HomeMy WebLinkAboutKROGER NATIONAL OPIOIDS SETTLEMENTDocusign Envelope ID: 16E112FF-704F-42CB-8ECE-9BO4AO27CEOD
A-2024-122
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New National Opioids Settlement: Kroger
Opioids Implementation Administrator
opioidspat"d ationCarubris.com
Santa Ana city, CA
Reference Number: CL-789668
TO LOCAL POLITICAL SUBDIVISIONS.
THIS PACKAGE CONTAINS DOCUMENTATION TO PARTICIPATE IN THE NEW
NATIONAL OPIOIDS SETTLEMENT. YOU MUST TAKE ACTION IN ORDER TO
PARTICIPATE.
Deadline., August 12, 2024
A new proposed national opioids settlement ("New National Opioids Settlement")
has been reached with Kroger ("Settling Defendant"). This Participation Package is
a follow-up communication to the Notice of National Opioids Settlement recently
received electronically by your subdivision.
You are receiving this Participation Package because California is participating in
the Kroger settlement.
This electronic envelope contains three attachments:
The Participation Form for the Kroger settlement, including a release of any
claims;
California State Subdivision Agreement for Kroger; and
Side -letter agreement between California and Kroger
The Participation Form and California State -Subdivision Agreement must
be executed, without alteration, and submitted on or before August 12,
2024, in order for your subdivision to be considered for initial
participation calculations and payment eligibility.
The side -letter agreement between California and Kroger modifies, as it applies to
California, one injunctive relief term contained in Exhibit P, Section IX(5)(I) of the
Kroger National Settlement Agreement.
Based upon subdivision participation forms received on or before August 12, 2024,
the subdivision participation rate will be used to determine whether participation is
sufficient for the settlement to move forward and whether a state earns its
maximum potential payment under the settlement. If the settlement moves
forward, your release will become effective. If a settlement does not move forward,
that release will not become effective.
Any subdivision that does not participate cannot directly share in the settlement
funds, even if the subdivision's state is settling and other participating subdivisions
are sharing in settlement funds. Any subdivision that does not participate may also
reduce the amount of money for programs to remediate the opioid crisis in its state.
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Please note, a subdivision will not necessarily directly receive settlement funds by
participating; decisions on how settlement funds will be allocated within a state are
subject to intrastate agreements or state statutes.
You are encouraged to discuss the terms and benefits of the New National Opioids
Settlement with your city attorney/county counsel, outside counsel representing
your city/county on opioid matters, the Attorney General's Office, and other
contacts within your state. Many states are implementing and allocating funds for
this new settlement the same as they did for the prior opioids settlements with
McKesson, Cardinal, Cencora (formerly AmerisourceBergen), J&j/Janssen, Teva,
Allergan, CVS, Walgreens, and Walmart but states may choose to treat this
settlement differently.
Information and documents regarding the New National Opioids Settlement and
how it is being implemented in your state and how funds will be allocated within
your state can be found on the national settlement website at
https:Hnationalopioidsettlement.com/ and the California Attorney General's website
at https://oag.ca.gov/opioids. This website will be supplemented as additional
documents are created. Please also refer to the Side -Letter Agreement with Kroger,
which modifies the Kroger National Opioid Settlement's injunctive relief within the
State of California.
How to return signed forms:
There are three methods for returning the executed Participation Form, the
California -State Subdivision Agreement ("Subdivision Agreement"), and any
supporting documentation to the Implementation Administrator:
(1) Electronic Signature via DocuSign: Executing the Participation Form and the
Subdivision Agreement electronically through DocuSign will return the signed
form to the Implementation Administrator and associate your form with your
subdivision's records. Electronic signature is the most efficient method for
returning the Participation Form and the Subdivision Agreement, allowing for
more timely participation and the potential to meet higher settlement
payment thresholds, and is therefore strongly encouraged.
(2) Manual Signature returned via DocuSign: DocuSign allows forms to be
downloaded, signed manually, then uploaded to DocuSign and returned
automatically to the Implementation Administrator. Please be sure to
complete all fields and note that execution and return of both the Subdivision
Agreement and the Participation Form are required for participation in the
corresponding settlement. As with electronic signature, returning a manually
signed Participation Form and Subdivision Agreement via DocuSign will
associate your signed forms with your subdivision's records.
(3) Manual Signature returned via electronic mail: If your subdivision is unable to
return an executed Participation Form and Subdivision Agreement using
DocuSign, the signed Participation Form and Subdivision Agreement may be
returned via electronic mail to opioidsparticioation(@rubris.com. Please
include the name, state, and reference ID of your subdivision in the body of
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the email and use the subject line Settlement Participation Form -
[Subdivision Name, Subdivision State] - [Reference ID]. Note that execution
and return of both the Subdivision Agreement and the Participation Form are
required for participation in the corresponding settlement.
Detailed instructions on how to sign and return the Participation Form and
Subdivision Agreement, including changing the authorized signer, can be found at
https://nationalopioidsettlement.com/. You may also contact
opioidsparticipationca)rubris.com.
The sign -on period for subdivisions ends on August 12, 2024.
If you have any questions about executing the Participation Form, please contact
your city attorney/county counsel, outside counsel representing your city/county on
opioids matters, the Implementation Administrator at
opioidsparticipationCaprubris.com, or the California Attorney General's Office at
opioidsettlement-IocalgovernmentCcDdoj.ca.gov.
Thank you,
New National Opioids Settlement Implementation Administrator
The Implementation Administrator is retained to provide the settlement notice
required by the New National Opioids Settlement and to manage the collection of
the Participation Form.
