A federal court on Thursday overruled the decision by a bankruptcy court that had decided the Sackler family, owners of Purdue Pharma who have been tied to the opiod crisis, would not have to face civil lawsuits.
The ruling was issued by U.S. District Court Judge Colleen McMahon.
The Federal District Court’s decision pleased Attorney General Merrick Garland, who wrote a statement that read, “The bankruptcy court did not have the authority to deprive victims of the opioid crisis of their right to sue the Sackler family.”
The $4.5 billion settlement the bankruptcy court reached agreed to shield the Sackler family from facing any civil lawsuits or criminal cases. The Sacklers threatened to walk away from the settlement if the court did not guarantee them legal protection. The family has not made a statement on Thursday’s decision.
U.S. bankruptcy court judge Robert Drain ruled that if there was no protection provided to the Sackler family, it would derail the reorganization of Purdue Pharma, the goal of which is to direct funds toward individuals and communities that have suffered from the opioid epidemic.
Purdue Pharma filed for bankruptcy in 2019 in the face of 3,000 lawsuits, which name the Sackler family and the pharma company as key contributors to the opioid epidemic that has killed 760,000 people since 1999. The accusations claim the Sackler family and the company pushed lies about their drug OxyContin, claiming it was not addictive while downplaying the risks associated with overdose.
The Stamford, Connecticut headquarters of Purdue Pharma — makers of OxyContin, a painkiller at the center of the US opioid crisis Photo: GETTY IMAGES NORTH AMERICA / JOHN MOORE
Rep. Carolyn Maloney, D-N.Y., chairperson of the Committee on Oversight and Reform, stated that, “The Sacklers must not be permitted to evade accountability by abusing our bankruptcy system, and I applaud the District Court for recognizing what I’ve long believed — that nonconsensual third-party releases are not only immoral and unjust, but also illegal.”
While the District Court vacated the decision of the bankruptcy court, McMahon did not rule that the releases are illegal, immoral or unjust.
McMahon disagreed with Drain’s decision, saying that a bankruptcy court lacked clear authority to grant the Sacklers immunity. McMahon also acknowledged that there are legal questions surrounding the case and whether the Sacklers could be granted immunity.
Purdue Pharma is expected to appeal McMahon’s decision.
