A federal judge has overturned Purdue Pharma’s settlement of thousands of lawsuits related to the opioid epidemic, as the company’s bankruptcy agreement contained a provision that would protect members of the Sackler family from civil lawsuits without declaring themselves personally bankrupt.
The news comes days after the Met Museum became the latest in a long line of arts institutions to remove the Sackler name from the many buildings and initiatives the family have donated money to following a campaign by activist organization Sackler P.A.I.N spearheaded by artist and activist Nan Goldin.
The original ruling, granted by a bankruptcy judge, was criticized as it allowed the owners of Purdue Pharma, inventors and purveyors of the highly addictive medical drug Oxycontin, to pay off claimants via the company while maintaining their own personal wealth. A U.S. district judge rejected the settlement on Thursday, December 16, on the grounds that bankruptcy judges do not have the authority to extend that kind of reprieve to parties that were not themselves declaring bankruptcy. The company intends to appeal the decision.
Oxycontin has played an important role in contributing to the U.S. opioid crisis, the death toll of which has run over 500,000. Purdue Pharma sought bankruptcy protection in 2019 in the face of the thousands of lawsuits alleging the company pushed their products on doctors and communities with catastrophic results that continue to unfold. The deal they struck allowed them to restructure the company to a nonprofit that would still produce opioids but would donate profits to help solve the crisis it had created. Sackler family members would also contribute $4.5 billion and charitable assets in a deal thought to total $10 billion.
Many states, tribes and entities who are creditors in the suit were pleased with the result and happy to proceed while others felt it fell short of true justice as it allowed members of the family to maintain their wealth after profiting from the crisis. A representative for P.A.I.N, Megan Kapler, told Artnet News in July that it was an “egregious abuse” of the court system. Connecticut attorney general William Tong, who was among those seeking to undo the original deal, called the latest ruling a “seismic victory for justice and accountability” in an interview with Courthouse News.
In a statement shared with Artnet News, Purdue Pharma’s board chair Steve Miller said that the ruling will “delay, and perhaps end, the ability of creditors, communities, and individuals to receive billions in value to abate the opioid crisis.” He added that the company is “confident” that it will successfully appeal this decision.
The district judge who overturned the settlement, Colleen McMahon, wrote in her ruling that the “great unsettled question” raised by the case is whether the bankruptcy court or indeed any court is statutorily authorized to grant such releases from future litigation. “This issue has split the federal Circuits for decades,” she wrote, adding: “This opinion will not be the last word on the subject, nor should it be.”