A federal judge’s decision to overturn a $4.5 billion settlement between Purdue Pharma and assorted state, local, and tribal governments is the right call. The settlement wrongly shielded the billionaire Sackler family, who owned the company that made the prescription painkiller OxyContin, from any and all civil liability in opioid-related tragedies.
As reported by The New York Times, the settlement was part of a complex restructuring plan for Purdue Pharma that was approved in September by a bankruptcy judge. But Judge Colleen McMahon of the US District of New York pulled the plug on it, because it protected the Sackler family from future civil lawsuits. After the Sacklers took more than $10 billion out of it, Purdue Pharma filed for bankruptcy. The Sacklers, who did not file for personal bankruptcy, offered to contribute toward the original settlement, “if – and only if – every member of the family could ‘achieve global peace’ from all civil [not criminal] litigation,” the judge wrote. And that, she said, was wrong. She did, however, also call the legal issue of the Sacklers’ release “a great unsettled question” of bankruptcy law and wrote, “This opinion will not be the last word on the subject, nor should it.”
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So now, what’s next for states that challenged the settlement — including Connecticut, Rhode Island, and Vermont — and others, like Massachusetts, that signed onto the settlement that McMahon threw out?
In a statement issued after the judge’s order, Connecticut Attorney General William Tong called it “a seismic victory for justice and accountability.” In a recent telephone interview, he called upon the Sackler family “to do the right thing … to step forward and acknowledge that you helped to cause and fuel” the opioid crisis. While Purdue Pharma is bankrupt, or claiming to be, “The Sacklers are not.” he said. In Connecticut, he said, “People want them accountable. . . . People want to see a financial payment by the Sacklers that really is in line with their responsibility.” He said he’s prepared to keep on fighting for more money, minus any of the strings the Sacklers previously tried to attach. He also said he would fight against any appeal filed by Purdue Pharma “if necessary to the Supreme Court.”
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According to the Times, Purdue said it does plan to appeal, which could result in years of litigation, not to mention great profit for lawyers being paid by Purdue. According to a recent court filing, lawyers in the Purdue case already have been paid $567 million, money that could otherwise go to victims of the opioid crisis.
In a statement issued after the judge’s order, Massachusetts Attorney General Maura Healey said, “My goal has always been to do right by the families who suffered from the Sacklers’ greed. . . . The test for success in this case is whether we deliver for the people the Sacklers hurt.” Healey had signed onto the settlement because after several years of negotiation, she believed they had gotten something of value: the $4.5 billion and a commitment to release millions of documents showing the role of Purdue and the Sacklers in the opioid crisis. But even though she backed an agreement that ultimately shielded the Sacklers from civil liability, she also testified in Congress about why the bankruptcy code should be revised to clarify the issue raised in McMahon’s ruling. But Congress hasn’t acted.
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These states were divided on the merits of the settlement that McMahon threw out. Yet there’s consensus about the urgent need to hold members of the Sackler family accountable for what they knew about the company’s misdeeds. That means making it possible to reclaim further profits that came at the expense of people’s lives. In unity, there’s strength. Regardless of where they stood on the settlement, the states should now work together to negotiate a new plan. Waiting for the courts to settle a “great unsettled question” of bankruptcy law could take years. And, regardless of how great and unsettled that legal question is, public officials working on the case would be wise to focus on the practical questions that are just as great, but were settled long ago.
Have the victims of the corporate crimes behind the opioid crisis been waiting too long for compensation? Yes.
Are more resources needed for prevention, harm reduction, treatment, and recovery from the scourge of opioid addiction? Yes.
Do the Sacklers bear responsibility for a crisis that helped make them billionaires but killed thousands of Americans? Yes.
Editorials represent the views of the Boston Globe Editorial Board. Follow us @GlobeOpinion.
