HomeBusinessSupreme Court Pauses Purdue Pharma Opioid Settlement Pending Review

Supreme Court Pauses Purdue Pharma Opioid Settlement Pending Review

The Supreme Court has temporarily halted a bankruptcy deal for Purdue Pharma that aimed to protect members of the Sackler family from further civil lawsuits related to the opioid crisis. The deal would have also limited the Sacklers’ personal liability to $6 billion. The delay caused by the court’s decision means that payments to the thousands of plaintiffs who have sued the Sacklers and Purdue will be postponed. The agreement allowed the Sackler family to pay billions in exchange for full immunity from civil legal disputes. The Justice Department objected to the plan, arguing that it allowed billionaires to take advantage of legal protections intended for financially distressed debtors. The Supreme Court will hear arguments in December to determine if the agreement complies with the bankruptcy code, which may have implications for similar lawsuits. The case involves resolving mass injury lawsuits through bankruptcy courts instead of traditional courts, and the outcome will impact other mass tort cases. The court’s decision raises uncertainty regarding the compensation plan for those affected by the opioid crisis and protection for the Sackler family. Johnson & Johnson has also sought to use bankruptcy court to settle mass claims. The legal battle over compensation for opioid crisis victims has been ongoing, and the Supreme Court has been wary of allowing bankruptcy courts to grant legal immunity to wealthy individuals accused of serious offenses. The U.S. Trustee Program, a Justice Department office, has argued that bankruptcy judges lack the authority to permanently block lawsuits against company owners who haven’t filed for personal bankruptcy. The government warned that the Purdue agreement could set a dangerous precedent for using the bankruptcy system to evade mass tort liability. Lawyers for Purdue Pharma defended the deal, asserting that the government’s request to pause it was unfounded and would harm victims while delaying the distribution of funds to address the opioid crisis. The Sackler family will lose ownership of the company after the bankruptcy is finalized, but they are still wealthy. Victim groups and entities expecting funds expressed frustration with the government’s challenge, concerned that it would further delay payments. Native American tribes, heavily impacted by the opioid crisis, emphasized the urgency of the funds. The court’s decision has left tribes waiting for a settlement that was supposed to provide help two years ago.