Supreme Court blocks Purdue Pharma opioid settlement

The Supreme Court has blocked a $6 billion bankruptcy settlement involving Purdue Pharma, its Sackler family owners, and thousands of plaintiffs, putting the disbursement of funds on pause pending further review by the Court.

At the crux of the issue is a stipulation in the settlement that the Sackler family, who is named alongside Purdue Pharma in many of the lawsuits brought by US states and thousands of local governments, be shielded from all future and current civil lawsuits related to their role in fueling the opioid epidemic.

Basically – the Sacklers haven’t filed for bankruptcy, but as part of the now-paused settlement a bankruptcy court would be absolving them from any current and future legal liability. And there are conflicting rulings on whether a bankruptcy court has the power to do this.

• “[Allowing the settlement] to stand would leave in place a road map for wealthy corporations and individuals to misuse the bankruptcy system to avoid mass tort liability,” the solicitor general, Elizabeth B. Prelogar, wrote in a brief for the government.

⚖️ Next steps: The Supreme Court will hear arguments in the case in December. A ruling is expected by July 2024.

💊 Zoom out: Between 1999 and 2021, more than 634,000 Americans died from an overdose involving any opioid, including prescription and illicit opioids (that’s per the most recent federal data available).