**Supreme Court Overturns Purdue Pharma Opioid Bankruptcy Settlement**
In a landmark decision, the Supreme Court has overturned a controversial bankruptcy settlement involving Purdue Pharma, the manufacturer of the opioid OxyContin. The ruling, which came down on Thursday, has significant implications for the ongoing opioid crisis and the legal responsibilities of the Sackler family, who own Purdue Pharma.
The case has been a focal point in the national debate over accountability for the opioid epidemic, which has claimed hundreds of thousands of lives in the United States. Purdue Pharma, under the control of the Sackler family, aggressively marketed OxyContin as a less addictive painkiller, a claim that proved disastrously false. The resulting public health crisis led to thousands of lawsuits against the company and the Sacklers, seeking trillions of dollars in damages.
The Supreme Court’s decision, which was split 5-4, found that the bankruptcy court did not have the authority to release the Sackler family from civil liability for opioid-related claims. This ruling effectively nullifies a multi-billion-dollar bankruptcy plan that had been approved by a lower court. The plan would have transformed Purdue Pharma into a nonprofit organization dedicated to addressing the opioid crisis, with the Sacklers contributing up to $6 billion to the settlement in exchange for immunity from future lawsuits.
Justice Neil Gorsuch, writing for the majority, stated that the Sacklers had sought to benefit from Purdue Pharma’s bankruptcy without filing for bankruptcy themselves. “They obtained all this without securing the consent of those affected or placing anything approaching their total assets on the table for their creditors,” Gorsuch wrote. He was joined by Justices Samuel Alito, Clarence Thomas, Ketanji Brown Jackson, and Amy Coney Barrett.
The decision has thrown the future of the settlement into uncertainty. The Sackler family, Purdue Pharma, and the plaintiffs’ lawyers have all expressed hope that a new deal can be reached quickly. However, the ruling means that negotiations will have to start anew, and the separate bankruptcy proceedings for Purdue Pharma will continue.
Justice Brett Kavanaugh, in a dissent joined by Chief Justice John Roberts and Justices Elena Kagan and Sonia Sotomayor, argued that the decision was devastating for the more than 100,000 opioid victims and their families. “Today’s decision is wrong on the law and devastating to the more than 100,000 opioid victims and their families,” Kavanaugh wrote. He emphasized that the ruling deprives victims of the substantial monetary recovery they had fought for and secured after years of litigation.
The original settlement plan, which the Supreme Court had put on hold last year, included a provision for the Sackler family to pay around $6 billion over 18 years. This money was intended to settle opioid-related claims and fund opioid recovery projects. The plan had broad support from state and local governments, as well as victims of the opioid crisis, who saw it as the best way to ensure compensation and funding for recovery efforts.
Purdue Pharma described the Supreme Court’s decision as “heart-crushing” for the victims but pledged to continue efforts to negotiate a new settlement. “The decision does nothing to deter us from the twin goals of using settlement dollars for opioid abatement and turning the company into an engine for good,” the company said in a statement.
Members of the Sackler family also expressed hope for a resolution that would provide substantial resources to combat the opioid crisis. “While we are confident that we would prevail in any future litigation given the profound misrepresentations about our families and the opioid crisis, we continue to believe that a swift negotiated agreement to provide billions of dollars for people and communities in need is the best way forward,” they said in a statement.
Jayne Conroy, a lawyer representing some of the plaintiffs, warned that if no new deal is reached, various lawsuits against the Sacklers that were put on hold as a result of the settlement would resume. She noted that the Sacklers would be under significant pressure to reach a quick settlement or face a “massive onslaught to secure assets that may be hidden around the world.”
The case has highlighted the ongoing impact of the opioid crisis and the role that Purdue Pharma and the Sackler family played in it. Purdue made billions from OxyContin, a painkiller that became widely available and contributed to the epidemic of opioid addiction and overdoses. As the company’s fortunes declined, it sought bankruptcy protection, but the Sackler family members did not. Instead, they negotiated a separate deal with Purdue and the plaintiffs in pending lawsuits.
The New York-based 2nd Circuit U.S. Court of Appeals had approved the plan last year over the objection of William Harrington, the U.S. government trustee monitoring the bankruptcy. Harrington argued that the release of additional claims against the Sacklers was unfair to potential future plaintiffs. The Justice Department’s trustee program, which aims to ensure that the bankruptcy system operates as required under law, supported this view.
At the Supreme Court, various groups representing plaintiffs backed Purdue, including one that represents 1,300 cities, counties, and other municipalities, and another representing 60,000 people affected by the opioid epidemic. However, Canadian municipalities and Indigenous First Nations were among those objecting to the settlement.
The Supreme Court’s decision underscores the complexities and challenges of addressing mass tort cases through the bankruptcy system. Justice Gorsuch noted that Congress has the power to overhaul the bankruptcy code to explicitly address opioid-related bankruptcies, suggesting that legislative action may be necessary to resolve such issues in the future.
As the legal battles continue, the Supreme Court’s ruling has left the future of the Purdue Pharma settlement and the broader efforts to address the opioid crisis in a state of flux. A decision in the case is expected by the end of June.
Source: SCOTUSblog, NBC News, The Washington Post
