Kermit approves $400 million settlement

Tempers flare on dilapidated property

Kermit resident Etta Lea Kiser (left) and Kermit councilman J.W. Endicott (right) point toward each other during a heating discussion in the Kermit Council meeting Monday night. (Citizen photo)

BY ROGER SMITH
MOUNTAIN CITIZEN

KERMIT, W.Va. — The Kermit Council approved a participation agreement for the $400 million settlement that West Virginia cities and counties reached in a lawsuit with three major U.S. drug distributors in August.

Tish Chafin, legal counsel from Williamson, W.Va., joined the Kermit meeting Monday via phone to advise the council.

“Everybody is probably aware that ‘the big three’ distributors, we were able to negotiate a $400 million settlement with them the night before the trial started,” Chafin said. “That’s the settlement that I’m recommending you approve this evening.”

Chafin told council members the settlement with Cardinal Health, Amerisource Bergen, and McKesson was twice what West Virginia would have gotten had it stayed in the national settlement. The $400 million is payable over 12 years, with the bulk of the money paid in the first seven years.

“As part of the terms, they want all the local governments like Kermit to approve it and have the settlement participation form turned in by Sept. 23. Then, the distributors have 60 days to make the first $50 million payment,” said Chafin. “It’s not unrealistic to think there could be some money available to distribute before the end of the year.”

The second payment of $50 million will come Jan. 31, 2023.

According to Chafin, half of what Kermit gets can be used to reimburse the town for past opioid expenses, such as increased litter control, law enforcement, fire department and other services.

Chafin also said West Virginia also settled with Johnson & Johnson, Teva and Allergan for another $260 million.

“I don’t have releases yet,” she said. “But if you add the $260 million to $400 million, West Virginia has settled so far for almost $700 million. We’re hoping that we can get another $100 million or so from the big-chain pharmacies that are left. There’s Walmart, Walgreens and CVS. The Attorney General already settled with RiteAid for $25 million or $30 million. That will also come to Kermit through the memorandum of understanding.”

The pharmacy trial is set for Sept. 26. After that trial, there will be another trial with the “remnant defendants that include the two main defendants Kroger and Amneal.”

“We still have a handful of defendants to either try or settle with,” said Chafin.

The settlement distribution includes every West Virginia county and city except Huntington and Cabell County, whose cases were dismissed July 4.

“You know they had their own trial, and [U.S. District Judge David] Faber, unfortunately, gave them zero,” stated Chafin. “So they’re not included in this.”

According to Chafin, the cities and counties that chose to litigate will receive a larger percentage of the settlement than those that opted not to join. Hampshire County was the only county that opted out of the lawsuit.

“Are there any counties in Kentucky that have this?” Mayor Charles Sparks asked Chafin.

“Well, they have their own money,” replied Chafin. “In Kentucky, the attorney general settled for all the counties. They participated in the national settlement, so they’re going to get paid over 18 years. Kentucky’s a bigger state than West Virginia, so they got a fair amount of money. But per capita, we still did way better than Kentucky by not participating in the national settlement and going out on our own.”

Chafin stated she could not give a dollar amount that would come to Kermit because the court had not entered an order about attorney fees and costs.

“There was a fair amount of cost that was accumulated in preparation for trial,” she said. “But I think in any event, it’s going to end up being less than what the contract was that you signed with us. Our contract was a 25 percent attorney fee and costs on top of that. I think the panel is looking at taking 25 percent off the top of everything, from fees and costs. So that will end up being a deal. But we don’t know yet, and they could possibly say less.”

The cities of Gilbert, Welch, Point Pleasant and Delbarton either approved the settlement or planned to approve the settlement Monday, according to Chafin.

“I will have all the cities and counties I represent turned in by Friday,” she added. “The distributors required 100 percent agreement. Every county and city has to agree.”

The settlement distribution will be based on the 2012 census form that listed Kermit’s law enforcement, health care, sanitation and other costs.

“Because Kermit is small, obviously your numbers are going to be smaller than, say, Williamson,” said Chafin, adding that Mingo County “gets a really big chunk” allocated.

“A big part of that reasoning is a lot of what happened in the Kermit area and all those pills that they distributed into Kermit.”

Mingo County’s portion will be shared with the cities.

“That’s where it gets a little bit trickier because the numbers aren’t as good, and it is based on size. Kermit can only spend so much on law enforcement because you only have so many people in your town as opposed to Williamson,” stated Chafin.

“I think there’s a good realization with the county that a lot of what is being attributed to the county is because of what happened in Kermit. So I think there’s an appreciation of that, and I feel confident we’ll be able to do something with that to make the numbers a little bit more equitable.”

Councilman Hawky Preece said that sounded better than what the council had been hearing.

When the suit was filed in 2017, Kermit became its poster child in the media.

At the peak of the opioid crisis, drug companies sent almost 9 million pain pills to one pharmacy in Kermit within a two-year period, according to data used in a Charleston Gazette-Mail report. Over a six-year period, they shipped more than 12 million hydrocodone pills to Kermit.

Tempers flare

The meeting heated up when resident Tim Crum, whose dilapidated property became the subject of a pending lawsuit last year, addressed the council.

Crum began by saying the court order stated “all improvements” would be demolished.

“That tells me you’re going to tear the trailer down, too?” Crum asked.

“No,” replied Sparks.

“That’s the way it reads,” continued Crum. “You’re sure of that?”

