9 towns sue over state's limits on use of money from opioid settlements

ALBANY — Nine towns are suing to stop the state from controlling how more than $1 billion will be spent in settlements from opioid manufacturers who were accused of contributing to a statewide crisis of addiction and death. Eight of the towns are on Long Island.

The constitutional clash between the power of the state and the “home rule” protections of local government involves a 2021 state law. The measure requires money from settlements and enforcement actions “must be used to address the harms caused by drug use and by the ways in which drug laws have been enforced.”

The law says the funds can’t be used for other government purposes and creates an advisory board to distribute the funds into addiction prevention, recovery and education programs. It also says that any action by other governments after June 13, 2019 “shall be extinguished.”

In July, state Attorney General Letitia James settled her cases against three drugmakers for $1.1 billion for what her office called “years of false and deceptive marketing, and by ignoring their duties to prevent the unlawful diversion of controlled substances.” More cases are pending.

The state cites as precedent a nearly century-old ruling by New York’s highest court, the Court of Appeals, that ruled: “If the subject be in substantial degree a matter of state concern, the Legislature may act” despite the home-rule protection.

The towns of Babylon, Brookhaven, Hempstead, Islip, Oyster Bay, North Hempstead, Huntington, Ramapo and Smithtown claim the law violates the state and U.S. constitutions. The suit was filed March 16 in federal court, but the case has already had to be amended because it misidentified the state attorney general as “Leticia Jones” instead of Letitia James.

The towns want to spend the funds in any way they see fit beyond opioid programs, because so many other areas of their town budgets were tapped to contend with the crisis.

“It’s supposed to be unrestricted funds,” said David Grossman, a Huntington attorney hired by the towns, although he said “some of them will use it for drug programs.”

The towns accuse the state of violating the “home rule” provision of the state constitution, which limits the state’s power to overrule local government actions. The lawsuit also accuses the state of violating the towns' right of free speech under the U.S. Constitution because they are prohibited from litigation to assert their rights.

The state law provides for funds to “be distributed regionally to ensure adequate geographic disbursement across the state.” But the law also calls for funding to go to programs run by the state departments of health, mental health, housing “and any other agency that may oversee an appropriate program or service.”

“All our clients are afraid they will never see the money,” Grossman said.

The state Attorney General’s Office in a letter dated Monday to the federal court seeks to dismiss the lawsuit.

“As the New York Court of Appeals has repeatedly held, legislation that ‘was enacted in furtherance of and bears a reasonable relationship to a substantial statewide concern’ is not subject to home-rule restrictions,’” states the attorney general’s office response to the lawsuit.

“There can be no dispute that the act, which facilitates statewide opioid settlements by the establishment of a statewide fund to address the opioid crisis … for opioid abatement to all counties and several cities in the state, bears ‘a reasonable relationship to a substantial statewide concern,’ ” said the attorney general’s office.

“Localities think they should be able to be in charge of some of these issues that really affect them,” said Vincent Bonventre, a distinguished professor of law at Albany Law School who studies the state constitution. “But that is not the test. It’s whether or not the state has a legitimate concern that overrides home rule and if the state does have that, that’s the end of the question.”

“This matter certainly seems to be one of those cases where the state has a legitimate interest,” Bonventre said. “So, I think there is only the slightest, remote chance that the localities could win a lawsuit on this matter.”

Written arguments are due over the next several weeks.

By Michael Gormley

michael.gormley@newsday.com@GormleyAlbany

Michael Gormley has worked for Newsday since 2013, covering state government, politics and issues. He has covered Albany since 2001.