The US Supreme Court ruled on Thursday that the Sackler family could not be legally protected in actions related to the opioid crisis, according to the New York Times.
The decision was related to a provision in a settlement involving Purdue Pharma, the Sacklers’ pharmaceutical company, which produces OxyContin, a painkiller that has addictive properties. The 5-4 decision, written by Justice Neil Gorsuch, states that the federal bankruptcy code does not allow for third-party liability shields in bankruptcy agreements.
The ruling affects a proposed settlement in which the Sacklers would have paid up to $6 billion to address the opioid epidemic.
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The dissent, written by Justice Brett Kavanaugh, called the decision “wrong on the law” and “devastating for more than 100,000 opioid victims and their families.”
The settlement deal, as it was approved in 2021, was to dissolve Purdue Pharma and distribute $4.5 billion in company funds to help curb the opioid epidemic and resolve hundreds of related claims. That deal included a controversial provision that would guarantee the Sacklers from future civil claims.
Later that year, a federal judge overturned the settlement agreement, stating that Sacklers should not have been released from civil liability in opioid-related lawsuits. An appeals court in May 2023 found that the Sacklers could in fact be protected from civil liability after the family sweetened the settlement by around $1.73 billion.
Earlier this month, the US Trustee Program, part of the Justice Department, argued that the liability shield was an improper use of the bankruptcy system and requested that the Supreme Court look into the deal.
Members Sackler family were for many years major donors to some of the world’s most prestigious art institutions. Since the fallout surrounding Purdue, however, a number of those institutions, including the London’s National Gallery and the Guggenheim Museum, removed the Sackler name from their buildings following protests from activists.