Supreme Court in a Tug-of-War Over Purdue Pharma’s $6 Billion Settlement

In a high-stakes drama unfolding at the Supreme Court, justices are grappling with a controversial $6 billion settlement involving Purdue Pharma, the notorious producer of OxyContin, and the Sackler family, accused of fueling the opioid crisis. 

The heart of the dispute: a deal that offers compensation to victims but shields the Sacklers from future civil lawsuits.

The settlement, initially approved by a bankruptcy judge and a federal appeals court, stipulates that the Sacklers fork over $6 billion to individuals and states affected by the opioid epidemic. 

In return, they get a golden ticket – immunity from further legal action, even though they, unlike Purdue, haven’t filed for bankruptcy. 

This move has sparked outrage and legal challenges, with nearly 2,600 victims – 3% of the total – refusing to settle.

At the heart of the courtroom battle is the federal law’s gray area, which doesn’t allow or disallow such settlements that shield non-bankrupt parties from lawsuits. 

The Justice Department is stepping in, claiming that the law doesn’t support settlements that block creditors from chasing assets outside bankruptcy protection.

Justice Brett Kavanaugh voiced the frustration of many victims, accusing the federal government of obstructing prompt payments to families and blocking funds for opioid prevention programs, all because of a “somewhat theoretical idea” of recovering money directly from the Sacklers in the future.

Justice Elena Kagan pointed out the overwhelming support for the deal, even from those who view the Sacklers as villainous. 

The settlement, she suggested, might be the best victims can hope for.

Deputy Solicitor General Curtis Gannon hinted that the Sacklers might be playing hardball. 

He recalled how the family increased their payout from $4.3 billion to $6 billion after a legal threat jeopardized the original settlement.

But it’s not just about the money. Justice Ketanji Brown Jackson and Justice Amy Coney Barrett raised concerns about the Sacklers’ alleged transfer of wealth to overseas trusts and private accounts, suggesting they were moving assets out of reach.

This case isn’t just about Purdue Pharma and the Sacklers. 

It’s a litmus test for how bankruptcy courts handle mass-victim litigations where non-bankrupt entities like the Sacklers could face liabilities. 

The outcome could set a precedent affecting future settlements in similar high-profile cases, like the Boy Scouts of America’s sex abuse claims settlement.

As the Supreme Court deliberates, the nation watches closely.

 The decision will not only impact the victims of the opioid crisis but also set a legal precedent for how American bankruptcy law handles complex settlements involving third parties. 

The question on everyone’s mind: Will the Supreme Court prioritize victim compensation, or will it uphold the principle that no one, not even the wealthy and powerful, should be beyond the reach of the law?