the purposes of resolving disputes with respect to compliance with this
Exhibit, should any of the Settling States have a reasonable basis to believe that
Janssen has engaged in a practice that violates a provision of this Exhibit
subsequent to the Effective Date, such Settling State shall notify Janssen in
writing of the specific objection, identify with particularity the provision of the
Agreement that the practice appears to violate, and give Janssen thirty (30) days
to respond in writing to the notification; provided, however, that a Settling State
may take any action if the Settling State believes that,because of the specific
practice, a threat to health or safety of the public requires immediate action.
2. Upon receipt of written notice, Janssen shall provide a good faith written response
to the Settling State's notification, containing either a statement explaining why
Janssen believes it is in compliance with this Exhibit of the Agreement, or a
detailed explanation of how the alleged violation occurred and a statement
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explaining how Janssen intends to remedy the alleged breach. Nothing in this
section shall be interpreted to limit the [State's] civil investigative demand
("CID") or investigative subpoena authority, to the extent such authority exists
under applicable law, and Janssen reserves all of its rights in responding to a CID
or investigative subpoena issued pursuant to such authority. If Janssen notifies the
Settling States in writing that two or more Settling States have notified Janssen of
alleged violations, the Settling States that provided notice of alleged violations
shall work in good faith to collectively resolve the alleged violation with Janssen
before taking any enforcement action(s).
3. The Settling States may agree, in writing, to provide Janssen with additional time
beyond thirty(30) days to respond to a notice provided under subsection K.1,
above, without Court approval.
4. Upon giving Janssen thirty(30) days to respond to the notification described
above, the Settling State shall also be permitted reasonable access to inspect and
copy relevant, non-privileged, non-work product records and documents in
possession, custody, or control of Janssen that relate to Janssen's compliance with
each provision of the Agreement pursuant to that Settling State's CID or
investigative subpoena authority.
5. The Settling State may assert any claim that Janssen has violated the Agreement
in a separate civil action to enforce compliance with the Agreement, or may seek
any other relief afforded by law for violations of the Agreement,but only after
providing Janssen an opportunity to respond to the notification described in
subsection K.1, above; provided, however, the Settling State may take any action
if the Settling State believes that, because of the specific practice, a threat to the
health or safety of the public requires immediate action.
6. In the event of a conflict between the requirements of the Agreement and any
other law, regulation, or requirement such that Janssen cannot comply with the
law without violating the terms of the Agreement or being subject to adverse
action, including fines and penalties, Janssen shall document such conflicts and
notify the Settling State of the extent to which it will comply with the Agreement
in order to eliminate the conflict within thirty (30) days of Janssen's discovery of
the conflict. Janssen shall comply with the terms of the Agreement to the fullest
extent possible without violating the law.
7. Janssen or any Settling State may request that Janssen and any Settling State meet
and confer regarding the resolution of an actual or potential conflict between the
Agreement and any other law, or between interpretations of the Agreement by
different courts. Nothing herein is intended to modify or extend the jurisdiction of
any single judicial authority as provided by law.
L. Compliance Duration
I. Subsections B-J shall be effective for 10 years from the Effective Date.
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2. Nothing in this Agreement shall relieve Janssen of its independent obligation to
fully comply with the laws of[State] after expiration of the 10-year period
specified in this subsection.
M. Compliance Deadlines
1. Janssen must be in full compliance with the provisions included this Agreement
by the Effective Date. Nothing herein shall be construed as permitting Janssen to
avoid existing legal obligations.
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EXHIBIT Q
Non-Released Entities
The following includes a non-exclusive list of non-Released Entities:
1. Actavis LLC
2. Actavis Pharma, Inc.
3. Allergan PLC
4. Allergan Finance, LLC
5. AmerisourceBergen Corporation
6. AmerisourceBergen Drug Corporation
7. Anda, Inc.
8. Cardinal Health, Inc.
9. Cephalon, Inc.
10. Collegium Pharmaceuticals
11. CVS Health Corp.
12. CVS Pharmacy, Inc.
13. Endo Pharmaceuticals Inc.
14. Endo Health Solutions Inc.
15. Mallinckrodt LLC
16. McKesson Corporation
17. McKinsey & Company Inc.
18. Par Pharmaceutical, Inc.
19. Par Pharmaceutical Companies, Inc.
20. Purdue Pharma L.P.
21. Purdue Pharma Inc.
22. SpecGx LLC
23. Teva Pharmaceuticals USA, Inc.
24. The Purdue Frederick Company
25. Walgreen Co.
26. Walgreens Boots Alliance, Inc.
27. Walmart Inc.
28. Watson Laboratories, Inc.
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EXHIBIT R
Agreement on Attorneys' Fees, Costs, and Expenses
This Agreement on Attorneys' Fees, Expenses and Costs ("Fee Agreement"), is entered
between Janssen and the Plaintiffs' Executive Committee appointed in the multidistrict litigation
in the Northern District of Ohio,In re National Prescription Opiate Litigation,No. 1:17-MD-
2804 ("MDL PEC"), in connection with the Janssen Master Settlement Agreement("Janssen
Agreement"). This Fee Agreement becomes effective on the Effective Date of the Janssen
Agreement or the date that the Consent Judgments anticipated under the Janssen Agreement
become final in 25 Settling States (whichever is later). However, the costs specified in
paragraphs II.I.1 and II.I.4 of this Fee Agreement that are to be funded pre-Effective Date by
Janssen are effective upon agreement in writing with Janssen.
I. Definitions
A. This Fee Agreement incorporates all defined terms in the Janssen Agreement,
unless otherwise defined herein, and shall be interpreted in a manner consistent
with the Janssen Agreement.
B. "Attorney." Any of the following retained through a legal contract: a solo
practitioner, multi-attorney law firm, or other legal representative of a
Participating Subdivision.
C. "Attorney Fee Fund." An account consisting of funds allocated to pay attorneys'
fees approved pursuant to Section II of this Fee Agreement established by Order
of and under the ongoing jurisdiction of the MDL Court, as provided below.
D. "Common Benefit Fund." The sub fund of the Attorney Fee Fund described in
Section II.C.
E. "Contingency Fee Fund." The sub fund of the Attorney Fee Fund described in
Section II.D.
F. "Cost and Expense Fund Administrator." The administrator appointed by the
MDL Court to administer the MDL Expense Fund and Litigating Subdivision
Cost Fund as provided in the Fee Agreement.
G. "Cost Funds." Collectively, the MDL Expense Fund and Litigating Subdivision
Cost Fund.
H. "Fee Entitlement." Any right, entitlement or expectation, including but not
limited to a fee contract, contingent fee contract, agreement, referral arrangement,
co-counsel arrangement, State Back-Stop agreement, or any other arrangement by
which counsel could receive compensation or other consideration. For the
avoidance of doubt, the scope of Fee Entitlement under paragraph II.G.3.a does
not include any Attorneys' fees associated with representation of a State.
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I. "Fee Panel." The three-person panel appointed by the MDL Court to administer
the Attorney Fee Fund and its sub funds as provided in the Fee Agreement.
J. "Litigating Subdivision Cost Fund." The cost fund described in Section II.E
herein.
K. "MDL Court." United States District Court for the Northern District of Ohio
Eastern Division, Case No. 1:17-and-2804, Judge Dan Aaron Polster.
L. "MDL Expense Fund." The cost fund described in Section II.F below.
M. "MDL PEC." The Plaintiffs' Executive Committee appointed by the MDL Court.
N. "Non-Participating Litigating Subdivision." A Litigating Subdivision that is not a
Participating Subdivision.
O. "Participating Litigating Subdivision." A Litigating Subdivision that is also a
Participating Subdivision.
P. "Participation Agreement." An agreement executed by an Attorney that
acknowledges the obligation to pay an appropriate MDL Common Benefit
Assessment.
Q. "Qualifying Representation." Legal services provided for representation of a
Participating Litigating Subdivision regarding Released Claims against Released
Entities.
R. "State Back-Stop Agreement." Any agreement by a Settling State and private
counsel for Participating Subdivisions in that State (or legislation enacted in that
State)to provide, adjust, or guarantee attorneys' fees and costs, whether from the
Attorney Fee Fund or any other source recognized in the agreement or legislation.
