
The Supreme Court appeared divided over whether to approve the bankruptcy restructuring of opioid developer Purdue Pharma, which shields the Sackler family from any litigation.
Several justices voiced doubts during an oral argument about the bankruptcy court’s ability to discharge the Sacklers from any possible legal claims. However, not all justices were eager to derail the multibillion-dollar agreement that would afford victims of the drug crisis a quick respite.
This bankruptcy case is anything but typical since it involves the national damage that the opioid epidemic caused and the part that Purdue, which was controlled by Sackler, played in producing it. Protesters gathered outside the courthouse before the debate, shouting “Sackler money, blood money.”
The Sackler family had planned to pay almost $6 billion to resolve allegations involving opioids, but the Supreme Court put the settlement on hold in August. In exchange, they would have been released from any future liability.
With the restructured business committed to addressing the effects of opioid misuse, the total settlement, including Purdue’s assets, is expected to be considerably higher.
Since 2019, no member of the Sackler family has held a position of influence inside the organization.
More about the Opioid Crisis
- The opioid crisis was caused in large part by Purdue’s OxyContin, a widely accessible opioid drug that generated billions in revenue.
- Since thousands of individuals have passed away from opioid overdoses in the past several years, the company’s marketing strategies for the medicine have been under intense investigation.
- Eight members of the Sackler family were named defendants in a suit by New York against Purdue Pharma in 2019.
Members of the Sackler family refrained from pursuing bankruptcy protection, although the company itself did so. To combat the opioid epidemic, they instead reached an independent agreement with Purdue and the plaintiffs in ongoing litigation, which would enable the business to reinvent itself.
Further allegations against the Sacklers should not be released, according to the Biden administration, since doing so would be unjust to prospective plaintiffs in the future.
The oral argument was dominated by Justice Neil Gorsuch’s “serious” constitutional concerns over the arrangement, which he saw as violating plaintiffs’ rights, particularly their right to due process if they did not sign up.
However, Justice Brett Kavanaugh pointed out that “bankruptcy courts for 30 years have been approving plans like this.” The discomfort on the bench was evident in Justice Elena Kagan’s remarks made throughout the debate.
Although hundreds of litigants who have reservations about the righteousness of the Sacklers have stated their support for the agreement, she questioned why the federal government ought to have the power to crush the deal.
Despite William Harrington’s objections, the plan was authorized in May by the NY-based 2nd U.S. Circuit Court of Appeals, which is overseeing the bankruptcy. In his role as a trustee for the Justice Department, Harrington helps make sure the bankruptcy system follows all the rules.
Harrington has been under fire from Purdue for his part in the settlement, which the university points out would not have been possible without the financial backing of the Sackler family.