The United States Supreme Court is Deciding Whether or Not Purdue Pharma Can be Shielded from Future Lawsuits
The United States Supreme Court is conflicted in deciding if Purdue Pharma should be allowed to be protected from future lawsuits. During the oral argument, judges were skeptical about a bankruptcy court having legal authority to release the Sackler family from legal claims. Other justices were afraid to stop the deal that would give immediate relief to opioid victims. The deal involves the Sackler family paying $6 billion to be used to settle opioid related claims but would completely release them from liability in future cases. The overall settlement contains assets held by Purdue, likely to be worth more than the $6 billion. Sackler family members have not been part of the company since 2019.
Purdue made billions from their drug OxyContin, a painkiller that fueled the opioid epidemic. It marketed the drug aggressively, which has come under scrutiny since thousands of people have died from opioid overdoses in recent years. The Sackler family did not seek bankruptcy protection while the company did. The family members instead negotiated a separate deal with Purdue and plaintiffs in pending lawsuits that will allow the company to reinvent itself so it can address the opioid epidemic that it caused.
The Biden administration is not in favor of additional claims against the Sacklers being forgiven, saying it is unfair to potential future plaintiffs. During oral argument, one justice brought up constitutional questions about the deal, saying that plaintiffs who did not sign onto the deal would have their right to due process violated. Another justice pointed to information showing that bankruptcy courts have been approving plans like this for the past 30 years. Another justice wondered why the federal government was able to stop the deal that thousands of plaintiffs have supported. The same justice pointed out that it was problematic that the Sacklers did not have to put the entirety of their assets on the table, which is normal for a bankruptcy case. This would allow the family to subvert the bankruptcy process.
A lawyer for the victims wants a deal to go through because there is a chance another will not be negotiated. The government’s lawyer wrote that the settlement would prevent the Sacklers from facing “claims alleging damages in the trillions” while “keeping billions of dollars that they siphoned from Purdue.”
In a decision in May, the New York based 2nd U.S. Circuit Court of Appeals approved the plan over the objection of William Harrington, the government trustee monitoring the bankruptcy. The goal of the trustee program is to ensure the bankruptcy system operates properly under the law. Purdue has criticized Harrington’s role, claiming that thousands of plaintiffs have signed onto the settlement, which could not have happened without the Sacklers’ contribution.
Many plaintiffs support Purdue including a group of 1,300 cities, counties, and other municipalities representing 60,000 people affected by the opioid epidemic. Some believe it is the only way to get billions in life saving and life changing funds that are desperately needed today. Canadian municipalities and First Nations are against the settlement.
The Sackler family made billions from OxyContin and spent its money lavishly, including on multiple charitable projects. The family still backs the settlement.
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