CORPORATE LIABILITY

HARRINGTON v. PURDUE PHARMA L.P., ET AL.

Issues

Can the Sackler Family, the former owners of Purdue Pharma, L.P., be released from future claims of liability in connection to their alleged contributions to the opioid crisis through Purdue Pharma’s Chapter 11 bankruptcy proceedings despite not being a party to those bankruptcy proceedings?

This case concerns the interpretation of a bankruptcy court’s power under Chapter 11 of the Bankruptcy Code to provide for release from claims by tort victims against non-debtors. OxyContin producer Purdue Pharma––owned by the Sackler Family––filed for bankruptcy in September 2019.  The bankruptcy plan provided for the Sackler Family to be released from all civil claims by third parties resulting from the acts or omissions of Purdue in exchange for the Sackler Family providing around $5.5 billion to satisfy bankruptcy claims. William K. Harrington, United States Trustee for Region 2, argues that the Code limits the bankruptcy court’s authority to manage debtor-creditor relationships. Purdue Pharma, its creditors, and the Sackler Family argue that the court’s power is limited only by “inconsisten[cy]” with the Code––which doesn’t expressly prohibit these kinds of releases. The case has significant implications for the handling of mass tort claims and potential relief for victims of the opioid crisis.

Questions as Framed for the Court by the Parties

Whether the Bankruptcy Code authorizes a court to approve, as part of a plan of reorganization under Chapter 11 of the Bankruptcy Code, a release that extinguishes claims held by nondebtors against nondebtor third parties, without the claimants’ consent.

Since the 1990s, the pharmaceutical manufacturer Purdue Pharma L.P.––owned by the Sackler family––vigorously promoted the use of its name-brand drug OxyContin, an opioid analgesic utilized for its painkilling qualities. In re Purdue Pharma at 9–10. OxyContin would prove highly addictive, and “has been blamed for significantly contributing” to the ongoing opioid epidemic.

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Nestlé USA, Inc. v. Doe

Issues

Under the Alien Tort Statute, can domestic corporations be held liable for aiding and abetting human rights abuses—specifically, child slavery—in a foreign country, when the aiding and abetting allegedly occurred on U.S. soil?

This case asks the Court to determine whether domestic corporations may be held liable for aiding and abetting human rights violations committed in foreign countries. Petitioners Nestlé and Cargill contracted for exclusive buyer-seller contracts with cocoa plantations on the Ivory Coast; Respondents John Doe et. al. were child slaves on those farms. John Doe alleges that Nestlé and Cargill aided and abetted the farmers from headquarters in the United States by providing monetary support while aware of the widespread use of child slavery on those farms, thus making them liable under the Alien Tort Statute. Nestlé and Cargill counter that the harm inflicted upon John Doe occurred exclusively on foreign soil, making the case impermissibly extraterritorial; furthermore, they argue recent Court cases determined that corporations were immune from liability under the Alien Tort Statute. The Court’s decision in this case will implicate political questions of foreign policy and foreign affairs, corporate incentives to invest in developing countries, and the United States’ support for human rights.

Questions as Framed for the Court by the Parties

(1) Whether an aiding and abetting claim against a domestic corporation brought under the Alien Tort Statute may overcome the extraterritoriality bar where the claim is based on allegations of general corporate activity in the United States and where the plaintiffs cannot trace the alleged harms, which occurred abroad at the hands of unidentified foreign actors, to that activity; and (2) whether the judiciary has the authority under the Alien Tort Statute to impose liability on domestic corporations.

In the Ivory Coast, cocoa plantations utilize child slaves to produce cheap cocoa. Doe I v.

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Acknowledgments

The authors would like to thank Professor Muna Ndulo for his guidance and insights into this case. The authors would like to thank Professor Muna Ndulo for his guidance and insights into this case.

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