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Subdivision Participation and Release Form
Governmental Entity: Santa Ana city
State: CA
Authorized Signatory: Alvaro Nunez City Manager
Address 1: P.O. Box 1988
Address 2: 20 Civic Center Plaza
City, State, Zip: Santa Ana, California 92702
Phone:
Email: ANunez Santa-ana.or
The governmental entity identified above ("Governmental Entity"), in order to obtain and
in consideration for the benefits provided to the Governmental Entity pursuant to the Settlement
Agreement dated March 22, 2024 ("Kroger Settlement"), and acting through the undersigned
authorized official, hereby elects to participate in the Kroger Settlement, release all Released
Claims against all Released Entities, and agrees as follows.
1. The Governmental Entity is aware of and has reviewed the Kroger Settlement,
understands that all terms in this Participation and Release Form have the meanings
defined therein, and agrees that by executing this Participation and Release Form, the
Governmental Entity elects to participate in the Kroger Settlement and become a
Participating Subdivision as provided therein.
2. The Governmental Entity shall promptly, and in any event no later than 14 days after the
Reference Date and prior to the filing of the Consent Judgment, dismiss with prejudice
any Released Claims that it has filed. With respect to any Released Claims pending in In
re National Prescription Opiate Litigation, MDL No. 2804, the Governmental Entity
authorizes the Plaintiffs' Executive Committee to execute and file on behalf of the
Governmental Entity a Stipulation of Dismissal with Prejudice substantially in the form
found at htips:llnationalopioidsettlement.com/
3. The Governmental Entity agrees to the terms of the Kroger Settlement pertaining to
Participating Subdivisions as defined therein.
4. By agreeing to the terms of the Kroger Settlement and becoming a Releasor, the
Governmental Entity is entitled to the benefits provided therein, including, if applicable,
monetary payments beginning after the Effective Date.
5. The Governmental Entity agrees to use any monies it receives through the Kroger
Settlement solely for the purposes provided therein.
6. The Governmental Entity submits to the jurisdiction of the court in the Governmental
Entity's state where the Consent Judgment is filed for purposes limited to that court's role
as provided in, and for resolving disputes to the extent provided in, the Kroger
Settlement. The Governmental Entity likewise agrees to arbitrate before the National
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Arbitration Panel as provided in, and for resolving disputes to the extent otherwise
provided in, the Kroger Settlement.
7. The Governmental Entity has the right to enforce the Kroger Settlement as provided
therein.
8. The Governmental Entity, as a Participating Subdivision, hereby becomes a Releasor for
all purposes in the Kroger Settlement, including without limitation all provisions of
Section XI (Release), and along with all departments, agencies, divisions, boards,
commissions, districts, instrumentalities of any kind and attorneys, and any person in
their official capacity elected or appointed to serve any of the foregoing and any agency,
person, or other entity claiming by or through any of the foregoing, and any other entity
identified in the definition of Releasor, provides for a release to the fullest extent of its
authority. As a Releasor, the Governmental Entity hereby absolutely, unconditionally,
and irrevocably covenants not to bring, file, or claim, or to cause, assist or permit to be
brought, filed, or claimed, or to otherwise seek to establish liability for any Released
Claims against any Released Entity in any forum whatsoever. The releases provided for
in the Kroger Settlement are intended by the Parties to be broad and shall be interpreted
so as to give the Released Entities the broadest possible bar against any liability relating
in any way to Released Claims and extend to the full extent of the power of the
Governmental Entity to release claims. The Kroger Settlement shall be a complete bar to
any Released Claim.
9. The Governmental Entity hereby takes on all rights and obligations of a Participating
Subdivision as set forth in the Kroger Settlement.
10.In connection with the releases provided for in the Kroger Settlement, each
Governmental Entity expressly waives, releases, and forever discharges any and all
provisions, rights, and benefits conferred by any law of any state or territory of the
United States or other jurisdiction, or principle of common law, which is similar,
comparable, or equivalent to § 1542 of the California Civil Code, which reads:
General Release; extent. A general release does not extend to claims that
the creditor or releasing party does not know or suspect to exist in his or
her favor at the time of executing the release that, if known by him or her
would have materially affected his or her settlement with the debtor or
released party.
A Releasor may hereafter discover facts other than or different from those which it
knows, believes, or assumes to be true with respect to the Released Claims, but each
Governmental Entity hereby expressly waives and fully, finally, and forever settles,
releases and discharges, upon the Effective Date, any and all Released Claims that may
exist as of such date but which Releasors do not know or suspect to exist, whether
through ignorance, oversight, error, negligence or through no fault whatsoever, and
which, if known, would materially affect the Governmental Entities' decision to
participate in the Kroger Settlement.
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11. Nothing herein is intended to modify in any way the terms of the Kroger Settlement, to
which Governmental Entity hereby agrees. To the extent this Participation and Release
Form is interpreted differently from the Kroger Settlement in any respect, the Kroger
Settlement controls.
I have all necessary power and authorization to execute this Participation and Release
Form on behalf of the Governmental Entity.
Signature: CA-%->
Name: Alvaro Nunez
Title: CijX Manager
Date: August % 9094
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Proposed California State -Subdivision Agreement
Regarding Distribution and Use of
Settlement Funds — Kroger Settlement
1. Introduction
Pursuant to the Kroger Settlement Agreement, dated as of March 22, 2024, and any revision
thereto as well as any modification thereto entered into by the State of California and Kroger (the
"Kroger Settlement Agreement"), including Section V and Exhibit O, the State of California
proposes this agreement (the "CA Kroger Allocation Agreement") to govern the allocation,
distribution, and use of Settlement Fund payments made to California pursuant to Sections IV
and V of the Kroger Settlement Agreement. For the avoidance of doubt, this agreement does not
apply to payments made pursuant to Section IX of the Kroger Settlement Agreement.