II. Fees and Costs
A. Total Attorneys'Fees and Costs.
1. Total attorneys' fees and costs to be paid by Janssen to Attorneys in each of
the relevant Payment Years under this Agreement shall be up to the following
amounts, subject to the provisions set forth below, including with respect to
the division of the Attorney Fee Fund into its sub funds:
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Item#11.
Attorney Fee
Fund
(Contingency MDL Expense Litigating
Fee Fund and Fund Subdivision Cost
Fund
Common
Benefit Fund
Payment $32,391,518.74 $9,615,384.61 $10,000,000.00
Year 1
Payment $35,936,883.63 $10,000,000.00
Year 2
Payment $64,482,248.52 $10,000,000.00
Year 3
Payment
Year 4 $43,720,414.21
Payment $43,720,414.21
Year 5
Payment $43,720,414.21
Year 6
Payment
$43,720,414.21
Year 7
2. The sub funds within the Attorney Fee Fund shall include the Common
Benefit Fund and the Contingency Fee Fund. The Cost Funds shall include
the MDL Expense Fund, and the Litigating Subdivision Cost Fund. The State
Counsel Fee Fund and the State Cost Fund shall be separate funds under the
control of the Settling States.
3. The Contingency Fee Fund and the Common Benefit Fund shall be
administered by a Fee Panel to be appointed by the MDL Court that will be
governed by the provisions of this Fee Agreement and shall design the process
and procedures for the allocation of fees pursuant to this Fee Agreement and
the MDL Court's Order. The Cost Funds shall be administered by the Cost
and Expense Fund Administrator to be appointed by the MDL Court who will
be governed by the provisions of this Fee Agreement and shall design the
process and procedures for the allocation of costs pursuant to this Agreement
and the MDL Court's Order.
4. The fees and costs to be paid under this Fee Agreement are available for
Attorneys engaged in Qualifying Representations only. Fees and costs to be
paid under this Fee Agreement are not available prior to the Effective Date of
the Janssen Agreement or if the Janssen Agreement does not proceed past
Janssen's determination in Section VIII.A of the Janssen Agreement. Fees
and costs to be paid under this Fee Agreement are not available for
representation of Non-Participating Subdivisions or Non-Litigating
Subdivisions and are not available for representation of private hospitals,
third-party payors,NAS claimants, personal injury/wrongful death claimants,
or any entity other than Participating Litigating Subdivisions. In addition,
fees and costs under this Fee Agreement are not available for representation of
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any individual or entity in matters other than those claims against Released
Entities, but may include a reasonable share of representations that involve
development of facts for pursuit of opioid-related claims against multiple
defendants in the pharmacy, manufacturing, and distribution chain.
B. Attorney Fee Fund and Sub Funds
1. There shall be a split of the Attorney Fee Fund into the Contingency Fee Fund
and the Common Benefit Fund. The split shall be 40%to the Contingency
Fee Fund and 60%to the Common Benefit Fund.
2. In no event shall Janssen be required to pay more into the Attorney Fee Fund
in any Payment Year than the maximum amount specified for that Payment
Year in paragraph II.A.1, which amounts are reflected in Exhibit M to the
Janssen Agreement. The amounts allocated to the Contingency Fee Fund and
the Common Benefit Fund set by the Fee Panel shall be subject to the
reductions and offsets set forth below.
3. Awards of fees from the Contingency Fee Fund shall be available to Attorneys
with Qualifying Representations of Participating Litigating Subdivisions
eligible to receive an allocation under the Janssen Agreement, as set forth in
Exhibit G to the Janssen Agreement, and shall be made applying the
Mathematical Model attached as Exhibit"A"to this Fee Agreement. The
collection of the data and calculations for the Mathematical Model has been a
cooperative effort among private counsel for a large number of Litigating
Subdivisions. The analysis has been spearheaded by Joseph Tann and
Andrew Arnold. The Fee Panel is encouraged to continue working with those
counsel in application of the Model. The Fee Panel shall oversee the
application of the Model and resolve any questions or disputes concerning the
eligibility of a Counsel to participate as required in Section II.G. The Panel is
empowered to hear disputes concerning and ensure the accuracy of the
mathematical calculation.
4. As to awards from the Contingency Fee Fund, there shall be no right of
appeal.
5. Any appeal of an award of the Fee Panel from the Common Benefit Fund will
be made to the MDL Court and be reviewed under an abuse of discretion
standard.
C. Common Benefit Fund(60% of the Attorney Fee Fund.)
1. Funds in the Attorney Fee Fund shall be allocated to the Common Benefit
Fund according to the schedule set forth below, subject to the adjustments
described in paragraph II.C.5. The payments are to be made on the following
yearly schedule, subject to the adjustments set forth below:
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Payment Year 1 $19,434,911.24
Payment Year 2 $21,562,130.18
Payment Year 3 $38,689,349.11
Payment Year 4 $26,232,248.53
Payment Year 5 $26,232,248.53
Payment Year 6 $26,232,248.53
Payment Year 7 $26,232,248.53
Total: $184,615,384.64
2. The Common Benefit Fund shall be available to compensate Attorneys
engaged in Qualifying Representations of Participating Litigating
Subdivisions who:
a. have performed work for the common benefit of all subdivisions pursuant
to the guidelines established by Judge Polster set forth in MDL 2804 and
the Order dated June 19, 2018, under docket number 636, which is
included herein by reference; and
b. satisfy the eligibility criteria set forth in Section II.G.
For purposes of Common Benefit Fund distribution, notwithstanding
paragraph II.A.4, Attorneys representing Tribal Nations litigating against
Janssen that have reached a settlement for Released Claims with Janssen
and/or Released Entities and meet the eligibility criteria in Section II.G shall
be eligible.
3. The Common Benefit Fund shall be overseen by the Fee Panel, which shall
determine the allocation of funds to eligible Attorneys consistent with this Fee
Agreement and the June 19, 2018 Order;
4. In assessing the benefits that an Attorney has conferred to Participating
Subdivisions (including non-Litigating Subdivisions) and/or Tribes for
purposes of any compensation decision, the Fee Panel shall give significant
weight to the extent to which(i) the Attorney and his or her clients have
contributed to increasing (or reducing) the Initial Participation Tier achieved
through participation in the Janssen Agreement, (ii) the Attorney and his or
her clients have contributed to increasing (or reducing) the amounts achieved
under Incentive Payments A-D through participation in the Janssen
Agreement, and(iii) the Attorney and his or her clients have contributed to the
potential triggering of any suspension, reduction, or offset of Settlement
payment amounts under the Janssen Agreement. The panel may also
consider additional fee recoveries the Attorney may potentially obtain,
including,but not limited to, from State Back-Stop Agreements,
representations of States or Tribal Nations, representations of other clients in
opioids-related matters, or through the representation of Subdivision clients,
whether they participated in the Janssen Agreement or not. It is the intent of
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this provision to recognize that the goal of the Janssen Agreement is to
provide for maximum participation by the Subdivisions, maximum abatement
funding for all Subdivisions nationally, and the maximum peace for Released
Entities. Therefore, representing a Non-Participating Subdivision does not
further the goal of the Janssen Agreement, and should not be considered
Common Benefit because it does not increase funds available to Participating
Subdivisions' abatement programs. Representing Later Litigating
Subdivisions is antithetical to the Janssen Settlement, detracts from Common
Benefit, and is addressed by the ethics opinion discussed in paragraph II.I.4.
The Fee Panel shall consider this concept of"common detriment" set forth in
this paragraph in all of its decision making with respect to the allocation of the
Attorney Fee Fund among Attorneys, as well as, in its discretion, any offsets
provided to Janssen as set forth in paragraph II.C.6 and Section II.H. The Fee
Panel shall consider the totality of the Attorney's Participating Litigating
Subdivisions as compared to the Attorney's Non-Participating Litigating
Subdivisions; the Parties recognize that, although the goal is for 100%
participation, Attorneys with a higher number of clients have a higher
probability of having one or more non-Participating Litigating Subdivision.
As used in this paragraph II.C.4, "client" or"representing" a Subdivision shall
include any Litigating Subdivision as to which the Attorney has a Fee
Entitlement.
5. As set forth in paragraph II.C.6 and Section II.H, the Fee Panel must consider
the factors described in paragraph II.C.4 to determine how and whether to
reduce the amounts to be paid by Janssen under this Fee Agreement and to
determine how to allocate funds among Attorneys. They may also, at their
discretion, consider other factors. Any reduction in payment obligation or
credit to be given Janssen in this Fee Agreement shall be applied against
Payment Year 7 and working backwards. Any reduction to an Attorney not
credited to Janssen shall be allocated to attorneys whose Litigating
Subdivision clients participated in the settlement by the Initial Participation
Date.
