Supreme Court grapples with OxyContin maker’s controversial billion-dollar bankruptcy settlement

WASHINGTON – The Supreme Court heard oral arguments on Monday for one of the most contentious bankruptcy cases in recent memory. At the heart of the matter is the Purdue Pharma settlement, which, in exchange for shielding the Sackler family, who owned the company, from opioid-related civil lawsuits, pledges billions to combat the devastating opioid epidemic.

Purdue Pharma, the maker of the highly addictive prescription painkiller OxyContin, is under scrutiny for its role in fueling the deadliest drug crisis in U.S. history. The U.S. Department of Justice reports widespread abuse of the drug, a reality Gary Carter’s family experienced firsthand. Carter’s son Bryant succumbed to fentanyl poisoning in 2018, the result of a substance use disorder that originated from stealing his grandparents’ OxyContin.

“Of course, my parents were on such high, high doses, and it was just prescribed on a regular basis. ‘Oh, did you lose it?  Hey, we’ll give you another prescription.’ You didn’t have to wait until it was needed to be refilled,” Carter told Emily’s Hope founder Angela Kennecke for an upcoming podcast episode of Grieving Out Loud.

This tragic narrative echoes across the nation as communities grapple with the aftermath of a surge in prescription pain pills, contributing to the illicit opioid market. The September approval of the Purdue Pharma settlement by Judge Robert Drain prompted an appeal from the U.S. Trustee Program, arguing against shielding the Sackler family from legal action.

The contested agreement also outlines a financial commitment of up to $6 billion from the Sacklers. While the family would relinquish ownership of the company, they would retain additional billions, with the restructured post-bankruptcy entity dedicating its profits to treatment and prevention efforts.

According to The New York Times, Supreme Court justices displayed a divided stance on the settlement’s scope, particularly questioning the broad immunity granted to the Sacklers. However, Justice Brett Kavanaugh said the tactic, known as third-party nonconsensual releases, has been used in settlements approved over “30 years of bankruptcy court practice.”

“The opioid victims and their families overwhelmingly approve this plan,” Justice Brett M. Kavanaugh said, according to the New York Times.

Justice Amy Coney Barrett raised concerns about potential ramifications for other settlements and future cases if the court sided with the U.S. trustee.

Purdue’s legal team said that rejecting the deal would result in substantial losses for those directly impacted, emphasizing the overwhelming support for the plan among claimants. They underscored the potential positive impact, asserting that the billions allocated would aid communities nationwide, and save lives.