Thursday’s Supreme Court ruling blocking a bankruptcy deal to protect the family that owns Purdue Pharma throws uncertainty into the case as it heads back to the lower courts. The only immediate outcome of the ruling is that it will now take longer for the financial settlement to reach victims of the opioid epidemic.
The bankruptcy agreement approved last year shielded members of the Sackler family, which previously controlled Purdue Pharma, and their numerous associates from future liability in opioid lawsuits. The Biden administration had argued that the bankruptcy court could not insulate the Sacklers from the claims.
In a split 5-4 decision, Justice Neil Gorsuch wrote in Thursday's majority opinion that federal law does not allow the Sacklers, who have not filed for bankruptcy themselves, to be relieved of liability for contributing up to $6 billion to the settlement.
“All the majority did was just say no, the bankruptcy law doesn't allow this. They didn't really offer many solutions,” Carl Tobias, William Chair in Law at the University of Richmond, told The Hill.
“I think the only thing that's clear is that the Sacklers are not going to get vaccinated. What that means for the money that they said they would contribute is unclear. What exactly is going to happen is unclear.”
Both Purdue Pharma and plaintiffs agreed that Thursday's ruling heralds more negotiations moving forward. The pharmaceutical manufacturer called the ruling “heartbreaking” in a statement.
“We will immediately reach out to the same creditors who have already proven they can join together to settle in the public interest, and renew our commitment to a solution that delivers billions of dollars in value to the fight against opioids and that enables the company to stand up. of bankruptcy as a public utility company,” the company said.
North Carolina Attorney General Josh Stein (D) said in a statement: “The Court's ruling means we must now return to the negotiating table. Purdue and the Sacklers must pay so that we can save lives and help people live free from addiction. they don't want to pay, I will see them in court.
“With this decision, we will redouble our efforts to hold those responsible for the harm done to our state accountable. We will explore new avenues to bring this case to a close,” West Virginia Attorney General Patrick Morrisey (R) said after the ruling.
According to Sarah Whaley, senior practice fellow at the Johns Hopkins Bloomberg School of Public Health, going back to the drawing board eliminates the certainty that states will receive the settlement funds they were counting on.
“States can't count on money they'd like not to have, and there's virtually no assurance anymore that they'll get money from Purdue,” Whaley said.
Tobias reiterated that the ruling will likely “delay resolution for hundreds of thousands of individuals, cities and counties and others.”
“A lot of energy and money has been spent on this short-term conclusion, which is actually not satisfying anyone,” he added.
Whaley noted, however, that the proposed bankruptcy agreement is far from the only settlement reached in the U.S. to combat the opioid epidemic. Several billion dollars have already been pledged in other settlements, and the renewed doubts about the Purdue Pharma deal are putting pressure on whether existing funds should be distributed appropriately.
“Without the promise of additional money from the Purdue settlements, it is even more important that states maximize the effectiveness of the dollars they do have through thoughtful planning and investments,” Whaley said.
