Organizational Scarring, Legal Consciousness, and the Diffusion of Local Government Litigation Against Opioid Manufacturers

Between 2017 and 2020, local government attorneys’ offices in the United States filed a surge of lawsuits against opioid manufacturers, distributors, and retailers. Aimed at recovering the costs of the opioid epidemic, this “affirmative litigation” was a novel action for most of them. Participation necessitated a tectonic shift in how they conceptualized their roles vis-à-vis the law. To understand how this occurred, we use a mixed-methods approach that draws on in-depth interviews and event-history analysis. Our investigation reveals the importance of “organizational scarring,” wherein an organization develops a lingering sense of having been wronged by another entity—a feeling that persists via an organizational narrative but does not shape organizational action until much later. Here, scarring resulted from the Big Tobacco lawsuits. As many localities perceived it, states’ distribution of settlement money unfairly disadvantaged them. This scar was activated when the possibility of opioid litigation arose, triggering distrust of state legal action and causing local government attorneys to reconceptualize affirmative litigation as befitting their roles—which facilitated their decisions to sue. Our findings not only shed light on a tactic that local governments are increasingly using to respond to public health crises, but also inform research on organizational learning, diffusion, and legal consciousness.