Two dozen U.S. states urged a bankruptcy judge to let them revive their stalled lawsuits against the billionaire owners of Purdue Pharma LP, saying keeping the opioid litigation on ice sends a message that wealthy people can escape justice.
The Sackler family has been accused of false or deceptive marketing of the OxyContin painkiller that triggered an overdose crisis and a death toll exceeding 400,000. The Sacklers are protected from the suits by a temporary injunction due to expire on April 8. Purdue this month asked the court to extend that protection until October.
In a bankruptcy court filing Thursday, the states said nine members of the family should be back in court because they are far from bankrupt. In fact, the states contend, they used an illegal scheme“to become one of the richest families in the world.”
“Allowing the Sacklers the special protection of a nationwide injunction against the law enforcement actions brought against them, through a bankruptcy in which they are not the debtors, sends the wrong message to the public about the fairness of our courts and system of justice,” the states said.
The Sacklers have denied the claims.
“Our family continues to believe that the bankruptcy reorganization process is the most efficient and effective way to reach a resolution that delivers critical resources to the individuals, families and communities most in need,” family members said Friday in an emailed statement.
The family is expected to respond to the states’ filing next week.
Michele Sharp, a spokeswoman for Purdue, said in a statement that the court order blocking litigation against the company is “critical to achieving a global settlement, which would provide billions of dollars in value towards addressing the opioid crisis.” She hailed the appointment of mediators to help with the proposed settlement.
“During the initial stay, we have worked tirelessly with all parties to reach important milestones,” she said, “and now with the appointment of two world-class mediators, we hope to determine how value will be allocated among groups of claimants.”
Purdue, which the states say pushed doctors to overprescribe OxyContin and downplay its highly addictive nature, has proposed a global settlement the company values at $10 billion to resolve 2,700 lawsuits. The family has vowed to put up at least $3 billion and hand over ownership of Purdue to a trust controlled by local governments and other creditors. Some states have said that’s not enough.
“The Sacklers want to give the public their tainted opioid companies of questionable value, while they keep their other, safer assets for themselves,” the states said in their filing.
Massachusetts Attorney General Maura Healey and her New York counterpart, Letitia James, are among the state law enforcement officers seeking to continue lawsuits against the Sacklers. In their filing, the states said they would agree to limit their lawsuits against the Sacklers for now by taking them only as far as rulings on the family’s motions to dismiss. That would give the states an idea of the strength of their claims, they said.
The states also challenged Purdue’s calculation of the value of the proposed settlement, which envisions using profit from future OxyContin sales to pay for overdose reversal and addiction treatment.
“Purdue projected a total of only $238 million in profit for the next seven years,” the states said. “You cannot buy billions of dollars’ worth of overdose reversal and addiction treatment with $238 million.”
The case is Purdue Pharma LP, 19-08289, U.S. Bankruptcy Court, Southern District of New York (White Plains).
–With assistance from Jef Feeley.
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