US Supreme Court SCOTUS has blocked Purdue Pharma bankruptcy settlement that would shield Sackler family from Opoid lawsuits

Unusual Whales

Jun 27, 2024 • 1 min read

The U.S. Supreme Court on Thursday rejected a nationwide settlement with OxyContin maker Purdue Pharma that would have protected members of the Sackler family, who own the company, from civil lawsuits related to the opioid crisis. This settlement also aimed to provide billions of dollars to address the epidemic.

After over six months of deliberation, the justices voted 5-4 to block the agreement that had been negotiated with state and local governments and victims. The Sacklers were to contribute up to $6 billion and relinquish ownership of the company, while retaining billions more. The deal stipulated that the company would emerge from bankruptcy as a new entity, with its profits directed towards treatment and prevention efforts.

Justice Neil Gorsuch, writing for the majority, stated that "nothing in present law authorizes the Sackler discharge."

Chief Justice John Roberts and Justices Brett Kavanaugh, Elena Kagan, and Sonia Sotomayor dissented. Kavanaugh, in his dissent, wrote, "Today's decision is wrong on the law and devastating for more than 100,000 opioid victims and their families."

"Opioid victims and other future victims of mass torts will suffer greatly in the wake of today's unfortunate and destabilizing decision," Kavanaugh added.

The Supreme Court's debate centered on whether the bankruptcy settlement could protect the Sackler family, who have not filed for personal bankruptcy, from liability for the opioid epidemic.

The Purdue Pharma settlement was set to be one of the largest ever reached by drug companies, wholesalers, and pharmacies to resolve lawsuits related to the opioid epidemic filed by state, local, and Native American tribal governments, among others.

These settlements have collectively surpassed $50 billion. The Purdue Pharma deal, however, would have been only the second to include direct payments to victims from a $750 million fund, with payouts ranging from about $3,500 to $48,000.

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