Washington: The US Supreme Court on Thursday blocked OxyContin maker Purdue Pharma‘s bankruptcy settlement that would have shielded its wealthy Sackler family owners from lawsuits over their role in the nation’s deadly opioid epidemic. The 5-4 decision reversed a lower court’s ruling that had upheld the plan to give Purdue’s owners immunity in exchange for paying up to $6 billion to settle thousands of lawsuits accusing the firm of unlawful misleading marketing of OxyContin, a powerful pain medication introduced in 1996.
The ruling represented a victory for Prez Biden’s administration, which had challenged the settlement as an abuse of bankruptcy protections meant for debtors in financial distress, not people like the Sacklers who have not filed for bankruptcy.Conservative Justice Neil Gorsuch wrote the ruling, which was joined by fellow conservative Justices Clarence Thomas, Samuel Alito and Amy Coney Barrett, as well as liberal Justice Ketanji Brown Jackson. “The Sacklers haven’t filed for bankruptcy and have not placed virtually all their assets on the table for distribution to creditors, yet they seek what essentially amounts to a discharge,” he wrote.
Justice Brett Kavanaugh wrote a dissenting opinion that was joined be fellow conservative Chief Justice John Roberts, and liberal Justices Sonia Sotomayor and Elena Kagan. “The decision is wrong on the law and devastating for more than 100,000 opioid victims and their families,” he said.
Purdue filed for Chapter 11 bankruptcy in 2019 to address its debts, nearly all of which stemmed from thousands of lawsuits alleging that OxyContin helped kickstart an opioid epidemic that has caused more than half a million US overdose deaths over two decades. At issue in the case was whether US bankruptcy law lets Purdue’s restructuring include legal protections for members of the Sackler family, who have not filed for personal bankruptcy. The decision has broader implications for other bankruptcy settlements involving claims of mass injury.
The ruling represented a victory for Prez Biden’s administration, which had challenged the settlement as an abuse of bankruptcy protections meant for debtors in financial distress, not people like the Sacklers who have not filed for bankruptcy.Conservative Justice Neil Gorsuch wrote the ruling, which was joined by fellow conservative Justices Clarence Thomas, Samuel Alito and Amy Coney Barrett, as well as liberal Justice Ketanji Brown Jackson. “The Sacklers haven’t filed for bankruptcy and have not placed virtually all their assets on the table for distribution to creditors, yet they seek what essentially amounts to a discharge,” he wrote.
Justice Brett Kavanaugh wrote a dissenting opinion that was joined be fellow conservative Chief Justice John Roberts, and liberal Justices Sonia Sotomayor and Elena Kagan. “The decision is wrong on the law and devastating for more than 100,000 opioid victims and their families,” he said.
Purdue filed for Chapter 11 bankruptcy in 2019 to address its debts, nearly all of which stemmed from thousands of lawsuits alleging that OxyContin helped kickstart an opioid epidemic that has caused more than half a million US overdose deaths over two decades. At issue in the case was whether US bankruptcy law lets Purdue’s restructuring include legal protections for members of the Sackler family, who have not filed for personal bankruptcy. The decision has broader implications for other bankruptcy settlements involving claims of mass injury.
