The U.S. Supreme Court announced that it will stay the Purdue Pharma bankruptcy order and hear the challenge filed by the U.S. Department of Justice. The news comes after the U.S. Circuit Court of Appeals for the Second Circuit overturned a previous ruling by a U.S. District Court, reviving a contentious legal issue involving Purdue’s bankruptcy order.
The Circuit Court’s decision in May overturned a ruling by U.S. District Judge Colleen McMahon, which had vacated a Purdue bankruptcy order for relying on so-called “nonconsensual third-party releases.” These releases would have forced states and other parties to grant legal immunity to the Sackler family, owners of Purdue Pharma, connected to the opioid crisis.
Judge McMahon’s ruling allowed Connecticut Attorney General William Tong and eight other dissenting attorneys general to negotiate a settlement with Purdue and the Sacklers. The settlement led to a payment of $6 billion to victims, survivors, and states, a permanent exit from the global opioid business by Purdue and the Sacklers, and a requirement for the Sacklers to face victims and survivors at a public hearing.
Connecticut did not participate in the appeal before the Second Circuit but reserved the right to continue opposition to third-party releases before the U.S. Supreme Court.
Tong expressed his support for the District Court’s refusal to “exploit our bankruptcy laws” by billionaire wrongdoers. He emphasized that non-consensual third-party releases are wrong and should not be misused to force settlements on dissenting victims.
“From day one, this has been a fight for justice for the thousands of victims and survivors of Purdue’s misconduct and the Sackler family’s craven pursuit of wealth. We have always reserved our right to participate before the Supreme Court alongside our sister states and families and victims, and we are reviewing our options now,” Tong said in a statement.The case highlights complex legal battles surrounding the opioid
crisis and the strategies employed by individuals and businesses to evade accountability through bankruptcy laws.
Tong has been vocal about the need for reforms to prevent such exploitation, testifying in 2021 before the House Judiciary Subcommittee on Antitrust, Commercial, and Administrative Law.
The Supreme Court’s decision to hear this case reflects the ongoing struggle for justice against those responsible for the opioid crisis and could set a significant precedent regarding the use of third-party releases in bankruptcy court.