TO: Board of Supervisors
FROM: Sheryl L. Bratton, County Counsel
REPORT BY: Sherri S. Kaiser, Chief Deputy County Counsel
SUBJECT: Participation in the National Opioids Settlement with Kroger
RECOMMENDATION
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Approve participation in the National Opioids Settlement with Kroger to receive $260,000 over 11 years and authorize the participation agreement waiving the right to sue Kroger. (Fiscal Impact: $260,000 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. Although that case is ongoing, most of the major defendants have settled. In July 2021, this Board authorized the County to participate in a nationwide settlement with the parent company of opioid manufacturer Janssen Pharmaceuticals and distributors McKesson, Cardinal Health, and Amerisource Bergen. In March 2023, this Board authorized further settlements with CVS, Walgreens, Walmart, Teva, and Allergan.
California’s share of the nationwide settlement funds depends on the number of counties and cities in California that choose to participate. The State administers the settlement funds, which are restricted and must be used to support opioid abuse disorder abatement efforts. Combined, the 2021 and 2023 settlements will provide approximately $10 million to the County over 18 years, of which the County had received $951,605 by the close of FY 2023-24. The Health & Human Services Agency manages the funds for the County, and, coincidentally, agenda item number 24-1158 on today’s consent calendar is a recommendation to use a portion of the settlement funds to enter agreements for local opioid prevention and health education services.
Kroger has also been a defendant in some of the opioid cases around the country, although not in Napa County’s case. Nonetheless, the County has the opportunity to participate in the Kroger settlement if the County waives its right to sue Kroger over its role in the opioid epidemic. In exchange, the County is estimated to receive approximately $260,000 over 11 years. This number remains an estimate, because both the State’s and the County’s share will depend on the overall number of California counties and cities that participate in the Kroger settlement. Future appropriations from the revenue received will require Board approval.
The community can only benefit from receiving additional funding to help abate the ongoing opioid abuse epidemic. Given that the County does not have an independent basis to sue Kroger given its minimal local market share, there is no detriment to the County if it waives its right to sue.
Requested Action: Approve participation in the National Opioids Settlement with Kroger and authorize the participation agreement waiving the right to sue Kroger.
FISCAL & STRATEGIC PLAN 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 County is estimated to receive approximately $260,000 over 11 years. 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 14 C.C.R. 15378 (State CEQA Guidelines) and therefore CEQA is not applicable.