The Supreme Court on Thursday dealt a significant blow to efforts to resolve the opioid crisis, rejecting a nationwide settlement that would have shielded members of the Sackler family, owners of OxyContin maker Purdue Pharma, from civil lawsuits. The 5-4 decision, after more than six months of deliberations, blocked an agreement hammered out with state and local governments and victims. The settlement, which would have provided billions of dollars to combat the opioid epidemic, included a contribution of up to $6 billion from the Sacklers, who would have relinquished ownership of the company but retained substantial wealth. It envisioned Purdue Pharma emerging from bankruptcy as a new entity, utilizing its profits for treatment and prevention.
Justice Neil Gorsuch, writing for the majority, declared that “nothing in present law authorizes the Sackler discharge.” The dissent, authored by Justice Brett Kavanaugh, expressed concern about the negative impact on opioid victims: “Opioid victims and other future victims of mass torts will suffer greatly in the wake of today’s unfortunate and destabilizing decision.”
The decision comes after the high court temporarily halted the settlement last summer in response to objections from the Biden administration. The future remains uncertain.
“Today’s Supreme Court ruling marks a major setback for the families who lost loved ones to overdose and for those still struggling with addiction,” said Edward Neiger, a lawyer representing over 60,000 overdose victims. “The Purdue plan was a victim-centered plan that would provide billions of dollars to the states to be used exclusively to abate the opioid crisis and $750 million for victims of the crisis, so that they could begin to rebuild their lives. As a result of the senseless three-year crusade by the government against the plan, thousands of people died of overdose, and today’s decision will lead to more needless overdose deaths.”
Ed Bisch, whose son Eddie died from an OxyContin overdose in 2001, voiced support for the Supreme Court’s decision. Bisch, a vocal critic of Purdue and the Sacklers, expressed relief that they would face accountability. “This is a step toward justice. It was outrageous what they were trying to get away with,” he said. “They have made a mockery of the justice system and then they tried to make a mockery of the bankruptcy system.”
The decision raises a crucial legal question: whether bankruptcy protection can extend to individuals like the Sacklers who haven’t filed for bankruptcy themselves. Lower courts had issued conflicting rulings on this issue, which has implications for other major product liability cases settled through bankruptcy.
The U.S. Bankruptcy Trustee, an arm of the Justice Department, argued against shielding the Sackler family from lawsuits, while the Trump administration had supported the settlement. The Biden administration, while opposing the specific settlement, advocated for continued negotiations, suggesting the potential for a more favorable agreement.
Proponents of the settlement argued that third-party releases are sometimes necessary to achieve a deal, and that federal law does not explicitly prohibit them.
Purdue Pharma’s aggressive marketing of OxyContin, introduced in 1996, is widely regarded as a catalyst for the nationwide opioid epidemic. Despite the drug becoming synonymous with the crisis, the majority of pills prescribed and used were generic versions. Opioid-related overdose deaths, predominantly from fentanyl and other synthetic drugs, continue to rise, reaching 80,000 in recent years.
The Purdue Pharma settlement would have been one of the largest reached by drug companies, wholesalers, and pharmacies to resolve lawsuits related to the epidemic. These settlements have totaled over $50 billion, but the Purdue Pharma agreement would have been only the second to include direct payments to victims from a separate $750 million fund. Payouts would have ranged from $3,500 to $48,000.
The Sackler family members have stepped down from the company’s board and haven’t received payouts since Purdue Pharma entered bankruptcy. However, they received over $10 billion in the decade before that, with half of it reportedly used to pay taxes.
