Case: 1:17-md-02804-DAP Doc #: 1203 Filed: 12/19/18 1 of 39. PageID #: 29020

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF OHIO
EASTERN DIVISION
IN RE: NATIONAL PRESCRIPTION
OPIATE LITIGATION
THIS DOCUMENT RELATES TO:
The County of Summit, Ohio, et al. v.
Purdue Pharma L.P., et al.,
Case No. 18-op-45090

)
)
)
)
)
)
)

MDL 2804
Case No. 1:17-md-2804
Judge Dan Aaron Polster
OPINION AND ORDER

This matter is before the Court upon the Report and Recommendation (“R&R”) of the
United States Magistrate Judge. Doc. #: 1025 (hereinafter cited as “R&R”). On November 2, 2018
Manufacturer,1 Distributor, and Retail Pharmacy Defendants and Plaintiffs all filed Objections to
various portions of the R&R. Doc. ##: 1082, 1079, 1078, and 1080. On November 12, 2018
Plaintiffs and Defendants filed Responses to the Objections. Doc. ##: 1115 and 1116. Upon a de
novo review of the record, and for the reasons set forth below, the Court ADOPTS IN PART and
REJECTS IN PART the Report and Recommendation.

The District Court reviews proper objections pursuant to its duty under Federal Rule of
Civil Procedure 72(b). Fed. R. Civ. P. 72(b) (“The district judge must determine de novo any part
of the magistrate judge’s disposition that has been properly objected to.”) In a footnote,
Manufacturer Defendants purport to object to “the entirety of the R&R.” Doc #: 1082 at n.1. This

1

Defendant Noramco, Inc. states that it joined in Manufacturers’ Motion to Dismiss “to the extent applicable,”
Doc. #: 499-1 at 1 n.2, and requests clarification that it is included among the moving Manufacturer Defendants and
is entitled to all applicable relief. Doc. #: 1082 at 1 n.1. The Court clarifies that Noramco is included among the
moving Manufacturer Defendants and is entitled to all applicable relief.

 Case: 1:17-md-02804-DAP Doc #: 1203 Filed: 12/19/18 2 of 39. PageID #: 29021

objection is not proper insofar as it does not include any bases in or support from legal authority.
Therefore, as there are no proper objections to the facts or procedural history, the Court adopts the
facts and procedural history as stated in the R&R. Further, there are no objections to the R&R with
respect to the following sections:


Section III.B. Preemption



Section III.H. Count Eight: Fraud



Section III.L. Statewide Concern Doctrine



Section III.M. Article III Standing2

The Court presumes the parties are satisfied with these determinations and adopts the R&R
with respect to these sections. “Any further review by this Court would be a duplicative and
inefficient use of the Court’s limited resources.” Graziano v. Nesco Serv. Co., No. 1:09 CV 2661,
2011 WL 1131557, at *1 (N.D. Ohio Mar. 29, 2011) (citing Thomas v. Arn, 474 U.S. 140 (1985);
Howard v. Secretary of Health and Human Services, 932 F.2d 505 (6th Cir.1991); United States
v. Walters, 638 F.2d 947 (6th Cir.1981)).

As an initial matter, Retail Pharmacy Defendants have asked the Court to clarify that the
claims brought against them are only brought in their capacity as distributors, not as dispensers.
See Doc. #: 1078 at 2. The Court understands that Plaintiffs have disclaimed any cause of action
against Retail Pharmacies in their capacity as retailers or dispensers of opioids, see Doc. #: 654 at
75 n.47, and thus considers the parties’ arguments while keeping in mind that the Retail
Pharmacies may only be held liable as distributors.

2

Pharmacy Defendants, in their objections, mention Article III standing only briefly in a section dedicated to the
RICO claims. See Doc. #: 1078 at 2-3. They mischaracterize the R&R’s analysis of the Article III standing
directness requirement, rehash arguments already made in their motion to dismiss, and then move on to address their
RICO analysis concerns. The Court finds this objection without merit, and therefore it is overruled.

2

 Case: 1:17-md-02804-DAP Doc #: 1203 Filed: 12/19/18 3 of 39. PageID #: 29022

A. Tolling of the Statute of Limitations
The R&R concluded that Plaintiffs have alleged sufficient facts “to raise a plausible
inference that the applicable limitations periods are subject to tolling.” R&R at 55-56.
Manufacturer Defendants object, stating that Plaintiffs’ Complaint indicates that they knew or
should have known of both the Manufacturers’ marketing practices and the costs Plaintiffs were
incurring. Defendants argue that it follows that Plaintiffs, by their own allegations, did not act with
sufficient diligence to support a fraudulent concealment theory. In addition to tolling under a
fraudulent concealment theory, Plaintiffs also assert that the continuing violations doctrine should
be applied to save their claims from the relevant statute of limitations.
1. Fraudulent Concealment
The R&R correctly states that “resolving a motion to dismiss based on statute-oflimitations grounds is appropriate when the undisputed facts ‘conclusively establish’ the defense
as a matter of law.” R&R at 54 (citing Estate of Barney v. PNC Bank, 714 F.3d 920, 926 (6th Cir.
2013); Cataldo v. U.S. Steel Corp., 676 F.3d 542, 547 (6th Cir. 2012), cert. denied, 568 U.S. 1157
(2013)). “In order for Plaintiff’s delay in filing to be excused due to Defendants’ fraudulent
concealment, Plaintiff must affirmatively plead with particularity: ‘(1) wrongful concealment of
their actions by the defendants; (2) failure of the plaintiff to discover the operative facts that are
the basis of his cause of action within the limitations period; and (3) plaintiff's due diligence until
discovery of the facts.’” Reid v. Baker, 499 F. App’x 520, 527 (6th Cir. 2012) (quoting Dayco
Corp. v. Goodyear Tire & Rubber Co., 523 F.2d 389, 394 (6th Cir.1975)). However, as the R&R
also points out, “courts should not dismiss complaints on statute-of-limitations grounds when there
are disputed factual questions relating to the accrual date.” Am. Premier Underwriters, Inc. v. Nat’l
R.R. Passenger Corp., 839 F.3d 458, 464 (6th Cir. 2016) (citing as examples of disputed factual
questions, “claims that the defendant fraudulently concealed facts, thereby preventing the plaintiff
3

 Case: 1:17-md-02804-DAP Doc #: 1203 Filed: 12/19/18 4 of 39. PageID #: 29023

from learning of its injury . . . and complex issues about whether information in the plaintiff's
possession sufficed to alert it of the claim”).
Defendants’ assertions that Plaintiffs were aware, at least since 2007, of their marketing
practices and knew about the effects of the opioid crisis, effectively admitted in the Complaint,3
are insufficient to conclusively establish that any of Plaintiffs’ claims are time-barred by the statute
of limitations. If Plaintiffs relied solely on Defendants’ concealment of their marketing practices,
Plaintiffs’ assertion that the statutes of limitation were tolled due to fraudulent concealment would
fail. However, Plaintiffs’ allegations of fraudulent concealment do not rely solely on Defendants’
alleged concealment of their marketing practices. Plaintiffs also allege that Defendants concealed
their lack of cooperation with law enforcement and that they affirmatively misrepresented that they
had satisfied their duty to report suspicious orders, concealing the fact that they had not done so.
See Doc. #: 514 at 232-33 (hereinafter cited as “SAC”).
Plaintiffs additionally point out that they could not have discovered “the nature, scope, and
magnitude of Defendants’ misconduct, and its full impact on Plaintiffs, and could not have
acquired such knowledge earlier through the exercise of reasonable diligence,” because until this
Court ordered production of the ARCOS database in this litigation, Plaintiffs did not have access
to that information. Id. at 233 (citing Doc. #: 233 at 6-7). Without access to the ARCOS data,
Plaintiffs were forced to take Defendants at their word that they were complying with their
obligations under consent decrees, statutes, and regulations. Plaintiffs inarguably knew about
Defendants’ marketing practices, but whether they had sufficient information, in the absence of

3

See, e.g., Doc. #: 514 at 238 (“In May 2007, Purdue and three of its executives pled guilty to federal charges of
misbranding OxyContin in what the company acknowledged was an attempt to mislead doctors about the risks of
addiction.”); see also Id. at 212 (“the increase in fatal overdoses from prescription opioids has been widely
publicized for years.”).

4

 Case: 1:17-md-02804-DAP Doc #: 1203 Filed: 12/19/18 5 of 39. PageID #: 29024

the ARCOS data, to identify Defendants’ alleged concealment and thus the scope or magnitude of
Defendants’ alleged misconduct is a disputed factual question.
2. Continuing Violations
Plaintiffs also assert that the applicable statute of limitations should be tolled under the
continuing violations doctrine. Id. at 231. In the Sixth Circuit, a “‘continuous violation’ exists if:
(1) the defendants engage in continuing wrongful conduct; (2) injury to the plaintiffs accrues
continuously; and (3) had the defendants at any time ceased their wrongful conduct, further injury
would have been avoided.” Hensley v. City of Columbus, 557 F.3d 693, 697 (6th Cir. 2009) (citing
Kuhnle Bros., Inc. v. County of Geauga, 103 F.3d 516, 521 (6th Cir.1997)). Although Ohio courts
are generally reluctant to apply the doctrine outside the Title VII context, “this doctrine is rooted
in general principles of common law and is independent of any specific action.” Id. Further, the
Sixth Circuit has noted that “no opinion has articulated a principled reason why the continuingviolation doctrine should be limited to claims for deprivations of civil rights and employment
discrimination.” Nat’l Parks Conservation Ass’n, Inc. v. Tennessee Valley Auth., 480 F.3d 410,
416–17 (6th Cir. 2007). “Courts have allowed the statute of limitations to be tolled [under the
continuing violations framework] when . . . there is a ‘longstanding and demonstrable policy’ of
the forbidden activity.” Ohio Midland, Inc. v. Ohio Dep’t of Transp, 286 F. App’x 905, 912 (6th
Cir. 2008) (citing Trzebuckowski v. City of Cleveland, 319 F.3d 853, 857 (6th Cir.2003).).
Here, taking the factual allegations in the Complaint as true, Plaintiffs have alleged a
longstanding and demonstrable policy of misrepresentations and omissions on the part of
Defendants sufficient to demonstrate their engagement in continuing wrongful conduct. In
addition, whether further injury could have been avoided had Defendants ceased this conduct is
another disputed factual question. Therefore, the Court finds that Plaintiffs have alleged facts
sufficient to raise a plausible inference that the applicable limitations periods are subject to
5

