The Supreme Court on Thursday rejected a nationwide settlement with OxyContin maker Purdue Pharma that would have shielded members of the Sackler family who own the company from civil lawsuits over the toll of opioids but also would have provided billions of dollars to combat the opioid epidemic. After deliberating more than six months, the justices in a 5-4 vote blocked an agreement hammered out with state and local governments and victims, reports the AP. The Sacklers would have contributed up to $6 billion and given up ownership of the company but retained billions more. The agreement provided that the company would emerge from bankruptcy as a different entity, with its profits used for treatment and prevention.
The high court had put the settlement on hold last summer, in response to objections from the Biden administration. It's unclear what happens next. Arguments in early December lasted nearly two hours as the justices seemed, by turns, unwilling to disrupt a carefully negotiated settlement and reluctant to reward the Sacklers. The issue for the justices was whether the legal shield that bankruptcy provides can be extended to people such as the Sacklers, who haven't declared bankruptcy themselves. Lower courts had issued conflicting decisions over that issue, which also has implications for other major product liability lawsuits settled through the bankruptcy system. The US Trustee Program, an arm of the Justice Department, argued that the bankruptcy law doesn't permit protecting the Sackler family from being sued.
The Biden administration had argued that negotiations could resume, and perhaps lead to a better deal, if the court were to stop the current agreement. The Purdue Pharma settlement would have ranked among the largest reached to resolve epidemic-related lawsuits filed by state, local, and Native American tribal governments and others. Those settlements have totaled more than $50 billion. But the Purdue Pharma settlement would have been only the second so far to include direct payments to victims from a $750 million pool. Payouts would have ranged from about $3,500 to $48,000. Sackler family members no longer are on the company's board, and they haven't received payouts from it since before Purdue Pharma entered bankruptcy. In the decade before that, though, they earned more than $10 billion.
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