Moody issues a default judgment against Endo in Tennessee case.
Chancellor E.G. Moody, who is presiding over a civil case in Tennessee, has imposed extreme sanctions on Endo Pharmaceuticals for withholding documents related to the sales and marketing of its opioid medication Opana ER. County prosecutors and other local government officials in the eastern Tennessee brought the lawsuit in 2017 alleging Endo’s Opana ER was “marketed aggressively without proper safeguards.” They demanded $2.4 billion in damages.
Endo discontinued sales of Opana ER in 2017 after the Food & Drug Administration (FDA) found the drug was being commonly abused by people who either crushed, dissolved, or injected it, causing outbreaks of infectious diseases.
In issuing his decision, Moody said the drug maker’s attorneys made “at least a dozen false statements during the pretrial discovery process.” He wrote, “It appears to the court that Endo and its attorneys, after delaying trial, have resorted to trying to improperly corrupt the record.”
Gerard Stranch, one of the attorneys suing Endo, agreed with the judge, saying its counsel clearly “conspired to hide the truth over a period of years and the attorneys crossed the line and worked with the company to subvert the court’s orders and then made false statements to the court about it.”
Barry Staubus, district attorney in Sullivan County Tennessee added that Endo’s deceptive marketing practices greatly affected Tennesseans and his county in particular, saying, “The damage is devastating. It has really ripped at the fabric of our community. It’s overdose deaths, its people losing their jobs, losing their dignity. Almost all our crime is driven by drugs.”
In September 2018, Moody lad issued an order requiring Endo to release information about Opana ER prescribers and the drug maker’s efforts to stop abuse, among other related documents. In his recent decision, the judge determined the company violated that order “deliberately as part of a coordinated strategy between Endo and its counsel to interfere with the administration of justice.” Moody also found that sworn testimony from witnesses brought to the court by Endo conflicted with these documents.
“This was the testimony under penalty of perjury by Endo,” Stranch said. “When we got this new tranche of documents, we discovered that people went on and off the list all the time.”
Moody concluded, “Endo’s behavior is so egregious” he was justified in issuing a “default judgment,” finding the company liable. He noted that “plaintiffs have sued for $2.4 billion and have expert testimony which supports that amount. Although this is a harsh sanction, justice demands it under the circumstances. Anything less would make a mockery of the attorneys who play by the rules and the legal system.” Moody indicated that “at least three people die every day of an opioid overdose in Tennessee.”
Endo said it would appeal. In a statement, its attorneys said, “Endo strongly disagrees with the court’s orders, which it believes are procedurally, factually, and legally deficient.”
A. Benjamin Spencer, dean of William & Mary Law School agreed that the punishment imposed by the court was “really extreme,” but added of Endo’s actions, “To the extent that it involves misrepresentation, falsehoods, and continuing ongoing obfuscation and obstruction, I think it is extraordinary. Lawyers are supposed to know better.”