Supreme Court Pauses Opioid Settlement With Sacklers Pending Review (2024)

The Supreme Court on Thursday temporarily blocked a bankruptcy deal for Purdue Pharma that would have shielded members of the billionaire Sackler family, which once controlled the company, from additional civil lawsuits over the opioid epidemic and that capped the Sacklers’ personal liability at $6 billion.

The order is likely to delay any payments to the thousands of plaintiffs who have sued the Sacklers and Purdue, the maker of the prescription painkiller OxyContin, which is widely blamed for igniting the opioid crisis. Under the deal, the Sacklers had agreed to pay billions to plaintiffs in exchange for full immunity from all civil legal disputes.

The order was in response to a Justice Department objection to the plan, which the government said allowed members of the Sackler family to take advantage of legal protections meant for debtors in “financial distress,” not for billionaires.

The justices said they would hear arguments in December to decide whether the agreement is authorized by the U.S. bankruptcy code. The case could have far-reaching implications for similar lawsuits.

That is because the Purdue agreement involves a popular but controversial practice: resolving lawsuits about mass injuries through bankruptcy courts, rather than allowing the cases to make their way through the traditional court system. In many of these agreements, third parties — in this instance, the Sacklers — are shielded from liability without being required to declare bankruptcy.

“What are the Sacklers getting out of this?” said Lindsey Simon, an associate professor at Emory University School of Law and a bankruptcy expert. “They’re getting one deal to be done. Whereas if they didn’t get it, individuals could still sue them forever.”