The US Court of Appeals for the Fourth Circuit on Tuesday vacated a 2022 district court judgment in City of Huntington, West Virginia v. AmerisourceBergen Drug Corporation et al, holding that West Virginia common law permits public nuisance claims based on “the conditions resulting from the over-distribution of opioids.”

The case will now return to the district court for reconsideration under corrected legal standards, with the distributors potentially exposed to the plaintiffs’ proposed $2.5 billion abatement plan. The original 2022 district court ruling had dismissed the plaintiffs’ claims against drug distributors AmerisourceBergen, Cardinal Health, and McKesson Corporation, on the basis that they acted in “good faith.”  The defendants control over 90 percent of the US opioid distribution market.

At appeal, the court found that the district court committed multiple legal errors. It firstly rejected the lower court’s exclusion of product-based harms from public nuisance law, predicting that West Virginia’s Supreme Court would permit such claims when distribution “unreasonably operates to hurt or inconvenience an indefinite number of persons.” It also stated that the district court misinterpreted the distributors’ duties under the Controlled Substances Act, which requires distributors to monitor each individual pharmacy order for suspicious characteristics such as unusual quantity or frequency. The appeals court found that the distributors in fact repeatedly allowed suspicious orders to be fulfilled without respect to mandatory reporting requirements. It further held that conduct by prescribers and pharmacies does not absolve the distributors of responsibility, as the consequences were “reasonably foreseeable.”

The decision issued guidance regarding possible relief, holding that equitable remedies may include monetary awards used to fund treatment facilities, prevention programs, and community recovery efforts. Typically, equitable relief is a a court order that requires a party “to do or stop doing something.” However, citing United States v. Price, the court stated that orders which “compel expenditures of money” may be considered appropriate.

This decision marks the latest legal development in the ongoing opioid crisis. In January, New York State reached a $7.5 billion settlement with Purdue Pharmaceuticals while the US Justice Department filed a federal lawsuit accusing Walgreens of filling millions of prescriptions without a legitimate medical purpose.