CRIMINAL CAPITALI$M
Uncertainty follows court’s rejection of Purdue opioids dealBy GEOFF MULVIHILL
Cheryl Juaire, of Marlborough, Mass., center, leads a protest near the Arthur M. Sackler Museum at Harvard University, in Cambridge, Mass., on Friday, April 12, 2019. A federal judge’s decision to reject a massive opioid settlement with Oxycontin maker Purdue Pharma is a victory for those who want to hold the family that owns the company accountable for their role in the nation’s overdose epidemic. It also will delay the billions of dollars that would have gone to communities and addiction treatment centers across the country to address the ongoing toll of drug addiction.
(AP Photo/Josh Reynolds, File)
A federal judge’s decision to reject a multibillion dollar opioid settlement involving OxyContin maker Purdue Pharma is being hailed as a step toward justice by advocates who have long called for greater accountability for the family that owns the company.
But not everyone involved in the arduous settlement process is celebrating, including some advocates who have lost loved ones to the nation’s ongoing — and growing — addiction crisis. The ruling Thursday from New York-based U.S. District Court Judge Colleen McMahon is a blow to those who sought to use billions of dollars from Purdue and from the Sackler family members involved with the company to fight the epidemic.
“It could be dragged out for months, if not years,” said Cheryl Juaire of Massachusetts, who has lost two grown sons to opioid overdoses.
Juaire founded an organization for grieving parents and was a voice for victims on a committee during the Purdue bankruptcy proceedings that led to the settlement vacated this week.
“Every day, 265 people are dying. The attorneys are getting richer because they’ve still got a job to do, and lives are being lost,” she said. “When is somebody going to say, ‘This is all about the lives?’”
Avi Israel also lost a son to opioid addiction, but sees this week’s ruling differently. Like Juaire, he has dedicated his life to fighting addiction, starting Save the Michaels of the World, a group that has helped get 1,200 people in western New York into addiction treatment this year.
He said Thursday’s decision was the right one.
“You could give me all the money in the world; that’s not going to bring my son back,” said Israel, who also sits on a state board that helps distribute money New York brings in from opioid litigation.
Allowing lawsuits to move forward against Sackler family members could have a more long-lasting effect by deterring corporate executives from pushing medications they know could cause harm.
“I want them to know what it feels like for millions of us in this holiday season, when you sit at the table and you stare at an empty chair and you know that all of that could have been avoided,” he said.
A federal judge’s decision to reject a multibillion dollar opioid settlement involving OxyContin maker Purdue Pharma is being hailed as a step toward justice by advocates who have long called for greater accountability for the family that owns the company.
But not everyone involved in the arduous settlement process is celebrating, including some advocates who have lost loved ones to the nation’s ongoing — and growing — addiction crisis. The ruling Thursday from New York-based U.S. District Court Judge Colleen McMahon is a blow to those who sought to use billions of dollars from Purdue and from the Sackler family members involved with the company to fight the epidemic.
“It could be dragged out for months, if not years,” said Cheryl Juaire of Massachusetts, who has lost two grown sons to opioid overdoses.
Juaire founded an organization for grieving parents and was a voice for victims on a committee during the Purdue bankruptcy proceedings that led to the settlement vacated this week.
“Every day, 265 people are dying. The attorneys are getting richer because they’ve still got a job to do, and lives are being lost,” she said. “When is somebody going to say, ‘This is all about the lives?’”
Avi Israel also lost a son to opioid addiction, but sees this week’s ruling differently. Like Juaire, he has dedicated his life to fighting addiction, starting Save the Michaels of the World, a group that has helped get 1,200 people in western New York into addiction treatment this year.
He said Thursday’s decision was the right one.
“You could give me all the money in the world; that’s not going to bring my son back,” said Israel, who also sits on a state board that helps distribute money New York brings in from opioid litigation.
Allowing lawsuits to move forward against Sackler family members could have a more long-lasting effect by deterring corporate executives from pushing medications they know could cause harm.
“I want them to know what it feels like for millions of us in this holiday season, when you sit at the table and you stare at an empty chair and you know that all of that could have been avoided,” he said.
