Parens Patriae and State Attorneys General: A Solution to Our Nation's Opioid Litigation?

• Author: Cordova, Nick

State attorneys general have tried to take the lead in responding to the national opioid crisis by suing pharmaceutical companies and distributors on behalf of their states' citizens. (1) An attorney general's standing to bring these suits relies on the common law doctrine of parens patriae, which allows a state to assert "quasi-sovereign interest[s]" in a judicial forum, including "the health and well-being--both physical and economic--of its residents." (2) Several state and federal laws codify this concept in particular areas of the law, such as antitrust, by explicitly providing for parens patriae actions. (3) But on the whole, the doctrine's precise boundaries remain ill-defined. (4)

Recently, however, two state attorneys general invoked parens patriae in petitions seeking to halt opioid lawsuits brought by local governments. Their petitions argued that local government lawsuits illegally impaired each state's ability to protect its citizens through state-controlled suits. (5) Both petitions failed, but no court has squarely addressed the possibility that parens patriae standing may prevent local governments from bringing claims for harms to their residents. The remainder of this paper refers to this concept as "parens patriae preclusion." I intend this term to cover several distinct ideas, each of which might bar local government suits on the basis of a state's unique parens patriae role.

The first possibility is that local governments simply lack standing (at least in federal courts) to sue based on harms to their residents, because municipal governments lack the sovereign capacity necessary to bring claims on their residents' behalf as parens patriae. This concept would not involve "preclusion" in the res judicata sense, but nonetheless merits discussion because the attorneys general packaged it within their broader preclusion arguments. Another possibility is that state-level settlements of parens patriae cases preclude local governments from litigating broad-based public (and possibly also private) claims by res judicata. Finally, local governments might be barred from litigating these claims even if no settlement has been reached at the state level. This bar might be inherent in the sovereignty that states have and local governments lack or might only arise when states initiate litigation. This note will attempt to delineate clearly between these ideas, although it is not always possible to isolate which of these ideas a party intended to advance. Elaborating on this set of ideas (which, again, this note refers to collectively as "parens patriae preclusion") is worthwhile because they could profoundly influence opioid litigation should they gain judicial acceptance. This note will ask (and take a position on) whether this parens patriae preclusion concept has any legal merit, how it would likely affect pending opioid litigation, and whether these effects would be normatively positive.

First, this note will introduce the two instances where state attorneys general have made explicit parens patriae preclusion arguments. Part I will then examine the sparse legal materials on the scope and effect of parens patriae standing, and argue that they lend enough support to certain aspects of the arguments made by the attorneys general to make these arguments plausible as a matter of legal theory. Part II will explore how active assertions of parens patriae preclusion might operate on pending opioid litigation. Part III will discuss innovative proposals to address perceived problems with the current path of opioid litigation, their likelihood of success, and how parens patriae preclusion might interact with them. The note concludes by arguing that, under any foreseeable set of circumstances, continued development and court acceptance of a parens patriae preclusion doctrine is normatively desirable because it would promote the goals of facilitating nationwide settlement agreements and proper allocation of settlement funds.

Introduction

On August 30, 2019, Ohio Attorney General Dave Yost filed a petition for a writ of mandamus asking the Sixth Circuit to enjoin the U.S. District Court for the Northern District of Ohio from holding a bellwether trial of suits that two Ohio counties, Cuyahoga and Summit, brought against several opioid manufacturers and distributors. (6) In this petition, Yost argued, "[t]he counties advance claims that belong to the State," (7) that, if allowed to proceed, "will cripple the federal dual-sovereign structure of these United States." (8) Hyperbole aside, the petition offers an argument with intuitive appeal: states, not their political subdivisions, have standing as parens patriae to "recover money for harms to the general health, safety, and physical and economic wellbeing of Ohioans." (9) The counties' claims, based on harms to their residents and requesting relief similar to that which Ohio requests, interfere with this power by making it more difficult for the Attorney General to negotiate a settlement with the defendants. (10) The defendants, knowing that the counties' suit would survive a settlement with the state and would continue to threaten liability for the same harms a settlement with the Attorney General would address, would be disincentivized to negotiate. On October 10, 2019, a three-judge panel disregarded this argument in its denial of Ohio's petition. (11) The opinion rejected the petition as untimely without addressing the question of whether Ohio's parens patriae claims precluded the counties' similar claims. (12)