Pursuant to Exhibit O, Paragraph 4, of the Kroger Settlement Agreement, acceptance of this CA
Kroger Allocation Agreement is a requirement to be an Initial Participating Subdivision.
2. Definitions
a) CA Participating Subdivision means a Participating Subdivision that is also (a) a
Plaintiff Subdivision and/or (b) a Primary Subdivision with a population equal to or
greater than 10,000. For the avoidance of doubt, eligible CA Participating
Subdivisions are those California subdivisions listed in Exhibit C (excluding
Litigating Special Districts) and/or Exhibit I to the Kroger Settlement Agreement.
b) Allergan Settlement Agreement means the Allergan Settlement Agreement dated
November 22, 2022, and any revision thereto.
c) CVS Settlement Agreement means the CVS Settlement Agreement dated December 9,
2022, and any revision thereto as well as any modification thereto entered into by the
State of California and CVS.
d) Distributor Settlement Agreement means the Distributor Settlement Agreement dated
July 21, 2021, and any revision thereto.
e) Janssen Settlement Agreement means the Janssen Settlement Agreement dated July
21, 2021, and any revision thereto.
f) Teva Settlement Agreement means the Teva Settlement Agreement dated November
22, 2022, and any revision thereto.
g) Walgreens Settlement Agreement means the Walgreens Settlement Agreement dated
December 9, 2022, and any revision thereto.
h) Walmart Settlement Agreement means the Walmart Settlement Agreement dated
November 14, 2022, and any revision thereto.
i) CA Litigating Special District means a Litigating Special District located in
California. CA Litigating Special Districts include Downey Unified School District,
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Elk Grove Unified School District, Kern High School District, Montezuma Fire
Protection District (located in Stockton, California), Santa Barbara San Luis Obispo
Regional Health Authority, Inland Empire Health Plan, Health Plan of San Joaquin,
San Leandro Unified School District, Pleasant Valley School District Board, and LA
Care Health Plan.
j) PlaintffSubdivision means a Subdivision located in California, other than a CA
Litigating Special District, that filed a lawsuit, on behalf of the Subdivision and/or
through an official of the Subdivision on behalf of the People of the State of
California, against one or more Opioid Defendants prior to October 1, 2020.
k) Opioid Defendant means any defendant (including but not limited to Kroger Co.,
Walgreen Co., Teva Pharmaceutical Industries Ltd., Allergan Finance, LLC, Allergan
Limited, CVS Health Corporation, CVS Pharmacy, Inc., Walmart Inc., Johnson &
Johnson, Janssen Pharmaceuticals, Inc., Purdue Pharma L.P., Cardinal Health, Inc.,
AmerisourceBergen Corporation, and McKesson Corporation) named in a lawsuit
seeking damages, abatement, or other remedies related to or caused by the opioid
public health crisis in any lawsuit brought by any state or local government on or
before October 1, 2020.
3. General Terms
This agreement is subject to the requirements of the Kroger Settlement Agreement, as well as
applicable law, and the Kroger Settlement Agreement governs over any inconsistent provision of
this CA Kroger Allocation Agreement. Terms used in this CA Kroger Allocation Agreement
have the same meaning as in the Kroger Settlement Agreement unless otherwise defined herein.
Pursuant to Section V(D)(1) of the Kroger Settlement Agreement, (a) all Settlement Fund
payments will be used for Opioid Remediation, except as allowed by Section V(B)(2) of the
Kroger Settlement Agreement; and (b) at least seventy percent (70%) of Settlement Fund
payment amounts will be used solely for future Opioid Remediation.
4. State Allocation
The Settlement Fund payments to California,' pursuant to the Kroger Settlement Agreement,
shall be allocated 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 Settlement Fund shall be combined pursuant to this CA Kroger Allocation Agreement, and
15% of that total 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").
1 For purposes of clarity, use of the term "California" refers to the geographic territory of
California and the state and its local governments therein. The term "State" or "State of
California" refers to the State of California as a governmental unit.
2
IN
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A. State of California Allocation
Fifteen percent of the total Settlement Fund payments will be allocated to the State and used by
the State for future Opioid Remediation.
B. CA Abatement Accounts Fund
i. Allocation of CA Abatement Accounts Funds
a) Seventy percent of the total Settlement Fund payments will be allocated to the CA
Abatement Accounts Fund. The funds in the CA Abatement Accounts Fund 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. The percentage from the CA
Abatement Accounts Fund allocated to each CA Participating Subdivision is set forth in
Appendix 1 in the column entitled abatement percentage (the "Local Allocation"). For
the avoidance of doubt, CA Litigating Special Districts and California towns, cities, and
counties with a population less than 10,000 are not eligible to receive an allocation of CA
Abatement Accounts Funds.
b) A CA Participating Subdivision that is a county, or a city and county, will be allocated its
Local Allocation share as of the date on which it becomes a Participating Subdivision,
and will receive payments as provided in the Kroger Settlement Agreement.
c) 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, rather than to the city, so long as: (a) the county is a CA Participating
Subdivision, and (b) the city did not elect to receive its share of funds in the National
Opioids Settlement with Distributors AmerisourceBergenCorporation, Cardinal Health,
Inc., and McKesson Corporation (the "Distributors Settlement"). If a city later changes or
has already changed its distribution election in the Distributors Settlement, that change in
election will apply here, provided that the change in election is received by the settlement
administrator at least 60 days prior to a Payment Date. A Local Allocation share allocated
to a city but paid to a county is not required to be spent exclusively for abatement
activities in that city, but will become part of the county's share of the CA Abatement
Accounts Funds, which will be used in accordance with Section 4.B.ii (Use of CA
Abatement Accounts Funds) and reported on in accordance with Section 4.B.iii (CA
Abatement Accounts Fund Oversight).
