The United States Supreme Court debated if the family that owns Purdue Pharma can receive immunity as part of a bankruptcy agreement.
Purdue Pharma began manufacturing OxyContin, an opioid approved by the Food and Drug Administration, in the 1990s. The drug and its extensive prescription across the country led to an increase in opioid addiction and fatal overdose deaths. An estimated 280,000 Americans died after overdosing on prescription opioids between 1991 and 2021.
The Department of Justice announced in October 2020 that it had reached a global resolution of its criminal and civil case against Purdue – as well as individual stakeholders and the Sackler family – pending approval from the bankruptcy court.
“The abuse and diversion of prescription opioids has contributed to a national tragedy of addiction and deaths, in addition to those caused by illicit street opioids,” said Deputy Attorney General Jeffrey A. Rosen in a statement. “With criminal guilty pleas, a federal settlement of more than $8 billion, and the dissolution of a company and repurposing its assets entirely for the public’s benefit, the resolution in today’s announcement re-affirms that the Department of Justice will not relent in its multi-pronged efforts to combat the opioids crisis.”
The company may ultimately pay more than $10 billion to assist those impacted by the opioid crisis. The Sackler family agreed to pay $6 billion to settle opioid-related lawsuits provided they were released from further liability. No one from the family has been involved in the business since 2019.
The bankruptcy deal was approved but later overturned by a federal district court judge in 2021. The Second Circuit Court of Appeals upheld the agreement in May, but it was blocked in August when the Supreme Court agreed to hear the case.
“The company sought bankruptcy protection, but the Sackler family members did not,” reports NBC News. “Instead, they negotiated a separate deal with Purdue and plaintiffs in pending lawsuits that would allow the company to reinvent itself to address the opioid crisis. The Biden administration objects to the release of additional claims against the Sacklers, saying it would be unfair to potential future plaintiffs.”
During the Dec. 4 hearing, the justices debated the bankruptcy court judge’s decision when he approved the plan. Some justices noted that the majority of creditors who voted were in favor of the plan. However, just 20% of the 618,000 eligible claimants took part in the vote.
“It’s overwhelming, the support for this deal – and among people who have no love for the Sacklers,” said Justice Elena Kagan, who was appointed by President Barack Obama in 2010. “Among people who think that the Sacklers are pretty much the worst people on Earth. They’ve negotiated a deal which they think is the best that they can get.”
Justice Brett Kavanaugh, an appointee of President Donald Trump, chastised the Justice Department for not focusing on the victims of the opioid epidemic, according to CNN.
“Your opening never mentioned the opioid victims,” said Kavanaugh. “The opioid victims and their families overwhelmingly approve this plan, because they think it will ensure prompt payment. So in those circumstances, those narrow circumstances, bankruptcy courts for 30 years have been approving plans like this.”
