SCOTUS Rejects Purdue Pharma Settlement

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Facts

  • The US Supreme Court (SCOTUS) ruled Thursday that the Sackler family, who owns the Oxycontin-maker Purdue Pharma, cannot make a settlement agreement that includes legal protections for the family.1
  • The Sacklers agreed to pay opioid crisis victims up to $6B over 18 years and $4.5B in the first nine years. A US Dept. of Justice (DOJ) watchdog, however, said the provision offering legal liability protection to the family was an improper use of the bankruptcy system.2
  • Writing for the bipartisan majority, Justice Neil Gorsuch argued that since the Sacklers didn't offer 'anything approaching their full assets,' US bankruptcy law does not allow them to 'extinguish virtually all claims against them for fraud, willful injury, and even wrongful death.'3
  • Justice Brett Kavanaugh wrote the dissenting opinion, which also consisted of both liberal and conservative justices. He argued that thanks to the ruling, 'Opioid victims and other future victims of mass torts will suffer greatly.'4
  • The minority of victims who opposed the deal, which would've offered between $3.5K and $48K per victim, argue that the money isn't enough to compensate for their and their loved ones' injuries. They also want the ability to sue the Sacklers in civil court.3
  • The Sacklers previously settled with the DOJ in 2020, in which they agreed to pay $225M to the government if the bankruptcy went through and another $225M in damages to the DOJ.5

Sources: 1NBC, 2New York Times, 3wsj.com, 4FOX News and 5Washington Post.

Narratives

  • Narrative A, as provided by The Conversation. While delaying compensation to victims is not ideal, this ruling is a clear and objective analysis of bankruptcy law, which does not allow individual company owners to place themselves behind the protective shields of a corporate bankruptcy settlement. If the Sackler family wishes to shield themselves from future personal lawsuits, they will have to declare bankruptcy as individuals.
  • Narrative B, as provided by Newsweek. This ruling not only misinterprets bankruptcy law but it delays compensations for victims dating back to the 1990s. After releasing this lethally addictive drug in 1996, the Sacklers' marketing schemes led to the deaths of over 240K people just between 1999 and 2009. This is a sad day for victims seeking financial justice.

Predictions