Pill Mann" made by Frank Huntley of Worcester, Mass., from his opioid prescription pill bottles, is displayed during a protest by advocates for opioid victims outside the Department of Justice, Friday, Dec. 3, 2021, in Washington. A federal judge has rejected OxyContin maker Purdue Pharma’s sweeping deal to settle thousands of lawsuits over the toll of opioids. U.S. District Court Judge Colleen McMahon in New York found flaws in the way the bankruptcy settlement protects members of the Sackler family who own the company from lawsuits. (AP Photo/Carolyn Kaster)
Advocates for opioid victims gather around a banner made by artist Fernando Luis Alvarez with the image of Deputy Attorney General Lisa Monaco that reads "DON'T SHIELD THE SACKLER CARTEL!" During a protest outside the Department of Justice, Friday, Dec. 3, 2021, in Washington. A federal judge has rejected OxyContin maker Purdue Pharma’s sweeping deal to settle thousands of lawsuits over the toll of opioids. U.S. District Court Judge Colleen McMahon in New York found flaws in the way the bankruptcy settlement protects members of the Sackler family who own the company from lawsuits.. (AP Photo/Carolyn Kaster)
The contrasting views of justice in the Purdue Pharma bankruptcy reflect a complicated case at the center of multiple lawsuits seeking to hold players in the drug industry accountable for the nationwide epidemic of addiction and overdoses. Combined, prescription and illicit versions of the drugs have been linked to more than 500,000 deaths in the U.S. over the past two decades, and it’s gotten worse during the coronavirus pandemic. Federal officials say there were 100,000 overdose deaths in the 12 months that ended in April, the majority of them from opioids.
The Purdue case is the highest-profile, but it’s not the largest opioid settlement in the works. The drug distribution companies AmerisourceBergen, Cardinal Health and McKesson, plus drugmaker Johnson & Johnson, have agreed to a settlement worth $26 billion over time. The deal relies on having a critical mass of local governments surrender their right to sue and sign on.
Facing thousands of lawsuits from state and local governments, unions, hospitals and others, Purdue filed for bankruptcy protection in 2019 as part of an effort to settle the cases. After negotiations and mediation, it reached a deal supported by the overwhelming majority of state and local governments, as well as individuals with claims who voted on it.
The plan calls for Sackler family members to give up ownership of Purdue. The transformed company would continue to make OxyContin, but with profits going to fight the opioid crisis. It also would try to develop low- or no-cost drugs to reverse overdoses and treat addictions. Sackler family members would contribute $4.5 billion over time in cash and charitable assets.
Most of the money would flow to government entities, which would be obligated to use it to fight the crisis and not just to fill their budgets.
“The most important thing to me is that in the plan, every single penny has to be used for the epidemic,” Juaire said.
Because of the advocacy of Juaire and other representatives of victims, a portion of the settlement — $750 million — would go to individual victims and their families. Payments were expected to range from $3,500 to $48,000. That set the Purdue deal apart from other large opioid settlements, where money for individual victims is not included.
But the deal came with one catch that angered many advocates, state attorneys general and others: The Sacklers would be protected from all current and future civil lawsuits over the toll of opioids.
Ellen Isaacs, left, and Lee Nuss, center, both from Florida, hold each other and a sing of remembrance of Randall M. Nuss, Lee's husband, during a protest with other advocates for opioid victims outside the Department of Justice, Friday, Dec. 3, 2021, in Washington. A federal judge has rejected OxyContin maker Purdue Pharma’s sweeping deal to settle thousands of lawsuits over the toll of opioids. U.S. District Court Judge Colleen McMahon in New York found flaws in the way the bankruptcy settlement protects members of the Sackler family who own the company from lawsuits. (AP Photo/Carolyn Kaster)
Nurse practitioner Sarah Thrower, of Holidaysburg, Pa., holds a sign that reads "Sacklers Lie Children Die!!" as she stands with Randy Anderson, of Bold North Recovery and Consulting, on a bullhorn during a protest with advocates for opioid victims outside the Department of Justice, Friday, Dec. 3, 2021, in Washington. A federal judge has rejected OxyContin maker Purdue Pharma’s sweeping deal to settle thousands of lawsuits over the toll of opioids. U.S. District Court Judge Colleen McMahon in New York found flaws in the way the bankruptcy settlement protects members of the Sackler family who own the company from lawsuits. (AP Photo/Carolyn Kaster)
Under a 2020 settlement with the U.S. Department of Justice, the company pleaded guilty to criminal charges in a deal that would waive most of their $8.3 billion in penalties and forfeitures as long as it entered a settlement that would use money to fight the opioid crisis. Members of the Sackler family agreed separately to pay $225 million to settle federal civil claims. There are no indications that criminal charges could emerge against family members, though some activists are pressing officials to file them.