6. The amounts to be provided as a credit or offset to Janssen from the Common
Benefit Fund shall depend on the relevant Participation Tier achieved, set
forth in Exhibit H of the Janssen Agreement, as follows:
a. At Participation Tier 1 or below, the Common Benefit Fund payments to
be paid by Janssen shall be reduced as follows:
i. With respect to any Attorney seeking payment from the Common
Benefit Fund, the Fee Panel shall compare the aggregate allocation
that Participating Litigating Subdivisions with which the Attorney has
a Fee Entitlement would receive using the negotiating class allocation
metrics with the aggregate amount that all Litigating Subdivisions
(Participating and Non-Participating)with which the Attorney has a
Fee Entitlement would receive using the negotiating class allocation
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metrics,provided that only Litigating Subdivisions in Settling States
shall be considered for this ratio. The Fee Panel will multiply the
amount to be paid to that Attorney from the Common Benefit Fund by
that ratio, reduce the Attorney's award by a maximum reduction of
15%, and the dollar amount of such reduction shall be deducted,
dollar-for-dollar, from the amount owed by Janssen to the Common
Benefit Fund of the Attorney Fee Fund.
ii. In the event that any Non-Participating Subdivision that is (a)under
the jurisdiction of the MDL Court or(b) represented by an Attorney
that is obligated to pay into the MDL Common Benefit Fund pursuant
to a Participation Agreement, an order of the MDL Court, or any other
arrangement settles with or wins a judgment against a Released Entity
separate from the Janssen Agreement, and such settlement or judgment
results in a common benefit fee assessment or fee payment into the
MDL Common Benefit Fund during the time of Janssen's obligation to
pay fees under this Fee Agreement, Janssen's obligation to pay into the
Common Benefit Fund shall be reduced dollar-for-dollar for any
amount of such fee assessments or payments (in the aggregate based
on all reductions in this subparagraph II.C.6.a.ii) that exceed the
reductions in subparagraph II.C.6.a.i.
iii. For the avoidance of doubt, in Tier 1 for each settlement or judgment
with Janssen that results in an assessment or payment to the MDL
Common Benefit Fund, that payment shall result in an offset for
Janssen, unless the assessment or payment occurs after the Payment
Date for Year 7.
b. At Participation Tier 2, the Common Benefit Fund payments to be made
by Janssen shall be reduced only as follows:
i. Reduction by the Fee Panel. With respect to all Attorneys making an
application that seeks payment from the Common Benefit Fund, the
Fee Panel shall, following a determination that an Attorney is eligible
under Section II.G, apply the criteria specified in paragraph II.C.4 in
determining whether the lack of participation by Subdivisions with
which an Attorney has a Fee Entitlement has resulted in a reduction in
the Participation Tier achieved, reduction in benefit to Participating
Subdivisions as a result of reductions in Incentives A-D, and/or
potential triggering of a suspension, reduction, or offset under the
Janssen Agreement. If the Fee Panel concludes that such a reduction
has occurred, it must consider(1)the relative size of the Non-
Participating Subdivision, as adjusted by the severity measures
reflected in Exhibit H (governing the Participation Tiers) of the
Janssen Agreement, and the impact of its non-participation on the
Janssen Agreement as a whole (including amounts of Incentive
Payments and triggering of suspensions, reductions, or offsets); (2)
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whether and by how much the payment to the Attorney from the
Common Benefit Fund should be reduced as a result of the impact of
such non-participation on Participating Subdivisions; and(3)whether
some or all of said reduction should revert to Janssen due to the
reduction in peace obtained from the Janssen Agreement.
Consideration of the factors discussed in this subparagraph and
paragraph II.C.4 is mandatory. The decision whether to (and by how
much)to reduce payments by Janssen or to reduce the payment to any
Attorney based on the factors in paragraph II.C.4 shall be in the sole
discretion of the Fee Panel.
ii. Offsets.
(1) In the event that any Non-Participating Subdivision that is (a)
under the jurisdiction of the MDL Court or(b) represented by an
Attorney that is obligated to pay into the MDL Common Benefit
Fund pursuant to a Participation Agreement, an order of the MDL
Court, or any other arrangement settles with or wins a judgment
against a Released Entity separate from the Janssen Agreement,
and such settlement or judgment results in a common benefit fee
assessment or fee payment into the MDL Common Benefit Fund
during the time of Janssen's obligation to pay Common Benefit
Fees under this Fee Agreement, Janssen's obligation to pay into
the Common Benefit Fund shall be reduced dollar-for-dollar up to
the amount of the fee assessment or payment, except that such
amount shall be capped at 7.5% of the amount of the settlement or
judgment. Such reduction shall be taken first from Payment Year
7 of Janssen's payments to the Common Benefit Fund of the
Attorney Fee Fund up to the full amount of Janssen's payment
obligation in Payment Year 7, then from Payment Year 6, and so
on.
(2) For the avoidance of doubt, for each settlement or judgment with
Janssen that results in an assessment or payment to the MDL
Common Benefit Fund, that payment shall result in an offset for
Janssen,unless the assessment or payment occurs after the
Payment Date for Payment Year 7.
c. At Participation Tier 3, the reductions to the Attorney Fee Fund shall be
the same as set forth in subparagraph II.C.6.b, except that the cap on each
offset shall be 5% of the amount of such settlement or judgment.
d. At Participation Tier 4, there shall be no reductions to Janssen's
obligations to make payment into the Common Benefit Fund,but the
principles set forth in paragraph II.C.4 shall continue to apply.
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D. Contingency Fee Fund. (40% of the Attorney Fee Fund.)
1. Funds from the Attorney Fee Fund shall be allocated to the Contingency Fee
Fund on the following yearly schedule, subject to the adjustments set forth
below:
Payment Year 1 $12,956,607.50
Payment Year 2 $14,374,753.45
Payment Year 3 $25,792,899.41
Payment Year 4 $17,488,165.68
Payment Year 5 $17,488,165.68
Payment Year 6 $17,488,165.68
Payment Year 7 $17,488,165.68
Total: $123,076,923.09
2. The Contingency Fee Fund shall be available to compensate Attorneys
engaged in Qualifying Representations of Participating Litigating
Subdivisions that meet the criteria set forth in Section II.G.
3. The Contingency Fee Fund shall be available to Attorneys who
a. represent Litigating Subdivisions that are Participating Subdivisions,
whether their actions are filed in state or federal court, and
b. meet the eligibility criteria of Section II.G.
c. Participation in the Contingency Fee Fund by counsel that have a case that
is not subject to the jurisdiction of the MDL Court shall not create,
provide, or waive jurisdiction of the MDL Court over that Litigating
Subdivision, that case or Attorneys, other than to oversee the fairness of
the distribution process, and enforcement of this Fee Agreement.
4. The amounts owed by Janssen to the Contingency Fee Fund shall depend on
the relevant Participation Tier set forth in Exhibit H of the Janssen Agreement
as follows:
a. At Participation Tiers 1, 2 and 3, the Contingency Fee Fund payments
shall be reduced as follows:
i. For Non-Settling States, the Contingency Fee Fund payments shall
first be reduced by the amounts identified by the Fee Panel,pursuant
to paragraph II.H.6, that would have been owed to counsel for
Litigating Subdivisions in Non-Settling States, had those States and
those Litigating Subdivisions been Settling States and Participating
Subdivisions.
ii. Following the calculation in subparagraph II.D.4.a.i, the Contingency
Fee Fund payments shall be reduced to reflect the non joinder of
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Litigating Subdivisions in Settling States by subtracting the amounts
identified by the Fee Panel,pursuant to paragraph II.H.6, that would
have been owed to counsel for Non-Participating Litigating
Subdivisions in Settling States had such Litigating Subdivisions been
Participating Subdivisions.
b. At Participation Tier 4, there shall be no reductions in the Contingency
Fee Fund.
c. In the event that Janssen, prior to the Effective Date of the Janssen
Agreement, settles with any Litigating Subdivision and,under such
settlement agreement pays attorneys' fees, the Fee Panel shall treat those
Litigating Subdivisions as Participating Litigating Subdivisions and,
applying the same criteria applicable to all Attorneys for Participating
Litigating Subdivisions, determine what amount they would have been
paid from the Contingency Fee Fund if they had become Participating
Subdivisions under the Janssen Agreement without such prior settlement.
