Supreme Court Blocks Controversial Purdue Pharma Opioid Bankruptcy Settlement

It looks like the Sackler family, head of the Purdue Pharma company that drove the opioid crisis, is not off the hook from future lawsuits anymore.


The Supreme Court took the bold step of blocking a very controversial bankruptcy settlement that would have cost Purdue $6 billion dollars that would have shielded them from all future lawsuits. The 5-4 decision stated that bankruptcy code does not shield the family from future opioid lawsuits, which was their goal. Make the COMPANY file bankruptcy and pay, the family does not suffer at all.

The opinion means that states and individuals who were counting on part of that $6 billion will have start negotiations again. Gorsuch wrote the opinion, saying:

“No one has directed us to a statute or case suggesting American courts in the past enjoyed the power in bankruptcy to discharge [such] claims … all without the consent of those affected.”

In layman’s terms: we cannot allow bankruptcy to protect you without allowing those affected by your misdeeds to consent or agree.

Gorsuch was joined by Alito, Crow-Thomas, Jackson and Barrett.

Purdue had attempted to get away with the literal murder of hundreds of thousands of people by filing for bankruptcy in 2019. At that time, it was facing thousands of lawsuits related to its killer (literally) product: OxyContin.

The DOJ’s Office of the U.S. Trustee challenged the bankruptcy arrangement, saying it violated federal law. The Supreme Court agreed.

Those that dissented were Kavanaugh, Roberts, Sotomayor Kagan. Kavanaugh, writing for the minority, said that the opinion is “wrong on the law and devastating for more than 100,000 opioid victims and their families.”

Purdue is unhappy, calling the opinion “heart crushing…The decision does nothing to deter us from the twin goals of using settlement dollars for opioid abatement and turning the company into an engine for good.”

Nah, they are just upset that they will hopefully be on the hook for even more money – not just through the company, but personally as well. The Sacklers deserve everything coming to them.

Two other big opinions came down on Thursday as well:

The Supreme Court blocked the EPA’s “good neighbor” rule which aimed to reduce air pollution from power plants and other industrial facilities. Read about it here.

The Supreme Court also ruled that the SEC incorrectly relies on internal tribunals, not federal courts, to bring enforcement actions in fraud cases. Read more here.

Reminder: We are still waiting for Trump’s Presidential Immunity opinion. That could be released on Friday or Monday (a newly added opinion day).

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