The Supreme Court on Thursday blocked OxyContin maker Purdue Pharma's bankruptcy settlement that would have shielded its wealthy Sackler family owners from lawsuits over their role in the deadly opioid epidemic. The 5-4 decision reversed a lower court's ruling that upheld a plan to give Purdue's owners immunity in exchange for paying up to $6 billion to settle thousands of lawsuits that accused the company of unlawful misleading marketing of OxyContin, a powerful pain medication developed and patented in 1996, Reuters reports. The ruling was a victory for the Biden administration, which challenged the settlement as an abuse of bankruptcy protections meant for debtors in financial distress, not people like the Sacklers who have not filed for bankruptcy.
Purdue filed for Chapter 11 bankruptcy in 2019 to address its debts stemming from thousands of lawsuits alleging that OxyContin helped kickstart the nation's opioid epidemic, which has caused more than half a million U.S. overdose deaths over two decades. At issue in Thursday's case is whether U.S. bankruptcy law lets Purdue's restructuring include legal protections for the members of the Sackler family, who have not filed for personal bankruptcy. The Connecticut-based company estimates that its settlement, approved by a U.S. bankruptcy judge in 202, would provide $10 billion in value to its creditors, including state and local governments, individual victims of addiction, hospitals and others who have sued the company. The high court decided the case on a 5-4 vote. Dissenter Brett Kavanaugh said, "Today's decision is wrong on the law and devastating for more than 100,000 opioid victims and their families. The Court’s decision rewrites the text of the U. S. Bankruptcy Code and restricts the long-established authority of bankruptcy courts to fashion fair and equitable relief for mass-tort victims."