 Case: 1:17-md-02804-DAP Doc #: 1203 Filed: 12/19/18 6 of 39. PageID #: 29025

tolling—under either a fraudulent concealment theory or a continuing violation theory—and that
no claims should be dismissed on statute of limitations grounds at this early stage in the litigation.
B. RICO
After a lengthy discussion of RICO, the R&R concluded that Plaintiffs’ RICO claims
should survive Defendants’ motions to dismiss. R&R at 11-44. “RICO was an aggressive initiative
to supplement old remedies and develop new methods for fighting crime.” Sedima, SPRL v. Imrex
Co., Inc., 473 U.S. 479, 498 (1985) (citing Russello v. United States, 464 U.S. 16, 26-29 (1983)).
In Sedima, the Supreme Court acknowledged the Second Circuit’s distress over the “extraordinary,
if not outrageous,” uses to which civil RICO claims had been applied. Id. at 499. “Instead of being
used against mobsters and organized criminals, it had become a tool for everyday fraud cases
brought against respected and legitimate enterprises.” Id. However, in reversing the 2nd Circuit,
the Sedima Court observed:
. . . Congress wanted to reach both “legitimate” and “illegitimate” enterprises.
United States v. Turkette, [452 U.S. 576 (1981)]. The former enjoy neither an
inherent incapacity for criminal activity nor immunity from its consequences. The
fact that § 1964(c) is used against respected businesses allegedly engaged in a
pattern of specifically identified criminal conduct is hardly a sufficient reason for
assuming that the provision is being misconstrued. Nor does it reveal the
“ambiguity” discovered by the court below. “[T]he fact that RICO has been applied
in situations not expressly anticipated by Congress does not demonstrate ambiguity.
It demonstrates breadth.” Haroco, Inc. v. American National Bank & Trust Co. of
Chicago, [747 F.2d 384, 398 (1984)].
Id.
The RICO analysis is complicated because, “RICO’s civil-suit provision imposes two
distinct but overlapping limitations on claimants—standing and proximate cause . . . [a]nd as a
matter of RICO law, the two concepts overlap.” Trollinger v. Tyson Foods, Inc., 370 F.3d 602,
613 (6th Cir. 2004). Defendants object to the R&R’s conclusions regarding both “overlapping”
limitations. Regarding standing, Defendants argue that Plaintiffs’ injuries are 1) not to Plaintiffs’
6

 Case: 1:17-md-02804-DAP Doc #: 1203 Filed: 12/19/18 7 of 39. PageID #: 29026

“business or property” as required by the statute, and 2) derivative of a third-party’s injuries (i.e.
not direct). Regarding proximate cause, Defendants argue that Plaintiffs’ injuries are too remote
to hold Defendants liable under RICO (i.e. not direct). Manufacturing Defendants succinctly
summarize the way “directness” applies to RICO analysis.
For standing to exist, an injury must be “direct” in the sense of being both (1) nonderivative of some third party’s injury (the standing analysis), see Trollinger, 370
F.3d at 614; and (2) having an uninterrupted, direct, and not overly attenuated
causal chain from conduct to injury (the proximate cause analysis), see Anza, 547
U.S. at 457.
Doc. #: 1082 at 3 (citing Anza v. Ideal Steel Supply Corp., 547 U.S. 451 (2006)) (emphasis in
original). “Because Congress modeled [the RICO] provision on similar language in the antitrust
laws (§ 4 of the Clayton Act and § 7 the Sherman Act) and because the antitrust laws have been
interpreted to require that a private plaintiff show proximate cause in order to have standing to sue,
RICO civil claims also require proximate cause. Trollinger, 370 F.3d at 612 (citing Holmes v. Sec.
Investor Prot. Corp., 503 U.S. 258, 267-68 (1992); Sedima, 473 U.S. at 496). Thus, although
standing is a threshold issue, because proximate cause analysis is necessarily incorporated within
the standing analysis, the Court begins with proximate cause.
1. Proximate Cause
In Holmes, the Supreme Court described proximate cause as “the judicial tools used to limit
a person’s responsibility for the consequences of that person’s own act,” and further stated “the
notion of proximate cause reflects ‘ideas of what justice demands, or of what is administratively
possible and convenient.’” 503 U.S. at 268 (quoting W. Keeton, D. Dobbs, R. Keeton, & D. Owen,
Prosser and Keeton on Law of Torts § 41, p. 264 (5th ed. 1984)). In a RICO claim, “[t]he
proximate-cause inquiry . . . requires careful consideration of the ‘relation between the injury
asserted and the injurious conduct alleged.’” Anza, 547 U.S. at 462 (quoting Holmes, 503 U.S. at
268). “Though foreseeability is an element of the proximate cause analysis, it is distinct from the
7

 Case: 1:17-md-02804-DAP Doc #: 1203 Filed: 12/19/18 8 of 39. PageID #: 29027

requirement of a direct injury.” Perry v. Am. Tobacco Co., 324 F.3d 845, 850 (6th Cir. 2003)
(citing Holmes, 503 U.S. at 268-69.). Additionally, the Holmes Court provided several reasons
why “some direct relation between the injury asserted and the injurious conduct alleged” is so
important to the proximate cause analysis. Holmes, 503 U.S. at 268. The Court stated:
First, the less direct an injury is, the more difficult it becomes to ascertain the
amount of a plaintiff’s damages attributable to the violation, as distinct from other,
independent, factors. Second, quite apart from problems of proving factual
causation, recognizing claims of the indirectly injured would force courts to adopt
complicated rules apportioning damages among plaintiffs removed at different
levels of injury from the violative acts, to obviate the risk of multiple recoveries.
And, finally, the need to grapple with these problems is simply unjustified by the
general interest in deterring injurious conduct, since directly injured victims can
generally be counted on to vindicate the law as private attorneys general, without
any of the problems attendant upon suits by plaintiffs injured more remotely.
Id. at 269–70 (internal citations omitted). Thus, it is important to first carefully consider the
relationship between the injury asserted by Plaintiffs and the alleged injurious conduct of
Defendants and then further consider whether that relationship implicates any of the concerns
highlighted by the Holmes Court.
Plaintiffs allege that “RICO Marketing Defendants . . . conducted an association-in-fact
enterprise . . . to unlawfully increase profits and revenues from the continued prescription and use
of opioids for long-term chronic pain” thereby creating the opioid epidemic.4 SAC at 270.
Plaintiffs further allege that RICO Supply Chain Defendants . . . formed an association-in-fact
enterprise . . . for the purpose of increasing the quota for and profiting from the increased volume
of opioid sales in the United States” thereby creating the opioid epidemic.5 It is important to note
that Plaintiffs never expressly define what they mean by the term “opioid epidemic.” The term

4

According to the Complaint, the RICO Marketing Defendants are “Purdue, Cephalon, Janssen, Endo, and
Mallinckrodt.” See Doc. #: 514 at 270.
5
According to the Complaint, the RICO Supply Chain Defendants are “Purdue, Cephalon, Endo, Mallinckrodt,
Actavis, McKesson, Cardinal, and AmerisourceBergen” See Doc. #:514 at 279.

8

 Case: 1:17-md-02804-DAP Doc #: 1203 Filed: 12/19/18 9 of 39. PageID #: 29028

may reasonably refer to the massive rate of addiction, overdose, and death associated with taking
opioids. See, e.g., id. at 214-15 (“Ohio is among the states hardest hit by the opioid epidemic. . . .
Overdose deaths have become the leading cause of death for Ohioans under the age of 55.”).
However, the term “opioid epidemic” may just as reasonably include black markets for
diverted opioids. See, e.g., id. at 284 (“[Defendants’ violations] allowed the widespread diversion
of prescription opioids out of appropriate medical channels and into the illicit drug market—
causing the opioid epidemic.”); see also id. at 7 (“The increased volume of opioid prescribing
correlates directly to skyrocketing addiction, overdose and death [and] black markets for diverted
prescription opioids.). Regarding their asserted injuries, however, Plaintiffs are more explicit.
Plaintiffs expressly assert thirteen categories of damages. See id. at 285-86. Among these is, for
example, the “costs associated with . . . attempts to stop the flow of opioids into local
communities.” Id.
Manufacturer Defendants argue that the chain of causation from conduct to injury is as
follows:
(i) a Manufacturer made deceptive claims in promoting its opioids (the conduct);
(ii) some physicians were exposed to that Manufacturer’s claims; (iii) which caused
some of those physicians to write medically inappropriate opioid prescriptions they
would not have otherwise written; (iv) which caused some of their patients to decide
to take opioids; (v) which caused some of those individuals to become addicted to
opioids; (vi) which caused some of those addicted individuals to need additional
medical treatment, to neglect or abuse their families, to lose their jobs, and/or to
commit crimes; (vii) which caused Plaintiffs to expend additional resources on
emergency services, and to lose revenue from a decreased working population
and/or diminished property values (the injury).
Doc. #: 1082 at 9-10 (emphasis in original). However, Plaintiffs have alleged sufficient facts to
support a far more direct chain of causation: (i) RICO Marketing Defendants made deceptive
claims in promoting their opioids in order to sell more opioids than the legitimate medical market
could support (the conduct); (ii) the excess opioids marketed by the RICO Marketing Defendants
9

 Case: 1:17-md-02804-DAP Doc #: 1203 Filed: 12/19/18 10 of 39. PageID #: 29029

and distributed by the RICO Supply Chain Defendants were then diverted into an illicit, black
market; (iii) Plaintiffs were forced to expend resources beyond what they had budgeted to attempt
to stop the flow of the excess opioids into local communities and to bear the costs associated with
cleaning them up. Under this potential chain of causation, the relationship between Plaintiffs’
injury and Defendants’ alleged conduct is less remote than prior Sixth Circuit precedent finding
proximate cause, and is not too remote to support a finding of proximate cause here. See, e.g.,
Trollinger, 370 F.3d at 619 (finding proximate cause where Tyson “hired sufficient numbers of
illegal aliens to impact the legal employees’ wages,” having an “impact on the bargained-for wagescale,” which “allowed Tyson not to compete with other businesses for unskilled labor,” and
finally where “Tyson’s legal workers did not ‘choose’ to remain at Tyson for less money than
other businesses offered”).
Thus, it is incumbent upon the Court to consider whether any of the Holmes Court’s reasons
for requiring directness are implicated. Here, Plaintiffs’ alleged damages are not speculative, but
concrete and ascertainable. No other party can vindicate the law and deter Defendants’ alleged
conduct because Plaintiffs’ asserted damages are not recoverable by any other party. Finally, there
is no potential for—and thus no reason for the Court to have to adopt complicated rules to
prevent—duplicative recoveries. As none of the Holmes concerns are implicated in this case, the
Court finds that Plaintiffs have sufficiently alleged proximate cause for their RICO claims.
2. Standing
Having determined that Plaintiffs have alleged sufficient facts to find that they do not stand
at too remote a distance to recover, the Court now turns to standing. Title 18 of the U.S. Code,
section 1964(c), has been deemed the standing provision of RICO. It provides that “[a]ny person
injured in his business or property by reason of a violation of section 1962 of this chapter may sue
therefor . . . and shall recover threefold the damages he sustains and the cost of the suit, including
10

