Fate of Billions for Opioid Victims From Sacklers Rests With Supreme Court
“The court will decide whether Purdue’s owners can gain permanent immunity from future opioid lawsuits in exchange for payments up to $6 billion.
By Jan Hoffman
Jan Hoffman has covered the Purdue litigation since 2018.
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.
It would be years before Gary Carter’s son, who had been filching his grandparents’ OxyContin, would die from an overdose of fentanyl, an illicit opioid that many people who became addicted to prescription painkillers eventually turned to over the past decade.
The three 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 multi-billion-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 civil 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.
Last summer, after a federal appeals court upheld the Sackler shields, the Justice Department division, the U.S. Trustee Program, petitioned the Supreme Court to take up the matter.
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, an increasingly popular, though contentious, bankruptcy tactic.
“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.
Eventually, attention became focused on the Sacklers themselves, some of whom served as Purdue board members and made large charitable donations to medical schools and museums. In exchange, the institutions renamed buildings after the Sacklers. But as the family saga became featured in books, television series and documentaries and their notoriety grew, most institutions stripped the Sackler name from their properties and dissociated themselves from Purdue’s owners.
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.
As lawsuits against Purdue and the Sacklers rapidly accrued, in 2019 Purdue sought restructuring in bankruptcy court, a move that automatically suspended all lawsuits against the company. The tactic was the first step on the path leading toward the Supreme Court.
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.
Whether the billions of dollars in the Purdue settlement and others will have a meaningful impact on addiction and overdose fatality rates remains to be seen. In January 2018, Dan A. Polster, a federal judge in Cleveland assigned to oversee nationwide opioid settlements, asked whether a court was, in fact, the proper place to grapple with a public health crisis that had passed through the hands of federal and state regulators, physicians, hospitals and insurers as well as the pharmaceutical industry.
“The federal court is probably the least likely branch of government to try and tackle this, but candidly, the other branches of government, federal and state, have punted,” he said.
Now, nearly six years after his remarks, with the Supreme Court about to wade in, the national opioid litigation may be edging toward conclusion. But many health and legal experts believe it will not resolve the addiction crisis that it was intended to address.
“It’s easy for people to think, ‘Hey, we’ll go to court, and we’ll solve the problem,’ but that also assumes that the way you solve a public health crisis is just by handing out money,” said Abbe R. Gluck, a Yale Law School professor and an author of a forthcoming article on unorthodox uses of bankruptcy.
Congress and oversight agencies need to step up, Ms. Gluck said. “When it comes to opioids,” she added, “there’s a lot more that has to happen that litigation can’t touch.”
Jan Hoffman writes about behavioral health and health law. Her wide-ranging subjects include opioids, tribes, reproductive rights, adolescent mental health and vaccine hesitancy. More about Jan Hoffman
