Supreme Court Divided Over Oxycontin Settlement & Bankruptcy Deal
What the $6 billion case means for opioid victims and potential ruling impact
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🗞 WILL THE SACKLERS GET WIDE-RANGING IMMUNITY?
Via: AP
DEAL OR NO DEAL
The Supreme Court appeared divided yesterday as they heard arguments on a deal for victims of the highly addictive pain killer OxyContin produced by Purdue Pharma.
The U.S. Justice Department asked the Court to block Purdue’s 2021 bankruptcy deal that includes a $6 billion settlement, but also gives legal immunity to the Sackler family — who owned and ran the company. That means they’d be shielded from future, civil lawsuits.
🚨 Purdue filed for bankruptcy in 2019 after thousands of opioid-related lawsuits. The question now is whether the family can be protected from future cases even though they did not file for bankruptcy themselves. They’re also accused of hiding massive amounts of money outside of the US.
More than 600,000 Americans died from opioids in the last 20 years. Via: NIH
THE SETTLEMENT
After years of ruthless (and it turns out illegal) marketing of painkillers that generated billions of dollars — and created millions of addicts — the Sacklers agreed to pay $6 billion (after first offering $3 billion) over 18 years to settle cases from states, local and tribal governments, as well as groups of individuals. They say they will not go higher and insist on legal immunity as part of the settlement.
Purdue would pay an additional $1 billion to $2 billion in the proposal, and dissolve into a trust overseen by an independent board that would use the profits to address the opioid crisis.
About 95% of victims voted to approve the settlement.
Several states, Canadian municipalities and indigenous tribes, plus more than 2,600 individuals, voted against it because of the legal protections for the Sackler family, their affiliates and related entities.
Most of the money will fund opioid treatment programs in states.
About 130,000 people would share $750 million of the settlement funds.
Victims and their families would get payouts that range from about $3,500 to $48,000 per claim, minus legal fees.
Members of the Sackler family would give up ownership of the company.
More than 30 million documents would be released, offering a deeper glimpse at Purdue Pharma and the Sackler family’s marketing of OxyContin.
Via: CNN
WIDE-RANGING IMPLICATIONS
Described by experts as among the most important corporate bankruptcy cases in decades, the dispute will dictate how companies can use bankruptcy to resolve mass injury claims. This approach — funneling victims into a trust and protecting the other parties that victims might sue — was also used for litigation over silicone breast implants, defective airbags and sex-abuse claims against the Boy Scouts.
And justices across ideological divides had wide-ranging questions:
Justice Brett Kavanaugh noted a 30-year history of bankruptcy courts approving such releases from liability and future lawsuits.
He described a “disconnect” between opioid victims and the government’s case.
Other justices said that some regional appeals courts do not allow the termination, without consent, of alleged victims’ rights to sue parties who are not technically part of the bankruptcy proceedings.
Justice Jackson noted the Sacklers taking money out of Purdue and put it in offshore accounts, which would reduce the amount available to victims suing the company.
Bottom line: Supporters say it is uncertain whether they could ever get a better deal from the Sacklers after years of fighting—and are worried they may never see any compensation if the deal is struck down. Opponents say the deal is not fair to future victims (e.g. a 13 year old who lost parents due to opioids but can’t bring a claim now) and that the Sacklers will be immune from future litigation.
WHERE’S THE $$
By the time of Purdue’s 2019 bankruptcy filing, the Sackler family had moved much of their wealth to offshore trusts largely beyond the reach of US courts. Some was put in the Bailiwick of Jersey, a self-governing island between England and France.
The Justice Department said the Sacklers withdrew more than $10 billion from the company; the family has said nearly half of that sum was paid in mandatory taxes.
As of 2021, the members of the Sackler family were worth about $11 billion.
If the deal is struck down, the victims would be forced to litigate, perhaps for years. And the Sackler’s offshore assets might be hard for victims to access.
Via: NIH
✔︎ Mo News Reality Check: Nearly 645,000 people died from overdoses involving opioids from 1999 to 2021, according to the CDC. The opioid crisis is on-going across America.
⏳ SPEED READ
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🗓 ON THIS DAY: DECEMBER 5
1933: The 21st Amendment to the U.S. Constitution is ratified, repealing the 18th Amendment and bringing an end to the 13 year national prohibition of alcohol in America.
1952: A lethal smog began blanketing London, causing thousands of deaths; the incident prompted passage of the Clean Air Act.
1984: Wham! released their song, ‘Last Christmas.’
1997: 'Good Will Hunting' starring Robin Williams, Ben Affleck and Matt Damon premiered in theaters.