d) A city within a county that is a CA Participating Subdivision may opt in or out of direct
payment at any time, and it may also elect direct payment of only a portion of its share,
with the remainder going to the county, by providing notice to the Settlement Fund
Administrator at least 60 days prior to a Payment Date. For purposes of this CA Kroger
Allocation Agreement, the Cities of Los Angeles, Oakland, San Diego, San Jose and
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Eureka will be deemed to have elected direct payment if they become Participating
Subdivisions.
e) The State will receive the Local Allocation share of any payment to the Settlement Fund
that is attributable to a county or city that is eligible to become a CA Participating
Subdivision, but that has not, as of the date of that payment to the Settlement Fund,
become a Participating Subdivision.
I) Funds received by a CA Participating Subdivision, and not expended or encumbered
within five years of receipt and in accordance with the Kroger Settlement Agreement and
this CA Kroger Allocation Agreement shall be transferred to the State; provided
however, that CA Participating Subdivisions have seven years to expend or encumber CA
Abatement Accounts Funds designated to support capital outlay projects before they must
be transferred to the State. This provision shall not apply to the Cost Reimbursement
Funds, which shall be controlled by Appendix 2.
ii. Use of CA Abatement Accounts Funds
a) The CA Abatement Accounts Funds will be used for future Opioid Remediation in one or
more of the areas described in the List of Opioid Remediation Uses, which is Exhibit E to
the Kroger Settlement Agreement.
b) In addition to this requirement, no less than 50% of the funds received by a CA
Participating Subdivision from the Abatement Accounts Fund in each calendar year will
be used for one or more of the following High Impact Abatement Activities:
(1) the provision of matching funds or operating costs for substance use disorder facilities
within the Behavioral Health Continuum Infrastructure Program;
(2) creating new or expanded Substance Use Disorder ("SUD") treatment infrastructure;
(3) addressing the needs of communities of color and vulnerable populations (including
sheltered and unsheltered homeless populations) that are disproportionately impacted
by SUD;
(4) diversion of people with SUD from the justice system into treatment, including by
providing training and resources to first and early responders (sworn and non -sworn)
and implementing best practices for outreach, diversion and deflection,
employability, restorative justice, and harm reduction;
(5) interventions to prevent drug addiction in vulnerable youth, including but not limited
to, youth in Poster care, juvenile justice -impacted youth, youth experiencing
adversities related to socioeconomic status, and unhoused youth; and/or
(6) the purchase of naloxone for distribution and efforts to expand access to naloxone for
opioid overdose reversals.
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c) The California Department of Health Care Services ("DHCS") may add to this list (but
not delete from it) by designating additional High Impact Abatement Activities. DHCS
will make reasonable efforts to consult with stakeholders, including the CA Participating
Subdivisions, before adding additional High Impact Abatement Activities to this list.
d) For the avoidance of doubt, and subject to the requirements of the Kroger Settlement
Agreement and applicable law, CA Participating Subdivisions may form agreements or
ventures, or otherwise work in collaboration with, federal, state, local, tribal or private
sector entities in pursuing Opioid Remediation activities funded from the CA Abatement
Accounts Fund. Further, provided that all CA Abatement Accounts Funds are used for
Opioid Remediation consistent with the Kroger Settlement Agreement and this CA
Kroger Allocation Agreement, a county and any cities or towns within the county may
agree to reallocate their respective shares of the CA Abatement Accounts Funds among
themselves, provided that any direct distribution may only be to a CA Participating
Subdivision and any CA Participating Subdivision must agree to their share being
reallocated.
iii. CA Abatement Accounts Fund Oversight
a) Pursuant to Section 5 below, CA Participating Subdivisions receiving settlement funds
must prepare and file reports annually regarding the use of those funds. DHCS may
regularly review the reports prepared by CA Participating Subdivisions about the use of
CA Abatement Accounts Funds for compliance with the Kroger Settlement Agreement
and this CA Kroger Allocation Agreement.
b) If DHCS determines that a CA Participating Subdivision's use of CA Abatement
Accounts Funds is inconsistent with the Kroger Settlement Agreement or this CA Kroger
Allocation Agreement, whether through review of reports or information from any other
sources, DHCS shall send a request to meet and confer with the CA Participating
Subdivision. The parties shall meet and confer in an effort to resolve the concern.
c) If the parties are unable to reach a resolution, DHCS may conduct an audit of the
Subdivision's use of the CA Abatement Accounts Funds within one year of the request to
meet and confer, unless the parties mutually agree in writing to extend the meet and
confer time frame.
d) If the concern still cannot be resolved, the State may bring a motion or action in the court
where the State has filed its Consent Judgment to resolve the concern or otherwise
enforce the requirements of the Kroger Settlement Agreement or this CA Kroger
Allocation Agreement. However, in no case shall any audit be conducted, or motion be
brought, as to a specific expenditure of funds, more than five years after the date on
which the expenditure of the funds was reported to DHCS, in accordance with this
agreement.
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e) Notwithstanding the foregoing, this Agreement does not limit the statutory or
constitutional authority of any state or local agency or official to conduct audits,
investigations, or other oversight activities, or to pursue administrative, civil, or criminal
enforcement actions.
