Purdue Pharma, the pharmaceutical company that makes the painkiller OxyContin, scored a major victory in court, as a judge has halted lawsuits against the company for six months in hopes of finalizing a settlement over the company’s role in the national opioid crisis.
Continue Reading Below
In a hearing, U.S. Bankruptcy Judge Robert Drain strongly brushed aside the argument from a group of state attorneys general that lawsuits against members of the wealthy Sackler family would be essential to getting accountability in the case. The judge added that verdicts in these types of cases often result in debates about the meaning of the outcome.
“A trial is at best a limited way to get to the truth,” said Judge Drain. “There are trials where people stand up and say ‘I did it.’ But that mostly happens on Perry Mason,” he said, referring to the popular books and TV series from the 1950s and ‘60s featuring a lawyer who won virtually every case.
The hearing was centered around how much members of the Sackler family should be held accountable for the role Purdue Pharma played in the crisis.
This decision does not mean that a tentative settlement struck between the company and about half the states in a New York bankruptcy filing last month would become a final agreement.
State attorneys general are evenly divided over whether to accept terms offered by Purdue to settle some 2,600 claims against it. About half of them say the proposed deal is too lenient to family members who siphoned billions out of their privately held company and stashed much of it overseas.
Last week, the attorneys general filed court papers contesting the firm's tentative agreement to settle thousands of opioid-crisis lawsuits. The confederation of AGs claim the settlement doesn't include an admission of wrongdoing from the Sacklers, wouldn't stop family members from future misconduct and would not force them to repay money. "They pocketed from their illegal conduct," the filing stated, "If the States accepted the offer, there would never be a trial to determine the Sacklers' liability for one of the greatest public health crises of our time."
The biggest bombshell in the court papers was that Purdue funneled up to $13 billion to the Sackler family over an unspecified period of time.
The litigation has 24 states participating and there are over 2,600 lawsuits against the privately-held company - and its owners, the Sackler family -for their part in the opioid crisis. According to the Centers for Disease Control, from 1999 to 2017, more than 702,000 people have died from a drug overdose. Of those deaths, almost 68 percent involved a prescription or illicit opioid.
“A trial is at best a limited way to get to the truth."
The Stamford, Conn.-based company has agreed to advance $200 million to battle the opioid crisis within six months in exchange for a pause on litigation against family members who own the company.
Purdue’s signature painkiller, OxyContin, made it the biggest name in a case that consolidated the hundreds of lawsuits by local governments, Native American tribes and other entities under a federal judge in Cleveland. That trial will begin on schedule, starting Oct. 21, after two efforts to delay it were downed by the Cincinnati-based Sixth U.S. Circuit Court of Appeals on Thursday. Ohio Attorney General Dave Yost argued that it should not proceed because states - not local governments - possess the sole authority to file such lawsuits on behalf of their citizens.
Purdue is one of five pharmaceutical companies that has settled with Ohio’s Cuyahoga and Summit counties to avoid the trial. The latest was Johnson & Johnson, and its Janssen Pharmaceutical subsidiary, which reached a deal worth more than $20 million on Oct. 1.
No longer part of the Cleveland case, Purdue and the Sackler family are hoping to resolve all lawsuits against them through the bankruptcy process. Sackler family members face hundreds of lawsuits in state courts, including about two dozen brought by state attorneys general. The biggest immediate question looming over the bankruptcy case is whether the judge will allow those cases to proceed.
A ruling in favor of the attorneys general -- who want to push forward with their lawsuits --
could imperil the tentative settlement. Members of the Sackler family would give up control of Purdue under that proposal, and the company would continue to operate as a trust with all profits going into the settlement.
Twenty-four states and lawyers representing local governments have agreed to the proposed deal, while another 24 states and more than 500 local and tribal governments oppose it. Two states, Kentucky and Oklahoma, have previously settled lawsuits with Purdue.
Court filings from Purdue say that, if the separate lawsuits against members of the Sackler family are allowed to go ahead, it could mean the family would not be willing or able to pay the money it has committed to the settlement.