The Sacklers, who made billions off OxyContin, has been granted immunity from lawsuits related to opioids.
Members of the Sackler family, who are at the core of the country’s deadly opioid problem, have gained broad protection from lawsuits stemming from their privately held firm Purdue Pharma and its OxyContin drug.
On Wednesday, Sept. 2, Federal Judge Robert Drain accepted a bankruptcy deal that absolves the Sacklers of all responsibility for the opioid crisis.
“This is a bitter result,” Drain remarked. “I believe that at least some of the Sackler parties have liability for those [opioid OxyContin] claims. … I would have expected a higher settlement.”
The complicated bankruptcy plan, which was certified by Drain during a hearing in White Plains, New York, was negotiated over two years in a series of intensive closed-door mediation sessions.
The settlement gives the Sacklers, hundreds of their accomplices, and their surviving empire of companies and trusts “releases” from liability for harm caused by OxyContin and other narcotics.
In exchange, they have agreed to pay $4.3 billion and relinquish ownership of Purdue Pharma.
In his bench judgment, Drain acknowledged the terrible harm caused by Purdue Pharma’s opioid drugs, claiming that they contributed to a “major public health catastrophe.”
According to Drain, the settlement would provide cash for addiction treatment and other opioid-abatement initiatives in communities.
“It is clear to me after a lengthy trial that there is now no other reasonably conceivable means to achieve this result,” he added.
The Sacklers, acknowledge no wrongdoing and claim to have made more than $10 billion from opioid sales, will continue to be one of the world’s wealthiest families.
Representatives from the family’s Mortimer Sackler branch said to NPR, “While we dispute the allegations that have been made about our family, we have embraced this path in order to help combat a serious and complex public health crisis.”
Judge Drain observed in his decision that members of the Sackler family had refused to express regret for their position as Purdue Pharma’s CEO.
“A forced apology is not really an apology,” Drain concluded. “So we will have to live without one.”
Meanwhile, opponents of the bankruptcy deal indicated they would fight Drain’s confirmation because of the Sacklers’ liability releases.
On Twitter, Washington state Attorney General Bob Ferguson wrote, “This ruling is disrespectful to victims of the opioid crisis who had no say in these processes—and must be appealed.”
The United States Trustee Program, a branch of the Justice Department that acts as a bankruptcy watchdog, also stated that it would seek a stay of Judge Drain’s decision until the outcome of the appeals process.
Activists are furious
Opioid advocates and many legal academics have been outraged by the settlement, which they call a “miscarriage of justice.”
Nan Goldin, an artist who became a significant drug campaigner after getting addicted to OxyContin, stated, “I’ve never seen any such abuse of justice.”
When it became evident that Drain would grant liability releases for the Sacklers, Goldin talked with NPR before the judgment, “It’s shocking. It’s really shocking. I’ve been deeply depressed and horrified,” she stated.
The Department of Justice asked Drain to reject the settlement in a series of court filings and at a bankruptcy hearing over the previous two weeks. The idea was also challenged by the attorneys general of nine states and the District of Columbia.
They claimed that the deal would unfairly deprive individuals and governments of the ability to sue the Sacklers, who had never filed for bankruptcy.
During the trial, DOJ attorney Paul Schwartzberg said, “Due process requires that those with litigation claims have reasonable opportunity to be heard.”
Attorneys for Purdue Pharma and the Sacklers contended that hundreds of individual lawsuits against the firm and members of the family would be filed without the agreement.
Judge Drain appeared to support the legal position during the trial.
Drain did limit the breadth of legal protections afforded to the Sacklers and their allies in his decision.
The liability releases will no longer cover consultants and advisers who worked with Purdue Pharma, including a law firm run by former Alabama Senator Luther Strange.
Attorneys also asked that family members be shielded from any litigation arising from their private business. On the other hand, Drain asked that the majority of non-opioid claims be excluded from the agreement.
On Wednesday, he further emphasized that the Sackler family’s immunity from civil litigation does not include immunity from criminal prosecution.
The Sacklers have never been charged and maintain that they committed no wrongdoing.
Critics claim that the launch of OxyContin in the late 1990s, while members of the Sackler family were on the board of directors, aided in the emergence of the opioid crisis.
More than 500,000 individuals have died in the United States due to opioid overdoses, and millions more suffer from opioid use disorder.
Purdue Pharma has admitted to criminal misconduct in the marketing of OxyContin on two occasions, the first in 2007 and the second last year. However, the Sacklers have never been charged with anything illegal or immoral, and they claim they did nothing wrong.
The Sacklers’ name has been removed from buildings and institutions due to a wave of negative press related to their firm. Many charitable and cultural organizations all around the world have ceased taking gifts from the family.
Most state and local government leaders across the United States and supporters of the bankruptcy plan have expressed dissatisfaction with the Sacklers’ responsibility releases.
They claim, however, that the agreement would send more than $5 billion to public trusts established to support drug treatment and healthcare initiatives over the next decade.
“Instead of years of value-destructive litigation, including within and among creditors, our proposal assures that billions of dollars will be spent to assisting individuals and communities who have been harmed by the opioid crisis,” Purdue Pharma Chairman Steve Miller said in a statement to NPR.
Even some of the bankruptcy plan’s early detractors, such as New York Attorney General Letitia James, said the money donated by the Sacklers would be put to good use.
“Instead of years of value-destructive litigation, including between and among creditors,” James said in a statement, “This plan ensures that billions of dollars will be devoted to helping people and communities who have been hurt by the opioid crisis.”
Purdue Pharma’s ashes will be permitted to form a new business that will manufacture and sell opioids, including OxyContin.
Future opioid revenues, however, would be used to help support addiction treatment programs, according to the deal’s architects.
Purdue Pharma will emerge from bankruptcy as a new firm that will act as a public trust corporation.
The Department of Justice’s appeal might be the deciding factor.
According to NPR, Purdue Pharma and its lawyers began a behind-the-scenes lobbying campaign to persuade the DOJ not to oppose the plan in court.
NPR obtained an early copy of a letter sent by the pharmaceutical firm to pro-bankruptcy groups.
The letter is structured as a direct plea to DOJ officials, and it claims to have been written by people harmed by the firm and members of the Sackler family.
The letter claims that “We collectively speak for the overwhelming majority of the state and local governments, organizations, and individuals harmed by Purdue and the Sacklers.”
The company’s participation in starting the initiative or writing the message is not mentioned in the document.
Purdue Pharma’s attempt outraged Ryan Hampton, an opioid campaigner who sat on an important committee negotiating the bankruptcy settlement.
“This letter was highly inappropriate. It was wrong, “Hampton said to NPR. “It was written, proposed and pushed at the eleventh hour at the beckoning of Purdue Pharma.”
A spokesman for the Department of Justice declined to comment on the pharma company’s attempts to sway its decision-making. In addition, he would not provide the timeframe for choosing whether to launch an appeal.