Resolution No. 6924 374
RESOLUTION NO. 6924
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CYPRESS
AUTHORIZING THE CITY OF CYPRESS TO ENTER INTO THE
SETTLEMENT AGREEMENTS WITH CVS, ALLERGAN, TEVA,
WALMART, AND WALGREENS, AGREE TO THE TERMS OF THE
RELATED STATE-SUBDIVISION AGREEMENTS, AND AUTHORIZE
ENTRY INTO THE RELATED STATE-SUBDIVISION AGREEMENTS
WITH THE ATTORNEY GENERAL
WHEREAS, the United States is facing an ongoing public health crisis of opioid
abuse, addiction, overdose, and death, forcing the State of California and California
counties and cities to spend billions of dollars each year to address the direct
consequences of this crisis; and
WHEREAS, pending in the U.S. District Court for the Northern District of Ohio is a
multidistrict litigation ("MDL") being pursued by numerous public entity plaintiffs against
the manufacturers and distributors of various opioids based on the allegation that the
defendants' unlawful conduct caused the opioid epidemic; and
WHEREAS on or about November 14, 2022, a proposed nationwide tentative
settlement was reached between the plaintiffs in the MDL and Walmart Inc. ("Walmart");
and
WHEREAS on or about November 22, 2022, a proposed nationwide tentative
settlement was reached between the plaintiffs in the MDL and Teva Pharmaceutical
Industries Ltd. and all of its respective past and present direct or indirect parents,
subsidiaries, divisions, affiliates, joint ventures, predecessors, successors, assigns,
including but not limited to Teva Pharmaceuticals USA, Inc., Actavis LLC (f/k/a Actavis
Inc.), Actavis Elizabeth LLC, Actavis Kadian LLC, Actavis Pharma, Inc. (f/k/a Watson
Pharma, Inc.), Actavis Kadian LLC, Actavis Laboratories UT, Inc. (f/k/a Watson
Laboratories, Inc. — Utah), Actavis Mid Atlantic LLC, Actavis Totowa LLC, Actavis
Laboratories FL, Inc. (f/k/a Watson Laboratories, Inc. — Florida), Actavis South Atlantic
LLC, Warner Chilcott Company LLC, and Watson Laboratories, Inc., and Anda Inc.
(collectively, "Teva"); and
WHEREAS on or about November 22, 2022, a proposed nationwide tentative
settlement was reached between the plaintiffs in the MDL and Allergan Finance, LLC
(f/k/a Actavis, Inc., which in turn was f/k/a Watson Pharmaceutics, Inc.) and Allergan
Limited (f/k/a Allergan plc, which, in turn, was f/k/a Actavis plc)(collectively, "Allergan");
and
WHEREAS, on or about December 9, 2022, a proposed nationwide tentative
settlement was reached between the plaintiffs in the MDL and CVS Health Corporation
and CVS Pharmacy, Inc. and all of their past and present direct and indirect parent and
subsidiaries (collectively, "CVS"); and
WHEREAS, on or about December 9, 2022, a proposed nationwide tentative
settlement was reached between the plaintiffs in the MDL and Walgreen Co.
("Walgreens"); and
WHEREAS, CVS, Teva, Walgreens, Walmart, and Allergan shall be referred in this
Resolution as "Settling Defendants"; and
WHEREAS, as part of the settlements with the Settling Defendants, local
subdivisions, including certain cities, that are not plaintiffs in the MDL may participate in
the settlements in exchange for a release of the Settling Defendants; and
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WHEREAS, copies of the proposed terms of those proposed nationwide
settlements have been set forth in the Master Settlement Agreements with the Settling
Defendants; and
WHEREAS, copies of the Master Settlement Agreements have been provided to
the City Council with this Resolution; and
WHEREAS, 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
WHEREAS, California local governments in the MDL 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 Agreements Regarding Distribution and Use of Settlement Funds("Allocation
Agreements") from the settlements with the Settling Defendants; and
WHEREAS, copies of the Allocation Agreements for all of the settlements with the
Settling Defendants have been provided with this Resolution; and
WHEREAS, the Allocation Agreements allocate the California Opioid Funds as
follows: 15% to the State Fund; 70% to the Abatement Accounts Fund; and 15% to the
Subdivision Fund. For the avoidance of doubt, all funds allocated to California from the
Settlements shall be combined pursuant to the Allocation Agreements, and 15% of total
from each settlement shall be allocated to the State of California (the "State of California
Allocation"), 70% to the California Abatement Accounts Fund ("CA Abatement Accounts
Fund"), and 15% to the California Subdivision Fund ("CA Subdivision Fund"); and
WHEREAS, under the Master Settlement Agreements, certain local subdivisions
that did not file a lawsuit against the Settlement Defendants may qualify to participate in
the settlements and obtain funds from the Abatement Account Fund; and
WHEREAS, the City is eligible to participate in the Settlement and become a CA
Participating Subdivision; and
WHEREAS, the funds in the CA Abatement Accounts Fund (the 70% allocation)
will be allocated based on the allocation model developed in connection with the proposed
negotiating class in the National Prescription Opiate Litigation (MDL No. 2804), as
adjusted to reflect only those cities and counties that are eligible, based on population or
litigation status, to become a CA Participating Subdivision (those above 10,000 in
population). The percentage from the CA Abatement Accounts Fund allocated to each
CA Participating Subdivision is set forth in Appendix 1 to the Allocation Agreements and
provided to the City Council with this Resolution. The City's share of the CA Abatement
Accounts Fund will be a product of the total in the CA Abatement Accounts Fund
multiplied by the City's percentage set forth in Appendix 1 of the Allocation Agreements
(the "Local Allocation"); and
WHEREAS, a CA Participating Subdivision that is a city will be allocated its Local
Allocation share as of the date on which it becomes a Participating Subdivision. The Local
Allocation share for a city that is a CA Participating Subdivision will be paid to the county
in which the city is located, unless the city elects to take a direct election of the settlement
funds, so long as: (a) the county is a CA 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; and
WHEREAS, it the intent of this Resolution is to authorize the City to enter into the
Master Settlement Agreements with the Settling Defendants by executing the
Participation Agreements and to enter into the Allocation Agreements by executing the
signature pages to those agreements.
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NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of
Cypress hereby approves and authorizes Peter Grant, City Manager 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 and all exhibits thereto.
BE IT FURTHER RESOLVED that all actions heretofore taken by the City Council
of the City of Cypress 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.
PASSED AND ADOPTED by the City Council of the City of Cypress at a regular
meeting held on the 10th day of April, 2023.
MAY R OF T CIT( OF CYPRESS
ATTEST:
kidAt„.
CITY LERK OFT E CI Y OF CYPRESS
STATE OF CALIFORNIA }
COUNTY OF ORANGE } SS
I, ALISHA FARNELL, City Clerk of the City of Cypress, DO HEREBY CERTIFY that
the foregoing Resolution was duly adopted at a regular meeting of the said City Council held
on the 10th day of April, 2023, by the following roll call vote:
AYES: 5 COUNCIL MEMBERS: Burke, Marquez, Peat, Minikus and Hertz-Mallari
NOES: 0 COUNCIL MEMBERS: None
ABSENT: 0 COUNCIL MEMBERS: None
VTMA
Y CLERK 0 THE CITY OF CYPRESS