The U.S. Supreme Court Justices tussled on Monday over Purdue Pharma's bankruptcy settlement. They expressed concerns that the agreement could shield the stinking affluent members of the Sackler family from future lawsuits connected to their roles in the dire opioid epidemic. At the same time, they worried about the risk of direct victims from nullifying the settlement.
Sacklers vs. The People
The Supreme Court convened to hear the Biden administration's appeal against a lower court's approval of the settlement for Purdue Pharma, based in Stamford, Connecticut. If the deal goes through, Purdue's owners, the Sackler family, would receive immunity against future lawsuits in exchange for paying large sums, up to $6 billion, to settle thousands of lawsuits. The plaintiffs ranged from states to hospitals to patients addicted to OxyContin, Purdue's highly potent pain medication, which many believe was misleadingly marketed.
The crux of the debate lies in whether it's permissible under U.S. bankruptcy law for Purdue's restructuring to grant legal immunity to the Sacklers, who haven't filed for personal bankruptcy. Some Justices showed doubts about the Biden administration's reservations, with Justice Brett Kavanaugh explicitly questioning why the conclusive final verdict should lie in the Supreme Court's hands.
Sackler's Unique Deal
However, other justices also expressed apprehension about shielding the Sacklers under bankruptcy law despite not officially being debtors. Liberal Justice Elena Kagan pointed out the preferential treatment, saying the Sacklers would be "protected from claims of fraud and willful misconduct," a courtesy usually not extended in standard bankruptcy proceedings.
OxyContin - The Root of the Crisis
In 2019, Purdue Pharma called upon Chapter 11 bankruptcy protections aiming to offset its amassed debts, almost all of which arose from a myriad of lawsuits alleging that OxyContin was a significant catalyst in the nationwide opioid crisis that's witnessed more than half a million U.S. overdose deaths over the last twenty years. By Purdue's estimates, its bankruptcy settlement, approved by a U.S. bankruptcy judge in 2021, would provide roughly $10 billion in value to its creditors.
The Upheld Settlement and Its Consequences
The Biden administration and eight states challenged the settlement. However, all the states retracted their objections after the Sacklers agreed to contribute more to the settlement funds. In May, the 2nd Circuit ruled that federal bankruptcy law allows legal protections for non-bankrupt parties like the Sacklers in exceptional scenarios. Their ruling defended the viewpoint that having the Sacklers targeted by lawsuits would hinder Purdue's efforts to reach a bankruptcy settlement.
Victims Left Out to Dry?
The lawyer representing Purdue, Gregory Garre, warned that voiding the bankruptcy deal could potentially leave countless victims of the opioid crisis with no compensation due to the predicted wave of lawsuits against the Sacklers. "The billions of dollars that the plan allocates for opioid abatement and compensation will evaporate, creditors and victims will be left with nothing, and lives surely will be lost," cautioned Garre.
This charged legal situation exposes the tension between compensating victims and holding individuals accountable for their supposed roles in the crisis. As the Supreme Court wrestles with this crucial issue, it's vital for those affected to stay informed and seek professional legal help. This situation is the perfect illustration of those times when expert legal advice can genuinely make a difference.
