For City Council Meeting [December 14, 2021]
TO: Honorable Mayor and City Council
FROM: Marcus Fuller, City Manager
Eric S. Vail, City Attorney
Title
Request City Council Consider and Approve Resolution No. 7812 Opting-In to the National Opioid Settlements, Approve Direct Receipt of Funds, and Authorize the City Manager to Execute all Necessary Documents.
Body
BACKGROUND
Since 2018, numerous states, counties, and cities across the country have been engaged in a lawsuit (In re: National Prescription Opiate Litigation, U.S.D.C. Case No. 1:17-CV- 2804) against opioid distributors AmerisourceBergen, Cardinal Health and McKesson (collectively the "Distributors") and one of the manufacturers, Janssen Pharmaceuticals, Inc. and its parent company, Johnson & Johnson (collectively "J&J").
After years of Court-supervised negotiations, the parties reached a resolution of the case against the Distributors and J&J. The settlements require the Distributors to pay up to $21 billion and J&J to pay up to $5 billion. Roughly $2.6 billion of the two settlements are expected to be directed to California and its subdivisions. Although the settlements were reached in July 2021, each participating state had to then reach an intrastate allocation agreement to determine how to apportion and distribute the settlement funds among the various entities. After several months of negotiating the allocation agreements were reached by all states at the end of October.
However, the settlements are contingent upon a sufficient number of jurisdictions executing the Settlement Agreements. All participants must execute the Settlement Agreements by January 2, 2022. Cities may either "opt-in" to the settlement or "opt-out." If a City opts-in then it is eligible to receive a percentage of the settlement proceeds either directly or to refer those to the County for administrative use. If a City opts-out then its share goes directly to the State.
The City of Rialto may receive up to approx...
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