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Supreme Court rejects national opioid settlement with OxyContin maker Purdue Pharma

WASHINGTON (AP) – The Supreme Court Thursday rejected a nationwide agreement with OxyContin maker Purdue Pharma it would have protected members of the Sackler family, owners of the company, from civil lawsuits related to opioid trafficking, but also would have provided billions of dollars to fight drugs. the opioid epidemic.

The decision could also affect other major bankruptcies, including A $2.4 billion bankruptcy plan for the Boy Scouts of America that was approved by a federal judge, the lawyers said.

After deliberating for more than six months, the judges of a vote of 5 to 4 Authorities blocked a settlement with state and local governments and victims. The Sacklers would have paid up to $6 billion and given up ownership of the company, but kept billions more. The deal called for the company to emerge from bankruptcy as a separate entity, with its profits used for treatment and prevention.

Justice Neil Gorsuch, writing for the majority, said “nothing in current law authorizes Sackler’s impeachment.”

Chief Justice John Roberts and Justices Brett Kavanaugh, Elena Kagan and Sonia Sotomayor dissented.

“Opioid victims and other future victims of mass crimes will suffer greatly as a result of today’s unfortunate and destabilizing decision,” Kavanaugh wrote.

The High Court had suspend the regulation last summer, in response to objections from the Biden administration.

It’s unclear what will happen next, although lawyers involved in the case expect negotiations to resume.

“Today’s decision by the Supreme Court marks a major setback for families who have lost loved ones to overdose and for those who still struggle with addiction,” said Edward Neiger, an attorney representing more of 60,000 overdose victims, in a press release.

“The Purdue plan was a victim-centered plan that would provide billions of dollars to states intended exclusively to alleviate the opioid crisis and $750 million to victims of the crisis, so they can begin to rebuild their lives. As a result of the government’s senseless three-year crusade against the plan, thousands of people have died from overdoses, and today’s decision will lead to even more unnecessary overdose deaths.”

An opponent of the regulation welcomed the result.

Ed Bisch’s 18-year-old son Eddie died of an overdose after taking OxyContin in Philadelphia in 2001.

The elder Bisch, who lives in New Jersey, has since spoken out against members of the Purdue and Sackler family and is part of a relatively small but vocal group of victims and family members who have opposed to the regulations.

“This is a step toward justice. It was outrageous what they were trying to do with impunity,” he said Thursday. “They made a mockery of the justice system, and then they tried to make a mockery of the bankruptcy system.”

He said he would have accepted the deal if he thought it could have stopped the opioid crisis.

He is now calling on the Justice Department to file charges against members of the Sackler family.

In early December, the arguments lasted nearly two hours in a packed courtroom, with the judges appearing alternately unwilling to disrupt a carefully negotiated settlement and reluctant to reward the Sacklers.

The question for the justices was whether the legal shield that bankruptcy provides can be extended to people such as the Sacklers, who have not declared bankruptcy themselves. Lower courts have issued conflicting rulings on this issue, which also has implications for other major product liability lawsuits resolved through the bankruptcy system.

The U.S. Bankruptcy Trustee, an arm of the Justice Department, has argued that bankruptcy law fails to protect the Sackler family from lawsuits. Under the Trump administration, the government supported the regulation.

The Biden administration had argued in court that negotiations could resume, and perhaps lead to a better deal, if the court terminated the current agreement.

Supporters of the plan said third-party releases are sometimes necessary to close a deal, and federal law imposes no prohibition against them.

But the majority of the court, which also included Justices Samuel Alito, Amy Coney Barrett, Ketanji Brown Jackson and Clarence Thomas, disagreed.

“The Sacklers are seeking greater relief than a bankruptcy discharge normally provides, as they hope to even extinguish wrongful death and fraud claims, and they seek to do so without putting virtually all of their assets on the table ” Gorsuch wrote. “The Sacklers are also not seeking a traditional release, as they hope a court will extinguish the opioid victims’ claims without their consent.”

Congress could draft special rules for opioid-related bankruptcies, he wrote.

And Kavanaugh, disagreeing, urged lawmakers to do just that. “Only Congress can remedy the chaos that will now result,” he wrote.

Jason Amala, a lawyer representing more than 1,000 men who allege they were sexually abused as children by Boy Scout leaders and volunteers, said the ruling could affect the Boy Scouts’ plan and others that employ similar disclaimers.

“The Supreme Court’s decision is quite simple,” Amala said in a statement. “If you injure someone, you and your insurance company will have to pay fair value to settle their claim. If you want protection from bankruptcy, you will need to file for bankruptcy on your own, disclose your assets and liabilities, and pay whatever amount a bankruptcy judge deems appropriate.

OxyContin first came to market in 1996, and Purdue Pharma’s aggressive marketing is often cited as a catalyst for the national opioid epidemic, with doctors being persuaded to prescribe painkillers without concern for the dangers of addiction.

The drug and the Stamford, Conn.-based company became synonymous with the crisis, even though the majority of pills prescribed and used were generic drugs. Opioid-related overdose deaths have continued to rise, reaching 80,000 in recent years. Most of them come from fentanyl and other synthetic drugs.

The Purdue Pharma settlement would have been one of the largest reached by pharmaceutical companies, wholesalers and pharmacies to resolve outbreak-related lawsuits brought by state, local and Native American tribal governments and others. These settlements total more than $50 billion.

But the Purdue Pharma settlement would have been only the second so far to include direct payments to victims from a $750 million pool. The payments reportedly ranged between $3,500 and $48,000.

Members of the Sackler family are no longer on the company’s board of directors and have not received any payments from it since before Purdue Pharma entered bankruptcy. However, over the previous decade, they received more than $10 billion, about half of which family members say went to pay taxes.

The case is Harrington v. Purdue Pharma, 22-859.

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This story has been corrected to show that Chief Justice John Roberts was a dissenter, not Justice Ketanji Brown Jackson.

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Associated Press writer Geoff Mulvihill contributed to this report from Cherry Hill, New Jersey.

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Follow AP coverage of the U.S. Supreme Court at https://apnews.com/hub/us-supreme-court.

News Source : apnews.com
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