Rhode Island has been an active litigant
By
Phil Mattera for the Dirt
Diggers Digest
The biggest events are, of course, the
settlements with pharmaceutical companies Purdue Pharma and Johnson &
Johnson along with the three big drug distributors—Cardinal Health,
AmerisourceBergen and McKesson—for their role in creating and prolonging the
opioid epidemic.
While
some argue that the amounts are not sufficient, those cases will result in
billions of dollars in payments to state governments from the corporations and
the family, the Sacklers, who controlled the now bankrupt Purdue and grew
enormously wealthy from its operations.
In
all, the states will rack up more than $30 billion in 2021, which would be the
largest amount since 2008, when the states received about $53 billion in
payments, largely as the result of a series of billion-dollar-plus settlements
with the likes of Merrill Lynch, Morgan Stanley and Goldman Sachs to resolve
allegations that the Wall Street banks misled investors in the marketing of
auction-rate securities.
This
year’s total is not entirely the result of the opioid litigation. There have
also been numerous other cases resolved by state attorneys general that may not
involve billions but are still quite significant. Here are some examples.
In
July, the New York AG announced that TIAA-CREF, a subsidiary
of retirement-services giant TIAA, had agreed to pay $97 million to resolve
allegations that it fraudulently misled tens of thousands of customers into
moving their retirement investments into higher-fee accounts offered by the
company.
Also in July, the Oregon AG announced that L Brands, the owner of Victoria’s Secret and other retail chains, had agreed to commit $90 million of company funds to protect employees from sexual harassment and discrimination and require accountability from executives when misconduct occurs.
The
settlement came in the wake of allegations by the Oregon Public Employees
Retirement Fund and other shareholders that the company’s board of directors
failed to investigate former CEO and Chairman Emeritus Leslie Wexner’s close
personal ties with convicted sex offender Jeffrey Epstein, and ignored a
widespread and pervasive culture of sexual harassment at the company.
In
June, the Ohio AG announced that Centene Corp. agreed to
pay $88 million to resolve allegations of overcharging Medicaid by charging
more than the capped industry-standard prices for drugs while acting as a
pharmacy benefit manager. Centene paid $55 million to settle a similar
case with the state of Mississippi, while Bristol Myers Squibb paid $75 million in an overcharging
settlement with a group of states.
Also
in June, the North Carolina AG announced that JUUL Labs would pay $40
million and change its practices to resolve allegations that it was responsible
for misleading teenagers into becoming addicted to nicotine-based vaping
products.
Last
month, the Pennsylvania AG announced that Glenn O. Hawbaker, Inc.
would pay more than $20 million to resolve criminal charges that it misdirected
retirement contributions meant specifically for employees working on
prevailing-wage projects into a company-wide plan that covered executives and
owners of the firm.
Also
in August, the Georgia AG announced that Turtle Creek Assets,
Ltd would pay more than $19 million to resolve allegations that the company
committed multiple violations of the federal Fair Debt Collection Practices Act
and the Georgia Fair Business Practices Act.
What
this sampling of cases shows is that amid all the controversy over their
policies on issues such as voting rights and abortion, many states of varying
ideological orientation continue to carry out their responsibility to protect
citizens from irresponsible corporate behavior.
Note:
These cases will appear in an update of Violation
Tracker that will be posted later this month.
