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.
Additional Resources
- John Kruzel and Andrew Chung, US Supreme Court halts Purdue Pharma bankruptcy settlement pending review, Reuters (Aug. 11, 2023).
- Abbie VanSickle and Jan Hoffman, What the Supreme Court’s Decision to Hear the Purdue Pharma Case Means, The New York Times (Aug. 11, 2023).
- John Fritze, These two moms lost sons to opioids. Now they’re on opposite sides at the Supreme Court, USA Today (Oct. 2, 2023).
- · Brian Mann, A landmark appeals court ruling clears way for Purdue Pharma-Sackler bankruptcy deal, NPR (May 30, 2023).