The U.S. Supreme Court will decide whether the billionaire Sackler family, owners of Purdue Pharma, can shield themselves from future lawsuits in exchange for $6 billion to local and state governments as well as victims harmed by the opioid crisis.
The heart of Harrington v. Purdue Pharma is whether a bankruptcy court can give the Sacklers a nonconsensual third-party release. A nonconsensual third-party release protects an outside party from liability without having to declare bankruptcy and without the affected parties agreeing to their release.
Avoidance Through Bankruptcy
Adam Levitin, a law professor at Georgetown University, told NPR the bankruptcy deal would protect the Sacklers from future lawsuits. It would also guarantee they would not have to “testify about their misdeeds in future litigation.”
Daniel G. Aaron, an associate professor of law at the University of Utah’s S.J. Quinney College of Law, said the Sacklers seek “global peace,” a lasting protection from future lawsuits awarded through the bankruptcy system.
Aaron co-authored an upcoming paper in the University of Utah S.J. Quinney College of Law Legal Studies Research Paper Series. The paper looks at the potential ramifications of the bankruptcy case on public health. It argues that bankruptcy proceedings may harm public health by shielding Purdue’s top executives from accountability. It also lays out a game plan for future executives to adopt when facing civil lawsuits for misdeeds.
Aaron believes the Sacklers’ receiving global peace would be a “break from history.” For example. previous attempts to receive immunity have been for companies but not for specific officials.
“Accountability was secured in prior public health crises to a degree, and we should hold ourselves to that standard,” Aaron said. “We shouldn’t give up the really important incentives of tort law in exchange for $6 billion contributed by the Sacklers.”
Purdue Pharma filed for bankruptcy protection in 2019, but none of the Sacklers have filed for bankruptcy. The settlement would see the Sacklers pay $6 billion over eight years. This will allow them to keep roughly half of their vast fortune.
Purdue Pharma and the Opioid Crisis
The Sackler family withdrew over $10 billion from Purdue Pharma, stashing the money primarily in off-shore accounts. This siphoning of company funds took place from about 2008 to 2017. It also began one year after three Purdue Pharma executives plead guilty to mislabeling OxyContin, promoting it as a drug less prone to addiction than other narcotics. The executives agreed to pay millions in fines and received no jail time.
The Sacklers ran Purdue Pharma when the company developed OxyContin and then falsely advertised the opioid as non-addictive. Aggressively marketing and selling opioids like Oxycontin is often credited as a main driver of the opioid crisis.
The opioid crisis killed nearly 645,000 Americans from 1999-2021. The economic costs of the crisis are estimated from $504 billion to $1.021 billion annually.
Ninety-five percent of the victims represented in the case approved the bankruptcy plan. However, Aaron argues that if the plan is allowed to proceed, immunity given to the Sacklers could threaten litigation values. This includes supporting the voice of victims and holding wrongdoers accountable.
“Those things, if we foreclose litigation against the Sacklers, will be lost, and those values are very hard to quantify,” Aaron said. “Disincentives for misconduct, the voice of plaintiffs so they get heard in open court. What is the dollar value of that? And is it okay to lose all those values for $6 billion contributed by the Sacklers when the annual cost of the opioid crisis is sometimes estimated at over $600 billion?”
The Supreme Court is expected to make a decision on the case by the end of June.
Noah Garcia • Jun 4, 2024 at 9:16 am
Where are the hopes for a long-term future when we let companies pull massive profits off our shoulders and cripple society in the long-run? 645,000 deaths in an unbelievable number of people. That’s as if 20% of this state alone suddenly died! Numerically, $6 billion does not compare to that loss, but it certainly cannot fix the much bigger problem of lost humanity.
Where is the dignity in companies like this? Similar to this opioid crisis, are much smaller yet horrendous problems like the PFAS in our water supplies or microplastics that are being found in nearly 100% of people now. What are the effect of all of these other harmful substances? What structures of humanity allow such monsters to arise? It’s disgusting that anything like this could ever be allowed to happen, and while $6 billion would bring a lot of relief to people, I have to agree that it’s hardly ever enough. It should have never occurred at all. Something needs to change.