 Case: 1:17-md-02804-DAP Doc #: 1203 Filed: 12/19/18 11 of 39. PageID #: 29030

reasonable attorney’s fee.” 18 U.S.C. § 1964(c). The two operative portions of this section are the
“business or property” limitation and the “by reason of” limitation.
“The ‘by reason of’ limitation . . . bundles together a variety of ‘judicial tools,’ some of
which are traditionally employed to decide causation questions and some of which are employed
to decide standing questions.” Trollinger, 370 F.3d at 613 (citing Holmes, 503 U.S. at 268.). As it
pertains to standing, the “by reason of” limitation is used to analyze whether a plaintiff is asserting
an injury that was borne directly by that plaintiff or whether the injury was “derivative or passedon” to the plaintiff by some intermediate party. See id. at 614.
a. The “by reason of” Limitation (Direct Versus Passed-On Injury)
Defendants claim that Plaintiffs’ asserted injuries are “necessarily derivative of harms to
individual opioid users.” Doc. #: 1082 at 4. They state that “it is the opioid user who (if anyone)
was directly harmed, and it is only as a result of this harm—in the aggregate—that Plaintiffs can
claim to have experienced additional public expenditures, lost tax revenue, and diminished
property values.” Id. Defendants cite Perry as a paradigmatic example from the Sixth Circuit of
the distinction between derivative and non-derivative injuries. Defendants characterize Perry as
follows: “Plaintiffs [in Perry] were individual insurance plan subscribers who alleged that because
of the tobacco manufacturers’ conduct, they paid increased premiums to account for medical care
provided to smokers in the same insurance pool.” Id. at 4-5 (citing Perry, 324 F.3d at 847) (internal
citations omitted).
Defendants’ characterization of Perry is correct, but Perry is factually distinct from this
case. In Perry, tobacco users suffered smoking-related injuries which increased healthcare costs.
That is where the similarities with the present case end. In Perry, the increased healthcare costs
were borne by insurance companies who then passed-on those costs to individual insurance plan
subscribers in the form of higher insurance premiums. The non-smoking individual subscribers
11

 Case: 1:17-md-02804-DAP Doc #: 1203 Filed: 12/19/18 12 of 39. PageID #: 29031

then sued the tobacco companies for the costs passed-on to them by the insurance companies. See
Perry, 324 F.3d at 847. Thus, Perry represents a classic case of “passed-on” economic injury.
Here, as described above, Plaintiffs have alleged a plausible claim that their injuries are the direct
result of Defendants’ creation of an illicit opioid market within their communities.6 Plaintiffs’
asserted economic injuries are borne by them and not passed-on by any intermediate party standing
less removed from Defendants’ actions.
The tobacco cases, in general, are factually distinct from the present case for an additional
reason. In the tobacco cases, no one asserted, nor could they have, that tobacco defendants created
an “illicit cigarette market” the attendant consequences of which might have caused the
government plaintiffs to expend their limited financial resources to mitigate. This “opioid epidemic
as an illicit market” concept is an important distinction underlying many of Plaintiffs’ allegations.
See, e.g., SAC at 150-51. Therefore, assuming as it must that Plaintiffs can prove their allegations,
the Court finds it plausible that Plaintiffs’ asserted injuries were directly caused “by reason of”
Defendants’ injurious conduct.
b. The “business or property” Limitation
Even if Plaintiffs’ asserted injuries were proximately and directly caused “by reason of”
Defendants’ alleged injurious conduct, Plaintiffs still may not bring a RICO claim if the injuries
asserted were not to their “business or property.” 18 U.S.C. § 1964(c). As a general principal,
“money, of course, is a form of property.” Reiter v. Sonotone Corp., 442 U.S. 330, 338 (1979). It
is also true that, “[a] person whose property is diminished by a payment of money wrongfully

6
Plaintiffs allege that “Congress specifically designed the closed chain of distribution to prevent the diversion of
legally produced controlled substances into the illicit market.. . . All registrants—which includes all manufacturers
and distributors of controlled substances—must adhere to the specific security, recordkeeping, monitoring and
reporting requirements that are designed to identify or prevent diversion.” Doc. #: 514 at 150-51 (citing 21 U.S.C.
§ 823(a)-(b); 21 C.F.R. § 1301.74).

12

 Case: 1:17-md-02804-DAP Doc #: 1203 Filed: 12/19/18 13 of 39. PageID #: 29032

induced is injured in his property.” County of Oakland v. City of Detroit, 866 F.2d 839, 845 (6th
Cir. 1989) (quoting Chattanooga Foundry and Pipe Works v. City of Atlanta, 203 U.S. 390, 396
(1906)). Plaintiffs assert thirteen categories of expenditures that they contend represent a
substantial monetary loss, and are therefore an injury to their property. See SAC at 285. Defendants
contend that none of the monetary costs asserted by Plaintiffs are the type of property injury
anticipated (and thus permitted) by the RICO statute.
(i) Personal Injuries
The Sixth Circuit has held that “personal injuries and pecuniary losses flowing from those
personal injuries fail to confer relief under § 1964(c).” Jackson v. Sedgwick Claims Mgmt. Servs.,
Inc., 731 F.3d 556, 565-66 (6th Cir. 2013). “Courts interpreting RICO have remained faithful to
this distinction [between non-redressable personal injury and redressable injury to property] by
excluding damages ‘arising directly out of’ a personal injury, even though personal injuries often
lead to monetary damages that would be sufficient to establish standing if the plaintiff alleged a
non-personal injury.” Id. (emphasis added).
The Jackson court’s holding that RICO claims that allege damages “arising directly out of
a personal injury” are not redressable adds another layer to the “directness” requirement
summarized by Defendants above. As stated previously, Defendants explained two ways in which
RICO allegations must be sufficiently direct to maintain a RICO claim. First, the relationship
between the asserted injury and the alleged injurious conduct must have a direct causal connection.
(the proximate cause analysis). And second, the asserted injury must also be borne directly by
Plaintiffs and not passed-on to them by intermediate parties (the standing “by reason of” analysis).
Under Jackson, there is an additional element of directness to consider—whether Plaintiffs’
alleged injury arises directly out of a personal injury. While the first two analyses require closeness

13

 Case: 1:17-md-02804-DAP Doc #: 1203 Filed: 12/19/18 14 of 39. PageID #: 29033

of the relationship between injury and injurious conduct, the Jackson analysis requires separation
between personal injury and pecuniary losses that arise therefrom.
To determine what type of pecuniary losses arise directly out of personal injury, the Court
first looks to the facts of Jackson itself. In Jackson, former employees who suffered personal
injuries at work sued their employer for a RICO violation. They alleged that their employer’s
workers’ compensation administrator and physician engaged in a fraudulent scheme to avoid
paying workers’ compensation benefits to them, causing them to suffer monetary losses (i.e.
receiving less money from their personal injury claim than they felt they were entitled to). See id.
at 561-62. The Jackson court rejected the plaintiffs’ theory that their workers’ compensation
benefits created an intervening legal entitlement to money, which is property under RICO. See id.
at 566. The Jackson court also cites several examples where other circuits have considered when
a pecuniary harm arises directly out of a personal injury. See, e.g., id. at 564 n.4. Reviewing these
cases, the Court determines that their unifying character is that pecuniary losses “arise directly out
of” a personal injury when the alleged RICO injury merely acts as an alternate theory for
recovering damages otherwise available in a tort claim for personal injury and is asserted by the
plaintiff him- or herself.7
In other words, damages that result from a personal injury to a plaintiff (such as attorney
fees, lost wages, lost workers’ compensation benefits, or medical expenses), that are recoverable

7

Footnote 4 of the Jackson opinion cites the following exemplary cases: Evans v. City of Chicago, 434 F.3d 916
(7th Cir.2006) (false imprisonment causing loss of income not an injury to “business or property”); Diaz v. Gates,
420 F.3d 897 (9th Cir.2005) (en banc) (false imprisonment causing loss of employment and employment
opportunity is an injury to “business or property”); Hughes v. Tobacco Inst., Inc., 278 F.3d 417 (5th Cir.2001)
(assault claim against tobacco company causing wrongful death of smoker not an injury to “business or property”);
Hamm v. Rhone–Poulenc Rorer Pharm., Inc., 187 F.3d 941 (8th Cir.1999) (retaliatory firing causing damage to
reputation not an injury to “business or property”); Bast v. Cohen, Dunn & Sinclair, PC, 59 F.3d 492, 495 (4th
Cir.1995) (surreptitiously recorded phone calls causing mental anguish not an injury to “business or property”); Doe
v. Roe, 958 F.2d 763 (7th Cir.1992) (coercion into sexual relationship by attorney causing emotional harm not an
injury to “business or property”); Drake v. B.F. Goodrich Co., 782 F.2d 638, 644 (6th Cir.1986) (exposure to toxic
chemicals during employment with defendant causing personal injuries not an injury to “business or property”).

