Billions at stake as Supreme Court considers Stamford-based Purdue Pharma settlement

Justices appeared divided over tossing out a controversial opioid settlement that would shield the company’s billionaire owners from future lawsuits.

John Craven and Associated Press

Dec 4, 2023, 10:45 PM

Updated 220 days ago

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Stamford-based Purdue Pharma was front and center at the U.S. Supreme Court on Monday. Justices appeared divided over tossing out a controversial opioid settlement that would shield the company’s billionaire owners from future lawsuits.
For victims of the opioid crisis – and the Sackler family, which owns Purdue – billions of dollars are at stake.
“THEY KNEW THE DAMAGE”
In life, Matt and Kyle Fitzgerald, of Southington, were inseparable. Now the brothers are linked in death; both became addicted to Purdue Pharma’s OxyContin pain killer.
Last year, their mother Liz reluctantly agreed to a nationwide settlement with the pharmaceutical giant.
“They knew the damage,” she said in 2022. “I didn't even know what OxyContin was, or what it could actually do.”
OxyContin first hit the market in 1996, and Purdue’s aggressive marketing of it is often cited as a catalyst of the nationwide opioid epidemic, persuading doctors to prescribe painkillers with less regard for addiction dangers. Opioid-related overdose deaths have continued to climb, hitting 80,000 in recent years. Most of those are from fentanyl and other synthetic drugs.
$6 BILLION SETTLEMENT – WITH CONDITIONS
After years of litigation, the Sacklers agreed to pay $6 billion and give up ownership of the company. Connecticut Attorney General William Tong negotiated the settlement, which was 40% more than the family originally offered. Our state’s share is $100 million.
But there's a catch.
The Sacklers would be immune from all further lawsuits, even though they did not personally file for bankruptcy.
SUPREME COURT INTERVENES
After the Biden administration raised objections to the settlement, the Supreme Court heard the case on Monday.
“The issue is, does the bankruptcy code allow this?” said Quinnipiac University bankruptcy law professor Bob White. “The real issue is the Sacklers, who did not file bankruptcy. And ‘the Sacklers’ is a term that folks at home should understand include a whole bunch of folks.”
Justices seemed reluctant to break up an exhaustively negotiated agreement, but also leery of somehow rewarding the Sacklers.
“It seems as though the federal government is standing in the way of that as against the huge, huge, huge majority of claimants,” said liberal justice Elena Kagan.
Justice Ketanji Brown Jackson seemed more inclined toward the opponents, saying the Sacklers’ insistence on a shield against all lawsuits is “causing this problem."
By contrast, conservative Justice Brett Kavanaugh sounded like a vote to allow the deal to proceed. He said the government was seeking to prevent payment to victims and their families, as well as money for prevention programs “in exchange really for this somewhat theoretical idea that they’ll be able to recover money down the road from the Sacklers themselves.”
Outside the court, a small but vocal group of protesters opposed the Purdue Pharma agreement. “Shame on Sackler,” one banner read. “No Sackler immunity at any $$,” read another.
Tong did not take a position Monday about the Supreme Court case, but issued this statement:
“There will never be enough justice for the suffering the Sackler family has caused. I continue to believe that our bankruptcy code should not enable billionaires to extract non-consensual releases that insulate their fortunes from justice. Regardless of the outcome here, my thoughts today are with the families of victims and survivors who deserve accountability and resolution.”
RIPPLE EFFECT?
Legal experts believe this case could impact other major abuse settlements.
"The Boy Scout case is on appeal. That's a $2½ billion settlement. It could affect that a lot,” said White. “There are still some clergy abuse cases in the pipeline.”
An attorney for the victims who agreed to the settlement argued, if the Purdue agreement is tossed out, they could end up with nothing.
“Let me be crystal clear. Without the release, the plan will unravel,” said attorney Pratik Shah. “Chapter 7 liquidation will follow, and there will be no viable path to any victim recovery.”
That’s why Liz Fitzgerald reluctantly agreed to the deal.
“They're just trying to pay it off and be done with the families,” she said of the Sacklers.
A decision in Harrington v. Purdue Pharma is expected by early summer.


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