Purdue Pharma Settlement Deal Overturned By Supreme Court

On Thursday, The United States Supreme Court stopped Purdue Pharma’s bankruptcy deal that would have contributed billions of dollars to compensate victims and fight the opioid crisis, in return for the Sackler family to be protected from civil lawsuits.

This case decided the future of the Purdue Pharma company, which had promoted the highly addictive drug OxyContin in the early days of the opioid epidemic, contributing to both the end and derailment of thousands of American lives.

The 5-4 decision was written by Neil Gorsuch, who explained that the high court found that the federal law prevents such a settlement. The deal would have provided for the previous owners of Purdue Pharma, the Sacklers, to be released from liability in exchange for the family’s contribution of up to $6 billion for the settlement.

Gorsuch wrote, “The Sacklers seek greater relief than a bankruptcy discharge normally affords, for they hope to extinguish even claims for wrongful death and fraud, and they seek to do so without putting anything close to all their assets on the table.”

The decision was far from unanimous, however, with Justice Brett Kavanaugh writing that this decision would have a “devastating” impact on countless victims of the opioid epidemic in his dissent. “The court’s decision will lead to too much harm for too many people for Congress to sit by idly without at least carefully studying the issue,” he wrote.

Almost all creditors agreed to Purdue Pharma’s deal and to protect the Sacklers, but the Supreme Court supported the complaints of a small group. This group had the backing of the U.S. trustee, a watchdog from the Justice Department that monitors bankruptcy cases.

This U.S. trustee estimated that the deal would have provided each opioid victim with reimbursement of an amount between $3,500 to $48,000. Now with new ownership, Purdue Pharma has said it will reach back out to creditors to find a new solution.