14

 Case: 1:17-md-02804-DAP Doc #: 1203 Filed: 12/19/18 15 of 39. PageID #: 29034

in a typical tort action are not recoverable in RICO, even if caused by a defendant’s racketeering
activity. These are costs that arise directly out of the plaintiff’s personal injury, and are not injuries
to plaintiff’s “business or property” under the statute.
Defendants contend that Plaintiffs are attempting to recover the pecuniary losses resulting
directly from their addicted residents’ physical injuries, citing Jackson. Plaintiffs respond that their
economic losses are not pecuniary losses resulting from their addicted residents’ personal injuries;
rather, they are concrete economic losses to the cities and counties resulting directly from
Defendants’ relinquishment of their responsibility to maintain effective controls against diversion
of Schedule II narcotics. See, e.g., 21 U.S.C. § 823(a)-(b).
Plaintiffs have the better argument. None of Plaintiffs’ thirteen categories of costs arise
directly out of a personal injury to Plaintiffs themselves. See Doc. #: 654 at 36-37 (“Plaintiffs’
damages claims are not for personal injuries, but police and fire services, lost taxes, revenue and
funding.”). Even if Jackson can be read to preclude a RICO claim by a plaintiff who is tasked to
protect the well-being of a third-party where the asserted economic harm is created by a personal
injury to that third-party, it still does not follow that all thirteen categories of damages asserted by
Plaintiffs arise directly out of such personal injuries. In that scenario, it would still be crucial to
determine whether Plaintiffs’ alleged injuries result directly from the personal injuries sustained
by their citizens.
Plaintiffs assert the following injuries:
a. Losses caused by the decrease in funding available for Plaintiffs’ public services
for which funding was lost because it was diverted to other public services designed
to address the opioid epidemic;
b. Costs for providing healthcare and medical care, additional therapeutic, and
prescription drug purchases, and other treatments for patients suffering from
opioid-related addiction or disease, including overdoses and deaths;

15

 Case: 1:17-md-02804-DAP Doc #: 1203 Filed: 12/19/18 16 of 39. PageID #: 29035

c. Costs of training emergency and/or first responders in the proper treatment of
drug overdoses;
d. Costs associated with providing police officers, firefighters, and emergency
and/or first responders with naloxone—an opioid antagonist used to block the
deadly effects of opioids in the context of overdose;
e. Costs associated with emergency responses by police officers, firefighters, and
emergency and/or first responders to opioid overdoses;
f. Costs for providing mental-health services, treatment, counseling, rehabilitation
services, and social services to victims of the opioid epidemic and their families;
g. Costs for providing treatment of infants born with opioid-related medical
conditions, or born dependent on opioids due to drug use by mother during
pregnancy;
h. Costs associated with law enforcement and public safety relating to the opioid
epidemic, including but not limited to attempts to stop the flow of opioids into local
communities, to arrest and prosecute street-level dealers, to prevent the current
opioid epidemic from spreading and worsening, and to deal with the increased
levels of crimes that have directly resulted from the increased homeless and drugaddicted population;
i. Costs associated with increased burden on Plaintiffs’ judicial systems, including
increased security, increased staff, and the increased cost of adjudicating criminal
matters due to the increase in crime directly resulting from opioid addiction;
j. Costs associated with providing care for children whose parents suffer from
opioid-related disability or incapacitation;
k. Loss of tax revenue due to the decreased efficiency and size of the working
population in Plaintiffs’ communities;
l. Losses caused by diminished property values in neighborhoods where the opioid
epidemic has taken root; and
m. Losses caused by diminished property values in the form of decreased business
investment and tax revenue.
SAC at 285-286. Perhaps it can be said that items b and e above (the provision of medical treatment
and emergency response services) arise directly out of the personal injury of the citizens because
they are effectively claims to recoup the costs of medical expenses. However, there are other
categories of costs, for example item h (the costs associated with “attempts to stop the flow of

16

 Case: 1:17-md-02804-DAP Doc #: 1203 Filed: 12/19/18 17 of 39. PageID #: 29036

opioids into [Plaintiffs’] communities . . . [and] prevent the current opioid epidemic from spreading
and worsening”), that cannot be said to arise directly out of Plaintiffs’ residents’ personal injuries.
Id. Thus, under no reading of Jackson can it be maintained that all of Plaintiffs’ asserted injuries
arise directly out of a personal injury, and it is more likely, in this Court’s opinion, that most do
not.
(ii) Sovereign Capacity
Finally, Defendants argue that regardless of the above, Plaintiffs cannot recover injury to
their property to the extent they seek to recover costs associated with services provided in
Plaintiffs’ sovereign or quasi-sovereign capacities, which Defendants argue, accounts for the
entirety of Plaintiffs’ claimed injuries. Doc. #: 1082 at 6-7. Defendants implore the Court to follow
the Ninth Circuit’s holding in Canyon County v. Syngenta Seeds, Inc., 519 F.3d 969 (9th Cir.
2008). Defendants claim that Canyon County’s holding that “money ‘expended on public health
care and law enforcement services’ by a city or county does not constitute injury to ‘business or
property’ under RICO” is applicable to the present case. See Doc. #: 1079 at 6 (quoting Canyon
County, 519 F.3d at 971). Defendants point out that the Sixth Circuit has previously relied on
Canyon County (albeit for its analysis of the proximate cause requirement of RICO and not for its
“business or property” analysis) in City of Cleveland v. Ameriquest Mort. Sec., Inc., 615 F.3d 496
(6th Cir. 2010). The R&R declined to follow Canyon County, however, stating that, “Defendants
. . . have not identified any Supreme Court or Sixth Circuit case directly on point with the facts of
this case.”
The R&R is correct because there has never been a case with facts analogous to those
alleged by Plaintiffs here. It cannot be stressed strongly enough that the prescription opiates at

17

 Case: 1:17-md-02804-DAP Doc #: 1203 Filed: 12/19/18 18 of 39. PageID #: 29037

issue in this case are Schedule II controlled substances.8 Plaintiffs have alleged a wanton
disregard for public health and safety exhibited by Defendants with respect to their legal duty to
try to prevent the diversion of prescription opioids. With the privilege of lawfully manufacturing
and distributing Schedule II narcotics—and thus enjoying the profits therefrom—comes the
obligation to monitor, report, and prevent downstream diversion of those drugs. See
21 U.S.C. § 823(a)-(b). Plaintiffs allege that Defendants have intentionally turned a blind eye to
orders of opiates they knew were suspicious, thereby flooding the legitimate medical market and
creating a secondary “black” market at great profit to Defendants and at great cost to Plaintiffs.9
Plaintiffs must shoulder the responsibility for attempting to clean up the mess allegedly created by
Defendants’ misconduct.
In Canyon County, the County brought a RICO claim against four defendant companies
for “knowingly employ[ing] and/or harbor[ing] large numbers of illegal immigrants within Canyon
County, in an ‘Illegal Immigrant Hiring Scheme.’” Canyon County, 519 F.3d at 972. The County
claimed that it “paid millions of dollars for health care services and criminal justice services for
the illegal immigrants who [were] employed by the defendants in violation of federal law.” Id.
Based on these facts, the Ninth Circuit concluded that “when a governmental body acts in its
sovereign or quasi-sovereign capacity, seeking to enforce the laws or promote the public well-

8
“Since passage of the Comprehensive Drug Abuse Prevention and Control Act of 1970, 21 U.S.C. § 801 et seq.
(“CSA” or “Controlled Substances Act”), opioids have been regulated as controlled substances. As controlled
substances, they are categorized in five schedules, ranked in order of their potential for abuse, with Schedule I being
the most dangerous. The CSA imposes a hierarchy of restrictions on prescribing and dispensing drugs based on their
medicinal value, likelihood of addiction or abuse, and safety. Opioids generally had been categorized as Schedule II
or Schedule III drugs; hydrocodone and tapentadol were recently reclassified from Schedule III to Schedule II.
Schedule II drugs have a high potential for abuse, and may lead to severe psychological or physical dependence.
Schedule III drugs are deemed to have a lower potential for abuse, but their abuse still may lead to moderate or low
physical dependence or high psychological dependence.” SAC at 16 n.5.
9
For example, Plaintiffs allege that “between 2012 and 2016, Summit County estimates that it spent roughly $66
million on costs tied to the opioid crisis. Those costs are projected to add up to another $89 million over the next
five years, representing a total cost to the County of $155 million over the ten year period “simply trying to keep up
with the epidemic.’” Doc. #: 514 at 226.

18

 Case: 1:17-md-02804-DAP Doc #: 1203 Filed: 12/19/18 19 of 39. PageID #: 29038

being, it cannot claim to have been ‘injured in [its] . . . property’ for RICO purposes based solely
on the fact that it has spent money in order to act governmentally.” Canyon County, 519 F.3d at
976 (emphasis added). As stated above, neither the Sixth Circuit nor the Supreme Court have
adopted the holding in Canyon County, and certainly not for the broad proposition that
governmental entities are barred from seeking RICO claims for services provided in their
sovereign or quasi-sovereign capacities. Not even Canyon County established such a bright-line
rule. The Canyon County court held that governmental entities are not injured in their property
based solely on the expenditure of money to act governmentally. Use of the word “solely” implies
that governmental entities might be able to assert an injury to their property based on the
expenditure of money plus something else, perhaps, for example, the assumption of a statutory
burden relinquished by a defendant.
In this case, the scope and magnitude of the opioid crisis—the illicit drug market and
attendant human suffering—allegedly created by Defendants have forced Plaintiffs to go far
beyond what a governmental entity might ordinarily be expected to pay to enforce the laws or
promote the general welfare. Plaintiffs have been forced to expend vast sums of money far
exceeding their budgets to attempt to combat the opioid epidemic. The Court thus concludes that
while Cities and Counties cannot recover ordinary costs of services provided in their capacity as a
sovereign, Cities and Counties should be able to recover costs greatly in excess of the norm, so
long as they can prove the costs were incurred due to Defendants’ alleged RICO violations.
Additionally, the Ninth Circuit held in Canyon County that governmental entities can, in
fact, recover in RICO for the costs associated with doing business in the marketplace. See, e.g., id.
(“government entities that have been overcharged in commercial transactions and thus deprived of
their money can claim injury to their property.”).

