Purdue Pharma and the wealthy families who control it are forever linked to the deadly opioid epidemic, which has killed tens of thousands of people.
But their role in the public health crisis is not the central question the Supreme Court will grapple with Monday when it hears arguments in the bankruptcy settlement involving Purdue, the maker of the highly addictive painkiller OxyContin.
Instead, the justices will focus on a narrower issue: whether the plan, designed to resolve thousands of claims brought by state and local governments, tribes, hospitals and private victims, can offer broad legal protections to Sackler family members, company owners
Under the deal, the Sacklers will pay up to $6 billion of their fortune to settle those claims in exchange for immunity from all civil legal disputes related to the opioid crisis and Purdue.
A broader court ruling could result in other major lawsuits in which a group of plaintiffs accuse a company of similar injuries. A decision could come in late June, near the end of the court’s term.
In recent years, bankruptcy court has become a popular place to deal with mass injury settlements. The Purdue case and others like it hinge on a system that courts in some parts of the country say allows third parties like the Sacklers to be absolved of liability, even if they aren’t declaring bankruptcy themselves.
A Justice Department watchdog asked the Supreme Court to intervene after the appellate court upheld the settlement. The deal violated federal law, the government said, by allowing Sacklers to take advantage of uniform protection for “A.”Financial distress” and offer “A road map for wealthy corporations and individuals to abuse the bankruptcy system“
Lawyer for Purdue In court filings That plan would “provide billions of dollars and life-saving benefits to victims of the opioid crisis.” The plan lays out strategies for the wealthy to avoid accountability was “baseless”. they added.
Purdue, which is widely credited with helping to diffuse the opioid crisis, has faced a flood of challenges since OxyContin’s addictive qualities and abuse potential became apparent.
The company continues to aggressively push painkillers regardless. In 2007, a holding company for Purdue pleaded guilty to a felony charge of “misbranding” drugs, including addiction risks, and agreed to pay Some $600 million in fines and other fees.
As overdose deaths rose, municipalities, tribes, families and others sought funding to combat the ravages of the drug. Many have blamed OxyContin.
Purdue Filed for bankruptcy protection inside September 2019 Civil suits against the company and, increasingly, the Sacklers mounted themselves.
Under a restructuring plan filed in March 2021, the company will dissolve and become a public benefit company focused on trying to combat the opioid epidemic. Instead, Sackler family members will pour billions of dollars from their personal fortunes into helping states, municipalities, tribes and others fight the opioid crisis. More than 90 percent of plaintiffs who voted on the plan approved it.
That September, U.S. Bankruptcy Court Judge Robert Drain in White Plains, N.Y. approved the plan. The US Trustee Program, an office of the Justice Department, was among those who appealed the decision.
As the appeal wound through the courts, members of the Sackler family Increase their cash offer Up to $6 billion to settle thousands of opioid claims by February 2022. They also insisted on abstaining from all opioid-related litigation.
The United States Court of Appeals for the Second Circuit ruled in favor of the plan A little more than a year later, Purdue was handed a victory.
By agreeing to take the case, the Supreme Court temporarily suspended the agreement, presumably suspending payment to the plaintiffs until it issues a ruling.
The plan approved by the appeals court includes the “most substantial and extensive” release of claims by parties who have not even declared bankruptcy, said Elizabeth B. Preloger, the solicitor general. Wrote requesting to hear the case in court.
Purdue’s lawyers argued that if the court overturned the deal, “individuals and companies with a real stake in the outcome would lose everything.”
They pointed to unusually high support among plan claimants, Add that “Countless lives will be helped — and literally saved — through the billions of dollars that will flow to communities nationwide under this plan.”
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