Kroger, New Mexico Reaches $85 Million Opioid Settlement

Following a recent bench trial, Kroger and New Mexico’s Attorney General reached a settlement of $85 million for Kroger’s alleged role in furthering the opioid epidemic. The settlement will preclude any further opioid litigation brought against the retailer by the State of New Mexico.

Negotiations began during a September bench trial against several retailers, including Walmart, CVS, and Walgreens. Kroger exited the trial before proceedings ended to work with the state in reaching an equitable settlement.

Of the total award, $58.5 million will be dispersed directly to the state, with funds divided between state and local government for use in combatting the opioid crisis. Local governments will receive slightly more than half the funds—$32 million—while the state will receive the remaining $26 million. An additional $25.5 million will go to counsel and litigation costs.

Upon releasing the news, New Mexico Attorney General (AG) Hector Balderas stated, “We achieved a great result for New Mexico by taking Kroger to court, and this settlement sends a clear message that pharmacies operating in New Mexico must take an active role in protecting the communities they serve.” Balderas’ statement goes on to say the funds will be dispersed to local communities within in 90 days.

The AG’s office continues to work with Albertsons, CVS, and Walmart in reaching additional settlements. The state is also awaiting the outcome of the bench trial with Walgreens, the only retailer who remained in the trial.

In a Q3 earnings call, Kroger CFO Gary Millerchip reiterated to investors that Kroger, “will continue to vigorously defend against other claims and lawsuits related to opioids.” The New Mexico settlement, Millerchip went on to say, “is based on a unique set of circumstances and facts related to New Mexico, and Kroger does not believe that the settlement amount or any other terms of our agreement with New Mexico can or should be extrapolated to any other opioid-related cases pending against Kroger.”

Kroger currently has litigation pending in several states. A trial for allegations regarding the opioid pandemic brought by West Virginia’s AG is scheduled for 2023, and an additional trial is brought by the state of Texas in 2024. Utah’s AG, Sean D. Reyes, filed a lawsuit against Kroger and other retailers in July. On December 21, the state of Washington’s AG, Bob Ferguson, announced his office had also filed against Kroger, along with Albertsons and Rite Aid.