Eight states and the U.S. Bankruptcy Trustee, a part of the Department of Justice, objected to the bankruptcy settlement and appealed after a U.S. Bankruptcy Court judge accepted the deal in September.
Their arguments swayed Judge McMahon. In her ruling, she said bankruptcy law does not give judges the power to accept deals that protect people who are not themselves filing for bankruptcy protection if some parties in the case don’t agree.
The decision “puts a fine point on the idea that there cannot be two systems of justice in this country,” one for the wealthy and one for everyone else,” Washington state Attorney General Bob Ferguson said in an interview Friday.
Purdue said it would appeal but that it also would keep trying to find a settlement all parties would accept.
McMahon anticipated an appeal in her ruling: “This opinion will not be the last word on the subject, nor should it be.” She said the issue of third-party releases has hovered over bankruptcy law for decades, with federal circuit courts disagreeing about whether they can be granted.
Jen Trejo, left, from California holds a sign that reads "JAIL TIME FOR THE SACKLERS" in one hand and a photo of her son Christopher in the other who died from opioid addiction at 32, and Kathy Moorehead of Louisville, Ky., holds a sign of P. Ryan Wroblweski, during a protest with other advocates for opioid victims outside the Department of Justice, Friday, Dec. 3, 2021, in Washington. A federal judge has rejected OxyContin maker Purdue Pharma’s sweeping deal to settle thousands of lawsuits over the toll of opioids. U.S. District Court Judge Colleen McMahon in New York found flaws in the way the bankruptcy settlement protects members of the Sackler family who own the company from lawsuits. (AP Photo/Carolyn Kaster)
The appeal will go to the New York-based U.S. 2nd Circuit Court of Appeals. It’s expected that whichever side loses will ask the U.S. Supreme Court to weigh in.
Congress also has considered legislation that would prohibit the kind of protections granted to Sackler family members, but the bill has stalled.
Representatives of the Sackler family have said in court, depositions and congressional hearings that they have not done anything improper and are not responsible for the opioid epidemic. They have not commented on Thursday’s ruling.
The Department of Justice, under different leadership than it was 13 months ago when Purdue pleaded guilty, praised McMahon’s decision.
“The bankruptcy court did not have the authority to deprive victims of the opioid crisis of their right to sue the Sackler family,” U.S. Attorney General Merrick Garland said in a statement.
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Mulvihill reported from Cherry Hill, New Jersey.
Judge rejects Purdue Pharma’s sweeping opioid settlement
By GEOFF MULVIHILL
A federal judge rejected OxyContin maker Purdue Pharma’s bankruptcy settlement of thousands of lawsuits over the opioid epidemic Thursday because of a provision that would protect members of the Sackler family from facing litigation of their own.
U.S. District Judge Colleen McMahon in New York found that federal bankruptcy law does not give the bankruptcy judge who had accepted the plan the authority to grant that kind of release for people who are not declaring bankruptcy themselves.
In a statement Thursday night, the company said that it would appeal the ruling and at the same time try to forge another plan that its creditors will agree to.
Purdue said the ruling will not hurt the company’s operations, but it will make it harder for company and Sackler money to be used to fight the opioid crisis as the legal fight continues.
“It will delay, and perhaps end, the ability of creditors, communities, and individuals to receive billions in value to abate the opioid crisis,” said Steve Miller, chairman of the Purdue board of directors. “These funds are needed now more than ever as overdose rates hit record-highs, and we are confident that we can successfully appeal this decision and deliver desperately needed funds to the communities and individuals suffering in the midst of this crisis.”
