OxyContin maker bankruptcy deal goes before the Supreme Court on Monday

abcnews.go.com:

The Supreme Court is hearing arguments over a nationwide settlement with OxyContin maker Purdue Pharma that would shield members of the Sackler family who own the company from civil lawsuits over the toll of opioids

WASHINGTON — The Supreme Court is hearing arguments over a nationwide settlement with OxyContin maker Purdue Pharma that would shield members of the Sackler family who own the company from civil lawsuits over the toll of opioids.

The agreement hammered out with state and local governments and victims would provide billions of dollars to combat the opioid epidemic. The Sacklers would contribute up to $6 billion and give up ownership, and the company would emerge from bankruptcy as a different entity, with its profits used for treatment and prevention.

But the justices put the settlement on hold during the summer, in response to objections from the Biden administration. Arguments take place Monday.

The issue for the justices is whether the legal shield that bankruptcy provides can be extended to people such as the Sacklers, who have not declared bankruptcy themselves. Lower courts have issued conflicting decisions over that issue, which also has implications for other major product liability lawsuits settled through the bankruptcy system.

The U.S. Bankruptcy Trustee, an arm of the Justice Department, contends that the bankruptcy law does not permit protecting the Sackler family from being sued by people who are not part of the settlement. During the Trump administration, the government supported the settlement.

Proponents of the plan said third-party releases are sometimes necessary to forge an agreement, and federal law imposes no prohibition against them.

Lawyers for more than 60,000 victims who support the