Law & Courts

Some Schools Will Get Money From Opioid Settlements—But It Won’t Be Easy

By Mark Lieberman — January 20, 2023 6 min read
Pills of the painkiller hydrocodone at a pharmacy in Montpelier, Vt., on Feb. 19, 2013.
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Some school districts stand to benefit from the recent state and local settlements in lawsuits against opioid manufacturers and distributors—but actually getting those funds will take considerable time and effort.

Many district leaders and experts contend that major companies like Purdue Pharma and McKinsey, as well as retail pharmacies like CVS and Walgreens, are among the parties responsible for the opioid crisis, which has forced schools to ramp up costly special education services and overdose-prevention initiatives. Dozens of districts have signed on to class-action lawsuits against these companies and made the case for billions of dollars in compensation.

But schools face a steep uphill climb to extract substantial funds from lawsuit settlements around the devastating effects of the opioid crisis, said Sara Whaley, a research associate for the Johns Hopkins University School of Public Health who tracks opioid settlement funds and advocates for maximizing their impact.

“It sounds like a lot of money,” Whaley said. “But when you actually get how much is going to a school system from this larger settlement, it’s not a lot.”

In Florida, the state attorney general is trying to convince a judge to block hospitals and the Miami-Dade school district from receiving funds from settlement agreements for state and local governments. In Oregon and Rhode Island, school districts designated to receive funds don’t know how much they’re getting or how to apply.

And in many states, schools are still pursuing litigation of their own, which could take years to resolve. McKinsey in October announced it was entering into settlement negotiations with districts and local governments, but those have not been resolved, according to lawyers representing districts.

The Minnetonka district in Minnesota, for instance, is still waiting to hear whether it will prevail in a lawsuit alongside other districts against numerous pharmaceutical companies involved in the proliferation of opioids. In the meantime, Minnesota state lawmakers passed a bill last year authorizing a $300 million settlement with four pharmaceutical companies (Johnson and Johnson, McKesson, Cardinal Health, and AmerisourceBergen) that prohibits anyone in the state, including the Minnetonka district, from suing those companies again.

“We continue to maintain the stance that school districts have suffered unique impacts related to the opioid crisis,” said JacQui Getty, a spokesperson for the district. “We are not supportive of a decision that ignores this fact.”

Many districts continue to fight for a bigger piece of the fiscal pie, their lawyers argue, because they’re central players in the fight to eradicate the opioid epidemic.

“We believe that school districts can be the superstar of abatement” of the opioid crisis, said Wayne Hogan, a civil trial lawyer who’s among the attorneys representing districts in numerous states in the fight over the costs of the opioid epidemic. “Every time a school district saves a kid’s life, they don’t drop out, they stay out of the criminal justice system, that has a multiplier effect on the rest of the government services.”

An ongoing crisis strains schools’ wallets and operations

The proliferation of deadly opioids nationwide in recent decades has sparked an ongoing public health emergency in many communities. In 2021 alone, more than 80,000 Americans died of overdoses involving opioids, including fentanyl.

The scourge has strained schools in a variety of ways. Opioid addiction in pregnant women heightens the risk of neonatal abstinence syndrome, which can cause permanent developmental disabilities in children and ramp up already-enormous mandatory costs for special education in schools. School staff have also been tasked with monitoring for signs of opioid abuse among students and providing prevention programs and resources for students.

The national landscape of opioid litigation is vast and complex. Here are some key highlights:

  • In the last two years, all 50 states and the District of Columbia reached settlement agreements with McKinsey, the consulting firm that used its federal connections to supercharge marketing efforts for deadly opioids. Some of those agreements included language that precludes anyone in the state, including school districts, from suing the company in the future over related issues. All told, the settlement funds total $50 billion. A spokesperson for McKinsey told Education Week in an email that the company believes the settlements “resolve claims that may be brought by municipalities or school districts.”
  • Several states, including California, Oklahoma, Pennsylvania, and West Virginia, have settled multi-million dollar lawsuits with pharmacy retailers like CVS, Walmart, and Walgreens.
  • More than five dozen school districts are involved in lawsuits against opioid manufacturers and distributors that directly tackle the crisis’s effects on special education funding.

Each state takes a different approach to divvying up the settlement funds it receives from these lawsuits, Whaley said. In North Carolina, all settlement funds go to county governments. Other states use the default template of devoting 15 percent to local governments and the rest for a state-appointed panel to appropriate as it sees fit.

Schools in some cases are left wondering how they’ll get a piece of the pie.

In Rhode Island, district leaders haven’t yet received funds allocated for expanding mental health resources, said Jim Erinakes, the superintendent of the Exeter-West Greenwich district and president-elect of the Rhode Island School Superintendents Association.

Oregon districts are set to take advantage of some portion of a 45 percent set-aside of settlement funds meant for opioid prevention and treatment. But a spokesperson for the Beaverton district said the Oregon Department of Justice hasn’t yet communicated how districts can actually access the funds. A spokesperson for the state agency didn’t immediately respond to a request for comment.

Florida’s attorney general, Ashley Moody, last April sued the Miami-Dade school board and five hospital systems to prevent them from directly taking part in the settlement fund intended for the state, arguing that their involvement would slow down the process of implementing relief efforts.

That litigation is ongoing and no settlement has been reached, said Jaquelyn Diaz, a spokesperson for the Miami-Dade schools. Moody’s office didn’t immediately return a request for comment.

The Rochester, N.Y., schools are also currently contesting the state’s apparent position that the district shouldn’t directly receive opioid settlement funds, said Ricardo Adams, a school board member who’s the district’s point person for opioid litigation.

The district has struggled mightily to fill crucial open positions for special education instructors and aides, Adams said, and the settlement money could boost that effort.

“We’re meeting those needs with bare minimum,” Adams said.

Representatives for Gov. Kathy Hochul and Attorney General Letitia James didn’t respond to requests for comment in time for publication.

The road ahead for addressing the opioid epidemic

Even with all the complications, there are bright spots for schools. Districts nationwide will be able to apply for $25.5 million in grants for special education services funded by bankruptcy court proceedings for a case against Purdue Pharma. Maine’s settlement agreement with McKinsey specifies that 3 percent of the state’s $130 million allocation will go toward special education services in schools. The Boise and West Ada school districts in Idaho are among the “special districts” that will receive a portion of the state’s McKinsey settlement dollars.

Whaley, the Johns Hopkins researcher, and her colleagues are urging state lawmakers and other officials involved in allocating funds to prioritize racial equity and evidence-based approaches to tackling the opioid crisis.

“It’s easy to be, like, let’s use the money to fund another ‘say no to drugs’ program. What’s hard is taking the time to plan and to think strategically when resources are scarce and time is scarce,” she said. “If we don’t do that, the decisionmakers who have the power are going to do what they’ve always done.”

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