Supreme Court Overturns Plan to Shield Sacklers in Purdue Opioid Settlement
The U.S. Supreme Court has invalidated a crucial aspect of Purdue Pharma’s bankruptcy arrangement that would have protected members of the Sackler family from future lawsuits tied to the opioid crisis. The Sacklers, who ran the company responsible for producing OxyContin, had agreed to contribute $6 billion (£4.7 billion) to a broader settlement in return for extensive immunity from civil claims related to the addictive drug.
However, the highest court in the nation ruled that such protections for the Sacklers, who themselves did not declare bankruptcy, were not legally permissible. The Sackler family, expressing disappointment, stated they would continue to seek a settlement, cautioning that the alternative would be prolonged and chaotic legal battles nationwide.
This ruling represents a triumph for the U.S. government and other opponents of the deal, who argued that it misused the bankruptcy system to grant unwarranted protections. Yet, the decision also casts significant doubt on the future of the agreement, which had garnered considerable, though mixed, support from many plaintiffs who viewed it as a practical means to access the Sacklers’ wealth for drug treatment and other purposes.
Ellen Isaacs, whose son Patrick Ryan Wroblewski died of an overdose in 2018, was among the family members who opposed the Sacklers’ legal shield. While uncertain about the next steps, she expressed hope for justice. “I’d like to see them held fully accountable,” she said. “I’m just so grateful to the Supreme Court right now I can’t get beyond that.”
Purdue Pharma and the Opioid Crisis:
Purdue Pharma gained notoriety in the U.S. as the producer and promoter of OxyContin, a prescription painkiller marketed as safe despite its high potential for addiction and abuse. The company declared bankruptcy in 2019 after facing thousands of lawsuits from states, cities, and families. Purdue later pleaded guilty to criminal charges, including defrauding health agencies and making illegal payments to doctors.
The legal shield for the Sacklers had been a critical component of other high-profile settlements, such as those involving the Boy Scouts of America and the Catholic Church. However, courts have been divided on whether such liability releases for third parties like the Sacklers are lawful. The U.S. government, urging the Supreme Court to address the issue, argued that allowing such protections would create a precedent for wealthy corporations and individuals to misuse the bankruptcy system and evade accountability.
Justice Neil Gorsuch, writing for the 5-4 majority, echoed these concerns. “The Sacklers have not agreed to place anything approaching their full assets on the table for opioid victims,” he wrote. “Yet they seek a judicial order that would extinguish virtually all claims against them for fraud, willful injury, and even wrongful death, all without the consent of those who have brought and seek to bring such claims.”
Ongoing Legal and Public Reactions:
The court noted that the Sacklers, who have long denied wrongdoing, sought to pay less than typically required by law while receiving more legal protection than usually permitted. Since 1999, a few years after OxyContin’s release, opioid overdose deaths have surged eightfold, now exceeding 80,000 annually. Court documents allege that the Sackler family, aware of the legal risks, withdrew approximately $11 billion from Purdue in the decade preceding its bankruptcy, placing much of the money overseas.
During the Supreme Court hearing last year, dozens of protesters opposed the deal, with signs stating, “my dead son does not release the Sacklers.” Despite this, many supported the agreement, accepting its terms for the sake of securing billions for treatment and $750 million directly for opioid victims, ranging from $3,500 to $48,000 each.
In his dissent, Justice Brett Kavanaugh described the settlement as a “shining example” of the bankruptcy system in action. “Today’s decision is wrong on the law and devastating for more than 100,000 opioid victims and their families,” he wrote, warning that it would limit bankruptcy courts’ ability to “fashion fair and equitable relief.”
Purdue Pharma described the ruling as “heart crushing” and announced plans to resume negotiations immediately. Yale Law School Professor Abbe Gluck noted the pressure on justices to ensure funds flow to victims, viewing the case as a “test case” for broader legal questions as more firms turn to bankruptcy courts for resolving mass claims.
Cheryl Juaire, a mother who lost two sons to opioid overdoses and helped negotiate the agreement, called the prospect of further negotiations a “complete nightmare.” She expressed that while justice through jail for the Sacklers would be satisfactory for many, it wouldn’t save lives.
Judge William Nelson of Indiana, whose son died of an overdose in 2009, and who opposed the deal, emphasized that his fight was not about money. “I don’t care if we never see a penny of it,” he said, hoping for eventual criminal charges against the Sacklers. “Our hearts go out to those who wanted the settlement, but we still adamantly feel that this was the right decision. It sends, or it should send, a message to the Sacklers that they’re not above the law.”
