The US Supreme Court on Thursday rejected the validity of a compensation agreement of some $6 billion in the opioid crisis on the grounds that it exempted the Sackler family, owner of the Purdue laboratory, from any future lawsuits from victims.
The Court ruled by a majority of five votes to four. The Department of Justice criticized this agreement, concluded in 2022 with the 50 American states, local communities and individual victims and validated by a federal appeals court, for protecting the Sackler family from any future prosecution, including victims who did not consent to it.
“The Bankruptcy Code does not authorize […] an immunization from prosecution without the consent of affected plaintiffs,” wrote Neil Gorsuch on behalf of the majority, joined by three other conservative judges and one progressive.
The Sacklers are accused of having aggressively promoted their pain medication OxyContin for years while being aware of its highly addictive nature. The sale of this product brought them tens of billions of dollars.
The overprescription of this opiate is generally considered to be the trigger of the crisis which has claimed more than half a million victims in 20 years in the United States.
Billions “siphoned”
Targeted by an avalanche of lawsuits, the Purdue pharmaceutical laboratory declared bankruptcy in 2019 and has since negotiated a plan, the latest version of which provides for its closure by 2024 in the United States for the benefit of a new entity and the payment of ‘at least $5.5 billion over 18 years.
The Supreme Court had suspended this agreement in August at the request of the government.
During the debates in November, the nine judges showed themselves to be unusually torn, balancing between the risk of compromising the victims’ compensation, and that of recognizing a court, in a bankruptcy case, the right to immunize the Sacklers against future prosecutions.
If the Justice Department’s bankruptcy trustee, who is challenging the deal, “wins his case, the billions of dollars earmarked for opioid prevention and compensation will evaporate and creditors and victims will be left with nothing.” , argued the laboratory’s lawyer, Gregory Garre.
His colleague representing the victims who signed the agreement, Pratik Shah, also considered it “irresponsible for the bankruptcy trustee to suggest that there is some kind of secret alternative to obtain compensation”, saying that “without the exemption, the plan will unravel”.
“We are saying that there are other opioid victims who have also suffered tragic harm who say they do not consent to having their rights forcibly extinguished,” replied government lawyer Curtis Gannon.
The Justice Department said the Sacklers “siphoned” some $11 billion from the company in the years before it filed for bankruptcy in 2019.