SCOTUS Rejects Purdue Pharma Deal That Would Have Protected Sackler Family But Would Have Provided Big Boost to Opioid Fight

After deliberating more than six months, the justices, in a 5-4 vote, blocked an agreement worked out with state and local governments and victims. The Sacklers would have contributed up to $6 billion and relinquished ownership of the company, but would have retained billions more. The agreement provided that the company would emerge from bankruptcy as a different entity and its profits would be used for treatment and prevention.

Justice Neil Gorsuch, writing for the majority, said that “nothing in current law authorizes Sackler’s removal.”

Justices Brett Kavanaugh, Ketanji Brown Jackson, Elena Kagan and Sonia Sotomayor dissented.

“Opioid victims and other future victims of mass torts will suffer greatly as a result of today’s unfortunate and destabilizing decision,” Kavanaugh wrote.

The high court had put the deal on hold last summer, in response to objections from the Biden administration.

It is unclear what will happen next.

“Today’s Supreme Court ruling marks a major setback for families who lost loved ones to overdoses and for those still struggling with addiction,” Edward Neiger, an attorney who represents more than 60,000 overdose victims, said in a statement.

“The Purdue plan was a victim-centered plan that would provide billions of dollars to states to be used exclusively to alleviate the opioid crisis and $750 million to victims of the crisis so they could begin to rebuild their lives. lives. As a result of the government’s reckless three-year crusade against the plan, thousands of people died from overdoses, and today’s decision will lead to more unnecessary overdose deaths.”

An opponent of the agreement praised the outcome.

Ed Bisch’s 18-year-old son Eddie died of an overdose after taking OxyContin in Philadelphia in 2001.

The elder Bisch, who lives in New Jersey, has been speaking out against members of the Purdue and Sackler family ever since and is part of a relatively small but vocal group of victims and family members who opposed the settlement.

“This is a step towards justice. “It was outrageous what they were trying to get away with,” he said Thursday. “They have made a mockery of the justice system and then tried to make a mockery of the bankruptcy system.”

He said he would have taken the deal if he thought it would have made a dent in the opioid crisis.

He is now calling on the Department of Justice to file criminal charges against members of the Sackler family.

Arguments in early December lasted nearly two hours in a packed courtroom as the judges seemed, in turns, unwilling to upset a carefully negotiated settlement and reluctant to reward the Sacklers.

The question for the justices was whether the legal shield that bankruptcy provides can be extended to people like the Sacklers, who have not filed for bankruptcy. Lower courts had issued conflicting decisions on that issue, which also has implications for other major products liability lawsuits resolved through the bankruptcy system.

The U.S. Bankruptcy Trustee, a branch of the Justice Department, argued that bankruptcy law does not protect the Sackler family from being sued. During the Trump administration, the government supported the agreement.

The Biden administration had argued before the court that negotiations could resume, and perhaps lead to a better deal, if the court halted the current deal.

Proponents of the plan said third-party disclosures are sometimes necessary to forge a deal, and federal law imposes no prohibition against them.

Purdue Pharma and the opioid crisis

OxyContin first hit the market in 1996, and its aggressive marketing by Purdue Pharma is often cited as a catalyst for the nationwide opioid epidemic, convincing doctors to prescribe painkillers with less regard for the dangers of addiction.

The drug and the Stamford, Connecticut-based company became synonymous with the crisis, even though most of the pills being prescribed and used were generic medications. Opioid-related overdose deaths have continued to rise, reaching 80,000 in recent years. Most of them come from fentanyl and other synthetic drugs.

The Purdue Pharma settlement would have ranked among the largest reached by pharmaceutical companies, wholesalers and pharmacies to resolve epidemic-related lawsuits brought by Native American state, local and tribal governments and others. Those deals have totaled more than $50 billion.

But the deal with Purdue Pharma would have been only the second so far to include direct payments to victims from a $750 million pool. The payments would have ranged from approximately $3,500 to $48,000.

Sackler family members no longer sit on the company’s board and have not been paid since before Purdue Pharma filed for bankruptcy. But over the past decade, they have been paid more than $10 billion, about half of which, family members said, went to pay taxes.

The case is Harrington v. Purdue Pharma, 22-859.

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