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HomeMy WebLinkAboutREP FC 015 2019/02/19 2018-2020 REPORT OF THE COMMITTEE ON FINANCE DATE: February 19, 2019 Re: Comm. No. 12/Res. No. 20-19 PLACE: Council Chambers Kailua-Kona, Hawai`i TIME: 1:06 p.m. Council Chair and Members Hawai`i County Council Hilo, Hawai`i 96720 Your Committee on Finance, to which was referred Resolution No. 20-19, reports as follows: Resolution No. 20-19, transmitted by Kaena Horowitz, Deputy Corporation Counsel, via Communication No. 12 dated November 7, 2018, authorizes the employment of a private attorney to represent the County of Hawai`i in litigation against opioid manufacturers who may be liable to the County of Hawai`i for the opioid epidemic. The Office of the Corporation Counsel requests the Council's approval to hire Napoli Shkolnik PLLC and its local counsel,the HI Accident Law Center, with any and all compensation to be provided from potential settlement or award amounts. Finance Committee Meeting of January 8, 2019 Council Member Herbert "Tim"Richards, III, feels there is a heavy focus on manufacturing and • not on the distribution. Mr. Richards commented it is the other way around, and the focus should be more on the distribution. Mr. Horowitz stated that the lawsuit is based on a national perspective. Manufacturing is not the sole point of the litigation and it would attach every point of the distribution chain. The idea would be all encompassing from start to finish. Council Chair Aaron Chung asked how many other counties are involved. Mr. Horowitz stated that Kauai has moved forward, and the Big Island would be second if it were to go ahead. Maui is willing to go forward within the next month or two. Mr. Horowitz stated there are many lawsuits across the nation being sort of collected, so the idea would be the County would join one of these lawsuits. The County would not have to front any money should an agreement be put in place. If a settlement or judgment should result in the County's favor,.the attorneys would take their percentage and the County would take the remainder. However, if there was a judgment against the County, the County would not have to bear any costs. FC Report No.: 15 FC-15 Page 2 February 19,2019 Mr. Horowitz stated Napoli Shkolnik is a national law firm. They represent several cities and counties across the nation and their local affiliate is Hawai`i Accident Law Center. The law firm has a lot of experience in opioid litigation. Mr. Horowitz has spoken with Napoli Shkolnik but most of his dealings have been with John Choi of the Hawaii Accident Law Center. Mr. Chung asked about theories of liability,but Mr. Horowitz was not able to go into detail because the complaint has not yet been finalized. Mr. Horowitz responded with respect to theories of liability from other lawsuits boiling it down to mainly the manufacturers, distributors, and those along the distribution chain, negligently and possibly knowingly prescribed these medications which resulted in addictions and deaths. Mr. Chung questioned whether going after the big pharmaceuticals would increase the cost to those in need and whether there would be a problem to hold off, to which Mr. Horowitz explained that nationally the suit has been consolidated so one court will do a mass settlement and distribute to the parties. If the case settles before the County of Hawai`i joins, then the County gets nothing. Mr. Chung is not inclined to vote in favor at this time and would like to see it deferred. Council Member Valerie Poindexter feels Hawaii County should take a different approach. The root causes are in the processes that are not in place, like physician education. She asked if patients are monitored through a facility that is equipped to handle and educate on pain management medication. Ms. Poindexter feels it will only drive up the cost of prescription medication, which would affect the seniors. At this time, Ms. Poindexter will not be supporting this measure. Council Member Rebecca Villegas feels it is time to hold manufacturers accountable. She stated joining with other communities across the country to make a stance and a statement that we are not okay with being told these different medicines are safe and healthy and not being properly educated. Ms. Villegas also feels the County need to set a standard and join other communities in stating that it is not okay. Council Member Susan Lee Loy asked how it works when the municipals of a state join but the state does not. Joseph Kamelamela, Corporation Counsel, replied that in this situation the State did not join, so whatever judgment that would be in the County's favor would go completely to the County. Councilmember Ashley Kierkiewicz commented that one life lost is one too many. Ms. Kierkiewcz would like an informational sheet that outlines the impact as well as cases that the municipalities are bringing against manufacturers and distributors. Ms. Kierkiewicz put a motion on the floor to postpone making a decision on this resolution until more information is produced. Mr. Chung asked what remedies are being looked at besides monetary damages. Mr. Horowitz stated that at this time it is geared towards monetary damages, and once the money comes down FC Report No.: 15 FC-15 Page 3 February 19,2019 to the municipalities, it would be up to the County to decide what to do with the funds. He supports the motion to defer this measure. Ms. Eoff feels more information is needed and supports a postponement until more information is received in order to make an informed decision. Ms. Villegas agrees to defer this matter and requested Corporation Counsel include information about the trends, increased cost for medications, and how that would or would not relate to this litigation. Ms. Poindexter commented and agreed that suing the manufacturer is not addressing the root cause. All the money will not fix the process or lack thereof Information needs to be gathered to find out what the root cause of this addiction really is before getting on board. Committee Chair Maile David reiterated that Corporation Counsel's statement about the goal of the lawsuit is that the power of accepting settlement and distribution would be up to the County as opposed to giving the State control. This goes along with all the Council Members' comments that it is not about the money and if this is the mindset of pursuing the lawsuit, will the law firm be paying for all the costs? Mr. Howortiz stated that is correct. Committee Chair David entertained Ms. Kierkiewicz's motion to postpone. Ms. Kierkiewicz requested postponement to the February 4, 2019, Hilo meeting, seconded by Ms. Poindexter. Finance Committee of February 4, 2019 Corporation Counsel Joseph Kamelamela requested a postponement since Mr. Horowitz is not being able to attend due to a medical appointment. Committee Chair David requested a motion to postpone to February 19, 2019, meeting in Kona. Moved by Mr. Richards and seconded by Ms. Eoff. Finance Committee of February 19, 2019 Mr. Horowitz gave a recap of the litigation. If this resolution were to pass, Napoli Shkolnik and the Hawai`i Accident Law Center would file a lawsuit on behalf of the County. The lawsuit would be against various levels of the distribution chain of opioids such as producers,marketers, distributors, and physicians which would seek to hold them liable for various negligent acts and misconduct. The County would not have to incur any costs up front. Should the case be resolved through victory, the County would receive a cut of the settlement and should it not be in the County's favor then Napoli Shkolnik and the Hawai`i Accident Law Center would take the loss. Council Member Matt Kaneali`i-Kleinfelder asked what the funds will be used for, should the County have a financial gain. Mr. Horowitz responded that it would be up to the Council as to how the funds will be disbursed. FC Report No.: 15 FC-15 Page 4 February 19,2019 Renee Schoen, Assistant Corporation Counsel, responded that the Administration or the Council can designate what the money could be used for. Mr. Richards commented that he does not feel a lawsuit for funding is the way to go. Creating litigation is a not a solution and he will not be able to support this. Your Committee on Finance is in accord with the purpose and intent of Resolution No. 20-18, and recommends its adoption. dmm AYES NOES ABS EX Respectfully submitted, CHUNG X DAVID X COMMITTEE ON FINANCE EOFF X KANEALI`I-KLEINFELDER X PjOr KIERKIEWICZ X • ' LEE LOY X -�L�', 005 POINDEXTER X MAILE MEDEIROS DAVID, CHAIR RICHARDS X FC REPORT NO.: 15 VILLEGAS X ADOPTED: APR 1 0 2019