R 5280 RESOLUTION NO. 528Q
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
ARROYO GRANDE CALIFORNIA AUTHORIZING THE
CITY MANAGER TO ENTER INTO THE SETTLEMENT
AGREEMENTS WITH WALGREENS CO.,WALMART, INC.,
CVS HEALTH CORPORATION/CVS PHARMACY INC.,
TEVA PHARMACEUTICAL INDUSTRIALS LTD., AND
ALLERGAN FINANCE LLC/ALLERGAN LIMITED, AGREE
TO THE TERMS OF THE STATE-SUBDIVISION
AGREEMENTS, AND AUTHORIZE ENTRY INTO THE
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,
RESOLUTION NO. 5280
PAGE 2
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,
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,
RESOLUTION NO. 5280
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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.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF ARROYO GRANDE AS FOLLOWS:
SECTION 1. The above recitals are true and correct and are incorporated herein
by this reference.
SECTION 2. The City Manager is authorized to settle and release the City's claims
against the Settling Defendants in exchange for the consideration set forth in the
Settlement Agreements and Allocation Agreements, including taking the following
measures:
1. The execution of the Participation Agreements with the Settling Defendants
and any and all documents ancillary thereto.
RESOLUTION NO. 5280
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2. The execution of the Proposed California State-Subdivision Agreement
Regarding Distribution and Use of Settlement Funds with the Settling
Defendants by executing the signature pages to those Allocation
Agreements.
3. Notify the Settlement Fund Administrator that the City requests a direct
payment under the Allocation Agreements at least 60 days prior to the
Payment Date in the Settlement Agreements.
SECTION 3. CEQA. That the City Council finds this Resolution is not subject to
the California Environmental Quality Act (CEQA) in that the activity is covered by the
general rule that CEQA applies only to projects which have the potential for causing a
significant effect on the environment. Where it can be seen with certainty, as in this case,
that there is no possibility that the activity in question may have a significant effect on the
environment, the activity is not subject to CEQA. (State CEQA Guidelines §§ 15060,
subd. (b)(2)-(3), 15378.)
SECTION 4. Severability. If any provision of this Resolution or the application
thereof to any person or circumstance is held invalid, such invalidity shall not affect other
provisions or applications, and to this end the provisions of this Resolution are declared
to be severable.
SECTION 5. Effective Date. This Resolution shall become effective immediately.
On motion of Council Member Guthrie, seconded by Council Member Secrest, and by the
following roll call vote, to wit:
AYES: Council Members Guthrie, Secrest, and Mayor Pro Tem Barneich
NOES: None
ABSENT: Council member George and Mayor Ray Russom
the foregoing Resolution was passed and adopted this 11th day of April, 2023.
RESOLUTION NO.Sa b
PAGE 5
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C REN RAY RUSSOM, MAYOR
ATTEST:
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J SICA MA ON, I ' LERK y
APPROVED AS TO CONTENT:
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WHITNEY c/ONALD, CITY MANAGER
APPROVED AS TO FORM:
ISAAC R'f' i INTERIM I ATTORNEY
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OFFICIAL CERTIFICATION
I, SARAH LANSBURGH, Deputy City Clerk of the City of Arroyo Grande, County of
San Luis Obispo, State of California, do hereby certify under penalty of perjury, that the
attached Resolution No. 5280 was passed and adopted at a regular meeting of the City
Council of the City of Arroyo Grande on the 11th day of April, 2023.
WITNESS my hand and the Seal of the City of Arroyo Grande affixed this 18th day of
April, 2023.
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SARAH LANSB GH, DEP ` CITY CLERK