That sum, rather than being paid to the Attorney for the previously settling
Litigating Subdivision, shall be credited and/or returned to Janssen as if
determined under(a)(ii) above, except that such credit shall not be greater
than the amount to the Attorneys paid under the Litigating Subdivision's
prior settlement agreement.
E. Litigating Subdivision Cost Fund.
1. Janssen shall pay $30,000,000.00 into the Litigating Subdivision Cost Fund,
according to the schedule set forth below:
Payment Year 1 $10,000,000.00
Payment Year 2 $10,000,000.00
Payment Year 3 $10,000,000.00
Total $30,000,000.00
2. The Litigating Subdivision Cost Fund shall be available to compensate
Attorneys for costs and expenses arising out of representation of Participating
Litigating Subdivisions or to compensate Participating Litigating Subdivisions
for direct in-house costs for expenditures related to their litigation against
Janssen including the cost of in-house employees. No funds in the Litigating
Subdivision Cost Fund may be used to compensate the costs incurred by Non-
Participating Subdivisions or Non-Litigating Subdivisions or costs and
expenses arising out of representation of any such Subdivision. In allocating
the Litigating Subdivision Cost Fund, the Administrator shall not allocate any
funds for costs incurred after July 21, 2021.
3. During the period between July 21, 2021, and the Effective Date, the MDL
PEC, as well as Litigating Subdivisions eligible to claim costs from the
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Litigating Subdivision Cost Fund, shall make best efforts to cease litigation
activity against Janssen, including by jointly seeking stays or severance of
claims against Janssen, where feasible, or postponements if a motion to stay or
sever is not feasible or is denied, so long as such actions are not otherwise
detrimental to the Litigating Subdivision.
4. In the event that Janssen, prior to the Effective Date of the Janssen
Agreement, settles with any Litigating Subdivision and, under such settlement
agreement pay costs to the Litigating Subdivision or its Attorney, the MDL
Cost and Expense Fund Administrator shall treat those Litigating Subdivisions
as Participating Litigating Subdivisions and, using the same criteria applicable
to all applicants to the Litigating Subdivision Cost Fund, determine what
amount in costs the Litigating Subdivision or its Attorney would have been
paid from the Subdivision Cost Fund if they had settled under the Janssen
Agreement. That sum, rather than being paid to the Attorney or the previously
settling Litigating Subdivision, shall be credited and/or returned to Janssen,
except that such sum shall not be greater than the amount paid under the
previously settled Litigating Subdivision's settlement agreement.
5. The MDL Court shall appoint a Cost and Expense Fund Administrator, who
shall develop a process and criteria,with input from participating counsel, by
which to a) determine the distribution of amounts from the MDL Expense
Fund in pursuit of the claims against Janssen; and b)receive and evaluate
applications from Participating Litigating Subdivisions, whether filed in
Federal Court or State Court, to seek reimbursement from the Litigating
Subdivision Cost Fund for eligible costs under Section II.E.2 in pursuit of the
claims against Janssen. The Cost and Expense Fund Administrator shall
require transparency from all applicants as to any other sources for
compensating Attorneys for Litigating Subdivisions for costs incurred. The
Cost and Expense Fund Administrator shall be compensated from the Fund.
6. In the event that the total amount of reimbursements from the Litigating
Subdivision Cost Fund approved as reasonable by the Cost and Expense
Administrator is less than the $30,000,000.00, any remaining funds shall
revert to Janssen.
F. MDL Expense Fund.
I. In Payment Year I of the Janssen Settlement, Janssen shall pay the following
amount into the MDL Expense Fund:
MDL Expense Fund 1 $9,615,384.61
2. The MDL Expense Fund shall be released following the Effective Date of this
Fee Agreement without any delay to reimburse the MDL Counsel for an
agreed-to portion of the expenses incurred, as approved by the Cost and
Expense Fund Administrator. The MDL Expense Fund will be paid directly
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to the MDL Cost Account, set up by MDL Order and will be administered
under the ongoing jurisdiction of the MDL Court, as provided below. No
funds may be used to compensate the costs incurred by Non-Participating
Subdivisions or to compensate any Attorney for costs incurred in representing
one or more Non-Participating Subdivisions.
3. In allocating the MDL Expense Fund, the Administrator shall not allocate any
funds for costs incurred after July 21, 2021, unless the Administrator
determines that there are sufficient funds to cover all subdivision costs
incurred prior to July 21, 2021 and that special circumstances exist to justify
costs incurred following the public announcement of the Janssen Agreement.
G. Eligibility.
1. It is the intention of all parties participating in the Fee Panel process that there
should be total transparency to the Fee Panel and to all fund participants. In
connection with the process to be developed by the Fee Panel, any and all
monies in attorney's fees, including referral fees, expenses paid, promises for
payment, or any other Fee Entitlement, to any applicant in any opioid
litigation shall be disclosed to the Fee Panel as a condition of participating in
the Attorney Fee Fund and prior to an award from the Fee Panel. Any
payment, expectation of payment or perceived entitlement to participate in a
State Back-Stop Agreement or any other agreement reached with a Settling
State or any Subdivision or any other source regarding payment of fees must
be disclosed to the Fee Panel. Similarly, any right to payment from any other
fund, for example a fund for payment to lawyers representing Settling States
or Tribal Nations or Subdivisions shall be disclosed to the Fee Panel. Because
it is anticipated that there will be multiple firms listed on contingent fee
agreements with Litigating Subdivisions, the Fee Panel shall establish
procedures, with input from Attorneys for Participating Litigating
Subdivisions, for who should petition for fees from such groups and to whom
the fee shall be paid and thereafter distributed to co-counsel in accordance
with applicable agreements. For the avoidance of doubt, all Attorneys that are
part of such groups must meet the eligibility criteria in paragraph II.G.3, must
be subject to the criteria set forth in paragraph II.C.4, and must be disclosed to
the Fee Panel.
2. An Attorney may apply for and recover attorneys' fees from the Common
Benefit Fund, the Contingency Fee Fund, and the Litigating Subdivision Cost
Fund and any fund created by a past or future State Back-Stop Agreement,
provided the Attorney satisfies the requirements relevant to each such fund
and requirements for disclosure to the Fee Panel.
3. An Attorney may not receive any payment from the Attorney Fee Fund
(which includes both the Contingency Fee Fund and the Common Benefit
Fund)unless the following eligibility criteria are met and annually certified by
the Attorney:
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a. The Attorney must expressly waive the enforcement against the Litigating
Subdivision client of all Fee Entitlements (other than under State Back-
Stop Agreements) arising out of or related to any or all Qualifying
Representations of any Participating Litigating Subdivision prior to
applying for attorneys' fees from the Attorney Fee Fund or costs from the
Cost Funds. All applications for attorneys' fees or costs under this Fee
Agreement shall include an affirmation by the Attorney of such waiver
and notice to the client(s) of such waiver. Such waiver shall not preclude
the Attorney from submitting such Fee Entitlements to the Fee Panel as a
factor for consideration in allocating payments from the Attorney Fee
Fund or in connection with a State Back-Stop Agreement. For the
avoidance of doubt, no Attorney may recover fees or costs under this Fee
Agreement unless the Attorney expressly agrees not to enforce Fee
Entitlements as to each and every Participating Litigating Subdivision
represented by that Attorney, but such Attorneys may participate in and
receive funds from a State Back-Stop Agreement.
b. The Attorney must represent that s/he has no present intent to represent or
participate in the representation of any Later Litigating Subdivision or any
Releasor with respect to Released Claims against Released Entities.
c. The Attorney must represent that s/he has not and will not engage in any
advertising or solicitation related to Released Claims against Released
Entities where such advertising or solicitation relates to a representation
that the Attorney could not undertake consistent with the ethics opinion
referenced in paragraph II.I.4.
d. The Attorney must represent s/he will not charge or accept any referral
fees for any Released Claims brought against Released Entities by Later
Litigating Subdivisions. For the avoidance of doubt, this representation
shall not prohibit Attorneys from receiving allocated shares of any future
common benefit assessments arising out of settlements or judgments with
Later Litigating Subdivisions represented by other Attorneys that are the
result of the MDL Court's Common Benefit order.