Representatives of the two branches of the family who own the company did not immediately respond to a request for comment.
A spokesman for the descendants of Mortimer Sackler, one of the late brothers who owned the company, had no comment.
Connecticut Attorney General William Tong, who was among a handful of state officials seeking to have the deal undone, called the ruling “a seismic victory for justice and accountability.” Tong said the ruling will “re-open the deeply flawed Purdue bankruptcy and force the Sackler family to confront the pain and devastation they have caused.”
Purdue sought bankruptcy protection in 2019 as it faced thousands of lawsuits claiming the company pushed doctors to prescribe OxyContin, helping spark an opioid crisis that has been linked to more than 500,000 deaths in the U.S. over the last two decades.
Through the bankruptcy court, it worked out a deal with its creditors. Members of the Sackler family would give up ownership of the company, which would transform into a different kind of entity that would still sell opioids — but with profits being used to fight the crisis. It would also develop new anti-addiction and anti-overdose drugs and provide them at little or no cost.
Sackler family members also would contribute $4.5 billion in cash and charitable assets as part of an overall deal that could be worth $10 billion, including the value of the new drugs, if they’re brought to market.
Government entities and businesses agreed to use any money they receive fighting the opioid epidemic. The deal also calls for millions of company documents, including communications with lawyers, to be made public.
In return, members of the wealthy family would get protection from lawsuits over their role in the opioid crisis — both the 860 already filed and any others in the future.
Most state and local governments, Native American tribes, individual opioid victims and others who voted said the plan worked out in the bankruptcy court should be accepted.
New York Attorney General Letitia James, like several others, sued Sackler family members and opposed the settlement before eventually agreeing to it this year. She said in a statement that if the deal doesn’t hold up, she’s ready to resume the civil lawsuit: “Purdue Pharma and the Sackler family remain named defendants in our ongoing litigation and we will hold them accountable for their unlawful behavior, one way or another.”
The U.S. Bankruptcy Trustee’s office, eight state attorneys general and some other entities have been fighting the deal. They argue that it does not properly hold members of the Sackler family accountable and that it usurps states’ ability to try to do so.
A bankruptcy court judge approved the plan over the objections in September. But the opponents appealed to McMahon’s court.
The main issue on the appeal was the lawfulness of the measures that would extend legal protections to family members.
Such “third-party releases” are not used in most bankruptcy cases, but they are common in cases such as Purdue’s, in which the companies involved are burdened with lawsuits and have relatively little value — but their wealthy owners could contribute.
The Purdue deal would not protect family members from any criminal charges. But so far none have been filed, and there are no signs that any are forthcoming, though some activists are calling for charges.
In a hearing, McMahon focused in on how Sackler family members transferred $10.4 billion from the privately held Stamford, Connecticut-based company over the decade before the bankruptcy. McMahon wanted to know whether the money was moved in part to ensure a role for the Sacklers in bankruptcy negotiations.
But in her ruling Thursday, McMahon did not dig deeply into those transfers or the idea of holding Sackler family members accountable for the opioid crisis. Instead, she focused on whether the bankruptcy law even allows for the kind of deal the company and its creditors struck if there are objections to it.
“The great unsettled question in this case is whether the Bankruptcy Court – or any court – is statutorily authorized to grant such releases. This issue has split the federal Circuits for decades,” she wrote.
She also noted that other courts will weigh in on the case. The next step is likely before the U.S. 2nd Circuit Court of Appeals.
“This opinion will not be the last word on the subject, nor should it be,” she wrote. “This issue has hovered over bankruptcy law for thirty-five years.
By GEOFF MULVIHILL
A federal judge rejected OxyContin maker Purdue Pharma’s bankruptcy settlement of thousands of lawsuits over the opioid epidemic Thursday because of a provision that would protect members of the Sackler family from facing litigation of their own.
U.S. District Judge Colleen McMahon in New York found that federal bankruptcy law does not give the bankruptcy judge who had accepted the plan the authority to grant that kind of release for people who are not declaring bankruptcy themselves.
In a statement Thursday night, the company said that it would appeal the ruling and at the same time try to forge another plan that its creditors will agree to.
