TO: Board of Supervisors
FROM: Sheryl L. Bratton, County Counsel
REPORT BY: Jason M. Dooley, Chief Deputy County Counsel
SUBJECT: Participation in the Remnant Defendants’ Settlement Agreement with six regional distributors/dispenser defendants.
RECOMMENDATION
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Authorize the Chief Executive Officer to execute documents necessary to participate in the Remnant Defendants’ Settlement Agreement with six regional opioid distributor/dispenser defendants, including: (1) Associated Pharmacies, Inc. (and American Associated Pharmacies); (2) J M Smith Corporation; (3) Louisiana Wholesale Drug Company, Inc.; (4) Morris and Dickson Co.; (5) North Carolina Mutual Wholesale Drug Company, Inc.; and (6) United Natural Foods, Inc. (including its subsidiaries SuperValu and advantage Logistics). (Fiscal Impact: Increased Revenue; General Fund; Not Budgeted; Discretionary)
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BACKGROUND
In May 2018, the Board authorized a consortium of outside counsel involved in the nationwide opioid litigation to file a federal complaint on behalf of the County against 14 manufacturers, distributors, and retailers of opioid drugs. In June 2018, the County joined with numerous other public entities across the state and nation in filing a federal complaint against opioid drug manufacturers, distributors, and retailers. In July 2021, the County entered into a set of settlement agreements with the opioid manufacturer Janssen Pharmaceuticals and its parent company, Johnson & Johnson and the three largest pharmaceutical distributors of opioids, entitling it to a share of statewide settlement funds. In March 2023, the County entered into similar settlement agreements with two pharmaceutical manufacturers, Teva and Allergan, and three pharmacies, CVS, Walgreens, and Walmart. In August 2024, the County entered into a settlement agreement with Kroger. In August 2025, the Board authorized participation in three additional settlements: (1) Sandoz Inc.; (2) Purdue Pharma L.P. & Sackler Family; and (3) Other Small Generic Pharmaceutical Opioid Manufacturers
On March 10, 2026, outside counsel provided notice of a new settlement, called the Remnant Defendants’ Settlement Agreement, which resolves disputes with six opioid distributors or dispensers: (1) Associated Pharmacies, Inc. (and American Associated Pharmacies); (2) J M Smith Corporation; (3) Louisiana Wholesale Drug Company, Inc.; (4) Morris and Dickson Co.; (5) North Carolina Mutual Wholesale Drug Company, Inc.; and (6) United Natural Foods, Inc. (including its subsidiaries SuperValu and advantage Logistics). The County did not specifically name these defendants in its lawsuit, but the Settlement will provide compensation to any participating entities or parties, even without having filed against the parties. Additionally, the Agreement provides that if sufficient entity plaintiffs do not opt into the Settlement and the associated release, the Agreement will not become effective. The exact amount of any settlement payment is unknown and is based on the participation rate of other entity parties. A rough estimate of the potential value of this particular settlement to Napa County is $300,000 which will be paid over several years. In FY24-25, the County received approximately $1.8 million in settlement payments. The total amounts are not consistent year-to-year and it has averaged out to approximately $900,000 annually. Approval of this settlement agreement will add to that amount.
The community can only benefit from receiving additional funding to help abate the ongoing opioid abuse epidemic. Given the circumstances for each of these settlements, it is unlikely the County would have an independent basis to recover damages through continued litigation, especially against those defendants not named in the County’s complaint.
Requested Action: Approve participation in the Remnant Defendants’ Settlement Agreement and authorize the Chief Executive Officer to execute any documents required to opt in to the settlement agreement.
FISCAL IMPACT
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Is there a Fiscal Impact? |
Yes |
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Is it currently budgeted? |
No |
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Where is it budgeted? |
Not applicable |
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Is it Mandatory or Discretionary? |
Discretionary |
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Discretionary Justification: |
Participating in the settlement will provide funding for opioid abuse abatement services. |
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Is the general fund affected? |
No |
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Future fiscal impact: |
The exact settlement payments from this Agreement cannot be calculated until all participating jurisdictions are identified. At this time, the County receives approximately $900,000 annually in opioid settlement payments. Any future appropriations will be presented to the Board for its consideration. |
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Consequences if not approved: |
The funding will not be available. |
ENVIRONMENTAL IMPACT
ENVIRONMENTAL DETERMINATION: The proposed action is not a project as defined by 14C.C.R 15378 (State CEQA Guidelines) and therefore CEQA is not applicable.