Reuters identified 106 U.S. workplaces where employees complained of slipshod pandemic safety practices around the time of outbreaks — and regulators either never inspected the facilities or, in some cases, waited months to do so, according to the OSHA records. The agency never inspected 70 of those workplaces, where at least 4,500 workers were infected by the coronavirus and 26 died after contracting COVID-19, according to the Reuters analysis. The workers’ regulatory complaints came from a cross-section of companies that included some of America’s best-known firms, including Tesla Inc and Tyson Foods Inc. As of mid-December, just 12 of the 106 facilities have been penalized in response to workers’ complaints. The complaints came from a wide range of workplaces, from meatpacking plants and factories to e-commerce warehouses and nursing homes. Their employees alleged failures to enforce social distancing and mask-wearing; managers pressuring sick employees to work; and a lack of notification to employees about co-workers’ infections.
In the summer of 2007, after Purdue Pharma agreed to pay $600 million to resolve a federal investigation of opioid-marketing misconduct, the Sackler family members at the helm of the drug giant deliberated whether it was time to leave the pharmaceutical business, the Washington Post reported. “I think we need to discuss if fundamentally we want to be in the pharmaceutical business going forward. I would vote no,” wrote David Sackler, who was not in the company at the time of the June email to his father, Richard, and cousin Mortimer, both on the company’s board. The email chain was about the possible buyout of a smaller company. “I think we’ve all had enough of a rough ride over the past 10 years to make me wary of committing for another venture in the space,” he wrote. Copies of the emails, along with memos and messages from a family WhatsApp group chat, were unsealed last week in U.S. Bankruptcy Court for the Southern District of New York, where the company and its affiliates filed for relief in September 2019. The documents offer the most complete picture yet of the internal deliberations of the wealthy family that led one of the largest manufacturers of prescription painkillers during the height of the opioid crisis. Following the Justice Department settlement, the Sacklers met with a bankruptcy attorney, assessed selling the company to a larger firm and were advised to take “defensive measures,” including through “overseas assets with limited transparency and jurisdictional shielding from U.S. judgments,” according to the documents.
Alysa Gummow didn't know what to think in October when the letters from law firms arrived in the mail. She had filed for bankruptcy in 2017 to restructure nearly $50,000 in debt — mostly from an earlier hip surgery. But that was resolved. She learned that Froedtert South hospital in Kenosha, Wisconsin was suing her to recover about $1,000 in separate bills that her health insurance didn't cover, the Associated Press reported. In April, Froedtert South said it would make debt lawsuits "rare" during the pandemic. But the hospital has since filed at least 231 lawsuits in small claims court against debtors like Gummow. It filed more in 2020 than it did in 2019 — 314, compared to 282. This year's lawsuits collectively seek to recoup $1.1 million in alleged debt, according to a WPR/Wisconsin Watch analysis.
In a Florida case that could have broader implications, a federal appeals court has upheld a U.S. Small Business Administration decision that prevents businesses from receiving Paycheck Protection Program loans if they are in bankruptcy proceedings, the Orlando Sentinel reported. A three-judge panel of the U.S. Court of Appeals for the 11th Circuit yesterday overturned a decision by Bankruptcy Judge Michael Williamson, who sided with Gateway Radiology Consultants, a Pinellas County medical practice that filed for chapter 11 bankruptcy in 2019 and sought a $527,710 loan under PPP, part of the CARES Act approved by Congress in response to the coronavirus pandemic. Judge Williamson ruled this summer that the Small Business Administration had exceeded its authority under federal law when it disqualified businesses in bankruptcy proceedings from the loan program. Also, he ruled that the SBA’s decision was “arbitrary and capricious.” Nevertheless, Judge Williamson on July 1 asked the Atlanta-based appeals court to take up the issue, in part saying the SBA’s stance on the issue has “spawned litigation around the country.” The judge wrote that one court had tallied more than 30 lawsuits challenging the SBA’s position. In a 44-page opinion Tuesday, the appellate court panel concluded that Congress delegated to the SBA the question of whether businesses in bankruptcy proceedings are eligible for the loans. Also, the court rejected the argument that the SBA’s handling of the issue was arbitrary and capricious. “The SBA did not exceed its authority in adopting the non-bankruptcy rule for PPP eligibility,” said the opinion, written by Chief Judge Ed Carnes and joined by Judges Robin Rosenbaum and R. Lanier Anderson III. “That rule does not violate the CARES Act, is based on a reasonable interpretation of the Act, and the SBA did not act arbitrarily and capriciously in adopting the rule.”
