1/21/22, 11:06 AM
Judge Overturns Purdue Pharma's Opioid Settlement - The New York Times
@he Net Jork &imeshttps://www.nytimes.com/2021/12/16/health/purdue-pharma-opioid-settlement.html
Judge Overturns Purdue Pharma's Opioid Settlement
The ruling said the company's owners, members of the Sackler family, could not receive protection from civil lawsuits in return for a $4.5 billion contribution.
By Jan Hoffman Dec. 16, 2021
A federal judge on Thursday evening unraveled a painstakingly negotiated settlement between Purdue Pharma and thousands of state, local and tribal governments that had sued the maker of the prescription painkiller OxyContin for the company's role in the
opioid epidemic, saying that the plan was flawed in one critical area.
The judge, Colleen McMahon of the U.S. District Court for the Southern District of New York, said that the settlement, part of a
company's owners, members of the billionaire Sackler family, from liability in civil opioid-related cases.
Although the Sacklers did not file for personal bankruptcy protection, they had made immunization from opioid claims an absolute requirement in exchange for contributing payments amounting to $4.5 billion to the agreement.
But the bankruptcy code, Judge McMahon said, does not explicitly permit a judge to grant such releases, which she called "the great unsettled question."'
Lawyers for a small group of states that had appealed the plan immediately hailed the ruling. "This is a seismic victory for justice and accountability that will re-open the deeply flawed Purdue bankruptcy and force the Sackler family to confront the pain and devastation they have caused, said William Tong, the attorney general of Connecticut.
In recent months, members of Congress have proposed legislation called "The Sackler Act" to preclude owners from receiving such protections unless they file for bankruptcy themselves. But even if eventually passed, it is unlikely to become law in sufficient time to resolve the Purdue case.
In her ruling, Judge McMahon all but openly invited the U.S. Court of Appeals for the Second Circuit to weigh in. Various appellate
desperately need a clear answer"
Within hours of the ruling, Purdue said it would appeal. Judge McMahon's ruling "will delay, and perhaps end, the ability of creditors, communities, and individuals to receive billions in value to abate the opioid crisis, said Steve Miller, chairman of the company's board of directors. "These funds are needed now more than ever as overdose rates hit record-highs, and we are confident that we can successfully appeal this decision and deliver desperately needed funds to the communities and individuals suffering in the midst of this crisis."
The fates of Purdue and the Sacklers have been perhaps the most closely watched among the web of litigation brought against companies in the pharmaceutical industry seeking to hold them accountable for the epidemic of opioid addiction in the United States, which has claimed more than a half-million lives.
Under the crush of thousands of lawsuits, Purdue filed for bankruptcy restructuring in September 2019, which automatically put a hold on all the claims against it.
Nearly two years later, Judge Robert Drain, the bankruptcy court judge in Whit