In a sweeping ruling, the bankrupt OxyContin maker Purdue Pharma can shield its owners–members of the wealthy Sackler family–from further opioid lawsuits. In exchange, Sackler family members will contribute up to $6 billion to a trust that will be used to pay the claims of victims of addiction, states, hospitals and others who have sued Purdue over its marketing of OxyContin and its role in the opioid epidemic.
In a majority opinion written by New York-based 2nd Circuit Judge Eunice Lee, the court ruled that the legal claims against Purdue were inextricably linked to claims against its owners, and allowing lawsuits to continue targeting the Sacklers would undermine Purdue’s efforts to reach a bankruptcy settlement. Essentially, the court said US bankruptcy law allows legal protections for non-bankrupt parties, like the Sacklers, in extraordinary circumstances.
Another judge, Richard Wesley wrote a separate opinion “reluctantly” agreeing that protections for the Sacklers were legal, based on the court’s past decisions, though he made a point to emphasize the murkiness of precedent.
Purdue has long sought to use its bankruptcy case to resolve thousands of lawsuits, alleging that OxyContin helped kickstart an opioid epidemic that caused over half a million overdose deaths over two decades. Purdue has pleaded guilty to charges related to its opioid marketing, while its owners have said they have regret but did not commit any wrongdoing.
The families of the late Mortimer Sackler and the late Raymond Sackler said in a joint statement that they looked forward to moving ahead after the long wait for a 2nd Circuit decision.
“The Sackler families believe the long-awaited implementation of this resolution is critical to providing substantial resources for people and communities in need,” The families of the late Mortimer Sackler and the late Raymond Sackler said in a statement.
In addition to the Sackler payment, Purdue itself will pay an additional $1.4 billion in opioid settlements, contribute “substantial” additional insurance recoveries, and commit itself to develop and distribute overdose reversal and addiction treatment medicines for no profit.