FAQs National Opioids Settlements

1. 1. Are all California cities and counties eligible to receive funds from the National Opioid Settlements?

   • Cities and counties with a population greater than 10,000, based on the U.S. Census Bureau’s population estimates for July 1, 2019 (released May 2020), are eligible to receive funds from the National Opioid Settlements. Certain litigating cities and counties with a population less than 10,000 are also eligible to receive funds.



2. 2. If my city or county joins the National Opioid Settlements, how much will it receive?

   • California generally expects to receive up to approximately 9.92% of the national settlement funds. The amount California ultimately receives will depend on how many eligible states and eligible cities and counties join the Settlements. The amounts that California may receive will be divided into three funds: 1) State fund 15%; 2) CA Subdivision Fund 15%; and 3) CA Abatement Accounts Fund 70%. Subdivisions that join can expect to receive their abatement percentage share of the CA Abatement Accounts Fund as provided in Appendix 1 to the applicable California State Subdivision Agreement. Litigating cities and counties that join can also expect to receive their plaintiff subdivision percentage share of the CA Subdivision Fund as provided in Appendix 1.



3. 3. How were the percentages in Appendix 1 set?

   • The allocation model in Appendix 1 that sets forth the distribution of funds is based on nationally available federal data on opioid use disorder, overdose deaths, and opioid shipments into California, and was developed by lawyers and experts in the national opioid litigation.



4. 4. If my city or county joins, will it receive direct payment of settlement funds?

   • If a city joins, and it is located in a county that is participating in the Settlement, your allocated Abatement Accounts Fund amount will be paid to the county unless you choose direct payment. You may decide to opt in or out of direct payment at any time, and may also choose to receive only a portion of your share directly. If your city changes its mind on whether it would like direct payment, you may contact Tijuan Faulcon at tfaulcon@browngreer.com, California’s point of contact at the Directing Administrator, BrownGreer, for guidance on how to change your city’s election.

     A county that joins a Settlement will receive direct payment, unless it chooses to direct funds to another eligible city or county.

     If your city/county is a Participating Subdivision and a Plaintiff Subdivision, your city/county will receive direct payment of Subdivision Funds. Your city/county may not opt-out of direct payment of Subdivision Funds, however you may choose to reallocate Subdivision Funds to another Participating Subdivision so long as such reallocation otherwise meets the requirements under the Settlement Agreement(s) and State-Subdivision Agreement(s).



5. 5. If my city or county receives direct payments from the National Opioid Settlements, is it required to spend the monies for particular uses?

   • Yes. The Settlements require funds to be used primarily for opioid abatement. Please see Section 4.B.ii of the California State Subdivision Agreements, Section V and Exhibit E to the Distributors, Walgreens, Walmart and CVS Settlement Agreements, Section VI of and Exhibit E to the Janssen Settlement Agreement, and Section VIII of and Exhibit E to the Teva and Allergan Settlement Agreements, for specific limitations on the use of Settlement funds.

     Additional information about allowable use of settlement funds can be found on the Department of Health Care Service’s (DHCS) Opioid Settlements website at https://www.dhcs.ca.gov/provgovpart/Pages/California-Opioid-Settlements.aspx.



6. 6. If my city or county receives direct payments from the National Opioid Settlements, is it required to report on the use of funds?

   • Yes. Section 5 of the California State Subdivision Agreements lays out certain annual reporting requirements for cities and counties that receive direct payment of funds. Information regarding reporting requirements under the State-Subdivision Agreements can also be found on DHCS’s Opioid Settlements website at https://www.dhcs.ca.gov/provgovpart/Pages/California-Opioid-Settlements.aspx.

     The Settlement Agreements have additional reporting requirements when money from the Settlement Funds is used for purposes that do not qualify as Opioid Remediation. Please see Section V.B.2 of the Distributors, Walgreens, Walmart and CVS Settlement Agreements, Section VI.B.2 of the Janssen Settlement Agreement, and Section VIII.C of the Teva and Allergan Settlement Agreements for information. If you have questions regarding how to file a Non-Opioid Remediation Use report, you may contact Tijuan Faulcon at tfaulcon@browngreer.com, California’s point of contact at the Directing Administrator, BrownGreer.



7. 7. If my city does not elect direct payment of its allocation of the Abatement Accounts Fund, is it still obligated to report on the use of those funds?

   • If your city or county chooses not to receive direct payment of funds from the Abatement Accounts Fund, it will not be subject to the reporting requirements under the Settlement Agreements or the State-Subdivision Agreements. If your city or county receives direct payment of funds from the Subdivision Fund, but chooses to reallocate those funds to another Participating Subdivision, it must nonetheless report on those funds to DHCS.



8. 8. If an eligible city or county does not join, what happens to its allocated share?

   • If a city or county does not join, the total settlement amount California may receive may be reduced since that amount is dependent upon participation by cities and counties. In addition, if a city or county does not join, its share of the CA Abatement Accounts Fund will go to the State.



9. 9. What about attorney’s fees for cities and counties?

   • The Settlements establish Attorney Fee Funds for attorneys representing cities and counties that join the Settlements. These attorneys’ fees include amounts for outside counsel representing participating subdivisions as well as participating states. The Settlements require outside attorneys who recover from those funds to waive enforcement of their contingency fee entitlements as to all of their clients and notify their clients accordingly. Subdivisions may also enter into back-stop agreements to pay their contingency-fee attorneys from any monies they receive from the CA Subdivision Fund, as provided in Section 5 of the California State-Subdivision Agreements and Exhibit R to each of the Settlement Agreements.



10. 10. Why are the California State-Subdivision Agreements “proposed”?

    • Cities and counties will accept the Proposed California State-Subdivision Agreements through the sign-on process. Exhibit O to each of the Settlement Agreements lays out certain requirements that must be met before state-subdivision agreements may be approved. Once those thresholds are met and the judgments attaching the agreements are entered in a court judgment, the California State-Subdivision Agreements will become final.



11. 11. Where can I get more information about the Settlements?

    • Cities/counties should first consult with their respective city attorney/county counsel. Cities and counties that retained attorneys to file opioid litigation may also wish to consult those attorneys.

      Cities and counties may also contact the Attorney General’s opioids team via email at OpioidSettlement-LocalGovernment@doj.ca.gov.

      Additional settlement-related information is available at https://nationalopioidsettlement.com/.

      Additional information regarding reporting and use requirements can be found on DHCS’s Opioid Settlements website at https://www.dhcs.ca.gov/provgovpart/Pages/California-Opioid-Settlements.aspx.

Disclaimer: To the extent any of the answers in this FAQ are inconsistent with the Settlement Agreements, California State-Subdivision Agreements, or documents filed in the Mallinckrodt bankruptcy matters, those documents will govern over any inconsistent responses in this FAQ.