e. The Attorney may not have and must represent that s/he does not have a
Fee Entitlement related to a Later Litigating Subdivision.
f. The Attorney must certify that s/he has reviewed the ethics opinion
referenced in paragraph II14 and will act in conformity with such
opinion.
g. The Attorney must fully disclose the participation, or the anticipation of
participation, in any agreement with a Settling State or Participating
Subdivision concerning fees arising out of or related to the Janssen
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Agreement, including any fees paid or anticipated to be paid or any State
Back-Stop Agreement.
h. The Attorney must identify for the Fee Panel whether s/he utilized state
litigation work product or MDL work product, including but not limited to
ARCOS data, document repositories, experts developed in the MDL, and
deposition transcripts. The Attorney must identify whether s/he signed the
MDL Participation Agreement, and for which case(s) it was signed.
i. Any Attorney who applies for fees from one or both Funds must represent
that, having exercised his/her independent judgment, s/he believes the
Janssen Agreement to be fair and will make or has made best efforts to
recommend the Janssen Agreement to his or her Subdivision clients in
Settling States. For avoidance of doubt, each Attorney is expected to
exercise his or her independent judgment in the best interest of each client
individually before determining whether to recommend joining the
settlement. All applications for attorneys' fees or costs under this section
shall include an affirmation by the Attorney in compliance with this
Subsection.
4. No Attorney receiving fees under this Fee Agreement may apply for or
recover from the Attorney Fee Fund fees arising from representing a Non-
Settling State or a Non-Participating Subdivision. All applications for
attorneys' fees under this Section shall include an affirmation by the Attorney
of compliance with this Section.
5. An Attorney who has filed an application under this section and received an
award of attorneys' fees shall provide a certification of compliance with the
Sections of this Fee Agreement annually during the years upon which they are
still entitled to receive attorneys' fee payments.
6. If, at any time, the Attorney is unable to make the representations set forth in
this Section, such representations become untrue, or the Attorney falsely
represents compliance with the eligibility criteria, the Attorney shall cease to
be eligible to receive funds from the Attorney Fee Fund until further review
by the Fee Panel of the Attorney's eligibility under and compliance with this
Section II.
7. If an Attorney has a Fee Entitlement with a Later Litigating Subdivision or
otherwise becomes unable to reaffirm compliance with the eligibility criteria
set forth above, the Attorney shall notify Janssen and the Fee Panel. For the
avoidance of doubt, any Attorney who undertakes any new representation of,
or has a Fee Entitlement with, a Later Litigating Subdivision shall be
prohibited from receiving any future funds from the Attorney Fee Fund. If an
Attorney fails to notify Janssen and the Fee Panel of such Fee Entitlement
with a Later Litigating Subdivision, the Attorney shall be required to refund
amounts previously paid.
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8. In the event that an Attorney is deemed ineligible by the Fee Panel (whether
based on its initial application or subsequent recertification), the Fee Panel
shall provide notice to the Attorney and give the Attorney 30 days to provide
additional information such that the Fee Panel could re-consider the
Attorney's eligibility.
9. To the extent that an Attorney has a Fee Entitlement with a Participating
Subdivision and is authorized to bring Released Claims against Released
Entities, but such authorization is, in scope, less broad than the category of
Released Claims set forth in the Janssen Agreement, such Attorney may
participate fully in both the Contingency Fee Fund and the Common Benefit
Fund, without any reduction imposed by the Fee Panel due to the scope of the
authorization, so long as the Participating Subdivision fully releases all
Released Claims against Released Entities.
10. Attorneys applying to the Attorney Fee Fund knowingly and expressly agree
to be bound by the decisions of the Fee Panel, subject to the limited appeal
rights set forth in this Fee Agreement, and waive the ability to assert the lack
of enforceability of the allocation reached through the arbitration procedures
outlined herein.
H. Calculation of Amounts Due.
1. The Fee Panel shall be solely responsible for determining the amount of fees
to be paid to each Attorney and each Participating Subdivision that applies
under this Section. None of the Released Entities shall have any
responsibility, obligation, or liability of any kind whatsoever with respect to
how attorneys' fees are calculated under this Section, except that the Fee
Panel may receive information from Janssen as to (a)the identity of
Participating,Non-Participating, Litigating, Later Litigating, and Non-
Litigating Subdivisions; (b) the impact of non-participation by a Litigating
Subdivision as is relevant to the Fee Panel's determination in paragraph
II.C.4; and(c) such other information as Janssen may voluntarily elect to
provide.
2. The Fee Panel shall establish procedures for the arbitration process consistent
with this Fee Agreement and orders of the MDL Court. Such procedures may
include submission of documentary and/or other evidence, interviews with
applicants and/or other counsel (including counsel for Janssen) that the Fee
Panel deems appropriate, and/or other means of creating a record upon which
fee awards will be based.
3. In making determinations under this Fee Agreement, the Fee Panel must apply
the eligibility criteria set forth in Section II.G of this Fee Agreement and the
criteria set forth in Section II. In addition, the Fee Panel will give
consideration in regard to Common Benefit awards to the Johnson factors, as
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well as the following factors (which factors may be applied and given relative
weight in the Fee Panel's discretion):
a. The Attorney's contemporaneously recorded time and labor dedicated to
Qualifying Representations along with the Attorney's financial
commitment to such Qualifying Representations. Claimed"time"will not
be automatically accepted by the Fee Panel but will be critically reviewed
and given substantially more weight and consideration if such time was
subject to the audit process described in any Pretrial Order(s) governing
the collection of common benefit time;
b. The novelty, time, and complexity of the Qualifying Representations;
c. The skill requisite to perform legal services properly and undesirability of
the case;
d. The preclusion of other employment by the Attorney due to time dedicated
to Qualifying Representations;
e. The "common benefit," if any, alleged to have been conferred by the
Attorney and whether such common benefit work product by that Attorney
was used by others in parallel litigations against Released Entities whether
within or outside the MDL,provided that any Attorney claiming that s/he
substantially benefited cases other than those in which s/he entered an
appearance as counsel must substantiate such claims by proffering factual
support, such as proper supporting affidavits or other documents as
determined by the Fee Panel with input from Attorneys for Participating
Litigating Subdivisions;
f. Any"common detriment," as set forth in paragraph II.C.4.
g. Any contingent fee agreement or other Fee Entitlement with Participating
Subdivisions, enforcement of which, except for State Back-Stop
Agreements, are waived in conjunction with the application, the nature
and extent of any work for those Participating Subdivisions,whether such
Participating Subdivisions actively litigated and, if so, the nature and
procedural history of such case(s);
h. The experience, reputation, and ability of the Attorney;
i. Whether the Attorney's clients brought Released Claims against Released
Entities;
j. The status of discovery in cases primarily handled by the Attorney;
k. The nature of any work by the Attorney on"bellwether" cases or cases
that were similarly active in litigation;
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1. Any pressure points successfully asserted by the Attorney in cases against
Janssen or any risk for Janssen created by the Attorney in cases against
them;
in. Any risk for defendants created by applicants in cases against Janssen;
n. Successful and unsuccessful motion practice in cases worked on by the
Attorney;
o. The date of filing of any cases filed by the Attorney;
p. Obtaining consolidation of the litigation in the Attorney's jurisdiction;
q. The number and population of entities represented by the Attorney and the
fees that would have been awarded under extinguished contingent fee
arrangements;
r. Whether the Attorney's clients brought claims against Janssen;
s. Whether the Attorney has had a leadership role in the litigation,whether in
state or federal court;
t. Whether the Attorney has had a leadership role in any negotiations aimed
at resolving the litigation;
u. Whether the Attorney's cases have survived motions to dismiss;
v. The extent to which the Attorney contributed to the work product used for
the common benefit of opioids litigants, including, without limitation,
work on ARCOS data, Prescription Data Monitoring Programs, IQVIA
data, depositions, document production and analysis experts, motions,
briefs and pleadings, trial preparations, and trials;
w. The extent to which litigation was done prior to and contributed to
completion of settlement negotiations, as distinct from litigation that was
done litigating after the announcement of the Janssen Agreement, such
latter litigation both being of less value and potentially resulting a
common detriment to the settlement process; and
x. Any other factors that the Fee Panel finds to be appropriate to consider
after input from applicants to the Attorney Fee Fund.
