The U.S. Supreme Court on Thursday agreed to hear a challenge by President Joe Biden’s administration to the legality of OxyContin maker Purdue Pharma‘s bankruptcy settlement that would shield its wealthy Sackler family owners from lawsuits over their role in the country’s opioid epidemic. The court also paused bankruptcy proceedings concerning Purdue and its affiliates and said in a brief order that it would hold oral arguments in December in the administration’s appeal of a lower court’s ruling upholding the settlement. The court’s new term begins in October. Purdue’s owners under the settlement would receive immunity in exchange for paying up to $6 billion to settle thousands of lawsuits filed by states, hospitals, people who had become addicted and others who have sued the Stamford, Connecticut-based company over its misleading marketing of OxyContin. The Associated Press has the story:
Supreme Court blocks OxyContin maker $6B bankruptcy deal
Newslooks- WASHINGTON (AP)
The Supreme Court on Thursday blocked a nationwide settlement with OxyContin maker Purdue Pharma that would shield members of the Sackler family who own the company from civil lawsuits over the toll of opioids.
The justices agreed to a request from the Biden administration to put the brakes on an agreement reached last year with state and local governments. In addition, the high court will hear arguments before the end of the year over whether the settlement can proceed.
The deal would allow the company to emerge from bankruptcy as a different entity, with its profits used to fight the opioid epidemic. Members of the Sackler family would contribute up to $6 billion.
But a key component of the agreement would shield family members, who are not seeking bankruptcy protection as individuals, from lawsuits.
The U.S. Bankruptcy Trustee, represented by the Justice Department, opposes releasing the Sackler family from legal liability.
A pharmacist holds a bottle OxyContin made by Purdue Pharma at a pharmacy in Provo, Utah, U.S., May 9, 2019.
The justices directed the parties to address whether bankruptcy law authorizes a blanket shield from lawsuits filed by all opioid victims.
The 2nd U.S. Circuit Court of Appeals had allowed the reorganization plan to proceed.
Lawyers for Purdue and other parties to the agreement had urged the justices to stay out of the case. “This is a baseless stay application that, if granted, would harm victims and needlessly delay the distribution of billions of dollars to abate the opioid crisis,” Purdue’s lawyers wrote.
Ed Neiger, a lawyer representing individual victims of the opioid crisis who would be in line for a piece of the settlement, said it was a disappointment that they would have to wait longer for any compensation but also praised the court for agreeing to hear the case so soon. “They clearly see the urgency of the matter,” he said.
Another group of mostly parents of people who died from opioid overdoses has called for the settlement not to be accepted.
Opioids have been linked to more than 70,000 fatal overdoses annually in the U.S. in recent years. Most of those are from fentanyl and other synthetic drugs. But the crisis widened in the early 2000s as OxyContin and other powerful prescription painkillers became prevalent.