Arkansas Attorney General Leslie Rutledge advanced a closely analogous argument when she petitioned the Arkansas Supreme Court for a writ of mandamus to halt an opioid lawsuit brought by seventy-five counties, fifteen cities, and a district attorney. (13) Rutledge argued that the suit would usurp her sole authority to bring lawsuits on behalf

of the state as parens patriae. (14) The Arkansas Supreme Court responded with a one-sentence opinion that reads: "Petitioner's emergency petition for writ of mandamus is denied." (15) Because both the Sixth Circuit and Arkansas Supreme Court declined to analyze thoroughly the argument that parens patriae standing prevents local governments from bringing lawsuits parallel to a state attorney general, it remains an open question whether this argument is well-founded.

1. Is There a Legal Basis for Parens Patriae Preclusion?

   Now that two state attorneys general have argued that states' parens patriae standing is exclusive and therefore bars local governments from bringing suits based on injuries to their residents, an attempt to determine whether a legal basis exists to support this claim is in order. Supreme Court precedent and the origins and history of parens patriae standing suggest that local governments lack standing (at least in federal courts) to bring lawsuits on behalf of their citizens. This concept does not turn on whether a state has already asserted parens patriae standing, but focuses instead on local governments' incapacity to do so. It therefore does not involve res judicata. This note nonetheless includes this concept under the umbrella term parens patriae preclusion because both attorneys general bundled it with arguments that truly implicate res judicata.

   1. Parens Patriae History, Theory, and Case Law

      Beginning in the thirteenth century, as a prerogative of the English Crown to initiate legal action as guardian of the mentally infirm, (16) the parens patriae concept expanded dramatically in the United States throughout the nineteenth century as states asserted standing to vindicate other "quasi-sovereign interests," including the abatement of public nuisances. (17) This rapid common law development left the boundaries of parens patriae standing anything but clearly defined. The Supreme Court has never ventured "an exhaustive formal definition nor a definitive list of" what constitutes a "quasi-sovereign interest," (18) and justices have offered divergent views as to whether a state's assertion of parens patriae standing heightens or relaxes courts' standing analysis. (19) Still, tracing the Court's treatment of the concept provides some insight into the potential extent of its reach.

      The Supreme Court has justified the expansion of parens patriae standing by reasoning from two theories: "universal sovereignty theory," which posits that parens patriae standing is a privilege that inherently belongs to all sovereign governments; and "sovereignty transference theory," which posits that parens patriae authority transferred from the British Crown to the states when they achieved independence. (20) The Court has not cleanly differentiated between these two related theories, (21) but both, whether applied separately or in combination, make plausible the argument that states' parens patriae authority precludes local government lawsuits for harms to their residents.

      The Supreme Court first endorsed "universal sovereignty theory" in 1890 when it proclaimed, in Late Corp. of the Church of Jesus Christ of Latter-Day Saints v. United States, (22) that "[t]his prerogative of parens patriae is inherent in the supreme power of every State" and is "often necessary to be exercised in the interests of humanity." (23) The Court has never repudiated this rationale. (24) When combined with the Court's labelling of lawsuits that protect the public welfare as exercises of parens patriae, (25) this theory would arguably preclude local governments from pursuing lawsuits to address harms to their residents. The argument would go that local governments' interest in protecting their residents is a public welfare concern--a quasi-sovereign interest that only a quasi-sovereign actor can assert. Because the Supreme Court has repeatedly held that local governments lack any measure of sovereignty, (26) any suit by a local government for injuries to its residents would be an impermissible exercise of parens patriae...