In the News: New York State Files Motion Asking Judge to Render Default Judgement Against Endo Pharmaceuticals

Pills spilling out of open pill bottles

Recent weeks in the New York State opioid trial have seen defendant Endo Pharmaceuticals propelled into the spotlight, as the company stands accused by the State of willfully withholding relevant and potentially damning evidence during discovery — a move for which Endo and its attorneys were subject to orders of contempt and sanctions in a similar case involving several Tennessee counties.

The judge presiding over the Tennessee opioid case found that Endo’s legal representatives made numerous “false statements” about their discovery compliance.

At the start of August, New York State filed a motion requesting that a ruling procedure referred to as a “default judgment” be granted against Endo Pharmaceuticals and its associates, which occurs when one party in a lawsuit — in this case Endo — fails to complete an action that has been ordered by the court.

In such circumstances, a federal judge can decide to rule in favor of the party that is compliant. In some default judgments, judges may also levy additional sanctions and/or penalties against the offending company, its associates, and parent company or owners, which is what New York State is requesting.

New York’s motion for default judgement states:

“As the State has now discovered, Endo [and their long-time attorneys] have — for nearly a decade — been concealing vast troves of smoking-gun evidence proving Endo’s grave misconduct in New York, including at least tens of thousands of individual records, each revealing another shocking detail of Endo’s inappropriate, behind-closed-doors communications and transactions pushing the company’s dangerous and addictive opioid drugs on New York prescribers.”

On Aug. 1, Suffolk County and Nassau County joined the State’s motion for default judgment.

The State (and counties) argue that there is no reasonable alternative but for the judge to grant a default judgment, because the plaintiffs’ right to a fair and honest trial has been “irreparably compromised.” In other words, because the jury did not have access to the information that Endo did not include during discovery, it may not have the means by which to render a fair judgement.

According to coverage by Law360, Simmons Hanly Conroy Partner Jayne Conroy said, about the undisclosed information:

“The actions of Endo and its counsel have shaken our reliance on the discovery process and our ability to achieve justice for our clients. It’s a sad day for our legal system to see such evidence of abuse, especially during the first opioid jury trial in the country.”

Endo claims it attempted to produce thorough discovery documentation in “good faith,” but also “recognizes that those efforts have at times fallen short.”

In New York’s motion, the State alleges that Endo and its employees acted in such ways as to promote addiction among patients, often returning to drug-troubled areas to continually promote its opioid painkillers such as Percocet® as a potential “gateway” to higher-strength opioids.

In an example that has been made public, one such Endo sales representative observed “a lot of drug abusers and crackheads” while at the office of a prescriber and failed to report such conduct to the State, which is required by law. Instead, records indicate that Endo sales representatives made an additional five visits to the same troubled area in the span of eight months.

In addition, the State’s motion argues that Endo’s sales representatives communications with healthcare providers — including call notes, records and data — are highly relevant to the State’s case due to their deeply incriminating content. According to the State, Endo sales representatives made copious misrepresentations about the safety and efficacy of Endo’s opioid-based drugs.

Furthermore, Endo proactively concealed all of this potentially damning documentation, which discloses the content of its employees’ private conversations with prescribers in New York, in a “commercial data warehouse,” while continuing to make hundreds of thousands of sales visits to New York healthcare providers.

Such evidence, the State argues, is essential for proving Endo’s culpability.

According to the motion, New York is asking the Court to render a default judgment in order to:

  • Deem the relevant issues resolved in the plaintiff’s favor
  • Exclude Endo Pharmaceuticals from contesting the ruling
  • Expedite the process of discovery into Endo and its associates’ repositories of records and documents
  • Determine the extent of Endo’s parent company’s involvement in concealment

It has yet to be determined whether New York Judge Garguilo will punish Endo Pharmaceuticals for these discovery failings, though he has noted, “there hasn’t been compliance.” Since the request for default judgement, Judge Garguilo has appointed a Referee — Judge Maltese — to oversee the dispute and help him determine if discipline is needed.

Awaiting Judge Maltese’s findings, Judge Garguilo vowed “to rule by the end of next week, as opposed to waiting until the case goes to a jury.” He also said:

“[It is] noteworthy that the chancellor … on 12 occasions — on 12 occasions — in the Tennessee action indicated that the defendants were not truthful. Not once. Twelve occasions.”

Referring to the case in Tennessee, in which Endo was held in contempt of court, Judge Garguilo noted, “It should be abundantly clear that the proverbial sword of Damocles is hanging over the head of Endo.”

In July, Endo agreed to pay $35 million to settle opioid claims made by Tennessee counties.

Simmons Support Team
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