The Supreme Court has halted Purdue Pharma’s bankruptcy reorganization, raising questions about the liability of the Sackler family. The Biden administration requested the emergency hold, objecting to a provision that shielded the Sacklers from future lawsuits connected to the opioid crisis.
In a unanimous decision, the justices blocked an appeals court ruling that allowed the bankruptcy to proceed. As part of the proposed settlement, the Sackler family had agreed to pay $6 billion, which could have been used to settle opioid-related claims. However, the deal also included complete protection for the Sacklers from any future liability.
The Supreme Court has agreed to hear the government’s appeal in December and is likely to issue a ruling in early 2023. The central legal question is whether the bankruptcy court had the authority to release the Sackler family from the claims made by opioid victims.
Purdue Pharma, the pharmaceutical company responsible for OxyContin, profited immensely from the drug, which played a significant role in fueling the opioid epidemic. The company’s aggressive marketing tactics came under scrutiny as thousands of individuals died from opioid overdoses in recent years.
The Solicitor General, Elizabeth Prelogar, argued that the Sackler family had withdrawn $11 billion from Purdue Pharma while attempting to shield themselves from liability. Prelogar contended that the bankruptcy court’s approval of the deal amounted to an abuse of the system, treating potential plaintiffs unfairly.
The 2nd U.S. Circuit Court of Appeals had previously approved the plan in May, despite objections from William Harrington, the U.S. government trustee overseeing the bankruptcy. The Justice Department’s trustee program ensures that the bankruptcy system operates according to the law.
Purdue Pharma criticized Harrington’s role, accusing him of delaying billions of dollars intended for victim compensation, opioid crisis abatement, and overdose rescue medicines. However, eight states and the District of Columbia initially opposed the plan but later signed on to a renegotiated agreement. They did not join the Biden administration in requesting the hold.
While the lawsuit victims’ lawyers argued in favor of the plan, stating that the third-party releases were necessary for a comprehensive settlement, the Supreme Court will ultimately decide the fate of the Sackler family’s liability.
The Court’s decision to put the Purdue Pharma bankruptcy on hold underscores the significance of addressing accountability where the opioid crisis is concerned. As the legal battle continues, the ruling of the highest court in the land will shape the future course of action for thousands impacted by the devastating consequences of the opioid epidemic.
