THE US SUPREME Court has rejected Purdue Pharma’s $6 billion opioids settlement that would have shielded the Sackler family that controlled the drugmaker from future litigation.
In a 5-4 ruling, the judges agreed with the Justice Department which argued that the Sacklers, who earned tens of billions of dollars flooding the country with highly addictive opioids, should not gain sweeping legal protection in the controversial deal that would have seen them give up control of the company.
The Supreme Court held today that “the bankruptcy code does not authorize this kind of order,” with the majority opinion written by Neil Gorsuch and joined by Clarence Thomas, Samuel Alito, Amy Coney Barrett and Ketanji Brown Jackson.
Brett Kavanaugh, Chief Justice John Roberts, Sonia Sotomayor and Elena Kagan dissented, in a case where judges defied typical conservative-liberal fault lines.
“The Sacklers have not agreed to place anything approaching their full assets on the table for opioid victims,” wrote Gorsuch.
“Yet they seek a judicial order that would extinguish virtually all claims against them for fraud, willful injury, and even wrongful death, all without the consent of those who have brought and seek to bring such claims.”
The Sackler’s pharmaceutical company is most famous – or infamous – for producing the painkiller OxyContin, which has been the subject of multiple TV drama productions. The family has also been a major donor to prestigious arts institutions and museums, many of which have since removed the Sackler name from their buildings.
Sackler family members are no longer on the company’s board, and they have not received payouts from it since before Purdue Pharma entered bankruptcy. In the decade before that, though, they were paid more than $10 billion , about half of which family members said went to pay taxes.
In his dissent, Justice Kavanaugh, one of the judges nominated to join the court by former president Donald Trump, said: “Today’s decision is wrong on the law and devastating for more than 100,000 opioid victims and their families.”
“The plan was a shining example of the bankruptcy system at work,” he continued. “Not surprisingly, therefore, virtually all of the opioid victims and creditors in this case fervently support approval of Purdue’s bankruptcy reorganization plan.”
The 2022 agreement, suspended since last August, came after years of negotiations involving officials from all 50 US states and set aside $6 billion for victims of the opioid epidemic from the 2019 bankruptcy of Purdue.
The settlement gave the families of Raymond Sackler and Mortimer Sackler protection from all future civil claims, effectively protecting their other assets from opioid-related lawsuits.
The US Trustee, an arm of the Justice Department, accused the Sacklers of withdrawing $11 billion from Purdue Pharma over the decade before the company filed for bankruptcy protection.
The US opioid epidemic has caused more than 500,000 overdose deaths in the United States over two decades, authorities say. The Sacklers and Purdue became synonymous with the crisis as the number of deaths rose and they made enormous profits.
Purdue and other opioid makers were accused of encouraging the liberal prescription of their products through aggressive marketing tactics while hiding how addictive the drugs are.
Facing an avalanche of litigation, in 2021 Purdue pled guilty to three criminal charges over its marketing of OxyContin.
Arguing the case in December, Deputy Solicitor General Curtis Gannon outlined the Biden administration’s objections to the deal.
“It permits the Sacklers to decide how much they’re going to contribute,” Gannon said. “It grants the Sacklers the functional equivalent of a discharge.”
But Gregory Garre, representing Purdue Pharma, said rejecting the settlement could lead to years of litigation and leave victims with no compensation at all.
Purdue’s bankruptcy filing resulted directly from the massive, country-wide litigation against it and other major drugmakers and pharmacy companies for knowingly fomenting the addiction crisis.
Under the March 2022 settlement, the Sacklers were “absolutely, unconditionally, irrevocably, fully, finally, forever and permanently” released from further legal liability.
With reporting from AFP and Press Association
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