Yahoo News Supreme Court Rules Sackler Family Can Still Be Held Liable for Opioid Epidemic
The family behind one of the most addictive substances in the world, peddled to patients by their own doctors who downplayed their harmful effects, is not shielded from liability for the deaths of hundreds of thousands, the Supreme Court ruled on Thursday.
The Supreme Court ruled 5-4 that the Sackler family’s bankruptcy settlement, which would have sent billions of dollars to victims of the opioid epidemic, is not valid. The settlement would have shielded the Sackler family from personal liability, and the court’s ruling on Thursday means they are not immune from any fault related to their company, Purdue Pharma, and its responsibility for opioid addiction brought on by the aggressive pushing of OxyContin.
“The Sacklers seek greater relief than a bankruptcy discharge normally affords, for they hope to extinguish even claims for wrongful death and fraud, and they seek to do so without putting anything close to all their assets on the table,” Justice Neil Gorsuch wrote in the opinion for the 5-4 decision. “Describe the relief the Sacklers seek how you will, nothing in the bankruptcy code contemplates (much less authorizes) it.”Justice Brett Kavanaugh, who joined Justices Elena Kagan, Sonia Sotomayor, and Chief Justice John Roberts in their votes against the decision, wrote the dissent.
“As a result, opioid victims are now deprived of the substantial monetary recovery that they long fought for and finally secured after years of litigation,” the dissent read. “The court’s decision will lead to too much harm for too many people for Congress to sit by idly without at least carefully studying the issue,” wrote Kavanaugh, imploring Congress to “fix the chaos that will now ensue” thanks due to the court’s decision.
Purdue’s now-rejected Chapter 11 bankruptcy protection was filed in September 2019 after scores of state, local, and Native American tribal governments, as well as over 60,000 individuals, sued Purdue seeking damages for the manufacture and sale of OxyContin. The highly addictive painkiller has directly resulted in the death of over 225,000 people between 1999 and 2022, according to the National Institute on Drug Abuse, and has contributed significantly to the nearly 650,000 total opioid deaths in the same time frame.
Although Purdue and the Sacklers claimed to be unaware of how addictive OxyContin was, a 2006 Department of Justice report listed the series of combative techniques Purdue employed to keep selling OxyContin, even when the company and family learned of people crushing and snorting the pills for its narcotic effects as early as the year it was released. The report found Purdue spent millions on marketing, giving away free samples, and offering bonuses to sales representatives to get doctors to prescribe OxyContin to their patients.
The company paid for fancy dinners and trips for the doctors; targeted physicians who weren’t pain specialists by inviting them to medical conferences and pain management seminars; and promoted OxyContin in patient advocacy groups. Purdue distributed misleading materials and information to convince doctors and patients the painkiller was safe to use for even the slightest pain and promoted higher dosages. Purdue also filed false reports with the Drug Enforcement Administration in an attempt to cover up how much it knew about OxyContin and other addictive opioids.
Following the four-year Justice Department investigation, the company pleaded guilty to a felony count of misbranding OxyContin in 2007 and paid over $600 million in fines and other costs. Prosecutors recommended felony charges for three top Purdue executives, but DOJ officials under the George W. Bush Administration squashed the notion. The family has remained virtually untouched since then.
The three original Sackler brothers, all physicians, bought Purdue in 1952 and developed OxyContin in 1996. Six Sackler members sat on the company’s board, including Chairman Richard Sackler, who oversaw the company’s aggressive marketing strategy.
The court ruled the Sackler family is not released from personal liability.
As part of the bankruptcy settlement with over 2,000 governments as well as 60,000 individuals, the Sacklers agreed to contribute $6 billion of their funds to combat opioid addiction, $750 million of which will go directly to compensating victims. Purdue will restructure itself as a public benefit corporation that will use its profits to fight the opioid crisis.
The company originally agreed to pay $4.5 billion in the settlement when it filed for bankruptcy in the Southern District of New York. Although Purdue itself filed for bankruptcy — which restructured its operations and reduced its liabilities — the Sackler family used a third-party release to shield themselves from personal accountability. Although it originally approved the plan and granted non-consensual third-party releases of the Sackler family, SDNY then reversed the approval, ruling bankruptcy courts were not authorized to grant such non-consensual third-party releases, causing Purdue to up its settlement to $6 billion. The case went before the Supreme Court, when arguments were heard on December 4, 2023. As a result of Thursday’s ruling, individual tort litigants are able to seek damages from the Sacklers.
Nearly 95 percent of the settlement’s claimants approved of the $6 billion figure, and may receive anywhere between $3,500 and $48,000 through the agreement.
“It’s overwhelming, the support for this deal, and among people who have no love for the Sacklers, among people who think that the Sacklers are pretty much the worst people on Earth,” Justice Elena Kagan said during oral arguments in December. “They’ve negotiated a deal which they think is the best that they can get.”
Ronald Mann, a Columbia Law School Professor who specializes in bankruptcy litigation, pointed to the overwhelming support the settlement has amongst claimants for why the court ruled the way it did.
“It’s very difficult to overturn this plan because to overturn this plan is really to take $6 billion out of the hands of people that are really, really badly injured,” Mann told Rolling Stone. “It’s money that they will most likely never get if they do get it. Lawyers will make huge amounts of money recovering this so it may just be a windfall for lawyers to litigate for years.”
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