City devastated by OxyContin use sues Purdue Pharma, claims drugmaker put profits over citizens’ welfare

A Washington city devastated by black-market OxyContin filed a first-of-its-kind lawsuit against the painkiller’s manufacturer Thursday, alleging that the company turned a blind eye to criminal trafficking of its pills to “reap large and obscene profits” and demanding it foot the bill for widespread opioid addiction in the community.

The suit by Everett, a city of 100,000 north of Seattle, was prompted by a Times investigation last year. The newspaper revealed that drugmaker Purdue Pharma had extensive evidence pointing to illegal trafficking across the nation but in many cases did not share it with law enforcement or cut off the flow of pills.

One Los Angeles ring monitored by Purdue and highlighted by The Times’ investigation supplied OxyContin to gang members and other criminals who were trafficking the drug to Everett. At the height of the problem, in 2010, OxyContin was a factor in more than half the crimes in Snohomish County, and it ignited a heroin epidemic that still grips the region, officials said.

In a complaint in state Superior Court, city lawyers accused Purdue of gross negligence, creating a public nuisance and other misconduct and said the company should pay costs of handling the opioid crisis — a figure that the mayor said could run to tens of millions of dollars — as well as punitive damages.

“Purdue’s improper actions of placing profits over the welfare of the citizens of Everett have caused and will continue to cause substantial damages to Everett,” the lawyers wrote. “Purdue is liable for its intentional, reckless, and/or negligent misconduct and should not be allowed to evade responsibility for its callous and unconscionable practices.”

Purdue has been sued hundreds of times over the past 20 years over its marketing of OxyContin to doctors and the drug’s risk of addiction to patients, but Everett’s suit is the first to focus narrowly on what the company knew about criminal distribution of the painkiller.

Purdue declined to comment about the suit Thursday. In a statement Wednesday in advance of a vote by the Everett City Council to authorize the litigation, a spokesman for Purdue said, “We share public officials’ concerns about the opioid crisis and we are committed to working collaboratively to find solutions.”

The Times’ investigation, published in July, disclosed that for more than a decade, an internal security team at Purdue monitored doctors and pharmacies it suspected of colluding with dealers and addicts. In the case of the L.A. ring, criminals set up a phony clinic near MacArthur Park in 2008 and worked with corrupt physicians and pharmacies to obtain pills over 18 months.

A Purdue sales manager dispatched to investigate the high volume of prescriptions at the clinic found a rundown building thronged with rough men and urged supervisors to alert the Drug Enforcement Administration, saying she was “very certain this is an organized drug ring.”

Despite her pleas and additional evidence suggesting that pills were pouring into the hands of criminals, company officials did not go to authorities until years later when the drug ring was out of business and its leaders under indictment. By then, 1.1 million pills had spilled into the illicit pipeline.

Within days of The Times’ story, Everett officials quietly began looking into a lawsuit against the company and later hired a Seattle law firm to evaluate a case.

“We know this is a bold action we are taking, but it is the right thing to do,” Mayor Ray Stephanson said.

The glut of OxyContin from California in the late 2000s created a new breed of addicts in Everett and the surrounding area. Those drawn to the pills included young people and professionals who saw the painkiller as more fashionable and less dangerous than street drugs.

Many became addicted and lost their homes, jobs and families. After Purdue reformulated OxyContin in 2010 to make it harder to abuse, addicts moved en masse to heroin, which has a similar effect.

Heroin remains an enormous problem in the region, with more than 40 residents fatally overdosing each year and government resources severely taxed. The sole detox center in Snohomish County has only 16 beds, but on any given day the jail might have up to 160 inmates in need of detox, officials said. Everett last year spent $160,000 removing trash from a single city block that has become an open-air drug market. Homelessness has exploded, with addicts living in encampments along highways, behind stores and in wooded areas throughout the city.

“A lot of individuals we are coming across have worked, have had a job, and somehow they were introduced to prescription drugs,” said Staci McCole, one of two social workers recently embedded with the Everett Police Department to help officers handle addicts.

City lawyers wrote in their suit that the heroin crisis “is directly attributable to Purdue’s wrongful and tortious conduct.”

“We believe that the flooding of the city with OxyContin caused the crisis,” said Hil Kaman, Everett’s public health and safety director. “Our capacity to respond has been overwhelmed, and Purdue should pay for the harm they caused.”

Although Everett is the first municipality to sue Purdue solely on the basis of criminal sales of its drug, other jurisdictions trying to recoup costs of the opioid epidemic have raised the issue, along with claims of fraudulent marketing. Two California counties that sued the company in 2014 said that Purdue knowingly profited from criminal dealings of its drug, citing as evidence the company’s Region Zero program, a secret database of more than 1,800 suspect doctors first revealed by The Times. By the company’s own admission, fewer than 10% of those doctors had been reported to law enforcement.

After the newspaper’s July story, the New Hampshire attorney general issued a subpoena for company records related to criminal trafficking in that state. The company has refused to turn over the material and is battling the state in appellate court over its use of outside lawyers.

Federal regulators have cracked down on opioid wholesalers in recent years for facilitating criminal trafficking. McKesson, one of the nation’s largest of these distributors, paid a $150-million fine this week to settle allegations that it had failed to report suspicious orders to authorities.

The Times’ investigation showed that Purdue had more extensive evidence of suspected criminal trafficking nationally than any single distributor. But historically, manufacturers have not been held responsible for preventing the illicit sales of their drugs.

Experts had mixed opinions about Everett’s chances of recovering money. The suit has similarities to litigation against firearm manufacturers by states and cities deluged with gun violence, experts said. Some of those cases succeeded, but many did not.

Richard Ausness, a University of Kentucky law professor who has written about suits against Purdue, said that the evidence in gun cases was often attenuated, such as sales data showing huge weapons sales in areas with small populations and loose gun laws.

“They didn’t have the specific knowledge that Purdue had,” said Ausness. Purdue “knew that clinic was a front for a criminal enterprise and you don’t really see anything that specific in gun litigation.”

University of Florida law professor Lars Noah, who teaches pharmaceutical regulation and public health law, said he was doubtful that a court would accept Everett’s claim that Purdue was liable for the addiction crisis under the public nuisance statute.

“These theories have been tried with other industries that sell consumer goods and courts with rare exceptions have decided it is too much of a stretch,” Noah said, adding that he considered the case “more of a publicity stunt.”

In Everett, those personally affected by illicit use of OxyContin said they were heartened by the city’s suit. Debbie Warfield’s son, Spencer, became addicted to the drug after high school, often buying pills from street dealers. He later switched to heroin.

“You just couldn’t imagine how your son could be shooting up heroin. It was beyond belief,” Warfield said.

Spencer Warfield died of an overdose in 2012. He was 24.

Of Purdue, she said, “I definitely think they need to take some responsibility.”

“Honestly, it makes me want to cry because it is so overdue,” said Lindsey Greinke, a former OxyContin and heroin addict who now runs an Everett nonprofit that helps people afford detox and treatment programs. “I hope something actually comes of it. We need it.”

To read the article in Spanish, click here

harriet.ryan@latimes.com

Twitter: @latimesharriet

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UPDATES:

4:20 p.m.: This article was updated to note that Purdue Pharma declined to comment on the lawsuit Thursday.

4:00 p.m.: This article was updated to include comments from legal experts.