4. The Fee Panel shall develop procedures for receiving a single application,
which may be updated or amended based on new information(such as
participation by additional Litigating Subdivisions) from each Attorney
seeking compensation from the Attorney Fee Fund pursuant to processes and
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procedures developed by the Fee Panel, which shall not be inconsistent with
this Fee Agreement. Any request for attorneys' fees not included on the
single application or through the updating/amendment process designed by the
Fee Panel shall be deemed waived. For purposes of transparency and to
permit the Fee Panel to conduct its work, the application from each Attorney
shall, at a minimum, require each Attorney to
a. Identify all Litigating Subdivisions for which s/he is seeking payment
from the Attorney Fee Fund;
b. Identify all Subdivisions in both Settling and Non-Settling States (and,
where applicable, Tribal Nations)with respect to which s/he has a Fee
Entitlement with respect to Relevant Claims against Released Entities, and
identify all co-counsel in such cases;
c. Identify which of those Subdivisions are Participating Subdivisions and
which are not (with similar information for Tribal Nations, where
applicable);
d. Specify the specific fund or funds within the Attorney Fee Fund from
which the Attorney is seeking compensation;
e. Demonstrate his or her eligibility for compensation from the relevant sub
funds within the Attorney Fee Fund pursuant to the criteria set forth for
the relevant sub fund;
f. Identify any and all Fee Entitlements from representations of States, Tribal
Nations, or other plaintiffs related to Released Claims against Released
Entities or in opioids-related matters;
g. Notwithstanding "a-f' above, the Panel may consider a supplemental
application if the Attorney shows good cause why circumstances exist that
will lead to consideration for additional Common Benefit award.
Examples would include, but are not limited to, an Attorney having Non-
Participating Litigating Subdivision clients that subsequently become
Participating Subdivisions, a Bar Date passes that increases participation
or the Participation Tier, or an Allocation Agreement is reached.
5. With respect to the Common Benefit Fund, the Fee Panel shall (subject to any
applicable MDL Court Order):
a. Review the applications of all Attorneys seeking compensation from the
Common Benefit Fund, including determining eligibility for each
Attorney as set forth in Section II.G.
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b. Reduce, on an annual basis, Janssen's payment obligations, as set forth in
paragraph II.C.5. The Panel shall inform Janssen and the MDL PEC of all
such amounts and adjust Janssen's payment obligations accordingly.
c. Using criteria set forth in Sections II.0 and II.I, allocate amounts from the
Common Benefit Fund to eligible Attorneys, including payment amounts
for each Payment Year. In making such allocations (regardless of the
Participation Tier achieved), the Panel shall apply the principles set forth
in paragraph II.C.4 and shall allocate any reduction in the payments of
Janssen specified in paragraph II.C.5 to the amounts paid to Attorneys
with a Fee Entitlement to Litigating Subdivisions that are not Participating
Subdivisions.
6. With respect to the Contingency Fee Fund, the Fee Panel shall:
a. Review the applications of all Attorneys seeking compensation from the
Litigating Subdivision Fee Fund, including determining eligibility for each
Attorney as set forth in Section II.G.
b. Apply the Mathematical Model in Exhibit A.
c. Use such allocations to reduce payments, on an annual basis, the payment
obligations of Janssen to the Attorney Fee Fund as set forth in paragraph
II.D.4, and distributions therefrom, and inform Janssen and the MDL PEC
of all such adjustments.
7. To the extent that there is a dispute about the calculations of the Fee Panel
related to the amounts that Janssen is required to pay(including application of
any reductions or offsets under this Fee Agreement), such disputes shall be
presented to the Fee Panel and any disputed funds be paid into/held in escrow.
The Fee Panel shall resolve such disputes expeditiously, with either Party
having the right to seek review from the MDL Court.
8. For purposes of determination of fee or cost awards, allocations, reductions,
and possible reversions under this Fee Agreement, unless specified otherwise
a Subdivision will be considered a Non-Participating Subdivision if it is not a
Participating Subdivision as of the deadline for the application for the fee or
cost award at issue (or, if the determination does not involve a specific
application, the date on which the record for such determination closes).
9. In the event that the Fee Panel, through the use of the Mathematical Model set
forth in Exhibit A, allocates funds from the Contingency Fee Fund for an
Attorney based on a Qualifying Representation of a Participating Litigating
Subdivision or allocates cost to such Participating Litigating Subdivision and
that Subdivision is in a Settling State in which the Consent Judgment has not
been approved, such funds shall be placed into escrow until the Consent
Judgment is approved, after which time they shall be released.
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Item#11.
I. Miscellaneous.
1. The costs associated with the Fee Panel prior to the Effective Date of the
Attorney Fee Agreement shall be funded by Janssen. The Fee Panel shall
charge an hourly rate that previously has been approved by a federal or state
court and shall provide a budget and a cap for such work prior to the Effective
Date, which shall be approved by Janssen and such approval shall not be
unreasonably withheld. Janssen shall receive a refund for any such payment
of pre-Effective Date costs from interest that accrues on the monies in the
Attorney Fee Fund(including interest that accrues during such time as the
Attorney Fee Fund monies are in escrow prior to the Effective Date of the
Janssen Agreement), up to the amount of such costs. Post-Effective Date, the
cost of the Fee Panel shall be charged against the applicable Fee Fund based
on allocation by the Fee Panel and shall not be otherwise funded by Janssen.
The costs associated with the Cost and Expense Fund Administrator shall be
paid from funds in the MDL Expense Fund and the Litigating Subdivision
Cost Fund and shall not be otherwise funded by Janssen.
2. The MDL PEC will seek, and the Attorneys General for Settling States and
Janssen will not oppose, a Common Benefit Fee Order requiring an
assessment of 7.5% on the gross recovery(by judgment or settlement) of any
Non-Participating Subdivision that is subject to the federal court jurisdiction,
represented by a MDL PEC firm, represented by any Attorney receiving fees
from the Common Benefit Fund, represented by any Attorney that signed a
Participation Agreement or paid in a case otherwise under the jurisdiction of
the MDL Court.
3. The MDL PEC shall provide to Janssen information they have that identifies
Attorneys who represent Litigating Subdivisions who are not Participating
Subdivisions and who have an obligation to pay a common benefit
assessment, either due to the MDL Court's orders or having signed a
Participation Agreement.
4. The MDL PEC shall retain ethics counsel of its choice to provide an opinion
that addresses the compliance of its ethical obligations, as it relates to the
Janssen Agreement. Such opinion shall address the issue of the potential
conflict of interest for an Attorney that had represented a Participating
Subdivision also representing a Later Litigating Subdivision as defined in the
Janssen Agreement. This Subsection shall be enforceable to the extent
permitted by the equivalent to Rules 1.16 and 5.6 of the ABA Model Rules of
Professional Conduct in the relevant jurisdictions. The opinion shall be
provided to Janssen as soon as it is completed and, in any event,prior to July
31, 2021 and shall be disseminated to counsel eligible to apply to the Attorney
Fee Fund within 30 days of the announcement of the Janssen Agreement. The
MDL PEC represents that it will comply with this opinion until the Reference
Date and thereafter if the Janssen Agreement proceeds.
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5. Participating Subdivisions agree to instruct their counsel to treat information,
work product and expert materials as secret under Rule 1.6 of the ABA Model
Rules of Professional Conduct. Accordingly, an Attorney shall not share
information or work product with, or experts or materials to, non-participants
(other than the Attorney's own current clients or their lawyers, consultants,
experts or other representatives or agents). However, nothing herein shall
prevent MDL Leadership or PEC Counsel from fulfilling their obligations in
any MDL and the MDL Court Order.
III. Miscellaneous
A. Termination. If the Janssen Agreement does not proceed past the Reference Date,
whether because Janssen does not determine to proceed or for any other reason, this Fee
Agreement shall be null and void, Janssen shall have no obligation to make any payments under
this Fee Agreement, and Janssen and the PEC shall take such steps as are necessary to restore the
status quo ante.
B. MDL Court Consideration. This Fee Agreement shall be attached as an exhibit to
the Janssen Agreement. This Fee Agreement shall also be submitted by Janssen and the MDL
PEC to the MDL Court for approval pursuant to the motion and order that shall be attached, prior
to the Preliminary Agreement Date of the Janssen Agreement, as Exhibit B.