C. CA Subdivision Fund
Fifteen percent of the total Settlement Fund payments will be allocated to the CA
Subdivision Fund. All funds in the CA Subdivision Fund will be allocated among the
Plaintiff Subdivisions that are Initial Participating Subdivisions. The funds will be used,
subject to any limits imposed by the Kroger Settlement Agreement and this CA Kroger
Allocation Agreement, to fund future Opioid Remediation and reimburse past opioid-
related expenses, which may include fees and expenses related to litigation, and to pay
the reasonable fees and expenses of the Special Master as set forth in Appendix 2.
The CA Subdivision Funds will be allocated as follows:
a) First, funds in the CA Subdivision Fund shall be used to pay the Special Master's
reasonable fees and expenses in accordance with the procedures and limitations set
forth in Appendix 2 to this document;
b) Second, funds will be allocated to Plaintiff Subdivisions that are Initial Participating
Subdivisions that have been awarded Costs, as defined by and in accordance with the
procedures and limitations set forth in Appendix 2 to this document.
c) Funds remaining in the CA Subdivision Fund, which shall consist of no less than 50%
of the total CA Subdivision Fund received in any year pursuant to Appendix 2,
Section 2.c.v, will be distributed to Plaintiff Subdivisions that are Initial Participating
Subdivisions, in relative proportion to the Local Allocation. These funds shall be used
to fund future opioid-related projects and to reimburse past opioid-related expenses,
which may include fees and expenses related to litigation against any Opioid
Defendant.
D. Provision for State Back -Stop Agreement
On August 6, 2021, Judge Dan Polster of the U.S. District Court, Northern District of Ohio,
Eastern Division, issued an order (ECF Docket Number 3814) ("MDL Fees Order") in the
National Prescription Opiate Litigation (MDL No. 2804) "cap[ping] all applicable contingent fee
agreements at 15%." Private counsel representing Plaintiff Subdivisions should seek its
contingency fees and costs from the Attorney Fee Fund or Cost Funds under the Kroger
Settlement Agreement, and, if applicable, the Teva Settlement Agreement, Allergan Settlement
Agreement, CVS Settlement Agreement, Distributor Settlement Agreement, Janssen Settlement
Agreement, and Walmart Settlement Agreement.
A Plaintiff Subdivision may separately agree to use its share of the CA Subdivision Fund to pay
for fees or costs incurred by its contingency -fee counsel ("State Back -Stop Agreement"),
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pursuant to Exhibit R, section I(CC), of the Kroger Settlement Agreement and the MDL Fees
Order, so long as such contingency fees do not exceed a total contingency fee of 15% of the total
gross recovery of the Plaintiff Subdivision pursuant to the Kroger Settlement, inclusive of
contingency fees from the national Attorney Fee Fund and this State Back -Stop Agreement.
Before seeking fees or litigation costs and expenses from a State Back -Stop Agreement, private
counsel representing Plaintiff Subdivisions must first seek contingency fees and costs from the
Attorney Fee Fund or Cost Funds created under the Kroger Settlement Agreement. Further,
private counsel may only seek reimbursement for litigation fees and costs that have not
previously been reimbursed through prior settlements or judgments.
To effectuate a State Back -Stop Agreement pursuant to this section, an agreement in the form of
Appendix 3 may be entered into by a Plaintiff Subdivision, private counsel, and the California
Office of the Attorney General. The California Office of the Attorney General shall, upon the
request of a Plaintiff Subdivision, execute any agreement executed by a Plaintiff Subdivision and
its private counsel if it is in the form of Appendix 3. The California Office of the Attorney
General will also consider requests from Plaintiff Subdivisions to execute and enter into
agreements presented in other forms.
For the avoidance of doubt, this agreement does not require a Plaintiff Subdivision to request or
enter into a State Back -Stop Agreement, and no State Back -Stop Agreement shall impose any
duty or obligation on the State of California or any of its agencies or officers, including without
limitation the Attorney General.
5. State and Subdivision Reporting
a) DHCS will prepare an annual written report regarding the State's use of funds from the
settlement until those funds are fully expended and for one year thereafter. These reports
will be made publicly available on the DHCS web site.
b) Each CA Participating Subdivision that receives payments of funds from the settlement
will prepare written reports at least annually regarding the use of those funds, until those
funds are fully expended and for one year thereafter. These reports will also include a
certification that all funds that the CA Participating Subdivision has received through the
settlement have been used in compliance with the Kroger Settlement Agreement and this
CA Kroger Allocation Agreement. The report will be in a form reasonably determined
by DHCS. Prior to specifying the form of the report DHCS will confer with
representatives of the Plaintiff Subdivisions.
c) The State and all CA Participating Subdivisions receiving CA Abatement Accounts
Funds will track all deposits and expenditures. Each such subdivision is responsible
solely for the CA Abatement Accounts Funds it receives. A county is not responsible for
oversight, reporting, or monitoring of CA Abatement Accounts Funds received by a city
within that county that receives direct payment. Unless otherwise exempt, Subdivisions'
expenditures and uses of CA Abatement Accounts Funds and other Settlement Funds will
be subject to the normal budgetary and expenditure process of the Subdivision.
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d) Each Plaintiff Subdivision receiving CA Subdivision Funds will track all deposits and
expenditures, as required by the Kroger Settlement Agreement and this CA Kroger
Allocation Agreement. Among other things, Plaintiff Subdivisions using monies from
the CA Subdivision Fund for purposes that do not qualify as Opioid Remediation must
identify and include in their annual report, the amount and how such funds were used,
including if used to pay attorneys' fees, investigation costs, or litigation costs. Pursuant
to Section V(B)(2) of the Kroger Settlement Agreement, such information must also be
reported to the Settlement Fund Administrator and Kroger.
e) In each year in which DHCS prepares an annual report DHCS will also host a meeting to
discuss the annual report and the Opioid Remediation activities being carried out by the
State and Participating Subdivisions.
