Katherine Scarpen of Kingston, New Hampshire (left) and Cheryl Jewell of Marlborough, Massachusetts (second from left) at the Arthur M. Sackler Museum of Harvard University in Cambridge, Massachusetts protest before. , whose son died from an OxyContin addiction, Jolie addressed three Sackler family members during a U.S. Bankruptcy Court virtual hearing on Thursday, March 10, 2022.
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Josh Reynolds/AP
The U.S. Supreme Court on Thursday invalidated a controversial bankruptcy agreement involving Purdue Pharma, the maker of the highly addictive painkiller OxyContin, and members of the Sackler family who own the scandal-plagued drug company.
The justices voted 5-4 to stay/dismiss bankruptcy settlements worth $6 to $10 billion.
Justice Neil Gorsuch, writing for the court’s majority, said the U.S. Bankruptcy Code does not give bankruptcy courts the authority needed to block lawsuits against parties who have not yet filed for bankruptcy.
“The Bankruptcy Code does not authorize releases and injunctions as part of a plan of reorganization under Chapter 11 that effectively seek to discharge claims against non-debtors without the consent of affected creditors,” he wrote.
Gorsuch added that if Congress were to grant this level of power to the bankruptcy courts, it would likely do so.
Writing for the Dissent, Justice Brett Kavanaugh wrote that the ruling undermined a deal that would have provided funds to communities and victims of the opioid crisis.
“Today’s decision is legally wrong and devastating to the more than 100,000 opioid victims and their families,” Kavanaugh wrote.
Bankruptcy deal will provide state and local governments about $8 billion to combat the consequences of opioid addiction; it also Individual compensation will be provided to the victims.
Provides majority of settlement funds Could have been Members of the Sackler family, which owns and operates Purdue Pharma, agreed to pay $6 billion in damages.
In exchange, the Sackler family will be shielded from personal liability, although six Sackler family members serve on the company’s board of directors, including Chairman Richard Sackler, who closely guided the company’s development of OxyContin as a A painkiller implemented an aggressive and deceptive marketing strategy that was not addictive.
Ninety-five percent of victims who sued Purdue Pharma ultimately agreed to bankruptcy settlements. But the remaining 5 percent objected, arguing that the bankruptcy court exceeded its authority by allowing the Sacklers to retain half of their wealth and evade further liability. The deal was also opposed by the U.S. Department of Justice’s bankruptcy regulator.
But the Supreme Court on Thursday rejected the deal.
Experts say the decision will have far-reaching consequences for a drug overdose crisis that kills more than 100,000 people each year in the United States.
It’s expected to resonate in the corporate world, where a growing number of wealthy companies and individuals are seeking to use federal bankruptcy laws to limit their liability when accused of wrongdoing.
