After opting out in January, Johnson City will not directly collect money from the settlement in the Sullivan County “Baby Doe” lawsuit, but city officials do expect to benefit from the funds awarded to Washington County.
“We are a part of Washington County,” said City Manager Pete Peterson on Thursday. “We’re part of the lawsuit because we’re Washington County.”
According to the Kingsport Times News, attorneys representing participating local governments and Baby Doe, a child born with neonatal abstinence syndrome, announced on Thursday a $35 million settlement with opioid manufacturers Endo Health Solutions and Endo Pharmaceuticals.
Once Baby Doe’s damages and plaintiffs’ attorney fees are deducted from the settlement, $21 million will be split between the cities and counties involved in the litigation.
That money will go to Washington County and eight other counties in the region listed as plaintiffs in the lawsuit.
Washington County Mayor Joe Grandy said he anticipates counties will receive their checks from the settlement within the next two or three weeks.
Counties are expected to share the money, which is to be allocated by population on a per capita basis, with all local municipalities that have opted to be a party in the lawsuit.
As a result, Grandy said Washington County will be negotiating with the town of Jonesborough to determine its share. The town’s board of mayor and aldermen voted to join the lawsuit in April.
Local district attorneys asked local governments to join the lawsuit after the Tennessee Supreme Court ruled several months ago that the DAs could not be plaintiffs in the case. Nearly every county commission, municipality and town government in the region did so.
Neither help nor hurt
Johnson City commissioners, meanwhile, decided during a meeting in January to stay out of the case. With Washington County already a party in the lawsuit, City Attorney Sunny Sandos told commissioners that officials had to consider whether it would be necessary for the city to join.
“(The city joining) doesn’t help the case; it doesn’t hurt the case,” Sandos said in January, “but the liability that could be attached with regard to potential exposure or expenses is very real if we are a named party.”
Peterson reiterated Thursday that city officials discussed the legal liability of joining the lawsuit.
“As Washington County citizens, we felt like what are we really accomplishing by being represented twice,” Peterson said. “That just means you’ve got to cut the pie into even smaller pieces.”
Had the case gone to court and plaintiffs lost, Peterson added, there was concern that local governments could incur costs through the appeals process.
“Since we are Washington County, why take the risk of that potentially happening?” he said.
Johnson City Mayor Joe Wise said Tuesday, before the settlement was announced, that with Washington County involved in the lawsuit, the city’s interests were already represented.
“Anytime you become a party to a lawsuit there are inherent risks as well, and it didn’t seem appropriate to expose city taxpayers doubly to those risks,” Wise said. “The cost-benefit just wasn’t there. It really made sense to allow the county to represent our shared interests.”
J. Gerard Stranch IV, the managing partner for the firm representing the plaintiffs, said his firm had already indicated they would cover the cost of the litigation.
A judge granted a default judgment against Endo in April, noting the company’s attorneys made false statements to the court.
Stranch said he does not believe any local governments faced legal liability by joining the lawsuit.
“No matter what happened there was going to be no world in which a city, a county, or a DA was going to have to write a check for something that happened in the litigation,” Stranch said. “We would cover all of it.”
First Judicial District DA Ken Baldwin noted that Bristol, Tennessee, also opted not to join the case. Baldwin is one of the district attorneys in Northeast Tennessee who represented counties in the opioid lawsuit.
“Hopefully we’re going to do something with all this money that will benefit everybody in the county whether they live in the city or the county,” Baldwin said, adding that a region-wide facility treating opioid abuse, for example, could also benefit Johnson City residents.
“… there’s going to be a lot of discussions among the various counties that were plaintiffs to see what we can do that would benefit the most people.”
Grandy said that while Washington County’s government has made no firm commitment on how it will spend the settlement funds, county commissioners have indicated they would like to see that money used for drug treatment and to help both people and programs impacted by the opioid epidemic.
Grandy said each county will receive enough funds from the settlement to establish a mobile unit to deliver drug treatment to patients.
“Ultimately, commissioners would like to see us pool our resources to create a regional drug recovery facility,” Grandy said, noting there has been talk of converting the now-closed Northeast Correctional Complex Annex at Roan Mountain into a substance abuse rehabilitation center.
Stranch said Thursday local governments will be able to use the money they receive from the settlement however they please.
Peterson said he’s hopeful elected officials in Washington County will be “very mindful of the reason for the lawsuit and will make wise and sound judgment in their decision on how to spend any proceeds they receive as a result of the settlement.”
“The highest and best use of that money would be to address the problem that created the need for the lawsuit,” Peterson said.
Press Senior Reporter Robert Houk contributed to this report.