WASHINGTON — The Supreme Court on Thursday rejected a nationwide settlement with OxyContin maker Purdue Pharma that would have provided billions of dollars to combat the opioid epidemic while protecting the Sackler family that owns the company from civil lawsuits over opioid addiction.
After more than six months of deliberations, the justices voted 5-4 to reject a settlement reached with state and local governments and victims that would have seen the Sacklers contribute up to $6 billion and give up ownership of the company but keep billions more. The settlement would have seen the company emerge from bankruptcy as a separate entity, with any profits going to treatment and prevention.
Justice Neil Gorsuch, writing the majority opinion, said “nothing in current law authorizes the firing of the Sacklers.”
Justices Brett Kavanaugh, Ketanji Brown Jackson, Elena Kagan and Sonia Sotomayor dissented.
“Opioid victims and future victims of class action lawsuits will suffer greatly from today’s unfortunate and precarious ruling,” Kavanaugh wrote.
The Supreme Court put the settlement on hold last summer over objections from the Biden administration.
What happens next is unclear.
“Today’s Supreme Court decision is a devastating blow to the families who have lost loved ones to overdose and to those who continue to struggle with addiction,” Edward Nager, an attorney who represents more than 60,000 overdose victims, said in a statement.
“The Purdue plan was a victim-centered plan that would have provided billions of dollars to states to be used exclusively to alleviate the opioid crisis and provided $750 million in assistance to victims of the crisis to help them rebuild their lives. Three years of the Administration’s thoughtless opposition to this plan has resulted in thousands of people dying from overdoses, and today’s decision will lead to many more needless overdose deaths.”
Opponents of the settlement praised the outcome.
Ed Bisch’s 18-year-old son, Eddie, died of an overdose after taking OxyContin in Philadelphia in 2001.
Bish, who lives in New Jersey, has been speaking out against Purdue and the Sackler families ever since, and is part of a relatively small but vocal group of victims and families that opposed the settlement.
“This is a step towards justice. It’s outrageous what they were trying to get away with,” he said Thursday. “They made a fool of the justice system and they tried to make a fool of the bankruptcy system.”
He said he would have accepted the agreement if he believed it would make a dent in the opioid crisis.
He is now calling on the Department of Justice to pursue criminal charges against the Sackler family.
Arguments in early December lasted nearly two hours in a packed courtroom, with the justices alternately appearing unwilling to disrupt the carefully negotiated settlement and reluctant to compensate the Sacklers.
At issue for the justices was whether the legal protections offered by bankruptcy would extend to people like the Sacklers who haven’t declared bankruptcy. Lower courts have issued conflicting rulings on the issue, which also has implications for other major product liability cases resolved through the bankruptcy system.
The U.S. Bankruptcy Trustee, a division of the Justice Department, argued that bankruptcy law did not protect the Sackler family from lawsuits. Under the Trump administration, the government supported the settlement.
The Biden administration had argued to the court that if the court halted the current agreement, negotiations could resume and lead to a better deal.
Supporters of the plan said third-party disclosures may be necessary to reach an agreement and that federal law does not prohibit it.
OxyContin first hit the market in 1996, and Purdue Pharma’s aggressive marketing is often credited with sparking the national opioid epidemic, persuading doctors to prescribe the painkiller with little consideration for the risks of addiction.
Even though the vast majority of the drugs prescribed and used are generic versions, the drug and the Stamford, Connecticut-based company have become synonymous with the crisis. Deaths from opioid-related overdoses continue to rise, reaching 80,000 in recent years, most of them caused by fentanyl and other synthetic drugs.
The Purdue Pharma settlement would have been the largest ever reached by a pharmaceutical company, distributor, and pharmacy to resolve infectious disease-related lawsuits brought by state, local, and Native American tribal governments. These settlements total more than $50 billion.
But the Purdue Pharma settlement would have been the second to date in that it would have included direct payments from the $750 million fund to victims, with payments ranging from roughly $3,500 to $48,000.
The Sacklers are no longer directors of Purdue Pharma and have not received any compensation from the company since before the company’s bankruptcy, but they say they received more than $10 billion in compensation in the decade before the bankruptcy, about half of which went to taxes.
The case is Harrington v. Purdue Pharma, 22-859.