19

 Case: 1:17-md-02804-DAP Doc #: 1203 Filed: 12/19/18 20 of 39. PageID #: 29039

It is Defendants’ position that all of Plaintiffs’ costs responding to Defendants’ alleged
misconduct are sovereign or quasi-sovereign public services derivative of their residents’ opioid
problems, for which they cannot recover. See Doc. #: 1082 at 7. The Court disagrees. Certainly,
some of Plaintiffs’ alleged costs are costs associated with the ordinary provision of services to
their constituents in their capacity as sovereigns. See, e.g., SAC at 285 (asserting injury due to the
provision of emergency first responder services). These costs cannot be recovered unless Plaintiffs
can prove they go beyond the ordinary provision of those services. However, some of Plaintiffs’
alleged costs are clearly associated with Plaintiffs’ participation in the marketplace, and for those
costs, Plaintiffs can undoubtedly recover. See, e.g., id. (asserting injury due to the costs associated
with purchasing naloxone to prevent future fatal overdoses).
Therefore, under the broadest reading of Sixth Circuit precedent, the Court finds that
Plaintiffs may recover damages based on the provision of governmental services in their capacity
as a sovereign to the extent they can prove the asserted costs go beyond the ordinary cost of
providing those services and are attributable to the alleged injurious conduct of Defendants. Under
a more restrictive reading of Jackson, Plaintiffs still may recover those costs associated with
preventing the flood of these narcotics into their communities, which do not directly arise from the
personal injuries of their citizens (e.g. providing medical care, addiction treatment, etc.). Lastly,
Plaintiffs have sufficiently alleged that at least some of their claimed injuries are recoverable under
RICO due to Plaintiffs’ participation in the marketplace. Thus, the Court concludes that it is not
appropriate to dismiss the RICO claims at this early stage in the litigation.
C. Civil Conspiracy
The R&R concluded that Plaintiffs sufficiently pled a claim for civil conspiracy. R&R at
95-98. Distributor Defendants object, stating that the Complaint “alleges no facts to support the
assertion that Distributors participated in the marketing of opioids [or] . . . in applying or lobbying
20

 Case: 1:17-md-02804-DAP Doc #: 1203 Filed: 12/19/18 21 of 39. PageID #: 29040

for increased opioid production quotas from DEA, . . . [and] no facts to support the claim that
Distributors conspired not to report the unlawful distribution practices of their competitors to the
authorities.” Doc. #: 1079 at 2-3 (emphasis removed). Pharmacy Defendants also object, arguing
that to the extent a civil conspiracy is alleged through Defendants’ participation in industry groups,
the Complaint is deficient with respect to the Retail Pharmacies, because it does not allege their
participation in those groups.
The R&R correctly identifies the elements of a cognizable conspiracy claim as: “(1) a
malicious combination; (2) two or more persons; (3) injury to person or property; and (4) existence
of an unlawful act independent from the actual conspiracy”) Hale v. Enerco Grp., Inc., 2011 WL
49545, at *5 (N.D. Ohio Jan. 5, 2011) (citation and internal quotation marks omitted). Distributor
Defendants take exception to the R&R’s finding of independent unlawful acts. Pharmacy
Defendants object to the R&R’s finding of a malicious combination. Defendants miss the forest
for the trees.
Distributor Defendants characterize the R&R’s finding of unlawful acts as
“(1) fraudulently marketing opioids; (2) fraudulently increasing the supply of opioids by seeking
increased quotas; and (3) failing to report suspicious orders.” Doc #: 1079 at 2. This
mischaracterizes the R&R’s actual finding that “the statutory public nuisance, Ohio RICO, and
injury through criminal acts claims” would all suffice to “fulfill the underlying unlawful act
element.” R&R at 96. The Court agrees that any of these claims is sufficient to satisfy the
underlying unlawful act element.
Pharmacy Defendants assert that, because the Complaint fails to expressly allege their
participation in industry groups such as the Healthcare Distribution Alliance and Pain Care Forum,
that Plaintiffs failed to adequately plead a civil conspiracy claim, at least regarding them. However,

21

 Case: 1:17-md-02804-DAP Doc #: 1203 Filed: 12/19/18 22 of 39. PageID #: 29041

the R&R did not rely on industry group participation to find a malicious combination. The R&R
concluded that:
Pleading the existence of a malicious conspiracy requires “only a common
understanding or design, even if tacit, to commit an unlawful act.” Gosden v. Louis,
687 N.E.2d 481, 496-98 (Ohio Ct. App. 1996). “All that must be shown is that . . .
the alleged coconspirator shared in the general conspiratorial objective.” Aetna Cas.
& Sur. Co. v. Leahey Const. Co., Inc., 219 F.3d 519, 538 (6th Cir. 2000) (citation
and internal quotation marks omitted).
Id. at 97. In other words, the R&R concluded that even absent evidence of participation in industry
groups, alleging a “shared conspiratorial objective” is sufficient to demonstrate a “malicious
combination” and thus survive Pharmacy Defendants’ motion to dismiss. Plaintiffs allege “all
Defendants took advantage of the industry structure, including end-running its internal checks and
balances, to their collective advantage.” SAC at 229 (emphasis added). Additionally, with respect
to Retail Pharmacy Defendants specifically, Plaintiffs assert, “instead of taking any meaningful
action to stem the flow of opioids into communities, they continued to participate in the oversupply
and profit from it.” Id. at 184. Thus, the R&R concluded, and this Court agrees, that Plaintiffs
adequately pled that Defendants shared a general conspiratorial objective of expanding the opioid
market and that there was a common understanding between all Defendants to disregard drug
reporting obligations to effectuate that goal. Therefore, the Court adopts the R&R with respect to
section III.K.
D. Abrogation of Common Law Claims Under the Ohio Products Liability Act
The R&R concluded that Plaintiffs’ Statutory Public Nuisance and Negligence Claims are
not abrogated by the Ohio Product Liability Act (“OPLA”).10 R&R at 58-60, 61-62. As further

10

Pharmacy Defendants argue, without any legal analysis, that Plaintiffs’ Unjust Enrichment Claim is abrogated by
the OPLA. Doc. #: 1078 at 11. The R&R does not address whether Plaintiffs’ Unjust Enrichment Claim is abrogated
by the OPLA, likely because the Pharmacies merely made a similarly undeveloped argument in their motion to
dismiss, and only rehash them here. Due to the conspicuous lack of legal development in either Pharmacy
Defendants’ Motion to Dismiss or Objections to the R&R, the Court finds this objection improper. Regardless, per
the analysis below, the Court finds that Plaintiffs’ Unjust Enrichment Claim is not abrogated by the OPLA.

22

 Case: 1:17-md-02804-DAP Doc #: 1203 Filed: 12/19/18 23 of 39. PageID #: 29042

discussed below, the Court concurs with and adopts the R&R’s recommendation and reasoning
with respect to these findings. However, the R&R also concluded that Plaintiffs’ Common Law
Absolute Public Nuisance Claim is abrogated by the OPLA. Id. at 62-65. The Court disagrees.
1. Abrogation of the Common Law Public Nuisance Claims
The Ohio Product Liability Act, Ohio Rev. Code § 2307.71 et seq., was enacted in 1988.
It was amended in 2005 and amended again in 2007. Despite the General Assembly’s attempts to
clarify the language and intent of the statute’s definition of “product liability claim,” the Court
finds that the definition remains ambiguous, and thus reviews the legislative history pursuant to
Ohio Rev. Code § 1.49(C) (“If a statute is ambiguous, the court, in determining the intention of
the legislature, may consider among other matters: . . . The legislative history.”).
The OPLA, at the time of its enactment, did not explicitly state that it was intended to
supersede all common law theories of product liability. It was also ambiguous regarding whether
it superseded common law claims seeking only economic loss damages. The Ohio Supreme Court
attempted to clarify these ambiguities in two cases, Carrel v. Allied Prods. Corp., 677 N.E.2d 795,
799 (1997) (holding that “the common-law action of negligent design survives the enactment of
the Ohio Products Liability Act.”) and LaPuma v. Collinwood Concrete, 661 N.E.2d 714, 716
(Ohio 1996) (holding that “although a cause of action may concern a product, it is not a product
liability claim within the purview of Ohio’s product liability statutes unless it alleges damages
other than economic ones, and that a failure to allege other than economic damages does not
destroy the claim, but rather removes it from the purview of those statutes.”).
In 2005, the General Assembly added the following provision to the OPLA (“the 2005
Amendment”): “Sections 2307.71 to 2307.80 of the Revised Code are intended to abrogate all
common law product liability causes of action.” 2004 Ohio Laws File 144 (Am. Sub. S.B. 80)

23

 Case: 1:17-md-02804-DAP Doc #: 1203 Filed: 12/19/18 24 of 39. PageID #: 29043

(codified at Ohio Rev. Code § 2307.71(B)). The associated legislative history of the 2005
Amendment states:
The General Assembly declares its intent that the amendment made by this act to
section 2307.71 of the Revised Code is intended to supersede the holding of the
Ohio Supreme Court in Carrel v. Allied Products Corp. (1997), 78 Ohio St.3d
284, that the common law product liability cause of action of negligent design
survives the enactment of the Ohio Product Liability Act, sections 2307.71 to
2307.80 of the Revised Code, and to abrogate all common law product liability
causes of action.
Id. (emphasis added). Notably, the General Assembly cited the Carrel holding while
conspicuously omitting the contemporary LaPuma holding. The Court therefore interprets the
General Assembly’s inclusion of Carrel to imply the intentional exclusion and therefore the tacit
acceptance of the Ohio Supreme Court’s holding in LaPuma.
In 2007, the Ohio Legislature further amended section 2307.71(A)(13) of the OPLA (“the
2007 Amendment”) to add the following to the definition of “product liability claim:”
“Product liability claim” also includes any public nuisance claim or cause of action
at common law in which it is alleged that the design, manufacture, supply,
marketing, distribution, promotion, advertising, labeling, or sale of a product
unreasonably interferes with a right common to the general public.
2006 Ohio Laws File 198 (Am. Sub. S.B. 117) (emphasis added). The associated legislative history
of the 2007 Amendment further states:
The General Assembly declares its intent that the amendments made by this act to
sections 2307.71 and 2307.73 of the Revised Code are not intended to be
substantive but are intended to clarify the General Assembly’s original intent in
enacting the Ohio Product Liability Act, sections 2307.71 to 2307.80 of the Revised
Code, as initially expressed in Section 3 of Am. Sub. S.B. 80 of the 125th General
Assembly, to abrogate all common law product liability causes of action including
common law public nuisance causes of action, regardless of how the claim is
described, styled, captioned, characterized, or designated, including claims against
a manufacturer or supplier for a public nuisance allegedly caused by a
manufacturer’s or supplier’s product.
Id. (emphasis added). Senate Bill 80 of the 125th General Assembly (the 2005 Amendment) was
a “tort reform” bill that was enacted to create limitations on various types of non-economic
24

