Motion-Secondary: State Of New York Litigation Coordinating Panel v. In Re Opioid Litigation

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                                FILED: WESTCHESTER COUNTY CLERK 04/19/2024 03:28 PM                                             INDEX NO. 75000/2022
NYSCEF DOC. NO. 77                                                                     RECEIVED NYSCEF: 04/19/2024




          SUPREME COURT OF THE STATE OF NEW YORK
          COUNTY OF WESTCHESTER



           IN RE: OPIOID LITIGATION –                       Index No. 75000/2022
           NON-TRACK I CASES


          THIS DOCUMENT RELATES TO ALL CASES

                                    PLAINTIFFS’ MEMORANDUM OF LAW
                                  IN SUPPORT OF THEIR MOTION TO SEVER
                                   DEFENDANT INSYS THERAPEUTICS, INC.
                                                 INTRODUCTION
                  Plaintiffs respectfully submit this memorandum of law in support of their motion

         pursuant to CPLR 603 and 1003 to sever Defendant Insys Therapeutics, Inc.

                                                       FACTS
                  On June 10, 2019, Insys Therapeutics, Inc. and six (6) affiliated companies (collectively,

          the “Debtors”) filed petitions in the United States Bankruptcy Court for the District of Delaware

          seeking relief under chapter 11 of the United States Bankruptcy Code. The chapter 11

         bankruptcy ultimately led to a liquidation of the business’ assets and Insys’ dissolution.

                  It does not appear that Insys ever served or filed a Notice of Suggestion of Bankruptcy

          and Automatic Stay of Proceedings. In any evert, these proceedings continued in Insys’ absence,

          as if Insys had been severed, and no actions have been taken by any plaintiff to enforce its claims

          against Insys in these proceedings. There does not appear to have been any objection by any

         party or by Insys to the continuation of these proceedings without Insys. Insys was not involved

          in the Track I trial.

                                                    ARGUMENT
                  CPLR 603 provides, in pertinent part, “[i]n furtherance of convenience or to avoid

         prejudice the court may order a severance of claims, or may order a separate trial of any claim, or




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FILED: WESTCHESTER COUNTY CLERK 04/19/2024 03:28 PM                                              INDEX NO. 75000/2022
NYSCEF DOC. NO. 77                                                                      RECEIVED NYSCEF: 04/19/2024




          of any separate issue.” CPLR 1001 provides, in pertinent part, “[t]he court may order any claim

         against a party severed and proceeded with separately.”

                 The automatic stay provisions of 11 U.S.C. § 362(a) do not extend to nonbankrupt

         defendants. Vogric v. Pathmark Stores, Inc., 169 A.D.3d 1096, 1097-98 (2d Dept. 2019). The

         Second Department has held that a bankruptcy filing by one defendant in a multi-defendant case

         justifies severance so that the plaintiff is not required to wait for the bankruptcy proceeding to be

         completed in order to pursue his remedy. Id. (reversing supreme court’s order denying motion to

         sever filed by plaintiff after one defendant filed bankruptcy); Moy v. St. Vincent's Hosp. & Med.

         Ctr. of New York, 92 A.D.3d 651, 652 (2d Dept. 2012) (same); Katz v. Mount Vernon Dialysis,

         LLC, 121 A.D.3d 856, 857 (2d Dept. 2014) (affirming supreme court order granting plaintiff’s

         motion to sever bankrupt defendant). Generally, the balance of the equities lies with plaintiff

         when severance is sought because the case against one defendant is stayed pursuant to § 362(a).

         Vogric, 169 A.D.3d at 1097-98

                 Plaintiffs will be prejudiced if they must await the completion of bankruptcy proceedings

         to pursue their remedies. Plaintiffs are currently dealing from the consequences of the opioid

         crisis, which they contend was caused or maintained by the defendants. The relief they seek is

         needed to prevent further suffering and death. Defendants will suffer no unfair prejudice in the

         event severance is granted

                                                  CONCLUSION
                 Plaintiffs’ motion to sever should be granted.

         Dated: April 19, 2024

                                                        /s/ Thomas I. Sheridan, III
                                                              Thomas I. Sheridan, III
                                                       SIMMONS HANLY CONROY LLC
                                                       112 Madison Avenue
                                                       New York, NY 10016




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FILED: WESTCHESTER COUNTY CLERK 04/19/2024 03:28 PM                  INDEX NO. 75000/2022
NYSCEF DOC. NO. 77                                           RECEIVED NYSCEF: 04/19/2024




                                (212) 784-6404
                                tsheridan@simmonsfirm.com

                                Counsel for Suffolk County


                                 /s/ Paul J. Napoli
                                       Paul J. Napoli
                                Hunter J. Shkolnik
                                NAPOLI SHKOLNIK
                                270 Munoz Rivera Avenue, Suite 201
                                Hato Rey, Puerto Rico 00918
                                Phone: (347) 379-1688
                                pnapoli@NSPRlaw.com
                                hunter@NSPRlaw.com


                                 /s/ Salvatore C. Badala
                                        Salvatore C. Badala
                                Joseph L. Ciaccio
                                NAPOLI SHKOLNIK PLLC
                                400 Broadhollow Road, Suite 305
                                Melville, New York 11747
                                Phone: (212) 397-1000
                                sbadala@napolilaw.com
                                jciaccio@napolilaw.com

                                Counsel for Nassau County




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