Supreme Court Questions Sackler Shield in Purdue Opioid Pact

December 4, 2023

Greg Stohr

Bloomberg News

The US Supreme Court signaled a likely divide over Purdue Pharma LP’s $6 billion opioid settlement, as the justices weighed Biden administration contentions that the accord improperly shields the Sackler family members who own the company.

In a Monday argument that cut across the court’s normal ideological divides, some justices questioned whether the Sacklers should get the benefit of a legal shield when they haven’t filed for bankruptcy themselves.

“Why should they get the discharge that usually goes to a bankrupt person once they’ve put all their assets on the table, without having put all their assets on the table?” Justice Elena Kagan asked.

The case threatens a bankruptcy reorganization plan that would end a mountain of litigation against the OxyContin maker and funnel money toward efforts to abate the opioid crisis. As part of the accord, family members have agreed to give up ownership of the company and pay as much as $6 billion.

Purdue Pharma is urging the Supreme Court to let the accord go forward, as are advocates for tens of thousands of opioid victims. They say the funds are urgently needed to address the nation’s opioid crisis.

A ruling against the plan could upend a key tool, known as non-consensual third-party releases, used in almost every big settlement. Purdue Pharma’s lawyer, Greg Garre, said a ruling against the plan would take a “wrecking ball to the bankruptcy code.”

He drew support from Justice Brett Kavanaugh, who said that “bankruptcy courts for 30 years have been approving plans like this.”