1. In the event that the MDL Court, through an order, makes any change to the
amounts potentially to be paid by Janssen under this Fee Agreement, makes
any change to the Fee Panel's consideration of the factors set forth in
paragraph II.C.4, or any other material change to the draft Order attached as
part of Exhibit B or the terms of this Fee Agreement, Janssen and the MDL
PEC shall meet and confer concerning such changes.
2. If Janssen and the MDL PEC are unable to reach agreement and revisions to
this Fee Agreement in the event discussed in paragraph III.B.1, this Fee
Agreement shall be null and void, Janssen shall have no obligation to make
any payments under this Fee Agreement, and Janssen and the MDL PEC shall
take such steps as are necessary to restore the status quo ante.
C. Amendment. Once the MDL Court has entered an order implementing this Fee
Agreement, this Fee Agreement can only be amended by (1) written agreement of Janssen and
the MDL PEC and(2) approval by the MDL Court.
D. Jurisdiction and Enforcement. The MDL Court shall have exclusive and ongoing
jurisdiction over the enforcement and implementation of this Fee Agreement as set forth herein.
The MDL PEC shall be the Authorized Party to enforce this Fee Agreement, as to the payment
obligations of Janssen as set forth in this section, and as to Attorneys making application to the
Funds under this Fee Agreement. Solely for purposes of assessing or allocating common benefit
fees, the MDL Court will continue to have jurisdiction over the work product developed in the
MDL Court by and under the direction of the MDL PEC with respect to claims against Janssen,
including data and documents, depositions, expert reports, briefs and pleadings; and the MDL
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Court's protective orders, management orders, and other decisions regarding such discovery and
other work product, including but not limited to, conditions on its use, will continue in full force
and effect. Nothing in this paragraph authorizes the MDL Court to act contrary to this
Agreement or to share any of the work product, or provides the MDL Court with jurisdiction
over the Janssen Agreement.
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Item#11.
EXHIBIT S
Agreement on the State Cost Fund Administration
1. Creation of a State Cost Fund. Janssen and the Settling States agree to the
creation of a state cost fund to pay litigation costs and expenses associated with litigation and
investigation related to the opioid litigation(hereinafter the "State Cost Fund"). This agreement
is a material part of the Settlement Agreement. The State Cost Fund shall be administered
separately from the Common Benefit Fund, the Contingency Fee Fund,the State Counsel Fee
Fund, Subdivision Costs Fund, and the MDL Expense Fund. No funds may be released from the
State Cost Fund to Non-Settling States.
2. State Cost Fund Amount. In Payment 1 of the Settlement, Janssen shall pay into
the State Cost Fund$13,461,539 (the "State Cost Fund Amount"). Janssen's State Cost Fund
payment shall be a component of its Global Settlement Attorney Fee Amount payable to the
Attorney Fee Fund, for Payment 1.
3. State Cost Fund Committee. A committee of Attorneys General from Settling
States or their designated representatives (hereinafter the "State Cost Fund Committee") shall
oversee the State Cost Fund. The committee shall initially consist of the following states: (a)
Delaware; (b) Florida; (c) Georgia; (d)New York; (e)North Carolina; (f) Ohio; (g) Tennessee;
and(h) Texas. The Settling State Attorneys General may by majority vote add or change the
composition of the State Cost Fund Committee, including replacing any above State, if that State
is not a Settling State.
4. State Cost Fund Administrator. The State Cost Fund Committee shall select an
administrator(the "State Cost Fund Administrator"). The State Cost Fund Administrator may be
different from the Settlement Administrator under the Settlement Agreement. The State Cost
Fund Administrator shall be responsible for administering the State Cost Fund and making
payments to Settling States.
5. State Cost Fund Guidelines. Monies in the State Cost Fund shall be released
without any delay to reimburse Settling States for documented opioid litigation and investigation
costs incurred or paid. In allocating the State Cost Fund, no funds shall be allocated for costs
incurred after July 21, 2021. The State Cost Fund Committee shall establish guidelines for the
submission and approval of expenses eligible for reimbursement from the State Cost Fund. The
State Cost Fund Administrator shall, in accordance with such guidelines, receive from Settling
States records sufficient to demonstrate the incurrence and/or payment of each expense
attributable to investigation or litigation related to the opioid litigation, including any outstanding
National Association of Attorneys General grant.
6. State Cost Fund Payment Priorities and Residual. To the extent that that the
aggregate eligible submissions of costs and expenses from Settling States exceed the State Cost
Fund Amount,payments to Settling States shall be paid in the following order until the State
Cost Fund is exhausted. If the State Cost Fund is unable to fully pay costs at any of the following
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Item#11.
levels, then Settling States with costs at that level shall be paid on a proportional basis. All
expenses with a lesser priority from the level where the State Cost Fund is exhausted will not be
reimbursed from the State Cost Fund. Costs shall be paid in the following order: (a)the
reasonable costs of the State Cost Fund Administrator, if any; (b) repayment of the National
Association of Attorneys General grants connected to opioid litigation; (c) costs incurred or paid
by outside counsel for a Settling State litigating against Janssen apart from any fee owed; (d)
litigation-related costs attributable to the Janssen case incurred or paid by a Settling State
litigating against Janssen; (e)pre-suit investigation-related costs attributable to a Janssen
investigation incurred or paid by either a Settling State outside counsel (not including any
amount of fees or any costs which have already been reimbursed pursuant to clause (c), above)
or a Settling State investigating Janssen; (f) costs incurred or paid by a Settling State or outside
counsel litigating against another opioid defendant other than a cost share entered into by a
Settling State, which costs have not yet been paid under a preceding clause of this paragraph; (g)
the amounts paid by a Settling State as part of cost share related to the filing of a proof of claim
in the Purdue Pharma, L.P. bankruptcy; and(h) the amounts paid by a Settling State as part of
any other cost share, including, but not limited to the cost share entered into by the Non-
Consenting States in the Purdue Pharma, L.P. bankruptcy. If the State Cost Fund has additional
monies after payment of the State Cost Fund Administrator's and all Settling States' submitted
costs, then the remaining funds will be provided to the National Association of Attorneys
General to be placed in the Financial Services Fund for the purpose of funding grants for
consumer protection or healthcare-related enforcement or training activities. In determining what
costs are attributable to Janssen, the State Fund Committee shall develop a guideline that ensures
that all Settling States are treated equitably.
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Item#11.
EXHIBIT T
Severity Factors
State Severity Factor
Alabama 108.5243%
Alaska 107.8614%
American Samoa 102.7639%
Arizona 107.7129%
Arkansas 103.2818%
California 82.8688%
Colorado 95.2263%
Connecticut 121.0971%
Delaware 155.5946%
District of Columbia 88.3270%
Florida 107.9604%
Georgia 86.6675%
Guam 96.8019%
Hawaii 77.1051%
Idaho 93.0570%
Illinois 86.6318%
Indiana 108.6768%
Iowa 78.2056%
Kansas 89.6374%
Kentucky 150.0126%
Louisiana 105.2878%
Maine 132.7534%
Maryland 115.2160%
Massachusetts 110.3001%
Michigan 112.4239%
Minnesota 75.9148%
Mississippi 96.7243%
Missouri 107.8496%
Montana 99.7815%
N. Mariana Islands 100.2421%
Nebraska 71.9045%
Nevada 130.5519%
New Hampshire 144.4997%
New Jersey 102.3701%
New Mexico 128.9295%
New York 91.4472%
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Item#11.
North Carolina 102.2754%
North Dakota 76.0864%
Ohio 123.0063%
Oklahoma 129.3047%
Oregon 108.9094%
Pennsylvania 118.2821%
Puerto Rico 73.9803%
Rhode Island 143.8802%
South Carolina 99.6801%
South Dakota 76.4482%
Tennessee 129.9078%
Texas 71.6286%
Utah 119.5878%
Vermont 140.2239%
Virgin Islands 100.4396%
Virginia 88.1611%
Washington 100.5007%
Wisconsin 99.6616%
Wyoming 100.9659%
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Item#11.
EXHIBIT U
Agreement on the State Outside Counsel Fee Fund
1. Creation of a State Outside Counsel Fee Fund. Janssen and the Settling States
agree to the creation of a state outside counsel fee fund to pay reasonable
attorney's fees of Settling States with outside counsel in connection with litigation
against Janssen (the "State Outside Counsel Fee Fund"). This agreement is a
material part of the Settlement Agreement. All terms utilized in this Agreement
shall have the same meaning as in the Settlement Agreement unless otherwise
indicated.
