The highest court in the United States, the Supreme Court, grappled with a nationwide agreement involving Purdue Pharma, the manufacturer of OxyContin. This agreement aims to protect members of the Sackler family, who are the owners of the company, from facing civil lawsuits related to the impact of opioids.
The justices appeared hesitant to dismantle a carefully negotiated agreement, while also wary of possibly rewarding the Sacklers.
A deal has been negotiated with state and local authorities and those affected by the crisis to allocate billions of dollars towards addressing the opioid epidemic. The Sackler family would contribute a maximum of $6 billion and relinquish their control of the company, while still retaining a significant amount of wealth. The company would reemerge from bankruptcy as a new entity, with its profits dedicated to treatment and prevention efforts.
During the summer, the high court delayed the settlement in response to concerns raised by the Biden administration.
Justice Elena Kagan appeared to capture the concerns that were troubling some of the other justices.
Kagan stated that the large majority of claimants are facing obstacles from the federal government.
However, she later mentioned that in cases of bankruptcy, legal immunity comes at a cost.
She explained that a discharge is received when all assets are disclosed, but the Sacklers did not fully disclose their assets.
The courtroom was filled with people and the arguments went on for almost two hours. The doors were covered in black as a tribute to retired Justice Sandra Day O’Connor, who passed away on Friday. Chief Justice John Roberts gave a speech honoring the first woman to serve on the court, stating, “She had a great impact on the world.”
A small yet loud group of demonstrators expressed their opposition to the Purdue Pharma settlement outside of the courthouse. One banner displayed the words “Shame on Sackler,” while another read “No immunity for Sackler at any cost.”
The matter at hand for the judges involves determining if the protection from legal action provided by bankruptcy can be applied to individuals like the Sacklers, who have not personally declared bankruptcy. There have been inconsistent rulings from lower courts on this matter, which also has consequences for other significant lawsuits regarding product liability that are resolved through the bankruptcy process.
The U.S. Department of Justice’s Bankruptcy Trustee argues that the bankruptcy law does not allow for the Sackler family to be shielded from lawsuits. The government, under the Trump administration, backed the proposed settlement.
Curtis Gannon, a lawyer from the Justice Department, stated on Monday that discussions could recommence and potentially result in a more favorable agreement if the court were to halt the current deal.
Advocates of the proposal argued that third-party agreements are occasionally essential in reaching a settlement, and there is no federal law that prohibits them.
Lawyer Pratik Shah, who is representing victims and other creditors in the bankruptcy case, stated to the justices that there is no alternative deal that can be considered better.
Attorneys representing over 60,000 affected individuals who endorse the agreement hailed it as a significant turning point in the opioid epidemic. However, they acknowledged that no monetary sum could adequately make up for the harm inflicted by the deceptive promotion of OxyContin, a potent pain relief medication.
An attorney representing a victim who objects to the agreement refers to the clause regarding the Sackler family as “preferential treatment for ultra-wealthy individuals.”
Judge Ketanji Brown Jackson appeared to favor the opponents, stating that the Sacklers’ insistence on a complete protection from legal action is the root of the issue.
In comparison, Justice Brett Kavanaugh appeared to be in favor of approving the agreement. He stated that the government’s goal was to stop compensation for victims and their loved ones, as well as funding for prevention initiatives, in return for the possibility of retrieving money in the future from the Sackler family.
In 1996, OxyContin was introduced to the public and Purdue Pharma’s forceful promotion of the drug is frequently referenced as a contributor to the widespread opioid crisis, influencing physicians to prescribe pain medication with less concern for the risks of addiction.
The medication and the company based in Stamford, Connecticut became closely associated with the crisis, despite the fact that most of the prescribed and used pills were generic. The number of deaths from opioid overdoses has continued to rise, reaching 80,000 in recent years. The majority of these deaths are caused by fentanyl and other synthetic drugs.
The proposed agreement with Purdue Pharma would rank among the largest settlements made by pharmaceutical companies, distributors, and retailers to settle lawsuits related to the epidemic. These lawsuits have been filed by state and local governments, as well as Native American tribes and other parties, and have amounted to over $50 billion in total.
However, the settlement made by Purdue Pharma is one of just two that have included direct compensation to victims from a pool of $750 million. It is anticipated that the payouts will vary from approximately $3,500 to $48,000.
The Sackler family members are no longer part of the company’s board and have not received any payments from it since before Purdue Pharma went bankrupt. However, in the ten years prior, they were compensated with over $10 billion, with half of that amount being used to pay taxes according to the family members.
A ruling is anticipated in the case of Harrington v. Purdue Pharma, 22-859, by the beginning of summer.
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