In 2014, when the first opioid lawsuits were filed against Purdue Pharma, Tiffinee Scott’s daughter was still years away from her fatal overdose from addictive prescription painkillers, including Purdue’s OxyContin, which she was taking to manage sickle cell pain.
That year, Dede Yoder’s teenage son was struggling with an addiction that began with an OxyContin prescription for a sports injury. He would die from an overdose in 2017, after attempting rehab eight times.
The two families and others who have ended up suing Purdue shared their stories in letters to the Supreme Court, which will hear oral argument Monday on the remaining sticking point in the yearslong effort to settle litigation that has ballooned into nearly 3,000 cases. A multibillion-dollar agreement is at stake.
A ruling upholding the disputed provision would finally start the flow of payments from the company and its owners — members of the billionaire Sackler family — to cities, states, tribes, and individuals to help them cope with the costs of the ongoing opioid crisis. It would also allow Purdue to emerge from bankruptcy restructuring as a public benefit company.
A ruling against the measure could blow up the painstakingly negotiated settlement, leaving the fate of the company and the urgently sought payments up in the air.
The court will consider the legality of a condition demanded by the Sacklers and approved by a bankruptcy judge: In exchange for paying up to $6 billion, the Sacklers insist on being shielded from lawsuits that anyone else might want to bring against them involving Purdue and opioids.
That liability shield is standard for businesses that file for bankruptcy, as Purdue has done. But the Sacklers have not filed for bankruptcy. Still, they argue that because the Purdue settlement relies on their personal contributions, Purdue’s liability protection should also extend to them.
The situation has created an agonizing irony for many who have lost loved ones to opioids. Desperate for funds to pay off their debts and address the addiction crisis, many support giving the Sacklers the sweeping legal pass.
“NO ONE wants to see the Sacklers pay the full price more than me,” Cheryl Juaire, who organized grieving parents, wrote to the court. “I lost TWO SONS as a result of their actions. But the only thing that will make my personal tragedy worse is to know that others will suffer the way I do every day.”
An overwhelming majority of claimants reached that conclusion more than two years ago, voting in favor of the settlement plan, including liability immunity for the Sacklers. They said they feared that protracted litigation would devour money that they have long needed.
But an arm of the Justice Department that monitors bankruptcy proceedings objected, along with a handful of other parties, arguing that precluding people from having their day in court was both unconstitutional and outside the power of a bankruptcy court.
This past summer, after a federal appeals court upheld the Sackler shields, the Justice Department division, the US Trustee Program, petitioned the Supreme Court to take up the matter.
Experts say the case has vast implications for businesses and organizations that turn to bankruptcy court to resolve claims of mass injury.
“There’s huge implications for all of corporate bankruptcy,” said Anthony J. Casey, a law professor at the University of Chicago. “I think this is probably the most important bankruptcy case before the court in 30, maybe 40 years.”
The Sacklers’ tactics seeking immunity mirror those used in any manner of settlements involving claims of mass injury, such as accusations of sex abuse leveled against the Boy Scouts of America and the Catholic Church.
Legal experts said the government had long questioned the validity of the practice, known as third-party nonconsensual releases, raising the possibility that a sweeping decision in the case would upend similar agreements.
“Purdue Pharma is just the case that they finally got the court to look at,” said Lindsey Simon, a bankruptcy expert who teaches at Emory University School of Law in Atlanta.
Increasingly, legal experts say, organizations flooded with a vast number of lawsuits accusing them of wrongful harm are relying on the bankruptcy system — not the civil legal system, as is typical — to devise settlements. By filing for bankruptcy, those entities are offered a path that shields them from future civil litigation, in part because bankruptcy is rooted in the idea that someone facing losses should have an opportunity to wipe the slate clean.
The Purdue Pharma deal — and others like it — goes a step beyond that by granting similarly expansive protections to members of the wealthy Sackler family. Not only are they insulated from liability without the consent of all of those who could potentially sue them, but the Sacklers themselves do not have to personally declare bankruptcy.
The US Trustee Program has described the tactic as an overreach of the bankruptcy system, effectively leaving the Sackler family unscathed: “It allows the Sacklers to shield billions of dollars of their fortune while extinguishing, without payment, claims alleging trillions of dollars in damages.”
The speed with which the court scheduled the case may reflect its awareness of the opioid problem. But legal experts said its ruling would be unlikely to dwell on the public health crisis. The court, they said, will focus narrowly on the liability shield.
“I’m sure, though, that even if the opioid crisis doesn’t show up anywhere in the opinion, the court has to be bearing in mind that cities, states and individuals have been desperately waiting for these funds. They need to know the answer to this question, so they can figure out what to do next,” said Adam Zimmerman, who teaches mass tort law at the University of Southern California’s Gould School of Law.
Though numerous pharmaceutical companies have been sued for their roles in the opioid epidemic, the Sacklers and Purdue loom large in the story of the complex, decades-old crisis. Their signature drug, OxyContin, approved by the Food and Drug Administration in late 1995, became a game-changer in a new market hungry for prescription painkillers. To the medical establishment that was then beginning to recognize pain as a “fifth vital sign,” long-acting OxyContin looked like a wondrous medication.
Purdue became known for lavish sales conferences, at which pain medicine physicians, trained and hired by the company, would falsely claim that the risk of addiction to OxyContin was extremely low. By 2007, Purdue and three of its top executives had paid fines of $634.5 million and pleaded guilty to federal criminal charges for misleading regulators, doctors, and patients about the drug’s potential for abuse.
The steep fines did little to deter Purdue from continuing to aggressively market OxyContin.
The size of the Sacklers’ fortune from OxyContin has long been a mystery. An independent audit commissioned by Purdue for the bankruptcy court found that the Sacklers withdrew about $10.5 billion from Purdue between 2008 and 2017, of which they paid more than 40 percent in taxes. The $6 billion settlement offer, the Sacklers say, represents most of the profit from the drug during that period.
Most other companies that have been sued over their role in the opioid crisis — drug manufacturers, distributors, and retailers — have reached settlements and are starting to make payments. But the opioid tragedy has not receded. Though production of prescription painkillers slowed, cheap heroin and then fentanyl rushed in to fuel an ever-growing demand. During a 12-month period ending in June, overdose fatalities from opioids and other drugs, including cocaine and methamphetamine, were predicted to surpass 111,000, according to provisional federal data.
This article originally appeared in The New York Times.