 Case: 1:17-md-02804-DAP Doc #: 1203 Filed: 12/19/18 25 of 39. PageID #: 29044

damages. See 2004 Ohio Laws File 144 (Am. Sub. S.B. 80). Both the 2005 and 2007 Amendments
demonstrate the General Assembly’s intent to limit non-economic damages on all common law
theories of product liability regardless of how the claim was characterized.
Throughout these amendments, however, the overarching substantive definition of a
“product liability claim” has not changed much from the original 1988 OPLA definition. To fall
within the statute’s definition a plaintiff’s product liability claim must 1) seek to recover
compensatory damages 2) for death, physical injury to a person, emotional distress, or physical
damage to property other than the product in question (i.e. “harm” as defined by the statute).11 The
subsequent amendments make clear that any civil action concerning liability for a product due to
a defect in design, warning, or conformity—including any common law public nuisance or
common law negligence claim, regardless of how styled—that 1) seeks to recover compensatory
damages 2) for “harm” is abrogated by the OPLA. Conversely, a claim not seeking to recover
compensatory damages or seeking to recover solely for “economic loss” (i.e. not “harm”) does not
meet the definition of a product liability claim and is not abrogated by the OPLA. The OPLA is
explicit that “Harm is not ‘economic loss,’” and “Economic Loss is not ‘harm.’” Ohio Rev. Code
§ 2307.71(A)(2) and (7). This reading of § 2307.71(A)(13) is consistent with the legislative intent,
the holding in LaPuma, and with § 2307.72(C) which states:
Any recovery of compensatory damages for economic loss based on a claim that is
asserted in a civil action, other than a product liability claim, is not subject to
sections 2307.71 to 2307.79 of the Revised Code, but may occur under the common
law of this state or other applicable sections of the Revised Code.
Ohio Rev. Code § 2307.72(C).

11

Section 2307.71(A)(13) of the OPLA also requires that the claim allegedly arise from any of:
(a) The design, formulation, production, construction, creation, assembly, rebuilding, testing, or marketing of
that product;
(b) Any warning or instruction, or lack of warning or instruction, associated with that product;
(c) Any failure of that product to conform to any relevant representation or warranty.
Ohio Rev. Code § 2307.71(A)(13).

25

 Case: 1:17-md-02804-DAP Doc #: 1203 Filed: 12/19/18 26 of 39. PageID #: 29045

Further, by defining a “product liability claim” in terms of damages, the OPLA does not
provide for any form of equitable remedy.12 To conclude that all public nuisance claims, including
those seeking equitable remedies, are subsumed by the OPLA would effectively be a substantive
change in the law in contravention of the General Assembly’s express intent that the amendment
not be substantive. In other words, if all public nuisance claims, including those only seeking
equitable relief, were abrogated by the OPLA, a party merely seeking an equitable remedy to stop
a public nuisance would be forced instead to sue for compensatory damages under the OPLA, a
result that appears completely at odds with the legislative intent to limit non-economic
compensatory damages. Therefore, a claim seeking only equitable relief is not abrogated by the
OPLA.
The R&R concluded that the 2007 Amendment added public nuisance claims as a second
category of actions that fall under the definition of a product liability claim. See R&R at 58 n.37.
In support of this conclusion, Defendants cite Mount Lemmon Fire Dist. v. Guido, 139 S. Ct. 22
(2018). See Doc. #: 1116 at 3. In Mount Lemmon, the Supreme Court interpreted Congress’
addition of a second sentence to the definition of “employer” under the ADEA.13 The Supreme
Court held that the phrase “also means” adds a new category of employers to the ADEA’s reach.
Mount Lemmon is factually inapposite, and the R&R’s conclusion is incorrect for two reasons.
First, there is a substantive difference between the phrases “also means” and “also includes.” The
term “means” is definitional, while “the term ‘including’ is not one of all-embracing definition,
but connotes simply an illustrative application of the general principle.” In re Hartman, 443 N.E.2d

12

Defendants identify section 2307.72(D)(1) as expressly carving out abatement relief for contamination of the
environment as an indication that the OPLA supersedes all other forms of equitable relief. See Doc. #: 1116 at 4.
However, a far more natural reading of this section is the carving out of all forms of relief for pollution of the
environment from preemption by federal environmental protection laws and regulations.
13
Under the ADEA, “the term ‘employer’ means a person engaged in an industry affecting commerce who has
twenty or more employees . . . . The term also means (1) any agent of such a person, and (2) a State or political
subdivision of a State . . . .” 29 U.S.C. § 630(b) (emphasis added).

26

 Case: 1:17-md-02804-DAP Doc #: 1203 Filed: 12/19/18 27 of 39. PageID #: 29046

516, 517–18 (Ohio 1983) (quoting Federal Land Bank of St. Paul v. Bismarck Lumber Co., 314
U.S. 95, 100 (1941)). In this case, the general principal is that to be a product liability claim, a
plaintiff’s cause of action must seek compensatory damages for harm. Thus, a public nuisance
claim—to be “also include[d]” as a “product liability claim” under the OPLA—must likewise seek
compensatory damages for harm. Ohio Rev. Code § 2307.71(A)(13).
Second, as the Mount Lemmon opinion points out, “Congress amended the ADEA to cover
state and local governments.” Mount Lemmon, 139 S. Ct. at 23. This amendment to the ADEA
certainly amounts to—and was intended to be—an intentional, substantive change in the law. As
highlighted above, however, the 2007 Amendment to the OPLA was not intended to be a
substantive change.
Therefore, in light of the legislative history, the Court finds it at least plausible, if not likely,
that the 2005 and 2007 Amendments to the OPLA intended to clarify the definition of “product
liability claim” to mean “a claim or cause of action [including any common law negligence or
public nuisance theory of product liability . . .] that is asserted in a civil action . . . that seeks to
recover compensatory damages . . . for [harm] . . . .” This definition is the most consistent with the
statute, the legislative history, and the caselaw. See LaPuma v. Collinwood Concrete, 661 N.E.2d
714, 716 (Ohio 1996) (“Failure to allege other than economic damages . . . removes it from the
purview of [the OPLA].”) (intentionally not overruled by the 125th General Assembly); Volovetz
v. Tremco Barrier Sols., Inc., 74 N.E.3d 743, 753 n.4 (Ohio Ct. App. Nov. 16, 2016) (“We
recognize that a claim for purely economic loss is not included in the statutory definition of
‘product liability claim,’ and, consequently, a plaintiff with such a claim may pursue a commonlaw remedy.”); Ohio v. Purdue Pharma, Case No. 17 CI 261 (Ohio C.P. Aug. 22, 2018) (finding
that the Plaintiff’s common law nuisance claim not seeking compensatory damages is not

27

 Case: 1:17-md-02804-DAP Doc #: 1203 Filed: 12/19/18 28 of 39. PageID #: 29047

abrogated under the OPLA.); see also, 76 Ohio Jur. 3d Claims Within Scope of Product Liability
Act § 1 (“Ohio’s products liability statutes, by their plain language, neither cover nor abolish
claims for purely economic loss caused by defective products.”).
Using this definition, Plaintiffs’ absolute public nuisance claim, at least insofar as it does
not seek damages for harm,14 is not abrogated by the OPLA. Section III.E of the R&R is rejected
to the extent it held that Plaintiffs’ absolute public nuisance claim is abrogated by the OPLA.
2. City of Akron’s Ability to Bring a Statutory Public Nuisance Claim
The R&R concluded that Plaintiffs’ statutory public nuisance claim was not abrogated.
R&R at 62. No party objected to this conclusion, therefore the Court adopts the R&R with respect
to this finding. The R&R further concluded that the City of Akron lacked standing to bring a
statutory public nuisance claim, and that the County of Summit, which had standing, was not
limited only to injunctive relief under the statute. The Pharmacy Defendants object to the R&R’s
conclusion that § 4729.35 of the Ohio Revised Code does not limit the remedy that can be sought
under the statute to an injunction, and Plaintiffs object to the R&R’s conclusion that § 4729.35
limits who may maintain a nuisance action. The issue then, is whether § 4729.35 is limiting and if
so, to what extent.
The operative statutes involved in Plaintiffs’ Statutory Public Nuisance Claim are:
Ohio Rev. Code § 715.44(A) (emphasis added):15
A municipal corporation may abate any nuisance and prosecute in any court of
competent jurisdiction, any person who creates, continues, contributes to, or
suffers such nuisance to exist.

14

“‘Harm’ means death, physical injury to person, serious emotional distress, or physical damage to property other
than the product in question. Economic loss is not ‘harm.’” Ohio Rev. Code § 2307.71(A)(2).
15
Page’s Ohio Revised Code Annotated, Title 7: Municipal Corporations, Chapter 715: General Powers, §§715.37715.44: Health and Sanitation, §715.44: Power to abate nuisance and prevent injury.

28

 Case: 1:17-md-02804-DAP Doc #: 1203 Filed: 12/19/18 29 of 39. PageID #: 29048

Ohio Rev. Code § 3767.03 (emphasis added):16
Whenever a nuisance exists, the attorney general; the village solicitor, city director
of law, or other similar chief legal officer of the municipal corporation in which
the nuisance exists; the prosecuting attorney of the county in which the nuisance
exists; the law director of a township that has adopted a limited home rule
government under Chapter 504. of the Revised Code; or any person who is a citizen
of the county in which the nuisance exists may bring an action in equity in the name
of the state, upon the relation of the attorney general; the village solicitor, city
director of law, or other similar chief legal officer of the municipal corporation; the
prosecuting attorney; the township law director; or the person, to abate the nuisance
and to perpetually enjoin the person maintaining the nuisance from further
maintaining it.
Ohio Rev. Code § 4729.35 (emphasis added):17
The violation . . . of any laws of Ohio or of the United States of America or of any
rule of the board of pharmacy controlling the distribution of a drug of abuse . . . is
hereby declared to . . . constitute a public nuisance. The attorney general, the
prosecuting attorney of any county in which the offense was committed or in which
the person committing the offense resides, or the state board of pharmacy may
maintain an action in the name of the state to enjoin such person from engaging in
such violation. Any action under this section shall be brought in the common pleas
court of the county where the offense occurred or the county where the alleged
offender resides.
If § 4729.35 had ended after the first sentence, there would be no question as among the
three statutes that the City of Akron would have the authority to bring an action to abate a nuisance
caused by the violation of applicable drug laws. However, the subsequent sentences of § 4729.35
can be read as either limiting or expanding (or both). Section 4729.35 is potentially limiting, for
example, in that it does not also list city directors of law, chief legal officers of municipal
corporation, or law directors of townships as parties that may maintain a nuisance action. It is also
potentially limiting in that it only mentions injunctive relief rather than (or in addition to) relief in
the form of abatement (or equitable relief generally). However, as Plaintiffs point out, § 4729.35

16

Page’s Ohio Revised Code Annotated, Title 37: Health-Safety-Morals, Chapter 3767: Nuisances, §§3767.013767.11: Disorderly houses, §3767.03: Abatement of nuisance; bond.
17
Page’s Ohio Revised Code Annotated, Title 47: Occupations-Professions, Chapter 4729: Pharmacists; Dangerous
Drugs, §§4729.27-4729.46: Prohibitions, §4729.35: Violations of drug laws as public nuisance.

