The deal reached by Purdue Pharma to settle billions of dollars in opioid-related claims against the company while also offering legal protections to the notorious Sackler family went up in smoke on Thursday when it was blocked by the Supreme Court.
The $6 billion settlement included a liability shield for the Sackler family that is simply not authorized by federal bankruptcy code, the court wrote in a 5-4 ruling.
While the settlement would have funneled billions towards fighting the opioid epidemic and provided relief to victims, it also contained a provision protecting the Sacklers from future civil lawsuits.
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“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,” Justice Neil Gorsuch wrote.
The high court had deliberated on the case for more than six months after it was asked to intervene last year in what the Justice Department called “an abuse of the bankruptcy system.”
The deal had sparked outrage for the immunity granted to the Sacklers, who controlled the OxyContin maker when the drug was touted as an “addiction proof” painkiller, ultimately leading to an epidemic and thousands of opioid overdoses. Most of the victims, however, had backed the agreement, with a lawyer for some of them arguing to the justices last December that there was “no viable path” towards compensation without the settlement.
“Forget a better deal,” attorney Pratik Shah said at the time. “There is no other deal.”
Edward Neiger, a lawyer representing more than 60,000 victims, released a statement in the wake of the Supreme Court’s ruling calling it a “major setback for the families who lost loved ones to overdose and for those still struggling with addiction.” He said the rejected settlement was “a victim-centered plan that would provide billions of dollars to the states to be used exclusively to abate the opioid crisis and $750 million for victims of the crisis, so that they could begin to rebuild their lives.”
Some of the other victims saw things differently, however. “It was outrageous what they were trying to get away with,” Ed Bisch, whose 18-year-old son died from an overdose, told the AP. “They have made a mockery of the justice system and then they tried to make a mockery of the bankruptcy system.”