2. State Outside Counsel Fee Fund Administration. The State Outside Counsel
Fee Fund shall be administered separately from the Common Benefit Fund, the
Contingency Fee Fund, the State Cost Fund, and the MDL Expense Fund. A
committee of Attorneys General shall oversee the State Outside Counsel Fee Fund
("Fee Fund Committee"). The Fee Fund Committee shall initially consist of the
following: (a)Arkansas; (b)Florida; (c)New Jersey; and(d) Puerto Rico. The Fee
Fund Committee shall select a settlement fund administrator(who may or may not
be different from the Settlement Administrator under the Distributor Agreement)
(the "Fee Fund Administrator")who shall administer the State Outside Counsel
Fee Fund according to the guidelines and directives of the Fee Fund Committee.
3. State Outside Counsel Fee Eligibility. To participate in the State Outside
Counsel Fee Fund, an outside counsel for a Settling State must have filed and be
maintaining an action in the name of a Settling State or its attorney general
against Janssen in a state or federal court as of June 1, 2021. No Settling State can
draw attorney's fees from both the State Outside Counsel Fee Fund and the
similarly sized fund to reimburse Settling State's without outside counsel.
4. State Outside Counsel Fee Fund Amount. Janssen shall pay funds in the State
Outside Counsel Fee Fund according to the schedule set forth below, as part of its
annual Global Settlement Attorney Fee Amount payable to the Attorney Fee
Fund, subject to the adjustments described below:
Payment Year 1 $32,391,518.74
Payment Year 2 $30,769,230.77
Payment Year 3 $ 4,146,942.80
5. State Outside Counsel Fee Fund Availability and Calculation of Amount.
a. The State Outside Counsel Fee Fund shall be available to compensate private
counsel for State Attorneys General for approved fees arising out of
representation of the State pursuant to the schedule developed by the Fee Fund
Committee and provided to Janssen.
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Item#11.
b. Fees shall be calculated by adding two components: (a) a fixed amount
consisting of fifty(50%) of the amount allocated to a State utilizing the
allocation percentage in the Settlement Agreement multiplied times 4.5%; and
(b) a proportional percentage of the remaining fee due under that Settling
State's contract assuming that fifty (50%) of the State's recovery is allocable
to a Settling State (versus allocable to the Settling State's Subdivisions) so
that the fees of all Settling States (minus the base amount that would have
been due to any of Non-Settling States) exhausts the State Outside Counsel
Fee Fund. The proportional share percentage will be the same for each
Settling State included in the State Outside Counsel Fee Fund. All amounts
paid will be less any costs or fees of the Fee Fund Administrator.
6. Payment by the Fee Fund Administrator.
a. If a Settling State and a Settling State's outside counsel agree that the amount
calculated in paragraph 5 above satisfies in full amounts owed to all Settling
State outside counsel, then upon written notice of that agreement and counsel
waiving in writing any entitlement to any additional fee, the Fee Fund
Administrator shall pay that Settling State's outside counsel pursuant to the
calculation and any schedule created by the Fee Fund Committee.
b. If a Settling State's outside counsel does not agree that the amount calculated
in Paragraph 5 above satisfies in full amounts owed by the Settling State, then
the Settling State's share shall be placed in an interest bearing escrow account
(less reasonable expenses of the Fee Fund Administrator) and held unless and
until the Settling State and its outside counsel agree in a signed writing to a
resolution of the amount outstanding or there is a final judgment entered that
is no longer appealable.
c. Upon being provided a signed, written agreement or the final non-appealable
judgment, the Fee Fund Administrator shall release monies from the State
Outside Counsel Fee Fund in either the amount held by the Fee Fund
Administrator, if the amount of the agreement or judgment is equal to or more
than the amount held, or the amount indicated in the agreement or in the final
judgment, if the amount in the agreement or judgment is less than the amount
held.
d. Nothing herein, including the amounts listed in paragraph 5 above, shall
prevent a Settling State from arguing in any proceeding with its outside
counsel that(a) its recovery was less than fifty (50%)percent of the recovery
in the Settlement Agreement down to and including fifteen(15%)percent of
the total recovery; (b) any payment should be discounted by an appropriate
discount rate commensurate to the risk of the Settlement Agreement and the
timeline that the Settling State is receiving its payments; (c) the settlement
amount should be lower because a Settling State's amounts were reduced
because a Settling State's outside counsel failed to obtain joinder from a
Settling State's Subdivision(s)who(m) the outside counsel also represented;
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Item#11.
or(d) any limitation placed by Janssen bars payment of a higher fee to outside
counsel.
e. In the event the amount due to the Settling State's outside counsel from an
escrow account is less than the total amount of funds escrowed on the account
of the Settling State, the balance shall be paid to the Settling State. In no
event, other than a State not being a Settling State, shall funds revert to
Janssen.
f. Amounts owed by Janssen to the State Outside Counsel Fee Fund shall be
reduced and/or credited to Janssen by the amount specified in paragraph 7,
below, for any Non-Settling outside counsel States.
7. Reversion or Reduction of Amounts owed to Non-Settling States. Amounts
owed by Janssen to the State Outside Counsel Fee Fund shall be reduced on
account of Non-Settling States as follows:
a. If the State of Washington does not become a Participating State and eleven
(11) of the other outside counsel States in the table below become
Participating States, then the amount Janssen owes under paragraph 4 will be
reduced by the State of Washington's Fixed Amount in the table below.
b. If ten (10) outside counsel States in the table below become Participating
States, then the amount Janssen owes under paragraph 4 will be reduced by
the allocated Fixed Amount in the table below for each Non-Settling State.
c. If nine (9) or fewer of the outside counsel States in the table below become
Participating States, then the amount Janssen owes under paragraph 4 will be
reduced by each Non-Settling State's allocated Fixed Amount plus half the
difference between the Non-Settling State's full share of the "Fee Amount if
all OC States Join" and the Fixed Amount for each Non-Settling State.
JJ Allocation% JJ Payment State Share Contract Full Contract Fixed Amount Fee Amount if
Amount Rate Amount all OC States
Join
Arkansas 0.9663486633% $44,048,604.48 $22,024,302.24 TIPAC $4,452,430.22 $991,093.60 $3,608,210.22
Florida 7.0259134409% $318,598,151.79 $159,299,075.89 TIPAC $11,464,953.79 $7,168,458.42 $10,417,038.57
Idaho 0.5254331620% $24,023,889.47 $12,011,944.74 10% $1,201,194.47 $540,537.51 $1,040,060.24
Kentucky 2.0929730531% $95,444,090.08 $47,722,045.04 TIPAC $4,636,102.25 $2,147,492.03 $4,029,130.22
Mississippi 0.8898883053% $40,549,243.09 $20,274,621.55 TIPAC j $4,277,462.16 $912,357.97 $3,456,713.24
Nevada 1.2486754235% $56,896,524.63 $28,448,262.31 19% $5,405,169.84 $1,280,171.80 $4,399,082.82
New 0.6258752503% $28,620,454.86 $14,310,277.43 27% $3,863,761.41 $643,960.23 $3,078,451.90
Hampshire
New Jersey 2.7551354545% $124,934,796.18 $62,467,398.09 33% $20,614,241.37 $2,811,032.91 $16,272,038.83
New 0.8557238713% $39,104,404.67 $19,552,202.33 24 $ $879,849.11 $3,762,616.04
Mexico 4,692,528.56
Ohio 4.3567051408% $197,559,821.57 $98,779,910.78 TIPAC $8,438,995.54 $4,445,095.99 $7,464,883.44
Puerto Rico 0.7263201134% $33,083,484.37 $16,541,742.19 25% $4,135,435.55 $744,378.40 $3,308,356.71
South 0.2169945907% $9,948,315.49 $4,974,157.75 12% $596,898.93 $233,837.10 $505,909.15
Dakota
Washington 2.3189040182% $105,153,378.36 $52,576,689.18 13.5% $7,097,853.04 $2,365,951.01 5,943,742.14
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Item#11.
8. In the event that the Fee Fund Administrator has received from Janssen part or all
of the amount that Janssen is entitled to offset under paragraph 7 above, the Fee
Fund Administrator shall return to Janssen the amount so received.
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