“The trailer stays,” Sparks told him. “All we want to have demolished is the house out back.”

The town recently sought bids on the demolition.

“Did we only get one bid?” Preece asked Sparks. “Is this the only bid that we got?”

Sparks pointed to a document on the table and said, “We got this from Tim, but this is a proposal.”

Crum replied, “It was a bid.”

Etta Lea Kiser requested permission to speak on the matter.

“When this all started – and I wish it would have been handled better – but they said it needed to be done before fall came,” Kiser said. “Here’s fall. …and he could have worked on it during that time and gotten it done himself without costing him a bunch of money that he doesn’t have.”

Sparks explained that the court ordered the town to take bids to get the property cleaned up.

“We only got one official bid,” added the mayor.

“Why is mine not official? Why is mine being set aside?” asked Crum.

Sparks told Crum the document he submitted was a “proposal.”

“I make a motion to accept the bid we got,” Preece said.

Endicott asked how long it would take the contractor to do the job.

“Three days at the most,” said Preece, adding that the material was considered contaminated and would be hauled to Ashland.

“So it’s not just the demolition, it’s the disposal?” asked Endicott. “That wasn’t clear — $11,000, I thought, was pretty high.”

Sparks said disposal cost would be between $6,000 and $7,000.

“Tim, you’ve had a long time to work on this, a long time to clean it up,” said Sparks. “I appreciate your proposal, your bid, or whatever you want to call it. But in order to get it done and get it done right, cleaned up the way it should be, I’ll take this.”

Crum responded, “You all are just going to bankrupt me financially. I have no money now.”

Kiser said Crum had family members who owned equipment and were willing to do the job.

Sparks said there would be a lien on the property.

“So the town of Kermit, instead of helping the residents, is going to put a lien on the property so they can steal property,” said Kiser.

“The lien is there until the debt is paid off, so any way you look at it, you’re going to tie the property up,” said Crum.

Kiser again appealed to Sparks, “If he can do this and do it correctly, why won’t you say ‘OK’? It’s wrong, it’s wrong.”

Sparks said he felt more comfortable taking the other bid.

“He’s a permanent resident,” said Kiser. “His parents were residents. I don’t understand why you wouldn’t want to help him instead of hurting him.”

Endicott replied, “That’s his grandmother’s house. It has sat there like that for the last umpteen years.”

Kiser began to speak, and Endicott said, “Let me speak. Hush. Let me speak.”

“You’re not going to speak to me that way,” Kiser told him.

“That was his grandmother’s house, and it has sat like that. It’s not only an eyesore but a health hazard,” continued Endicott. “He’s had chances to clean it up. I’m not in favor of $11,000. I’ll say that.”

“You shouldn’t even be voting on this anyway,” said Kiser. “You are his physician, and you are sitting on the council.”

Endicott said the two had nothing to do with each other.

“It absolutely does, sir,” said Kiser. “You should have recused yourself from even voting on it. You know the issues with that. It’s not only financial; it’s mental health.”

Endicott said he had known Crum a lot longer than Kiser had.

“He’s my friend,” stated Endicott.

“Really? I would hate for you to be my friend because I would hate to be done that way,” said Kiser.

Endicott told Kiser to “calm down.”

“I think I’ll excuse myself,” Kiser said as she walked toward the exit.

“I think that would be a good idea,” Endicott told her.

Kiser then turned around and returned to her seat. “Well, I think I’ll stay.”

Sparks expressed his frustration, saying Crum had received several certified letters, which Crum stated he had not.

“As the mayor, you could have come and talked to Tim,” said Kiser. “You knew he was sick. He had cancer.”

“I knew he had been sick,” said Sparks.

The council tabled the issue after no one seconded the motion to accept the $11,000 bid.

“If you will work with me, directly with me, I will get this taken care of,” said Crum.

“I’ll work with you,” Sparks told him.

“Get it cleaned up, would you?” Endicott said to Crum.

Sammons addresses safety issue

Dr. Charles Sammons brought a safety concern to the council.

“Coming from Mingo Avenue, down on the other side of the railroad, up on the schoolhouse crossing, I’d like you all to give some consideration to mowing from the top of the hill up on Route 52 around Second Avenue,” Sammons said.

The council agreed there was an issue as the overgrowth of trees and weeds obstructs motorists’ view.

Sammons suggested there were three and possibly four entities that could clear the area.

“There’s certainly a consideration for the railroad because those trees are pretty large,” said Sammons. “If they’re cut, when they fall, they would be on the tracks probably. Then you’ve got the Department of Highways and the town. Is there a community service program through the Corrections Department?”

Preece said told Sammons the town had no community service workers.

“Regardless of who does it, it is a safety issue,” stated Sammons. “If you’re coming from the north on 52 into Kermit, you can’t see from 52 onto the track. So it’s a safety issue both ways, particularly for a school bus that goes across there in the morning and the afternoon.”

Sammons asked the council to consider moving the “30 mph sign” from near the railroad crossing to the top of the hill on Route 52.

“That may reduce the speed coming down that hill,” he said.

Sammons also told the council that he received a “burglar alert” on his phone earlier in the day.

“I was out of town today,” he said. “I called the mayor, and he called your officer. I just want to commend the expedited response. Thankfully, nothing was going on, but I want to commend the response.”

Sparks told Sammons that he would look into a remedy to the obstructed area.


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