Threat of Litigation Looms as Purdue Pharma Returns to Settlement Talks

Purdue Pharma, the maker of OxyContin, is trying to chart a course for a massive new settlement of thousands of opioid lawsuits following the U.S. Supreme Court last month. rejected their previous agreement, what it was years in training.

State, local and tribal governments and individual victims want a sense of justice – and money.

And in this case, there is not enough money to pay all the alleged damages. Most of what exists is held by members of the Sackler family, owners of Purdue – much of it in foreign trust funds that are protected from US lawsuits.

Here’s a look at where things stand:

A national opioid epidemic has been raging for decades. In recent years, overdoses have been linked to about 80,000 deaths per year.

Currently, the biggest killers are fentanyl and other potent substances produced illicitly in laboratories. Before that it was heroin, and before that prescription drugs, including OxyContin, which hit the market in 1996.

Purdue targeted doctors with a campaign claiming there was a low risk of addiction in its latest formulation of a type of drug that has been around for centuries.

Since 2017, drugmakers, wholesalers, pharmacy chains and other companies have agreed to pay more than $50 billion in settlements with governments they have sued. Most of the money is intended to go to stop the crisis.

The Purdue deal would be among the largest.

Purdue filed for bankruptcy protection nearly five years ago as a way to resolve all the lawsuits it was facing.

The deal ultimately reached required members of the Sackler family, who had already left the company’s board of directors, to also give up ownership of the company. It would become known as Knoa Pharma and its profits would be used to combat the opioid crisis. The Sacklers would contribute up to $6 billion.

Unlike almost every other opioid settlement, a portion of the Purdue settlement — $750 million — would go directly to some people who were addicted to OxyContin and to the families of those who died from it. The largest payments would have been less than $50,000. Most would be much less than that.

In return, members of the Sackler family would receive immunity from all past, present and future lawsuits alleging a role in the crisis.

The agreement had almost universal support among the parties in the case, although some of them were reluctant, along with some resisters and many eligible individuals who did not vote.

In a 5-4 vote, the Supreme Court rejected the agreement.

Justice Neil Gorsuch, writing the majority opinion, said the law does not allow legal protections for Sackler family members who have not filed for bankruptcy protection when some of the creditors in the case do not agree.

For most of the lawyers and parties who spent years crafting the agreement, it was a devastating decision.

A judge said Tuesday he intends to grant lawyers’ request to have until Sept. 9 to work out a revised agreement.

They asked that retired U.S. Bankruptcy Judge Shelley Chapman, who helped the parties resolve the previous settlement, be appointed to mediate again, along with mediation expert Eric Green.

Sackler family members said after the Supreme Court ruled that while they believe they would win at trial, “that a quickly negotiated settlement to provide billions of dollars to people and communities in need is the best path forward.”

Attorney Mike Quinn represents Ellen Isaacs, a mother whose son died of an opioid overdose, in her fight against the previous agreement. Quinn said it’s essential that any new deal gives customers like his a say in accepting it.

Probably litigation.

Failure to reach a settlement within two months could open the door to the resumption of some 900 previous lawsuits against members of the Sackler family, alleging a role in creating the crisis. More could be archived.

Then it could be a race to judgment. There is no certainty as to which side would prevail. But a small number of judgments against the family could wipe out their fortune, leaving nothing for the thousands of other parties with potential claims.

A leading bankruptcy committee on Monday asked a judge to give it the exclusive right to sue members of the Sackler family, alleging that from 2007 to 2018, they fraudulently transferred $11.5 billion from the company to a series of trusts. for your benefit, to avoid losses in legal actions. .

“Under the Sacklers’ guidance, Purdue ignited and fueled an opioid storm that continues to rage to this day, generating tens of billions of dollars in revenue for Purdue, but at the cost of hundreds of thousands of American lives and economic damage to the nation. measured in trillions,” the Official Committee of Unsecured Creditors in Bankruptcy said in a legal document on Monday.

Purdue and other major lender groups support this plan.

Sackler family members issued a statement Tuesday criticizing the motion: “Their presentation is riddled with factual errors, ignores that about half the money was paid in taxes, and is contrary to the goal of working together toward a resolution that provides billions of dollars to communities and people in need.”

Sackler family members could file for bankruptcy to obtain legal protection.

Or Congress could intervene.

Attorney Jason Amala has represented plaintiffs in sexual abuse lawsuits in Scouts It is Catholic churches where similar mechanisms were involved in settlements. Amala said Congress could modify bankruptcy laws to allow legal protections in exchange for “the same due diligence and transparency as the company that filed for bankruptcy.”