6. Miscellaneous
a) The State or any CA Participating Subdivision may bring a motion or action in the court
where the State has filed its Consent Judgment to enforce the requirements of this CA
Kroger Allocation Agreement. Before filing such a motion or action the State will meet
and confer with any CA Participating Subdivision that is the subject of the anticipated
motion or action, and vice versa.
b) Except as provided in the Kroger Settlement Agreement, this CA Kroger Allocation
Agreement is not enforceable by any party other than the State and the CA Participating
Subdivisions. It does not confer any rights or remedies upon, and shall not be
enforceable by, any third party.
c) Except as provided in the CA Kroger Allocation Agreement, if any provision of this
agreement or the application thereof to any person, entity, or circumstance shall, to any
extent, be invalid or unenforceable, the remainder of this agreement, or the application of
such provision to persons, entities, or circumstances other than those as to which it is
invalid or unenforceable, will not be affected thereby, and each other provision of this
agreement will be valid and enforceable to the fullest extent permitted by law.
d) Except as provided in the Kroger Settlement Agreement, this agreement shall be
governed by and interpreted in accordance with the laws of California.
Docusign Envelope ID: 16E112FF-704F42CB-8ECE-9B04A027CEOD
The undersigned, Santa Ana city, ACKNOWLEDGES acceptance of this Proposed California
State -Subdivision Agreement Regarding Distribution and Use of Settlement Funds — Kroger
Settlement is a requirement to be an Initial Participating Subdivision in the Kroger Settlement and
ACCEPTS this Proposed California State -Subdivision Agreement Regarding Distribution and Use
of Settlement Funds — Kroger Settlement. EXECUTED on
Signature:
Name: Alvaro Nunez l
Title: City Manager
Date: August%, 2024
Ime
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Docusign Envelope ID: 16E112FF-704F-42CB-8ECE-9B04A027CEOD
APPENDIX 2
Cost Reimbursement Procedure
1. Additional defined terms:
a) Costs means the reasonable amounts paid for the attorney and other City Attorney and
County Counsel staff time for individuals employed by a Plaintiff Subdivision at the
contractual rate, inclusive of benefits and overhead, together with amounts paid for court
reporters, experts, copying, electronic research, travel, vendors, and the like, which were
not previously reimbursed and which were paid or incurred (i) prior to December 31,
2022 in litigation against any Opioid Defendant and/or (ii) in negotiating and drafting
any CA Allocation Agreement(s) concerning a settlement with any Opioid Defendant(s).
Costs does not include attorneys' fees, costs, or expenses incurred by private contingency
fee counsel. No part of the CA Abatement Accounts Fund will be used to reimburse
Costs.
b) First Claims Date means October 1, 2023 or when all applications for reimbursement of
Costs, in whole or in part, from funds available under Section IX and Exhibit R of the
Walgreens Settlement Agreement, Section XIV and Exhibit R of the Teva Settlement
Agreement, Section XIII and Exhibit R of the Allergan Settlement Agreement, Section X
and Exhibit R of the Distributor Settlement Agreement, Section XI and Exhibit R of the
Janssen Settlement Agreement, Section X and Exhibit R of the CVS Settlement
Agreement, or Section IX and Exhibit R of the Walmart Settlement Agreement, have
been finally determined under the provisions of those agreements, whichever comes first.
c) Special Master means a retired judicial officer or former public lawyer, not presently
employed or retained by a Plaintiff Subdivision, who will aggregate, review, and
determine the reasonable Costs to be awarded to each Plaintiff Subdivision that submits a
claim for reimbursement of Costs. The Special Master will be selected by a majority vote
of the votes cast by Plaintiff Subdivisions, with each such subdivision having one vote.
d) Plaintiff Subdivision Committee means the committee of Plaintiff Subdivisions that will
review and approve the invoices submitted by the Special Master reflecting his or her
reasonable time and expenses.
2. Cost Reimbursement to Plaintiff Subdivision
a) Purpose. Substantial resources have been expended to hold Opioid Defendants
accountable for creating and profiting from the opioid crisis, and this effort has been a
significant catalyst in creating National Opioid Settlements with various manufacturers,
distributors, and chain pharmacies.
Docusign Envelope ID: 16E112FF-704F-42CB-SECE-9604AO27CEOD
b) Claims Procedure.
If a Plaintiff Subdivision is eligible to seek reimbursement of Costs, in whole or in
part, from funds available under Section IX and Exhibit R of the Kroger Settlement
Agreement, Section IX and Exhibit R of the Walgreens Settlement Agreement,
Section XIV and Exhibit R of the Teva Settlement Agreement, Section XIII and
Exhibit R of the Allergan Settlement Agreement, Section X and Exhibit R of the
CVS Settlement Agreement, Section IX and Exhibit R of the Walmart Settlement
Agreement, Section X or Exhibit R of the Distributor Settlement Agreement, or
Section XI or Exhibit R of the Janssen Settlement Agreement, it must first make a
timely application for reimbursement from such funds. To allow sufficient time for
determination of those applications, no claim for Costs to the CA Subdivision
Fund under this Agreement may be made before the First Claims Date.
