The United States Supreme Court on Thursday overturned a contentious settlement negotiated by drugmaker Purdue Pharma with opioid epidemic victims.
The decision jeopardizes a large bankruptcy plan that would have shielded the Sackler family, which owns the company, from future litigation in exchange for donating billions to opioid sufferers and states devastated by the crisis.
Why did the court reject the settlement? The justices voted 5-4, saying the bankruptcy court lacked authority to grant that protection to the Sackler family.
“The Sacklers seek greater relief than a bankruptcy discharge normally affords, for they hope to extinguish even claims for wrongful death and fraud, and they seek to do so without putting anything close to all their assets on the table,” Justice Gorsuch said in the court’s plurality opinion. “Describe the relief the Sacklers seek how you will, nothing in the bankruptcy code contemplates [much less authorizes] it.”
However, Justice Brett Kavanaugh stated in his dissent that the decision will have a “devastating” impact.
“As a result, opioid victims are now deprived of the substantial monetary recovery that they long fought for and finally secured after years of litigation,” the dissenting opinion’s author said.
The case concerned the fate of Purdue Pharma and its executives, who manufactured and promoted the opioid painkiller OxyContin in the early stages of the opioid epidemic. In the settlement, the Sackler family agreed to pay $6 billion to families and states as part of a deal to wind down the corporation. In exchange, the Sacklers would be immune from future civil responsibility lawsuits.
Purdue first advertised Oxycontin as a safer, less addictive pain reliever, encouraging doctors to prescribe the medication for longer periods of time and for more common injuries.
However, a succession of lawsuits claimed that the family continued to promote Oxycontin despite knowing how addictive the medicine was.
Purdue Pharma said in a statement following the verdict, “We are reaching back out to creditors and renewing our pursuit of a resolution that delivers billions of dollars of value for opioid abatement and allows the company to emerge from bankruptcy as a company with a public-minded mission.”
CNN stated that the families of the late Mortimer Sackler and Raymond Sackler expressed unhappiness with the decision in separate statements.
“The Sackler families remain hopeful about reaching a resolution that provides substantial resources to help combat a complex public health crisis,” according to the statement. “The unpleasant reality is that the alternative is expensive and disorderly judicial proceedings in nationwide courtrooms. While we are certain that we would triumph in any future litigation given the significant misrepresentations regarding our family and the opioid crisis, we remain convinced that a speedy negotiated agreement to provide billions of dollars for individuals and communities in need is the best way forward.”