Purdue said the ruling will not hurt the company’s operations, but it will make it harder for company and Sackler money to be used to fight the opioid crisis as the legal fight continues.
“It will delay, and perhaps end, the ability of creditors, communities, and individuals to receive billions in value to abate the opioid crisis,” said Steve Miller, chairman of the Purdue board of directors. “These funds are needed now more than ever as overdose rates hit record-highs, and we are confident that we can successfully appeal this decision and deliver desperately needed funds to the communities and individuals suffering in the midst of this crisis.”
Representatives of the two branches of the family who own the company did not immediately respond to a request for comment.
A spokesman for the descendants of Mortimer Sackler, one of the late brothers who owned the company, had no comment.
Connecticut Attorney General William Tong, who was among a handful of state officials seeking to have the deal undone, called the ruling “a seismic victory for justice and accountability.” Tong said the ruling will “re-open the deeply flawed Purdue bankruptcy and force the Sackler family to confront the pain and devastation they have caused.”
Purdue sought bankruptcy protection in 2019 as it faced thousands of lawsuits claiming the company pushed doctors to prescribe OxyContin, helping spark an opioid crisis that has been linked to more than 500,000 deaths in the U.S. over the last two decades.
Through the bankruptcy court, it worked out a deal with its creditors. Members of the Sackler family would give up ownership of the company, which would transform into a different kind of entity that would still sell opioids — but with profits being used to fight the crisis. It would also develop new anti-addiction and anti-overdose drugs and provide them at little or no cost.
Sackler family members also would contribute $4.5 billion in cash and charitable assets as part of an overall deal that could be worth $10 billion, including the value of the new drugs, if they’re brought to market.
Government entities and businesses agreed to use any money they receive fighting the opioid epidemic. The deal also calls for millions of company documents, including communications with lawyers, to be made public.
In return, members of the wealthy family would get protection from lawsuits over their role in the opioid crisis — both the 860 already filed and any others in the future.
Most state and local governments, Native American tribes, individual opioid victims and others who voted said the plan worked out in the bankruptcy court should be accepted.
New York Attorney General Letitia James, like several others, sued Sackler family members and opposed the settlement before eventually agreeing to it this year. She said in a statement that if the deal doesn’t hold up, she’s ready to resume the civil lawsuit: “Purdue Pharma and the Sackler family remain named defendants in our ongoing litigation and we will hold them accountable for their unlawful behavior, one way or another.”
The U.S. Bankruptcy Trustee’s office, eight state attorneys general and some other entities have been fighting the deal. They argue that it does not properly hold members of the Sackler family accountable and that it usurps states’ ability to try to do so.
A bankruptcy court judge approved the plan over the objections in September. But the opponents appealed to McMahon’s court.
The main issue on the appeal was the lawfulness of the measures that would extend legal protections to family members.
Such “third-party releases” are not used in most bankruptcy cases, but they are common in cases such as Purdue’s, in which the companies involved are burdened with lawsuits and have relatively little value — but their wealthy owners could contribute.
The Purdue deal would not protect family members from any criminal charges. But so far none have been filed, and there are no signs that any are forthcoming, though some activists are calling for charges.
In a hearing, McMahon focused in on how Sackler family members transferred $10.4 billion from the privately held Stamford, Connecticut-based company over the decade before the bankruptcy. McMahon wanted to know whether the money was moved in part to ensure a role for the Sacklers in bankruptcy negotiations.
But in her ruling Thursday, McMahon did not dig deeply into those transfers or the idea of holding Sackler family members accountable for the opioid crisis. Instead, she focused on whether the bankruptcy law even allows for the kind of deal the company and its creditors struck if there are objections to it.
“The great unsettled question in this case is whether the Bankruptcy Court – or any court – is statutorily authorized to grant such releases. This issue has split the federal Circuits for decades,” she wrote.
She also noted that other courts will weigh in on the case. The next step is likely before the U.S. 2nd Circuit Court of Appeals.
“This opinion will not be the last word on the subject, nor should it be,” she wrote. “This issue has hovered over bankruptcy law for thirty-five years.
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