Judge overturns $4.5B Purdue Pharma opioid settlement because it shields Sacklers from liability in civil cases

"A federal judge on Thursday evening unraveled a painstakingly negotiated settlement between Purdue Pharma and thousands of state, local and tribal governments that had sued the maker of the prescription painkiller OxyContin for the company’s role in the opioid epidemic, saying that the plan was flawed in one critical area," Jan Hoffman reports for The New York Times. The judge "said that the settlement, part of a restructuring plan for Purdue approved in September by a bankruptcy judge, should not go forward because it releases the company’s owners, members of the billionaire Sackler family, from liability in civil opioid-related cases."

The Sacklers had agreed to pay $4.5 billion and forfeit membership in Purdue in exchange for immunity, Hoffman reports. Though the settlement would bring much-needed funding to state, local and tribal governments to address the harms of the opioid epidemic, the settlement has been criticized because it allows the Sacklers to remain wealthy and avoid other legal consequences.

U.S. District Judge Colleen McMahon noted that the Sacklers put $10 billion in Purdue money in offshore accounts to keep it away from U.S. authorities. Those withdrawals sped up after top Purdue executives pleaded guilty in 2007 on criminal and civil charges related to its opioid marketing. That left the company unable to resolve thousands of opioid lawsuits and forced it to declare bankruptcy.

The judge essentially invited a federal appeals court to weigh in on the ruling, writing in her opinion that appellate courts disagree on the issue and lower courts need clarity, Hoffman reports. Attorney General Merrick Garland agreed with McMahon Thursday night, saying "The bankruptcy court did not have the authority to deprive victims of the opioid crisis of their right to sue the Sackler family."