With a 5-4 vote in Harrington v. Purdue Pharma, the U.S. Supreme Court rejected oxycodone hydrochloride (OxyContin) maker Purdue Pharma's bankruptcy settlement, ending an agreement between victims and state and local governments years in the making.
At the heart of the case was whether the Sackler family, which owned Purdue, could be protected from civil lawsuits by the legal shield of company bankruptcy. Of note, the Sackler family was not a party to the Purdue bankruptcy and the family itself did not declare bankruptcy. In exchange for contributing up to $6 billion over 10 years to the bankruptcy settlement and giving up ownership of the company, the Sacklers demanded immunity from any future civil claims. During before the court, the Purdue attorneys said this claimants against Purdue would ever get -- essentially saying, "Take it or leave it."
Justice Neil Gorsuch, writing for the majority, found that the bankruptcy code did not allow third party, non-consensual releases, thereby overturning the bankruptcy agreement. The court's decision will prevent money from quickly going to those affected by the Sackler family and Purdue's marketing practices. The majority decision in this case was not only sound legally, but it may well result in more justice -- and possibly even greater compensation -- for those most affected by the opioid epidemic.
Now, the company and the Sacklers are back to the drawing board to determine how best to compensate the thousands of individuals and the governments that have filed claims for the role the Sacklers played in the opioid epidemic due to their marketing of the opioid OxyContin.
Was it Really the "Best Deal"?
As the cases mounted against the company, the Sacklers began to extract , reportedly removing , of which they paid 40% in taxes. But because the Sacklers didn't declare bankruptcy, it's difficult to have a complete picture of the family's assets. This makes it difficult to know if this was indeed the best deal that could be had.
Unsurprisingly, the against the Court's decision, stating in part, "While we are confident that we would prevail in any future litigation given the profound misrepresentations about our families and the opioid crisis, we continue to believe that a swift negotiated agreement to provide billions of dollars for people and communities in need is the best way forward."
But billions of dollars would not have gone straight to the people most directly affected by OxyContin-involved overdoses. The fact is, only a small percentage of the money in the company's bankruptcy settlement would have gone to victims and their families if the settlement had moved forward. Of the $6 billion proposed in bankruptcy court, only $750 million of it was set aside for individuals, with payouts ranging from $3,500 to $48,000. The rest of the money was set aside for other parties, including state and local governments, that filed the bulk of the suits against the company.
What Comes Next?
No amount of money will ever make up for the loss of a loved one, and it is true that the majority (95%) of the individual claimants who voted agreed to the settlement terms. But the Purdue bankruptcy settlement was hardly a windfall for the individuals directly affected by Purdue's actions. Furthermore, the settlement would have shielded the Sacklers from future civil liability. Is that true justice?
The Purdue attorneys who contend that the bankruptcy agreement was the best deal they'd ever get because of Purdue's limited assets do have a point. The company's assets were limited, but it appears this is mostly because of the Sacklers themselves. Family members had allegedly removed over a decade.
I've worked on this issue since the early days of the overdose epidemic. I've been in rooms with grieving parents and siblings. I've listened to their stories and cannot begin to fathom their heartbreak. I too want this chapter to be over and for the victims and their families to receive compensation for what they have been through, while knowing that no amount of money will ever make up for their loss. Had the Sackler family not sought immunity, this chapter would perhaps be over, and individuals, governments, and communities would soon receive restitution. In the end, it is the Sackler family that upended a resolution to this issue. Ultimately, it is up to the Sacklers. The next move is theirs.
is a professor of Addiction Policy at Georgetown University Graduate School of Arts and Sciences in Washington. She served in both the Biden and Obama administrations in the White House Office of National Drug Control Policy, most recently as acting director.