Supreme Court to Hear Oxy Arg 12/04 06:30
The Supreme Court on Monday is hearing arguments over a nationwide
settlement with OxyContin maker Purdue Pharma that would shield members of the
Sackler family who own the company from civil lawsuits over the toll of opioids.
WASHINGTON (AP) -- The Supreme Court on Monday is hearing arguments over a
nationwide settlement with OxyContin maker Purdue Pharma that would shield
members of the Sackler family who own the company from civil lawsuits over the
toll of opioids.
The agreement hammered out with state and local governments and victims
would provide billions of dollars to combat the opioid epidemic. The Sacklers
would contribute up to $6 billion and give up ownership, and the company would
emerge from bankruptcy as a different entity, with its profits used for
treatment and prevention.
But the justices put the settlement on hold during the summer, in response
to objections from the Biden administration.
The issue for the justices is 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 decisions over that
issue, which also has implications for other major product liability lawsuits
settled through the bankruptcy system.
The U.S. Bankruptcy Trustee, an arm of the Justice Department, contends that
the bankruptcy law does not permit protecting the Sackler family from being
sued by people who are not part of the settlement. During the Trump
administration, the government supported the settlement.
Proponents of the plan said third-party releases are sometimes necessary to
forge an agreement, and federal law imposes no prohibition against them.
Lawyers for more than 60,000 victims who support the settlement called it "a
watershed moment in the opioid crisis," while recognizing that "no amount of
money could fully compensate" victims for the damage caused by the misleading
marketing of OxyContin, a powerful prescription painkiller.
A lawyer for a victim who opposes the settlement calls the provision dealing
with the Sacklers "special protection for billionaires."
OxyContin first hit the market in 1996, and Purdue Pharma's aggressive
marketing of it is often cited as a catalyst of the nationwide opioid epidemic,
persuading doctors to prescribe painkillers with less regard for addiction
The drug and the Stamford, Connecticut-based company became synonymous with
the crisis, even though the majority of pills being prescribed and used were
generic drugs. Opioid-related overdose deaths have continued to climb, hitting
80,000 in recent years. Most of those are from fentanyl and other synthetic
The Purdue Pharma settlement would be among the largest reached by drug
companies, wholesalers and pharmacies to resolve epidemic-related lawsuits
filed by state, local and Native American tribal governments and others. Those
settlements have totaled more than $50 billion.
But the Purdue Pharma settlement would be one of only two so far that
include direct payments to victims from a $750 million pool. Payouts are
expected to range from about $3,500 to $48,000.
Sackler family members no longer are on the company's board, and they have
not received payouts from it since before Purdue Pharma entered bankruptcy. In
the decade before that, though, they were paid more than $10 billion, about
half of which family members said went to pay taxes.
A decision in Harrington v. Purdue Pharma, 22-859, is expected by early