29

 Case: 1:17-md-02804-DAP Doc #: 1203 Filed: 12/19/18 30 of 39. PageID #: 29049

might be read as an expansion of § 3767.03 in that it additionally allows the state board of
pharmacy and the prosecuting attorney of the county in which the alleged offender resides to
maintain a nuisance action.18 It also provides jurisdiction in either the county where the offense
occurred or the county where the alleged offender resides.
The R&R succinctly summarizes the applicable Ohio rule of statutory construction, “a
court should construe various statutes in harmony unless their provisions are irreconcilably in
conflict.” R&R at 65 (citing Ohio Rev. Code § 1.51; United Tel. Co. v. Limbach, 643 N.E.2d 1129,
1131 (Ohio 1994)). In the event statutory provisions are irreconcilable, the special or local
provision prevails. See id. Additionally, as before, the Court interprets the inclusion of certain
elements in a statute to imply the intentional exclusion of others.
Here, § 4729.35 is a special or local provision. It is irreconcilable with §§ 715.44(A) and
3767.03 because the plain language of these sections explicitly allows the chief legal officer of
any municipal corporation, for example a city law director, to bring an action for abatement of any
nuisance, whereas § 4729.35—at least implicitly—excludes a city law director from bringing a
nuisance action for violations of the drug laws. Further, even a statutorily authorized party may
only bring an action to enjoin such violations, not one for abatement.
Thus, the Court concludes, as the R&R did, that the General Assembly’s inclusion of the
attorney general, county prosecuting attorney, and state board of pharmacy in § 4729.35 implies
the intentional exclusion of a city law director. Similarly, the Court concludes, though the R&R
did not, that the General Assembly’s reference to “an action . . . to enjoin such person from
engaging in such violation” implies the exclusion of other forms of relief. Ohio Rev.
Code § 4729.35.

18

As opposed to only the county prosecuting attorney in which the nuisance exists as allowed by section 3767.03.

30

 Case: 1:17-md-02804-DAP Doc #: 1203 Filed: 12/19/18 31 of 39. PageID #: 29050

While it may not have been the General Assembly’s intent to limit the parties who can
maintain a nuisance action or to limit the available relief, the Court declines to second guess the
unambiguous text of the General Assembly’s statute. Further, because § 4729.35 is a special or
local provision, irreconcilable with the more general provision, the Court reads § 4729.35 as an
exception to the general provision. Therefore, the Court adopts the R&R’s conclusion that the City
of Akron lacks standing to bring a statutory public nuisance claim but rejects the R&R’s conclusion
that Ohio Rev. Code § 4729.35 does not expressly limit the categories of relief available for a
nuisance claim to an injunction.
3. Abrogation of the Negligence Claim
The R&R concluded that the OPLA does not abrogate Plaintiffs’ negligence claims. R&R
at 60. Distributor Defendants object to that determination. See Doc. #: 1079 at 12. As discussed
above, the OPLA only abrogates civil actions that seek to recover compensatory damages for
death, physical injury, or physical damage to property caused by a product. Distributor Defendants
do not meaningfully develop any argument with respect to Plaintiffs’ negligence claim other than
to cite several cases where courts purportedly dismissed various tort claims as preempted by the
OPLA. The cases are all distinguishable.
Defendants cite Chem. Solvents, Inc. v. Advantage Eng’g, Inc., 2011 WL 1326034 (N.D.
Ohio Apr. 6, 2011). Regarding the plaintiff’s negligence claim, the Chem. Solvents court first
determined that “the Plaintiff [was] not saying that the product itself was defective.” Id. at *13.
The court then held, “Thus, this is not a ‘products liability’ claim, but a claim premised upon
subsequent negligent actions by Advantage. Accordingly, the Court finds this claim is not
preempted by the OPLA.” Id. (citing CCB Ohio LLC v. Chemque, Inc., 649 F. Supp. 2d 757, 763–
64 (S.D. Ohio 2009) (“Similarly, the Court finds actions for fraud and negligent misrepresentation
as outside the scope of the OPLA’s abrogation, as neither fit neatly into the definition of a
31

 Case: 1:17-md-02804-DAP Doc #: 1203 Filed: 12/19/18 32 of 39. PageID #: 29051

‘common law product liability claim.’”)). Here, Plaintiffs likewise are not asserting that the opioid
products themselves are defective, rather that Defendants negligently permitted (or even
encouraged) diversion of those products.
Defendants also cite McKinney v. Microsoft Corp., No. 1:10-CV-354, 2011 WL 13228141
(S.D. Ohio May 12, 2011). McKinney is a traditional products liability case where the plaintiff, in
addition to his products liability claim under the OPLA, asserted a claim for negligent manufacture
(i.e. a defective product claim), the exact type of claim considered by the General Assembly when
it overruled Carrel. Plaintiffs’ negligence claim in this case, again, does not assert that Defendants’
opioids were defective.
Finally, Defendants turn to Leen v. Wright Med. Tech., Inc., 2015 WL 5545064, at *2 (S.D.
Ohio Sept. 18, 2015). In Leen, the plaintiff did not oppose the defendant’s abrogation arguments
in the motion to dismiss, so the court dismissed the common law negligence claim without
considering the merits. See id. Therefore, based on this Court’s analysis of the OPLA and the cases
cited by Defendants, the Court adopts the R&R’s conclusion that Plaintiffs’ negligence claim is
not abrogated.
Defendants also assert that the R&R’s reliance on Cincinnati v. Beretta U.S.A. Corp. is
misplaced because, they claim, it was effectively overruled by the General Assembly’s
amendments to the OPLA. 768 N.E.2d 1136 (Ohio 2002); see Doc. #: 1079 at 14. Whether and to
what extent the OPLA abrogates negligence claims is a separate and distinct question from whether
there is a common law duty to prevent or attempt to prevent the alleged negligent creation of an
illicit secondary market.
As previously stated, the OPLA does not abrogate Plaintiffs’ negligence claim, which seeks
only relief from economic losses. However, even if the Court had found that Plaintiffs’ negligence

32

 Case: 1:17-md-02804-DAP Doc #: 1203 Filed: 12/19/18 33 of 39. PageID #: 29052

claim was abrogated, it does not follow that Beretta’s analysis of what constitutes a legal duty in
Ohio is somehow flawed.19 Thus, Beretta’s discussion of Ohio common law duty is still relevant
to the present case and is analyzed further below.
E. Negligence
The R&R concluded that Plaintiffs have pled sufficient facts to plausibly support their
claims that Defendants owed them a duty of care, that their injuries were proximately and
foreseeably caused by Defendants’ failure to take reasonable steps to prevent the oversupply of
opioids into Plaintiffs’ communities, and that their claim is not barred by the economic loss
doctrine. R&R at 74-85. Defendants object to the finding that they owed Plaintiffs any duty and
the conclusion that the economic loss doctrine does not bar Plaintiffs’ claim.
1. Duty of Care
Defendants make several objections to the R&R’s analysis regarding the duty of care. “The
existence of a duty of care, as an element of a negligence claim under Ohio law, depends on the
foreseeability of the injury, and an injury is ‘foreseeable’ if the defendant knew or should have
known that his act was likely to result in harm to someone.” 70 Ohio Jur. 3d Negligence § 11
(citing Bailey v. U.S., 115 F. Supp. 3d 882, 893 (N.D. Ohio 2015)). The R&R concluded that “it
was reasonably foreseeable that [Plaintiffs] would be forced to bear the public costs of increased
harm from the over-prescription and oversupply of opioids in their communities if Defendants
failed to implement and/or follow adequate controls in their marketing, distribution, and
dispensing of opioids,” and therefore, that “Plaintiffs have plausibly pleaded facts sufficient to
establish that Defendants owed them a common law duty.” R&R at 78-79.

19

The Beretta court determined that the defendants’ negligent manufacturing, marketing, and distributing, and
failure to exercise adequate control over the distribution of their products created an illegal, secondary market
resulting in foreseeable injury and that from Defendants’ perspective, the City of Cincinnati was a foreseeable
plaintiff. See Beretta, 768 N.E.2d at 1144.

33

 Case: 1:17-md-02804-DAP Doc #: 1203 Filed: 12/19/18 34 of 39. PageID #: 29053

First, Manufacturer Defendants assert that to the extent they owe a statutory duty, it is owed
to the U.S. Drug Enforcement Agency, not to plaintiffs. Doc. #: 1082 at 14. They also assert that
they have no legal duty under 21 U.S.C. § 827 or 21 C.F.R. § 1301.74(b) to monitor, report, or
prevent downstream diversion. Id. These objections are not well-taken. The R&R expressly did
not reach whether any Defendant owed a duty to Plaintiffs under the statutes or regulations. R&R
at 79. It also did not address whether the statutes or regulations create a common law duty under a
negligence per se theory. Id. at n.49. The R&R instead concluded that the common law duty pled
by Plaintiffs was sufficient to support a negligence claim. See R&R at 79. This Court agrees.
Distributor Defendants assert that the R&R “refus[ed] to confront a key duty question
[(whether a duty, if one exists, flows to the County)] head on.” Doc. #:1079 at 14. They assert that
“the R&R identified no Ohio case recognizing a common-law duty to report or halt suspicious
orders of controlled substances,” and “even if there were a common-law duty to report or halt
suspicious orders, no authority suggests that such a duty runs to the cities or counties.” Id.
(emphasis added). The duty that Plaintiffs allege is not so narrow. Plaintiffs allege that Defendants,
like all reasonably prudent persons, have a duty “to not expose Plaintiffs to an unreasonable risk
of harm.” SAC at 312.
In reaching its conclusion on the duty of care, the R&R relies on Cincinnati v. Beretta. The
R&R provides this summary:
In Cincinnati v. Beretta, the Ohio Supreme Court addressed the question of whether
gun manufacturers owed a duty of care to a local government concerning harms
caused by negligent manufacturing, marketing and distributing of firearms. Beretta
involved allegations that the defendants failed to exercise sufficient control over
the distribution of their guns, thereby creating an illegal secondary market in the
weapons. The Beretta court concluded that the harms that resulted from selling
these weapons were foreseeable—that Cincinnati was a foreseeable plaintiff. 768
N.E.2d at 1144. Plaintiffs argue that the harm caused by the marketing and
distribution of opioids are similarly foreseeable.

