Purdue Pharma’s new opioid settlement hinges on Sackler family’s legal shield
The Sackler family members are hoping an appeals court will give them legal protections that would prevent people from bringing future civil opioid lawsuits against them. The Sackler family owns Purdue Pharma, a company known to have played a major role in the opioid crisis in the United States. Although at first glance it seems that such a decision would be frowned upon, on April 29, in the 2nd Court of Appeals in New York, lawyers not only for the Sacklers, but also lawyers defending the victims of the crisis opioids petitioned a panel of judges to grant the Sacklers protection.
The reason? This would be a way to secure significant funding, $10 billion, for opioid reduction programs nationwide. Many people, especially those who have lost loved ones to drug overdoses, think this is long overdue. The money is a major part of a new settlement involving Purdue Pharma. A the old opioid settlement agreement was rejected because one of its provisions would protect the Sackler family from individual opioid lawsuits. Over the past two decades, 500,000 people have died from opioids, and Purdue Pharma, with its heavy-handed manufacturing and marketing of Oxycontin, is considered to have played a major role in the crisis.
In 2019, after thousands of lawsuits were filed against the company, Purdue Pharma filed for bankruptcy protection. Three years later, Purdue Pharma is trying to emerge from bankruptcy. In March, a settlement agreement went ahead requiring the company to provide $10 million to the national fund, which will be managed largely by local and state governments. For its part, the Sackler family itself would contribute $6 billion in total. In return, the family wants protection from future opioid-related civil lawsuits. Members of the Sackler family would also relinquish ownership of the company, and Purdue would then become a new entity known as Knoa Pharma.
While most of the governments and other entities that originally sued Purdue have agreed to the terms, the U.S. Bankruptcy Trustee’s Office, an arm of the federal Department of Justice, has concerns. The main one is whether a bankruptcy court judge has the power to grant protection to members.
The Sackler family legal shield debate
According to a report by PBSbefore the appeals court began oral argument, more than 1,000 families of opioid victims sent a letter asking for approval of the legal shield.
“If this plan is not implemented, states would have to wait years to recover money to be used to alleviate the opioid crisis,” their letter reads. “With drug overdoses happening at a record rate, that’s time we can’t afford.”
Yet on April 29, inside the courtroom, attorneys representing the federal government reiterated their belief that since the family did not file for bankruptcy themselves, they should not benefit from this type of protection, and at least one judge seemed to lean towards this argument. .
According to Reuters, Judge Jon Newman gave little weight to the argument that the Sackler protections were necessary to obtain funding for opioid-related settlements. “Please don’t shoot yourself in the foot by saying it’s the Sacklers’ contributions that make this plan legal,” Judge Newman said.
However, according to an Associated Press report, Mitchell Hurley, a lawyer on Purdue’s side, disagreed with the thought. Hurley believes the panel must approve protection to see a fair outcome rather than seeing the fight against opioids continue in trials across the country. “The releases in question aren’t just important to the plan, they’re absolutely critical,” Hurley said.
It’s unclear how long it will take for the judges to issue a decision. However, an appeal to the United States Supreme Court is also possible.
Along with that, if the judges choose to side with Purdue Pharma and grant the family legal shield, the company will still have to go back to the bankruptcy judge for final approval.