Judge Orders Pause On Suits Against Sacklers, Purdue

By Kelly Burch 10/16/19

The Sacklers had asked for a months-long stay on lawsuits while they dealt with Purdue Pharma's bankruptcy. 

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A federal judge has put a temporary hold on further lawsuits of Purdue Pharma or the Sackler family, but not as long of a hold as the Sacklers wanted. 

Robert D. Drain, a bankruptcy judge based in New York, is overseeing the proceedings for Purdue (the maker of OxyContin), part of the company’s settlement in opioid litigation. Drain put a stay in place that will last until November 6.

According to the New York Times, Drain said that this will keep the parties from unnecessary spending on litigation, but also ensure that the settlement is moving forward. 

States that oppose the settlement agreement are trying to go after the Sacklers' personal wealth, which the states argue was gained through their company's harmful and possibly illegal marketing practices.

The Sacklers Wanted A Longer Stay To Deal With Bankruptcy

The Sacklers are contributing $3 billion to the settlement, but states argue that is little compared to the amount the company profited from OxyContin and other prescription drugs. The Sacklers asked for a months-long stay on lawsuits while they dealt with the bankruptcy. 

The judge, it seemed, ruled in the middle. During the seven-hour hearing, Drain emphasized that the bankruptcy court could craft a binding agreement that would help states reach their ultimate goal: getting damages to help them cover the costs of the opioid crisis. He said that Purdue (and the Sacklers) would not be able to use delay tactics in his court. 

Midway through the hearing, the Times reported that Drain shouted, “No one wastes time in front of me! Everyone, the debtor first and foremost, would engage in good faith.” 

Learning From The Big Tobacco Settlement

Drain pointed out that his court has the power to make a settlement that will dictate what the funds are used for. He pointed out that this could help avoid issues like those that happened with the tobacco settlement, where funds that were intended for smoking prevention were instead used to cover general budget shortcomings. 

“That could not happen in a bankruptcy plan, because a bankruptcy plan is binding,” he said. 

The states agreed to voluntarily abide by Drain’s decision, since a federal judge cannot compel states to a certain action. By November 6, the states will have more information from the Sacklers and Purdue, including how much, exactly, the family profited, said William Tong, Connecticut’s Attorney General. 

“We are disappointed by the court’s ruling, but pleased that it is limited in time to less than 30 days,” he said. “We will use this time to ensure that we get access to the Sacklers’ financial information and will be ready on Nov. 6 to make our case to hold Purdue and the Sacklers accountable.”

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Kelly Burch writes about addiction and mental health issues, particularly as they affect families. Follow her on TwitterFacebook, and LinkedIn.