Children's Health Defense The U.S. Supreme Court on Monday heard arguments in a case that will determine whether OxyContin maker Purdue Pharma’s controversial $6 billion bankruptcy settlement, which shields the company’s billionaire owners from future liability, can proceed.
The U.S. Supreme Court on Monday heard arguments in a case that will determine whether OxyContin maker Purdue Pharma‘s controversial $6 billion bankruptcy settlement can proceed.
The proposed bankruptcy deal — which aims to resolve opioid lawsuits against Purdue but also shields the billionaire Sackler family owners from future liability — outraged Biden’s U.S. Department of Justice (DOJ), which appealed to overturn the 2021 settlement, according to Reuters.
During Monday’s hearings, the justices appeared “reluctant” to upend the settlement but also “leery” about appearing to let the Sacklers off the hook, according to an Associated Press report.
The court’s ruling, expected by next summer, will set a precedent around corporate accountability.
The case, Harrington v. Purdue Pharma L.P. et al., revolves around dueling interpretations of what bankruptcy law does and does not permit, according to Cornell’s Legal Information Institute.
The DOJ, along with some individuals directly affected by the opioid crisis, argued the settlement approved by lower courts improperly extended immunity to the Sacklers, who did not file for bankruptcy themselves, according to Reuters.
However, Purdue Pharma and many of the opioid victims waiting to receive payouts contend such liability releases are a valid, if unconventional, application of bankruptcy law given the extraordinary circumstances.
“Bankruptcy courts for 30 years have been approving plans like this,” Justice Brett Kavanaugh said during Monday’s oral arguments, asking why the court should deem such liability releases “categorically inappropriate,” Reuters reported.
While the deal enjoys support from most plaintiffs and state governments, some justices expressed concern over extending protections to the Sacklers when the family members themselves were not considered debtors under the original plan, according to Reuters.
The Biden administration alleged Sackler family members withdrew $11 billion from Purdue Pharma before agreeing to the $6 billion settlement…
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