Critical Questions and Support for the Deal
During Monday’s Supreme Court session, the justices expressed their inclination to uphold a significant bankruptcy deal aimed at aiding the nation and tens of thousands of victims in recovering from the devastating opioid crisis. The deal, which includes $6 billion from the Sackler family, has received overwhelming support from the families directly affected by OxyContin. Justice Brett M. Kavanaugh highlighted the approval from the affected families and criticized the Biden administration’s objections, stating that the deal would provide prompt payment to the families and allocate funds towards preventive programs. Justice Elena Kagan echoed this sentiment, emphasizing the widespread support for the deal and the consequences of dismantling it.
State Attorneys’ Agreement and Justice Department Objection
All 50 state attorneys agreed to the deal, believing it would contribute to addiction treatment programs. The deal also includes smaller payments for the numerous victims of the opioid crisis, with approximately 97% of individual claimants approving it. However, the Justice Department raised a late objection, arguing that wealthy individuals like the Sacklers should not be allowed to use bankruptcy protection to shield themselves from future lawsuits. The Sackler family, unlike their company Purdue Pharma, is not bankrupt, leading to contention over their involvement in the deal.
Challenges and Complications
Justice Samuel A. Alito Jr. acknowledged the difficulty in obtaining additional funds from the Sacklers, as their assets are held outside the United States. This highlights one of the challenges in resolving mass torts, where bankruptcy courts have taken on the responsibility of devising settlements that fairly compensate victims. Appeals courts have been divided on whether bankruptcy judges have the authority to shield parties from future liability in exchange for funding settlements.
Supreme Court’s Intervention
In July, U.S. Solicitor Gen. Elizabeth Prelogar urged the Supreme Court to block the pending settlement, asserting that it wrongfully shielded the Sacklers from further liability. The justices temporarily halted the settlement and agreed to hear arguments on this legal issue, leading to the recent session where the lawyers for both Purdue Pharma and the victims of the opioid epidemic united in urging the justices to uphold the deal. However, Justices Neil M. Gorsuch and Ketanji Brown Jackson raised concerns about extending bankruptcy law to individuals who are not bankrupt, emphasizing potential due process implications for victims seeking justice.
This bankruptcy case serves as a unique and complex situation, with widespread support and objections from various parties involved. The Supreme Court’s decision will have a significant impact on the future of the bankruptcy deal and its implications for the victims of the opioid crisis.