The Supreme Court on Monday will consider the Biden administration’s bid to scuttle a $6 billion accord between bankrupt drugmaker Purdue Pharma LP and its billionaire owners, Bloomberg News reported. The deal would protect members of the Sackler family from future opioid lawsuits by way of an oft-used legal mechanism that the high court is now scrutinizing for the first time. If upheld, the settlement would snuff out an inferno of civil lawsuits blaming Purdue’s owners for the company’s aggressive marketing of OxyContin and, in exchange, route billions of dollars to victims, states and communities harmed by the nation’s addiction crisis. The proposal won overwhelming support from opioid crisis victims who voted on it, but there remains a vocal contingent bitterly opposed to letting Purdue’s billionaire owners put the lawsuits behind them. Detractors may get their way because of the challenge from a unit of the Justice Department. At issue is a component of the settlement that forces all opioid victims to give up their claims against the Sacklers even if they’d prefer to take their chances with a jury. Congress authorized similar maneuvers decades ago in bankruptcies related to asbestos lawsuits, and over time, lawyers and bankruptcy courts reasoned that the mandate could be expanded to an array of corporate wrongdoing. Similar deals have ended mass litigation over dangerous products and waves of sex abuse claims against Catholic dioceses, the Boy Scouts of America and USA Gymnastics. They even appear in some mundane acquisitions of bankrupt firms. But federal appeals courts are split over whether the linchpin of these agreements — provisions called nonconsensual third-party releases — are lawful.
