The Supreme Court rejected a settlement with OxyContin manufacturer Purdue Pharma that would have shielded the Sackler family from legal liability for the company’s role in exacerbating the disastrous opioid crisis.
The Supreme Court released the 5-4 decision Thursday morning, ruling that a bankruptcy judge did not have the authority to release the Sackler family from litigation filed by opioid victims. As part of the proposed deal, the family had agreed to give up ownership of the company and pay as much as $6 billion to settle opioid-related claims in exchange for legal protection from future cases.
Sackler family members previously owned and operated Purdue, which sold OxyContin and other prescription opioids at the height of the opioid epidemic. The company filed for Chapter 11 bankruptcy in 2019 after facing scores of lawsuits that sought damages arising from OxyContin. The narcotic is used to treat moderate to severe pain.
The Court’s ruling means that settlement talks would have to restart, and it’s likely no deal would be reached this time.
“The Sacklers seek greater relief than a bankruptcy discharge normally affords, for they hope to extinguish even claims for wrongful death and fraud, and they seek to do so without putting anything close to all their assets on the table,” conservative Justice Neil Gorsuch wrote in the majority opinion. “Nor is what the Sacklers seek a traditional release, for they hope to have a court extinguish claims of opioid victims without their consent.”
“Describe the relief the Sacklers seek how you will, nothing in the bankruptcy code contemplates (much less authorizes) it,” Gorsuch added.
He went on to conclude that Congress can decide whether to add special rules to the bankruptcy code for opioid-related bankruptcies.
Conservative-leaning Justice Brett Kavanaugh delivered the dissenting opinion, joined by Chief Justice John Roberts and liberal Justices Sonia Sotomayor and Elena Kagan.
The decision, Kavanaugh wrote, will leave a “devastating” impact on more than 100,000 opioid victims and their families because they “are now deprived of the substantial monetary recovery that they long fought for and finally secured after years of litigation.” He then urged Congress to amend U.S. bankruptcy law to “fix the chaos that will now ensue” from the ruling.
“The Court’s decision will lead to too much harm for too many people for Congress to sit by idly without at least carefully studying the issue,” Kavanaugh wrote.
The settlement was put on hold last year after the Supreme Court accepted the case. It was previously approved by a federal appeals court in New York.
Since Purdue’s bankruptcy filing, the opioid crisis has progressively worsened. In 2019, some 70,000 people died from drug overdose in the U.S. In 2022, drug overdoses contributed to nearly 108,000 deaths. That same year, almost 12,000 people died from natural and semisynthetic opioids, including oxycodone, the ingredient that is used in OxyContin. An additional 74,000 died from synthetic opioids other than methadone, primarily including fentanyl.