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Controversial Purdue Pharma bankruptcy deal is rejected by the Supreme Court

LEILA FADEL, HOST:

The Supreme Court has struck down a bankruptcy deal that would have given members of the Sackler family immunity from lawsuits linked to OxyContin. The Sacklers' privately owned company, Purdue Pharma, makes the highly addictive pain medication that's blamed for spurring America's opioid crisis, a crisis that has seen an estimated half a million overdose deaths. The 5-to-4 vote by the justices could open the floodgates to a wave of lawsuits against the Sacklers who own the company. NPR addiction correspondent Brian Mann joins us to talk about this. Good morning.

BRIAN MANN, BYLINE: Good morning, Leila.

FADEL: So the deal was hashed out over years by local and state officials, approved by many OxyContin victims and their families. Why did the justices knock it down?

MANN: Well, in his majority opinion, Justice Neil Gorsuch wrote simply that Congress never gave bankruptcy courts this kind of power, the kind of power that was hardwired into this settlement. Remember, what members of the Sackler family wanted here was a personal firewall against future liability for the harms caused by OxyContin. That meant the bankruptcy court forcing thousands of people to give up lawsuits against the Sacklers against their will. Gorsuch says if Congress wanted bankruptcy judges to have that kind of power, lawmakers needed to say so much more clearly.

FADEL: So the Sacklers didn't get their legal firewall. Are they likely to be sued?

MANN: They are. Sources told me, in the days before this ruling, they have lawsuits against members of the Sackler family queued up and ready to go, but in a joint statement to NPR yesterday, Sacklers - family members told me that they are, quote, "confident we would prevail in any future litigation." They described themselves, Leila, as "victims," and I'm quoting here, "of profound misrepresentation about our families and the opioid crisis." A lot of public health experts, of course, say members of the Sackler family did play a key role - pushing the aggressive marketing of OxyContin at Purdue Pharma, leading to this wave of addiction and overdose deaths. The Sacklers do say they will also go back to the negotiating table now to try to hash out a new deal.

FADEL: And what are families who were harmed by OxyContin saying?

MANN: A lot of families tell me they think the $8 billion bankruptcy deal here was the best they could hope for. It was a way to funnel money from the Sacklers to communities, to fund addiction programs to help individuals harmed by OxyContin. Now that money is on hold, maybe for years. In a dissenting opinion, Justice Brett Kavanaugh said that delay could be devastating for opioid victims, but there are also families praising the Supreme Court's decision. I spoke with Ed Bisch. His son, also named Ed, overdosed on OxyContin. He wants the Sacklers held personally accountable.

ED BISCH: We did not want to give them exactly what they want. Today is a very good day for justice.

MANN: Bisch says he hopes the Sacklers - who, again, deny any wrongdoing - will wind up having to pay a lot more money for their role in the opioid crisis.

FADEL: Will the Supreme Court opinion affect other bankruptcy cases?

MANN: Yeah, absolutely. I spoke about this with Jonathan Lipson, a bankruptcy law expert at Temple University. He says this is going to block a lot of wealthy companies and individuals that were hoping to game the bankruptcy system, in similar ways to what the Sacklers tried here.

JONATHAN LIPSON: If the Sacklers had gotten the shield, scores of companies that are currently litigating or looking at litigation for serious liability would say, well, why would we ever bother with the regular justice system? Like, we can just go into bankruptcy. We can control the process.

MANN: So Leila, this was a big precedent, affecting the opioid crisis, but also curbing the broader power of these bankruptcy courts.

FADEL: NPR's Brian Mann. Thank you, Brian.

MANN: Thank you. Transcript provided by NPR, Copyright NPR.

NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

Brian Mann is NPR's first national addiction correspondent. He also covers breaking news in the U.S. and around the world.
Leila Fadel is a national correspondent for NPR based in Los Angeles, covering issues of culture, diversity, and race.