HomeMy WebLinkAbout24962RESOLUTION NO. 24962
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM
SPRINGS, CALIFORNIA AUTHORIZING CITY OF PALM SPRINGS,
CALIFORNIA TO ENTER INTO THE SETTLEMENT AGREEMENTS WITH
MCKESSON CORPORATION, CARDINAL HEALTH, INC.,
AMERISOURCEBERGEN CORPORATION, JOHNSON & JOHNSON,
JANSSEN PHARMACEUTICALS, INC., ORTHO-MCNEIL-JANSSEN
PHARMACEUTICALS, INC., AND JANSSEN PHARMACEUITCA, INC.,
AGREE TO THE TERMS OF THE MOU ALLOCATING SETTLEMENT
PROCEEDS, AND AUTHORIZE ENTRY INTO THE MOU WITH THE
ATTORNEY GENERAL.
THE CITY COUNCIL OF THE CITY OF PALM SPRINGS DOES HEREBY FIND
AS FOLLOWS:
A. The United States is facing an ongoing public health crisis of opioid
abuse, addiction, overdose, and death. The State of California and California local
governments spend billions of dollars each year to address the direct consequences
of this crisis; and
B. Since 2017, state and local governments in California and around the
United States have been pursuing litigation against certain manufacturers,
distributors, and retailers of opioid pharmaceuticals (the "Opioid Defendants") in an
effort to hold the Opioid Defendants financially responsible for the impact on of the
Opioid Epidemic on the City of Palm Springs, California the City") and resources
necessary to combat the opioid epidemic; and
C. Negotiations to settle claims against several of the Opioid Defendants,
specifically McKesson Corporation, Cardinal Health, Inc., AmerisourceBergen
Corporation, Johnson & Johnson, Janssen Pharmaceuticals, Inc., Ortho-McNeil-
Janssen Pharmaceuticals, Inc., and Janssen Pharmaceutical, Inc. (the "Settling
Defendants") have been ongoing for several years; and
D. Negotiations with the Settling Defendants have resulted in proposed
nationwide settlements of state and local government claims to settle the Litigation;
and
E. Copies of the proposed terms of those proposed nationwide
settlements have been set forth in the Distributors Master Settlement Agreement
and the J&J Master Settlement Agreement (collectively "Settlement Agreements");
and
F. Copies of the Settlement Agreements, as well as summary of the main
terms of the Settlement Agreements, the deadlines for submitting the Participation
Agreements to the Settlement Agreements, and the MDL Court's Order setting
Resolution No. 24962
Page 2
deadlines for any Plaintiff who declines to enter into the Settlement Agreements,
have been provided to the City Council as part of the staff report accompanying this
Resolution; and
G. The Settlement Agreements provide, among other things, for the
payment of a certain sum to settling government entities in California, including to
the State of California and Participating Subdivisions upon occurrence of certain
events as defined in the Settlement Agreements ("California Opioid Funds"); and
H. California local governments, as well as the attorneys representing
those local governments, have engaged in extensive discussions with the State
Attorney General's Office ("AGO") as to how the California Opioid Funds will be
allocated, which has resulted in the Proposed California State -Subdivision
Agreement Regarding Distribution and Use of Settlement Funds- Distributor
Settlement and the Proposed California State -Subdivision Agreement Regarding
Distribution and Use of Settlement Funds- Janssen Settlement (collectively the
"Allocation Agreements"), which are agreements between all of the entities identified
in the Allocation Agreements, and
I. Copies of the Allocation Agreements have been provided with this
Resolution; and
J. The Allocation Agreements propose to allocate the California Opioid
Funds 15% to a State Fund; 70% to local governments in an Abatement Accounts
Fund; and 15% to litigating local governments in a Subdivision Fund. All funds
allocated to California from the Settlements will be combined pursuant to Allocation
Agreements, and 15% of that total shall be allocated to the State of California (the
"State of California Allocation"), 70% to the California Abatement Accounts Fund
("CA Abatement Accounts Fund Allocation"), and 15% to the California Subdivision
Fund ("CA Subdivision Fund Allocation"), and
K. The funds in the CA Abatement Accounts Fund (the California
Abatement Accounts Fund Allocation) will be allocated based on an allocation model
developed in connection with the proposed negotiating class in the National
Prescription Opiate Litigation (MDL No. 2804). The percentage from the CA
Abatement Accounts Fund allocated to each eligible local government (any county
or city above 10,000 in population) "Eligible Local Government") is set forth in
Appendix 1 to each Allocation Agreement and provided to the Council along with the