Mallinckrodt PLC shareholders lost their bid for an official committee to represent them in the drugmaker’s bankruptcy as it vies to dig out from an avalanche of litigation over opioid sales, WSJ Pro Bankruptcy reported. Bankruptcy Judge John Dorsey rejected the request yesterday, handing a win to Mallinckrodt, which is struggling to build support for a turnaround strategy that would resolve the company’s legal troubles. Like Purdue Pharma LP and Insys Therapeutics Inc., Mallinckrodt resorted to bankruptcy to try to get an agreement with states, municipalities, tribes and people seeking damages for the company’s alleged role in fueling the national epidemic of opioid addiction. In addition to opioid litigation, Mallinckrodt faces potential damages in an argument with the government over rebates to Medicaid for the company’s Acthar Gel product.
The U.S. government accused Walmart Inc. of fueling a nationwide opioid crisis by ignoring warnings from its own pharmacists that the chain wasn’t properly set up to screen painkiller prescriptions in violation of federal regulations, Bloomberg News reported. The complaint filed yesterday in Delaware comes two months after the world’s largest retailer filed its own case in Texas accusing the U.S. of scapegoating Walmart for government failures in dealing with the crisis. More than 400,000 Americans’ deaths have been tied to legal and illegal opioid-based drugs over the last two decades. In the new case, the U.S. alleges the retailer sought to boost profits with a system designed to make it almost impossible for overworked store pharmacists to catch red flags about overly large numbers of painkiller prescriptions. Walmart is in the unusual position of serving as the distributor of opioid-based medicines to its own stores. “Given the nationwide scale of those violations, Walmart’s failures to follow basic legal rules helped fuel a national crisis,” the U.S. said in the complaint filed in federal court in Wilmington.
Vitality Health Plan of California, which offers Medicare Advantage plans, filed for chapter 11 protection on Dec. 18, Becker's Hospital Review reported. The company entered bankruptcy after California hospitals canceled their contracts with the insurer earlier this year over its deteriorating financial situation. Vitality is required to maintain a few million dollars in financial reserves, but it had negative working capital as of this summer, according to the San Jose Mercury News, which cited documents from the California Department of Managed Health Care. The company entered bankruptcy with more than $1 million in estimated assets and more than $10 million in estimated liabilities, according to the bankruptcy petition. The creditor with the largest unsecured claim against the health plan is Regional Medical Center in San Jose, Calif., according to bankruptcy documents.
Members of the wealthy Sackler family, owners of OxyContin maker Purdue Pharma LP, have long denied that the $10 billion they transferred from their company over the course of a decade was an unlawful attempt to shield assets in anticipation of litigation over their role in the opioid crisis. But a review of emails, memos, depositions, legal motions and other documents unsealed on Friday in Purdue’s bankruptcy proceedings show Sackler family members discussed potential litigation exposure at least as early as 2007, a full decade before they faced a new wide-ranging legal attack and significant financial transfers stopped, Reuters reported. The documents were unsealed in response to legal actions from Reuters and other news organizations seeking to remove their heavy redactions. Purdue faced investigations and litigation before 2007, which it settled. Whether creditors can demonstrate that financial transfers since then were legally dubious hinges in part on whether they can show that the Sacklers knew they faced additional and significant litigation that could threaten Purdue’s solvency and the family’s wealth, estimated in December at $10.8 billion by Forbes magazine. In response to questions from a House oversight panel last week, David Sackler, who served on Purdue’s board from 2012 to 2018, testified that neither he, nor others, anticipated vast litigation that now totals roughly 3,000 legal actions. “I don’t believe anyone knew that lawsuits that really began in earnest in 2017 would be coming back in 2008,” he told lawmakers. But in a March 2007 email with relatives, his uncle, Jonathan, at the time a director, cited “ongoing risks” two months before a Purdue affiliate pleaded guilty to misbranding OxyContin, adding that “if there’s a future perception that Purdue has screwed up on compliance, we could get murdered.” In a subsequent message, he said the family was “not really braced for” challenges that included “the emergence of numerous new lawsuits.” Jonathan died in June. In May 2007, a week after the company affiliate’s guilty plea, David Sackler expressed concerns about future litigation to his father and uncle, the latter of whom assured him there was no basis for suing the family.
