Opioid Crisis: Billions At Stake As Supreme Court Grapples With Immunity For Sackler Family In Exchange For Settlement

Supreme Court justices appeared torn on a decision that could put an end to a high-profile trial on the Sackler family, owners of Purdue Pharma.

Purdue filed for bankruptcy in 2019, after receiving numerous lawsuits on allegations that its star product OxyContin played a pivotal role in the rise of the opioid crisis currently battering the nation.

Approximately 645,000 people died from opioid overdoses in the period between 1999 and 2021, according to the CDC.

OxyContin and other opioids became available in the late 1990s as an effective medication for pain, and were widely prescribed by physicians without awareness of its extremely addictive effects.

Several investigations show the role of Purdue in aggressively marketing the drug and downplaying its potential for abuse.

As thousands of patients became addicted, a large percentage turned to street heroin, which in many cases is more easily available than legally-prescribed opioids. The responsibility of the companies producing and marketing products like OxyContin came under public scrutiny in recent years, leading to a public reconsideration of their role in fueling the opioid epidemic.

As many members of society, including victims, families of victims, Native American tribes, states and local governments sued opioid manufacturers, Purdue reached a deal in 2021 in a New York bankruptcy court that involved the payment of $4 billion in reparations, while shielding the Sackler family from further litigations on this issue.

The Sacklers agreed to raise the sum to $6 billion after many states disagreed with the deal, which was nonetheless rejected by U.S. District Judge Colleen McMahon, on account of the fact that a bankruptcy court should not have the right to release debtors from obligations to third parties not involved in a deal. 

The Supreme Court stepped in after the 2nd Circuit Court of Appeals overturned McMahon's decision.

Should The Sacklers Be Granted Immunity?

There are many factors at stake in the Supreme Court's decision. While letting the deal go through would grant billions in reparations for victims of the opioid crisis, it would also bar those who did not take the deal from further suing the Sackler family.

On Monday, several victims who rejected the settlement congregated in protest outside the courthouse. Meanwhile, inside the Supreme Court chambers, justices, attorneys representing the victims, and other significant parties engaged in a two-hour discussion on the matter.

A majority of the harmed parties involved have accepted the deal, which puts the judges in the dilemma of whether the common good overrides the rights of individuals.

"The opioid victims and their families overwhelmingly approve this plan because they think it will ensure prompt payment," said Justice Brett M. Kavanaugh during the discussion.

On top of the reparation money, the deal includes a provision by which the Sacklers would give up the company for it to become a public trust, whose profits would be redirected to addressing the opioid epidemic.

The decision could also set a precedent for other similar cases in the future, in which a bankruptcy deal would free the defendant from further liability, and even bring past cases back from the grave, as Justice Amy Coney Barrett pondered.

As per the New York Times, Barrett said that blocking the Sackler deal would raise questions for plaintiffs of past cases where settlements included a release from liability, as it happened for sexual abuse cases concerning the Boy Scouts of America and the Catholic Church.

Justice Elena Kagan raised questions about the current legal proceedings, considering whether the U.S. government, via the U.S. Trustee, was impeding victims from reaching a favorable settlement. She also contemplated whether the proposed agreement would enable the Sackler family to retain significant assets from their OxyContin business while escaping legal consequences.

"In some ways, they're getting a better deal than the usual bankruptcy discharge," Kagan said.

However, Pratik A. Shah, a lawyer for the victims, said that relieving the Sacklers from liability was key for achieving a deal for the victims.

"Without the release, the plan will unravel," said Shah. "There will be no viable path to any victim recovery."

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