staff report accompanying this Resolution. The City's share of the CA Abatement
Accounts Fund is a product of the total in the CA Abatement Accounts Fund
multiplied by the City's percentage set forth in Appendix 1 (the "Local Allocation"),
and
L. Any city that is an Eligible Local Government will be allocated its Local
Allocation share only when it becomes a Participating Subdivision by signing the
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Participation Agreements to the Settlements. The Local Allocation share for a city
that is a Participating Subdivision will be paid to the county in which the city is
located, rather than to the city, so long as: (a) the county is a Participating
Subdivision, and (b) the city has not advised the Settlement Fund Administrator that
it requests direct payment at least 60 days prior to a Payment Date as defined in the
Settlement Agreements; and
M. If a city elects to take a direct distribution of its Local Allocation amount,
both the Settlement Agreements and the Allocation Agreements place certain
limitations on the time period for expenditures, use of CA Abatement Accounts
Funds and provide for accounting procedures and oversight of the expenditures of
the California Abatement Accounts Funds; and
N. The City hereby elects to take its direct distribution of its Local
Allocation amount as set forth on Exhibit 1 and to comply with the requirements of
the Allocation Agreements; and
O. The City, by this Resolution, shall establish an account for the receipt
of the Local Allocation Funds consistent with the terms of the Settlement
Agreements, the Allocation Agreements and this Resolution ("the Opioid Abatement
Account"); and
P. The City's Opioid Abatement Account shall be separate from the City's
general fund, shall not be commingled with any other City funds, and shall be
dedicated to funding opioid abatement measures as provided in the Settlement
Agreements and the Allocation Agreements.
THE CITY COUNCIL OF THE CITY OF PALM SPRINGS DOES HEREBY
RESOLVE AS FOLLOWS. -
SECTION 1: The City Council hereby approves and authorizes the City
Attorney to settle and release the City's claims against the Settling Defendants in
exchange for the consideration set forth in the Settlement Agreements, Allocation`
Agreements including taking the following measures:
1. The execution of the Participation Agreement to the Distributors
Settlement Agreement and any and all documents ancillary thereto.
2. The execution of the Participation Agreement to the Janssen
Settlement Agreement and any and all documents ancillary thereto.
3. The execution of the Proposed California State -Subdivision Agreement
Regarding Distribution and Use of Settlement Funds- Distributor
Settlement by executing the signature pages to that Allocation
Agreement.
Resolution No. 24962
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4. The execution of the Proposed California State -Subdivision Agreement
Regarding Distribution and Use of Settlement Funds- Janssen
Settlement Allocation Agreements by executing the signature pages to
that Allocation Agreement.
5. Notify the Settlement Fund Administrator that the City requests a direct
payment under the Allocation Agreements at least 60 days prior to the
Payment Date in the Settlement Agreements.
SECTION 2. The City's Local Allocation Funds shall be deposited in
the City's Opioid Abatement Account.
SECTION 3. All actions heretofore taken by the City Council and other
appropriate public officers and agents of the City with respect to the matters
contemplated under this Resolution are hereby ratified, confirmed and approved
SECTION 4. The City Attorney is hereby authorized to execute any
documents necessary to effectuate the authorized actions specified herein.
PASSED, APPROVED AND ADOPTED BY THE PALM SPRINGS CITY
COUNCIL THIS 9th DAY OF DECEMBER, 2021.
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JUSTIN CLIfTON, CITY VANAGER
ATTEST:
HONY J. I
J1*1AAC
LERK
Resolution No. 24962
Page 5
STATE OF CALIFORNIA )
COUNTY OF RIVERSIDE )
CITY OF PALM SPRINGS)
CERTIFICATION
ss.
I, ANTHONY MEJIA, City Clerk of the City of Palm Springs, hereby certify that Resolution
No. 24962 is a full, true and correct copy, and was duly adopted at a regular meeting of
the City Council of the City of Palm Springs on this 9th day of December 2021, by the
following vote:
AYES: Councilmembers Kors, Woods, Holstege Mayor Pro Tem Garner, and
Mayor Middleton
NOES: None
ABSENT: None
ABSTAIN: None
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the
City of Palm Springs, California, this TR46% day of 7Dtce, %bv,' , smi
�,Khony J. jia, M Clerk
City of Palm prings, alifornia