ii. A Plaintiff Subdivision that wishes to be reimbursed from the CA Subdivision Fund
must submit a claim to the Special Master no later than forty-five (45) days after the
First Claims Date. The Special Master will then compile and redistribute the
aggregated claim totals for each Plaintiff Subdivision via email to representatives of
all the Plaintiff Subdivisions. A claim for attorney and staff time must list, for each
attorney or staff member included in the claim, the following information: name,
title, total hours claimed, hourly rate (including, if sought, benefits and share of
overhead), and narrative summarizing the general nature of the work performed by
the attorney or staff member. For reimbursement of "hard" costs, the subdivision
may aggregate across a category (e.g., total for travel costs). It is the intention of the
Plaintiff Subdivisions that submission of documents related to reimbursement of
Costs does not waive any attorney -client privilege or exemptions to the California
Public Records Act.
iii. The Special Master may request, at his or her sole option, additional documents or
details to assist in the final award of Costs.
iv. The Special Master will review claims for reasonableness and will notify each
Plaintiff Subdivision of the final determination of its claim, and will provide a list of
all final awards to all Plaintiff Subdivisions by email or, upon request, via First
Class U.S. Mail. Any Plaintiff Subdivision may ask the Special Master to reconsider
any final award within twenty-one (21) days. The Special Master will make a final
determination on any such reconsideration request within thirty (30) days of receipt.
V. Any decision of the Special Master is final and binding, and will be considered
under the California Arbitration Act, Code of Civil Procedure section 1280 et seq.
as a final arbitration award. Nothing in this agreement is intended to expand the
scope of judicial review of the final award for errors of fact or law, and the Parties
agree that they may only seek to vacate the award if clear and convincing evidence
demonstrates one of the factors set forth in Code of Civil Procedure, section 1286.2,
subdivision (a). Plaintiff Subdivisions will have fourteen (14) days after all final
awards are made, together with any final determination of a request for
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reconsideration, to seek review in the Superior Court of California, pursuant to Code
of Civil Procedure, section 1285, where the State has filed its Consent Judgment.
vi. The Special Master will prepare a report of Costs that includes his or her fees and
expenses at least ninety (90) days before the Payment Date for each Annual
Payment. The Special Master's preparation of a report of Costs does not discharge a
Plaintiff Subdivision's reporting requirement under Section V(B)(2) of the Kroger
Settlement Agreement.
vii. A member of the Plaintiff Subdivision Committee, which is a CA Participating
Subdivision, will submit to the Settlement Fund Administrator and Kroger a report
of the fees and expenses incurred by the Special Master pursuant to Section V(B)(2)
of the Kroger Settlement Agreement.
c) Claims Priority and Limitation.
The Special Master will submit invoices for compensation of reasonable fees and
expenses to the Plaintiff Subdivision Committee no later than ninety (90) days prior
to the Payment Date for each Annual Payment. The Plaintiff Subdivision Committee
will promptly review and, if reasonable, approve the Special Master's invoice for
compensation. The Plaintiff Subdivision Committee will submit approved invoices
to the Settlement Fund Administrator for payment. The Special Master's approved
invoices have priority and will be paid first from the CA Subdivision Fund before
any award of Costs, subject to the limitation in Section 2.c.v below.
ii. Final Awards of Costs that do not exceed seventy-five thousand dollars
($75,000.00) will be paid next in priority after the Special Master's approved
invoices.
iii. Final Awards of Costs in excess of seventy-five thousand dollars ($75,000.00) will
be paid proportionally from the funds remaining in that year's Annual Payment.
iv. Any claim for Costs that is not paid in full will be allocated against the next year's
distribution from the CA Subdivision Fund, until all approved claims for Costs are
paid in full.
V. In no event will more than 50% of the total CA Subdivision Fund received in any
year be used to pay Costs or the Special Master's approved invoices.
vi. In no event shall more than $28 million of the total CA Subdivision Funds paid
pursuant to the Kroger Settlement Agreement, Walgreens Settlement Agreement,
Teva Settlement Agreement, Allergan Settlement Agreement, Distributor Settlement
Agreement, CVS Settlement Agreement, Janssen Settlement Agreement, and the
Walmart Settlement Agreement be used to pay Costs.
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d) Collateral Source Payments and Third -Party Settlement.
In the event a Plaintiff Subdivision is awarded compensation, in whole or in part, by
any source of funds created as a result of litigation against an Opioid Defendant for
its reasonable Costs, it will reduce its claim for Costs from the CA Subdivision
Fund by that amount. If a Plaintiff Subdivision has already received a final award of
Costs from the CA Subdivision Fund, it will repay the fund up to the prior award of
Costs via a payment to the Settlement Fund Administrator or notify the Settlement
Fund Administrator that its allocation from the next and subsequent Annual
Payments should be reduced accordingly. If the Plaintiff Subdivision is repaying
any prior award of Costs, that repayment will occur as soon as is feasible after the
Plaintiff Subdivision's receipt of Cost funds from the collateral source, but no more
than 90 days after its receipt from the collateral source. The Settlement Fund
Administrator will add any repaid Costs to the CA Subdivision Fund. Any Plaintiff
Subdivision that has submitted for reimbursement to any national fund and has not
received a final determination by the First Claims Date may request that the
settlement administrator withhold some or all of its payment from the CA
Subdivision Fund in order to avoid repayment.
ii. In the event a Plaintiff Subdivision reaches a monetary settlement or compromise
against any Opioid Defendant outside of the National Opioid Settlement, the
monetary portion of such settlement, net of fees paid to outside contingency fee
counsel and of funds earmarked strictly for abatement, will be credited against its
Costs and the subdivision will be ineligible to recover those credited Costs from the
CA Subdivision Fund. Plaintiff Subdivisions negotiating monetary settlements or
compromises against any Opioid Defendant outside of the National Opioid
Settlement will negotiate for funds to repay any Costs it previously received from
the CA Subdivision Fund or for Costs it otherwise might be eligible to claim from
the CA Subdivision Fund. If such a settlement is paid after all final approved claims
for Costs by all Plaintiff Subdivisions are satisfied in full, the settling subdivision
will reimburse the CA Subdivision Fund in that amount by making payment to the
Settlement Fund Administrator to add to the CA Subdivision Fund in a manner
consistent with the repayments described in section 2.d.i above.