34

 Case: 1:17-md-02804-DAP Doc #: 1203 Filed: 12/19/18 35 of 39. PageID #: 29054

R&R at 75-76. Here, taking Plaintiffs’ allegations as true, by failing to administer responsible
distribution practices (many required by law), Defendants not only failed to prevent diversion, but
affirmatively created an illegal, secondary opioid market. Opioids are Schedule II drugs. Despite
Manufacturer Defendants’ marketing campaign to the contrary it is well known that opioids are
highly addictive. When there is a flood of highly addictive drugs into a community it is
foreseeable—to the point of being a foregone conclusion—that there will be a secondary, “black”
market created for those drugs. It is also foreseeable that local governments will be responsible for
combatting the creation of that market and mitigating its effects. Thus, the Court affirms the R&R’s
conclusion that Defendants owe Plaintiffs a common law duty of care.
2. Economic Loss Doctrine
Defendants also object to the R&Rs conclusion that Plaintiffs’ negligence claim is not
precluded by the economic loss doctrine. Defendants’ objections merely rehash arguments already
made in their motions to dismiss. The R&R does a thorough analysis of the application of the
economic loss rule, and this Court finds no fault with it. The R&R states:
The economic loss rule recognizes that the risk of consequential economic loss is
something that the parties can allocate by agreement when they enter into a
contract. This allocation of risk is not possible where, as here, the harm alleged is
caused by involuntary interactions between a tortfeasor and a plaintiff. Thus, courts
have noted that in cases involving only economic loss, the rule “will bar the tort
claim if the duty arose only by contract.” Campbell v. Krupp, 961 N.E.2d 205, 211
(Ohio Ct. App. 2011). By contrast, “the economic loss rule does not apply—and
the plaintiff who suffered only economic damages can proceed in tort—if the
defendant breached a duty that did not arise solely from a contract.” Id.; see also
Corporex, 835 N.E.2d. at 705 (“When a duty in tort exists, a party may recover in
tort. When a duty is premised entirely upon the terms of a contract, a party may
recover based upon breach of contract.”); Ineos USA LLC v. Furmanite Am., Inc.,
2014 WL 5803042, at *6 (Ohio Ct. App. Nov. 10, 2014) (“[W]here a tort claim
alleges that a duty was breached independent of the contract, the economic loss rule
does not apply.”).

35

 Case: 1:17-md-02804-DAP Doc #: 1203 Filed: 12/19/18 36 of 39. PageID #: 29055

R&R at 84 (citing Corporex Dev. & Constr. Mgt., Inc. v. Shook, Inc., 835 N.E.2d 701 (Ohio 2005)).
Thus, the Court concurs with and affirms the R&R’s analysis of the economic loss rule and its
conclusion that it is not applicable to Plaintiffs’ tort claims.
F. The Injury Through Criminal Acts Objections
The R&R concluded that Defendants’ motion to dismiss Plaintiffs’ Injury Through
Criminal Acts Claim should not be dismissed. R&R at 88-90. Defendants’ primary objection to
this conclusion merely rehashes the argument initially made in their motions to dismiss: that they
have not been convicted of a crime. Their objection cites no new facts or case law that were not
already presented to and considered by Magistrate Judge Ruiz. Whether Ohio Rev. Code
§ 2307.60(A)(1) requires an underlying conviction is a question this Court recently certified to the
Ohio Supreme Court in Buddenberg v. Weisdack, Case No. 1:18-cv-00522, 2018 WL 3159052
(N.D. Ohio June 28, 2018) (Polster, J.); see also 10/24/2018 Case Announcements, 2018-Ohio4288 (available at http://www.supremecourt.ohio.gov/ROD/docs/) (accepting the certified
question). In Buddenberg, this Court denied the defendants’ motion to dismiss and ordered,
“Defendants may renew their challenge in the form of a motion for summary judgment after
discovery and further research.” Buddenberg, 2018 WL 3159052 at *6. Nothing in any
Defendants’ briefing convinces this Court that the same approach is not appropriate here.
Therefore, the Court adopts the R&R with respect to Section III.I. Defendants’ objections are
overruled.20
G. Unjust Enrichment
The R&R concluded that Defendants’ motion to dismiss Plaintiffs’ Unjust Enrichment
Claim should be denied. See R&R at 91-95. The issue at the heart of Defendants’ objections to the

20

Should the Ohio Supreme Court rule that a criminal conviction is required, this claim will of course be dismissed.

36

 Case: 1:17-md-02804-DAP Doc #: 1203 Filed: 12/19/18 37 of 39. PageID #: 29056

R&R’s conclusion is whether Plaintiffs conferred a benefit upon the Defendants. Defendants argue
that “the rule in Ohio is that to show that a plaintiff conferred a benefit upon a defendant, an
economic transaction must exist between the parties.” Doc. #: 1078 at 13 (internal quotations
omitted) (citing Ohio Edison Co. v. Direct Energy Bus., LLC, No. 5:17-cv-746, 2017 WL 3174347
(N.D. Ohio July 26, 2017); Caterpillar Fin. Servs. Corp. v. Harold Tatman & Sons Enters., Inc.,
50 N.E.3d 955 (Ohio Ct. App. 2015); In re Whirlpool Corp. Front-Loading Washer Prod. Liab.
Litig., 684 F. Supp. 2d 942 (N.D. Ohio 2009)).
This is not the rule in Ohio. All the cases cited by Defendants refer back to one sentence in
Johnson v. Microsoft Corp.: “The facts in this case demonstrate that no economic transaction
occurred between Johnson and Microsoft, and, therefore, Johnson cannot establish that Microsoft
retained any benefit ‘to which it is not justly entitled.’” 834 N.E.2d 791, 799 (Ohio 2005)
(emphasis added) (citing Keco Indus., Inc. v. Cincinnati & Suburban Bell Tel. Co., 141 N.E.2d
465 (Ohio 1957)). This holding is expressly limited to the facts of that case. Johnson does state
the rule in Ohio, however. It provides: “The rule of law is that an indirect purchaser cannot assert
a common-law claim for restitution and unjust enrichment against a defendant without establishing
that a benefit had been conferred upon that defendant by the purchaser.” Id. (emphasis added).
As Defendants are quick to point out, Plaintiffs do not claim to be purchasers of opioids,
indirect or otherwise. See, e.g., Doc. #: 1078 at 11 (“Plaintiffs do not allege that they purchased
opioids from the Pharmacy Defendants.”). As such, the R&R rightly concludes that “Plaintiffs’
theory of recovery is not based on a financial transaction, therefore the claim is not barred by
Johnson’s limiting indirect purchasers from maintaining unjust enrichment claims against parties
other than those with whom they dealt directly.” R&R at 92.
Plaintiffs’ claim is that “Plaintiffs have conferred a benefit upon Defendants by paying for
Defendants’ externalities: the cost of the harms caused by Defendants’ improper distribution

37

 Case: 1:17-md-02804-DAP Doc #: 1203 Filed: 12/19/18 38 of 39. PageID #: 29057

practices.” SAC at 328. According to Plaintiffs, Defendants’ conduct allowed the diversion of opioids
and thereby created a black market for their drugs. See id. at 7. This black market allowed Defendants
to continue to ship large volumes of opioids into Plaintiffs’ communities at great profit to Defendants
and great expense to Plaintiffs. See id. at 328. Under Ohio law, “one is unjustly enriched if the retention
of a benefit would be unjust, and one should not be allowed to profit or enrich himself or herself
inequitably at another’s expense.” 18 Ohio Jur. 3d Contracts § 279. Therefore, for the reasons stated,
Defendants’ objections are overruled. The Court adopts Section III.J of the R&R.

Having considered Plaintiffs’ Second Amended Complaint, Defendants’ Motions to
Dismiss, Plaintiffs’ Omnibus Response, Defendants’ Replies, Magistrate Judge Ruiz’s Report and
Recommendation, the parties’ Objections to the R&R, and their Responses, Defendants’ Motions
to Dismiss, Doc. ##: 491, 497, 499, are DENIED with the following exception: The City of
Akron’s Statutory Public Nuisance claim is dismissed for lack of standing under Ohio Rev. Code
§ 4729.35. The County of Summit’s Statutory Public Nuisance claim is limited to seeking
injunctive relief.
It is accurate to describe the opioid epidemic as a man-made plague, twenty years in the
making. The pain, death, and heartache it has wrought cannot be overstated. As this Court has
previously stated, it is hard to find anyone in Ohio who does not have a family member, a friend,
a parent of a friend, or a child of a friend who has not been affected.
Plaintiffs have made very serious accusations, alleging that each of the defendant
Manufacturers, Distributors, and Pharmacies bear part of the responsibility for this plague because
of their action and inaction in manufacturing and distributing prescription opioids. Plaintiffs allege
that Defendants have contributed to the addiction of millions of Americans to these prescription
opioids and to the foreseeable result that many of those addicted would turn to street drugs.
38

 Case: 1:17-md-02804-DAP Doc #: 1203 Filed: 12/19/18 39 of 39. PageID #: 29058

While these allegations do not fit neatly into the legal theories chosen by Plaintiffs, they fit
nevertheless. Whether Plaintiffs can prove any of these allegations remains to be seen, but this
Court holds that they will have that opportunity.
The Court, thus having ruled on all of Defendants’ Motions to Dismiss, orders Defendants
to file their Answers to Plaintiffs’ Corrected Second Amended Complaint, Doc. #: 514, no later
than January 15, 2019.
IT IS SO ORDERED.

/s/ Dan Aaron Polster December 19, 2018
DAN AARON POLSTER
UNITED STATES DISTRICT JUDGE

39