Home | WebMail | Register or Login

      Calgary | Regions | Local Traffic Report | Advertise on Action News | Contact

Sign Up

Sign Up

Please fill this form to create an account.

Already have an account? Login here.

Posted: 2024-06-27T14:16:11Z | Updated: 2024-06-27T17:11:18Z

The U.S. Supreme Court on Thursday struck down a hotly contested deal that shielded members of the billionaire Sackler family from civil lawsuits related to the opioid epidemic.

The decision , in Harrington v. Purdue Pharma, clouds the future of a settlement that committed billions of dollars to victims of the opioid epidemic, but it opens up the possibility that the Sacklers, who own Purdue while it remains in bankruptcy limbo, would face a deeper reckoning. And it may spell broader changes for other major settlements that insulate individuals behind acts of corporate wrongdoing.

The justices split along unusual lines. Justice Neil Gorsuch wrote the opinion, joined by Justices Amy Coney Barrett, Clarence Thomas, Ketanji Brown Jackson and Samuel Alito. Justice Brett Kavanaugh wrote the dissent, joined by Chief Justice John Roberts and Justices Sonia Sotomayor and Elena Kagan.

The Sacklers have not filed for bankruptcy, nor have they placed virtually all their assets on the table for distribution to creditors, Gorsuch wrote for the majority. Yet, they seek an order discharging a broad sweep of present and future claims against them, including ones for fraud and willful injury. In all of these ways, the Sacklers seek to pay less than the code ordinarily requires and receive more than it normally permits.

The decision reopens a deal that emerged from more than five years of legal wrangling that pitted immediate compensation for the effects of the opioid crisis against greater personal consequences for the Sackler family.

In 2019, facing a tidal wave of lawsuits over its role in driving the opioid crisis, Purdue Pharma but not its owners, the Sackler family filed for bankruptcy protection, placing all litigation on hold. Over the next several years, a deal emerged in a New York bankruptcy court to dissolve Purdue Pharma and remake it into a nonprofit whose proceeds would pay communities across the country to address the opioid epidemic. The Sackler family would also contribute up to $6 billion over several years to pay many victims of the crisis.

In return, the settlement would end all litigation against Purdue, one of the typical protections of bankruptcy. But the terms also shielded the Sacklers from any lawsuits, despite members of the family never filing for personal bankruptcy protection.

The deal sparked widespread outrage. Purdue Pharma and its trademark painkiller, OxyContin, helped trigger the opioid addiction epidemic that has killed more than half a million people in the United States while transforming its founding family into billionaires. Although the deal did not shield the Sacklers from criminal charges, none have been filed, making it unlikely the Sacklers would face a public reckoning as long as the settlement held.

Amid the public backlash, the U.S. Trustee, an arm of the U.S. Justice Department charged with oversight of bankruptcy cases, challenged the courts authority to stretch the benefits of Chapter 11 bankruptcy protection to third parties.

The bankruptcy court did not have the authority to deprive victims of the opioid crisis of their right to sue the Sackler family, Attorney General Merrick Garland said in a statement in late 2021.