(RightIsRight.co) – The Supreme Court said no to a nationwide settlement with OxyContin maker Purdue Pharma that would have protected owners of the company, the Sackler family, from civil lawsuits about the opioid crisis.
After six months of consideration, the justices blocked the agreement with a 5-4 vote. This deal had been made with state and local governments and victims.
The Sacklers were to contribute up to $6 billion and give up their ownership of the company while keeping billions more. The plan also included that the company would exit bankruptcy as a new entity, with its profits going to treatment and prevention efforts.
In turn, the high court had paused the settlement last summer after the Biden administration raised objections.
Moreover, arguments in early December lasted nearly two hours in a packed courtroom as the justices seemed torn between not wanting to disrupt a carefully negotiated settlement and not wanting to reward the family.
The main question was whether bankruptcy protection could be extended to people like the Sacklers, who have not declared bankruptcy themselves.
As part of the Department of Justice (DOJ), the U.S. Bankruptcy Trustee argued that bankruptcy law does not allow protecting the Sackler family from lawsuits.
Furthermore, the Biden administration suggested that negotiations could resume and possibly lead to a better deal if the court stopped the current agreement.
Also, supporters of the plan argued that third-party releases are sometimes needed to make an agreement, and federal law does not ban them.
OxyContin was first marketed in 1996, and Purdue Pharma’s aggressive promotion is often seen as a starting point for the opioid crisis. They convinced doctors to prescribe painkillers without much regard for addiction risks.
Additionally, the Purdue Pharma settlement would have been one of the largest by drug companies, wholesalers, and pharmacies to resolve lawsuits related to the epidemic, with total settlements over $50 billion.
However, the Purdue Pharma settlement would have been only the second to include direct payments to victims from a $750 million pool, with payouts ranging from about $3,500 to $48,000.
Sackler’s family members are no longer on the company’s board and have not received payouts since before Purdue Pharma went bankrupt. Yet, in the decade before that, they were paid over $10 billion, with about half going to taxes.
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