El
o . '
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APPENDIX 3
CALIFORNIA-SUBDIVISION BACKSTOP AGREEMENT
On August 6, 2021, Judge Polster of the US District Court for the Northern District of Ohio
issued an Order (the Order), docket number 3814, in In Re National Prescription Opiate
Litigation, MDL 2804, addressing contingent attorney fee contracts between political
subdivisions eligible to participate in the Kroger Settlement and their counsel.
In light of the Order, and at the request of [SUBDIVISION], the [SUBDIVISION], its counsel
[COUNSEL], and the California Attorney General, on behalf of the State of California, are
entering into this California -Subdivision Backstop Agreement (Backstop Agreement).
[SUBDIVISION] and [COUNSEL] intend this Backstop Agreement to constitute a State Back -
Stop Agreement as that term is used in the Order and in Exhibit R (Agreement on Attorneys'
Fees, Costs, and Expenses) of the Kroger Settlement Agreement.
Pursuant to this Backstop Agreement, [SUBDIVISION] may, subject to the limitations of the
Kroger Settlement Agreement and CA Kroger Allocation Agreement, as well as any other
limitations imposed by law, use funds that it receives from the Kroger Settlement CA
Subdivision Fund to pay a contingent fee to [COUNSEL]. Any such payment from
[SUBDIVISION] to [COUNSEL], together with any contingency fees that [COUNSEL] may
receive from the national Attorney Fee Fund, will not exceed a total contingency fee of
[PERCENTAGE NOT TO EXCEED 15%] of the total gross recovery of [SUBDIVISION] from
the Kroger Settlement.
[COUNSEL] certify that they first sought fees and costs from the Attorney Fee Fund created
under the Kroger Settlement Agreement before seeking or accepting payment under this
backstop agreement. [COUNSEL] further certify that they are not seeking and will not accept
payment under this backstop agreement of any litigation fees or costs that have been reimbursed
through prior settlements or judgments.
The Attorney General is executing this agreement solely because the definition of "State Back -
Stop Agreement" in Exhibit R of the Kroger Settlement Agreement requires such agreements to
be between "a Settling State" and private counsel for a participating subdivision. Neither the
California Attorney General nor the State of California have any obligations under this Backstop
Agreement, and this Backstop Agreement does not require the payment of any state funds to
[SUBDIVISION], [COUNSEL], or any other party.
[DATE] [SUBDIVISION SIGNATURE BLOCK]
[DATE] [COUNSEL SIGNATURE BLOCK]
[DATE] [ATTORNEY GENERAL SIGNATURE BLOCK]
o
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BY E-MAIL
March 28, 2024
David Jones
Supervising Deputy Attorney General
Healthcare Rights & Access Section
Department of Justice
1300 I Street
Sacramento, CA 95814
Phone: (916) 210-7861
Email: David.Jones@doj.ca.gov
Re: Kroger Opioids Settlement Agreement
Dear Mr. Jones:
Weil, Gotshal & Mangos LLP
2001 M Street, NW Suite 600
Washington, DC 20036
+1 202 682 7000 tel
+1 202 857 0940 fax
Chantale Fiebig
+1 (202) 682-7200
Chantale.Fiebig@w ll.com
This letter summarizes the agreement reached between Kroger and the State of California regarding the
multistate Kroger Settlement Agreement dated March 22, 2024 regarding opioid claims by states and
subdivisions (the "Multistate Kroger Settlement Agreement").
The Kroger Co. and all of its direct and indirect subsidiaries ("Kroger"), and the State of California, by
and through its Attorney General Rob Bonta, have agreed to the following modification to the Multistate
Kroger Settlement Agreement in its application to California. For the avoidance of doubt, the limited
modification set forth below applies only to California and to no other state or territory.
The "Prescription Red Flag" described in Section IX(5)(a) of Exhibit P to the Multistate Kroger Settlement
Agreement is modified in its entirety to read as follows:
A Controlled Substance prescription fails to meet the requirements of law. For the sake of
clarity, minor deficiencies in the patient's name, address, date of birth, or contact
information are not a red flag if the pharmacist, in his or her professional judgment and
usual course of practice, is able to resolve these deficiencies with the patient.
This limited California -specific modification was a necessary condition for California's decision to sign -
on as a participating state to the Multistate Kroger Settlement Agreement.
For the avoidance of doubt, all other terms and provisions in the Multistate Kroger Settlement Agreement
remain the same, including without limitation all "Prescription Red Flags" not specified above, all
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David Jones
March 28, 2024
Page 2
Well, Gatshal & Menges LLP
definitions, all release provisions, the eleven -year -payment schedule and all other terms and provisions of
the payment schedule, and all other terms and provisions.
These terms and this letter shall be included in a stipulated judgment to be Fled in a Superior Court in the
State of California.
Sincerely,
Chantale Fiebig
Counsel for The Kroger Co.
SO AGREED BY AND ON BEHALF OF THE STATE OF CALIFORNIA:
Name: David A. Jones
Title: Supervising Deputy Attorney General
Date: March 29, 2024