Morgan County has wide discretion to use opioid settlement money, says attorney

by Kate Shunney

Jefferson County attorney Stephen Skinner advised the Morgan County Commission last Wednesday that they can take some of the funds from a statewide opioid lawsuit settlement to reimburse itself for related expenses in prior years or fund future projects.

Skinner has worked with county officials since 2018, when Morgan County signed on to participate in the lawsuit. The legal action held pharmacies and drug distributors accountable for their part in West Virginia’s deadly opioid crisis.

Attorney Stephen Skinn

On February 14, Skinner held a video conference with commissioners to walk them through some of the permissible uses of the funds.

Morgan County received its first check from the consolidated lawsuit in the amount of $482,800 in December 2023.

Under a Memorandum of Understanding with the West Virginia First Foundation, which was formed to manage the settlement funds for the state, counties agreed to spend the opioid settlement money on a list of approved activities and programs. All of the funds are to be used to abate the effects of widespread opioid addiction.

Skinner said not all of those expenses have to be new programs, however.

“Local government share can be used as restitution for past expenses, assuming they’re in accordance with the MOU,” he said.

Skinner pointed out that up to 50% of the settlement funds can be spent to reimburse local governments for past “opioid abatement” like law enforcement costs and jail fees. The county just has to pass a resolution saying the expense is for reimbursement, and for what.

Skinner said attorneys involved in the large-scale lawsuit fought for this flexibility in the settlement rules.

“It’s not fair for the settlement to be restrictive, so this is a relief valve for local governments. I just wanted to make sure I pointed it out to you,” he said.

“Have you all generally decided what to do with the money?” Skinner asked commissioners.

Commissioner Joel Tuttle, participating by phone, said one decision had been made.

“We had actually decided we would spend some of it to pay for an additional prosecutor for the county,” he said.

Tuttle said they wanted to ask Skinner if that was an approved use.

Skinner said he would check the particular rules, but that the county would have flexibility to place the settlement money in their general fund as reimbursement for past expenses, then use the money how they see fit.

“I read it that way,” Tuttle said. “We would like it to fit the uses but have that as backup funding.”

Tuttle pointed out that Skinner asked if they had received their “first” check.

“Is this ongoing?” Tuttle asked.

Skinner confirmed there will be additional funds coming to Morgan County, but said the first distribution is the biggest.

“You’re going to get checks for at least a decade,” Skinner said. “This is your largest check.”

“There are several unresolved lawsuits that will generate more money, but it won’t necessarily go through this settlement process,” Skinner told commissioners.

He also pointed out that any of the drug stores or distributors that are part of the settlement could still go into bankruptcy, affecting payouts.

Skinner told commissioners they have a lot of control over how to spend the funds.

“This money is not regulated. This is completely your money. You’ll have reporting on it, but it’s not controlled by the [West Virginia First] Foundation,” Skinner said.

Under the settlement agreement in West Virginia, local governments (counties and towns) receive 24.5% of the lawsuit funds, the state will hold 3% in escrow and the West Virginia First Foundation will hold 72.5% of the funds to disburse out to regions for appropriate drug prevention, recovery services and programs to serve those affected by the opioid crisis.

Skinner said if the county is approached to give out any of their opioid settlement money, he would recommend instead that the county partner with programs that can get funding from the Foundation.

“The Foundation board is woefully behind in getting set up. They’re not giving out any money yet,” he said.

According to WV MetroNews, as of February 18, the Foundation had $220,129,242.95 in its accounts. The board just last week chose firms to perform their accounting and investment services.

The Foundation, which is made up of representatives from every region of the state, meets on the first Thursday of each month.