Supreme Court Blocks Bankruptcy Deal Shielding OxyContin Family from Lawsuits
The U.S. Supreme Court has temporarily blocked a bankruptcy deal that would have shielded the family behind OxyContin manufacturer Purdue Pharma from civil lawsuits. The decision comes after President Joe Biden requested a delay in approving the nationwide settlement, which had been reached with state and local governments.
Under the proposed settlement, Purdue Pharma would be allowed to reorganize as a different entity after emerging from bankruptcy. In addition, the Sackler family, who owns Purdue Pharma, would contribute $6 billion, but would be protected from future lawsuits. However, the Supreme Court wants to determine whether bankruptcy laws permit a blanket shield from all litigation involving opioid victims.
The 2nd U.S. Circuit Court of Appeals had previously approved the reorganization plan, but the U.S. Bankruptcy Trustee, represented by the Justice Department, opposed the shield on lawsuits. A group of parents who lost their children to opioid overdoses is also urging the court not to accept the settlement.
While supporters of the settlement express disappointment about the delay, others view it as an opportunity to ensure justice for victims. Ed Neiger, an attorney representing some victims, praised the Supreme Court for quickly hearing the case, stating that they recognize the urgency of the matter.
Opioid overdoses have claimed the lives of more than 70,000 Americans in recent years. While fentanyl and synthetic drugs are primarily responsible for these deaths, OxyContin and other prescription painkillers have also played a role.
Purdue Pharma issued a statement expressing confidence in the legality of their reorganization plan, which they believe is supported by the majority. They are optimistic that the Supreme Court will ultimately agree. However, they lamented the delay caused by the U.S. Trustee, as it delays the release of funds that could be used for victim compensation and addressing the opioid crisis.
The Supreme Court’s decision demonstrates a commitment to thoroughly examine the proposed settlement and its potential impact. By questioning the extent of legal protection afforded to the Sackler family, the court is aiming to safeguard the interests of opioid victims. This case serves as a crucial turning point in addressing the devastating consequences of the opioid epidemic and holds significant implications for future litigation involving pharmaceutical companies and their culpability in the crisis.
