WASHINGTON – The Supreme Court on Thursday tossed out the large bankruptcy reorganization of opioid maker Purdue Pharma, finding that the settlement improperly included legal protections for the Sackler family, putting billions of dollars won for victims in danger.
By a 5-4 vote, the court ruled on an ideologically independent basis that the bankruptcy court didn’t have the authority to exonerate members of the Sackler family from the legal claims of opioid victims.
As a part of the deal, the family that controlled the corporate had agreed to pay $6 billion, which might be used to settle opioid-related lawsuits, but only in exchange for a whole release from any liability in future cases.
Justice Neil Gorsuch, writing for almost all, said the Sacklers could have filed for bankruptcy but as an alternative sought to connect themselves to the corporate's bankruptcy proceedings to settle pending legal claims. “They accomplished all this without obtaining the consent of the affected parties or putting anything close to all of their assets on the table for their creditors,” Gorsuch wrote.
“The current law does not justify Sackler’s dismissal,” he added.
Justice Brett Kavanaugh dissented, citing the impact of the choice on those that would profit from the settlement.
“Today’s decision is unlawful and devastating to the more than 100,000 opioid victims and their families,” he wrote.
As a results of the ruling, “opioid victims will now be denied the substantial financial compensation they have long fought for and have finally received after years of litigation,” he added.
The ruling implies that settlement negotiations should be restarted and there may be a possibility that no agreement might be reached.
Purdue Pharma called the decision “heartbreaking” due to the impact on victims, but vowed to proceed efforts to barter a brand new settlement. “The decision does not deter us from our dual goals of using the settlement funds to fight opioids and transforming the company into an engine for good,” the statement said.
In a press release, members of the Sackler family said they “remain confident of reaching a solution that provides significant resources to combat a complex health crisis.”
“While we are confident of our ability to prevail in future litigation given the serious misrepresentations of our families and the opioid crisis, we continue to believe that a swiftly negotiated agreement to provide billions of dollars to people and communities in need is the best path forward,” they added.
At oral arguments in December, a lawyer representing among the victims told the judges that there was “no viable path” for victims to be compensated if the deal, including the Sackler agreement, was not honored.
The case drew even greater attention to the continuing impact of the opioid crisis and the role Sackler's Purdue property played in its creation.
As a part of the proposed agreement, which the Supreme Court placed on hold When the Sackler family took over the case last 12 months, they agreed to pay about $6 billion that might be used to settle opioid-related damages claims, but only in exchange for complete immunity from any liability in future litigation.
The settlement, including assets held by Purdue, could be value significantly more since the restructured company might be entirely dedicated to combating the consequences of opioid abuse.
Since 2019, no Sackler has been involved in the corporate.
Purdue made billions from OxyContin, a widely used painkiller that fueled the opioid epidemic. The company's tactics of aggressively marketing the drug got here under increasing scrutiny as 1000’s of individuals died from opioid overdoses.
When the corporate's sales plummeted, it filed for bankruptcy protection, but members of the Sackler family didn’t. Instead, they negotiated a separate cope with Purdue and plaintiffs in pending lawsuits that will allow the corporate to reinvent itself to deal with the opioid crisis.
The New York-based U.S. 2nd Circuit Court of Appeals approved the plan last 12 months over the objection of William Harrington, the U.S. government trustee who oversees the bankruptcy. The Justice Department's trustee program is designed to make sure the bankruptcy system functions as required by law.
Harrington objected to the discharge of further lawsuits against the Sacklers, saying it might be unfair to potential future plaintiffs.
Purdue criticized Harrington's role, saying groups representing 1000’s of plaintiffs joined the settlement, which might not have happened without the Sackler family's input.
At the Supreme Court, several groups representing plaintiffs supported Purdue, including one group representing 1,300 cities, counties and other municipalities and one other representing 60,000 people affected by the opioid epidemic.
Those who objected to the agreement included Canadian municipalities and indigenous First Nations.
Purdue flourished under brothers Mortimer and Raymond Sackler, who died in 2010 and 2017 respectively. The family reaped billions and spent generously, including on Sensational charity projects.
The family told the Supreme Court that they continued to support the settlement.
In a Brief filed on behalf of Lawyers for Mortimer Sackler's relatives, most of whom live abroad, warned of “significant legal costs and risks” in attempting to implement foreign court judgments against the family if the settlement is rejected.
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