Opioids Rage as Courts Tangle

Terry Schwadron
5 min readDec 23, 2021

Terry H. Schwadron

Dec. 23, 2021

Even as we hear new twists in the seemingly never-ending legal pursuit of justice in the epidemic of opioids in this country, the bare truth is that deaths from painkillers continue to pile up.

Here was the news from last week: A federal judge undid a painstakingly negotiated settlement between Purdue Pharma and thousands of state, local and tribal governments that had sued the maker of the prescription painkiller OxyContin for the company’s role in the opioid epidemic, saying that the plan ticked a technical flaw.

Apparently, the consolidation into all the cases into a single bankruptcy case resulting in a $4.5 billion payout by Purdue can’t shield the owning Sackler family from civil lawsuits, which had been the driver for the company to settle all outstanding legal cases.

That may come as good news to the many families who still want to sue Purdue and the Sacklers, but not for those seeking to avoid addiction.

Meanwhile, the Sackler family has had protection against 800 lawsuits and counting and can pursue other business ventures and philanthropies — though some recipients, including the Metropolitan Museum of Art in New York, are turning away their money as tainted.

Indeed, as part of the complicated court settlement, the Sacklers had been allowed to remove $10 billion in assets from Purdue before bankruptcy proceedings would remake the company around promises to pay for treatment and education programs regarding opioid usage.

Meanwhile, new information the Centers for Disease Control (CDC) shows that estimated overdose deaths from opioids increased to 75,673 over 12 month ending in April 2021, up from 56,064 the year before. Overdose deaths from synthetic opioids (primarily fentanyl) and methamphetamine also increased, the bulk of the 100,000 drug overdose deaths in the reporting period.

The death toll for opioids in the U.S. is over a half-million since people started counting.

Complex Law

The law here is complex, the issue of personal responsibility and morality is relatively more straightforward.

What we want is for our leaders to stand up and take responsibility when they err, particularly when people get injured or killed.

Instead in case after case not limited to pursuit of opioids, it seems that our legal and political systems operate on the opposite premise. Too often, we see lawyers pursuing technical grounds in criminal and civil cases to help protesting defendants to walk away from responsibility. When the client turns out to be wealthy or notorious, we see that the system suddenly becomes a lot more brittle about determining standing or intent or the percentage of blame. And the shopping for a friendly courtroom seems an epidemic of its own.

As The New York Times recounts it, during oral arguments, U.S.
District Court Judge Colleen McMahon in New York, said she was troubled by the more than $10 billion that the Sacklers withdrew from Purdue between 2008 and 2018, as the opioid epidemic was cresting. The Sackler dividends were largely deposited in offshore accounts and trusts that are inaccessible to American authorities.

To her, that meant the restructuring plan for Purdue approved in September by a bankruptcy judge, should not go forward because it releases the owning Sackler family from liability in civil opioid-related cases. Although the Sacklers did not file for personal bankruptcy protection, they had made immunization from opioid claims an absolute requirement in exchange for contributing payments amounting to $4.5 billion to the agreement.

But the bankruptcy code, Judge McMahon said, does not explicitly permit a judge to grant such releases, which she called “the great unsettled question.” After the ruling, Atty, Gen. Merrick B. Garland said, “The bankruptcy court did not have the authority to deprive victims of the opioid crisis of their right to sue the Sackler family.”

What’s Next?

Practically speaking, this ruling means that we could be seeking legal responsibility for years for an epidemic of opioid abuse that had no reason to happen other than for corporate greed without caring about consequences, opportunism of middlemen, and insatiable demand of those addicted, often following over-prescription of normal pain medication.

Families of the dead may see the ruling as a step towards their own pursuit of justice because it means that the Sacklers will be sued repeatedly using the same details of how their company manipulated and seemingly illegally incented doctors and others to over-prescribe painkillers that were overwhelmingly addictive.

Because of that, some states already had appealed the earlier settlement agreement specifically to allow families to go after the Sacklers.

At the same time, it seems clear that not moving ahead also means no access to use billions of dollars from Purdue to fight the continuing rise in opioid deaths.

In recent months, members of Congress have proposed legislation called “The Sackler Act” to preclude owners from receiving civil lawsuit protections unless they file for bankruptcy themselves. But even if eventually passed, it is unlikely to become law in sufficient time to resolve the Purdue case.

In her ruling, Judge McMahon invited appeals courts to give clear answers about the boundaries of the law. Purdue says it will appeal in any case, arguing weirdly that it must do so to make the settlement funds available to fight further rising addiction and deaths rather that to save the skins of its ownership family.

Purdue is not the only company in this position, but the case has been watched most closely. Faced withthousands of lawsuits, Purdue filed for bankruptcy restructuring in September 2019, which automatically put a hold on all the claims against it, a move that led to the consolidated settlement. Under that agreement, Purdue would be dissolved to form a new company called Knoa Pharma that would still produce OxyContin among other drugs and sent its profits to states and communities to fund opioid treatment and prevention efforts. The agreement held that the Sacklers would cede ownership and contribute $4.5 billion of their fortune to the state and local opioid abatement funds to eliminate all civil suits.

Then, again, owning up to responsibility shouldn’t be a technicality.