US Supreme Court grapples with Purdue Pharma bankruptcy settlement case
By John Kruzel and Andrew Chung
WASHINGTON (Reuters) -The U.S. Supreme Court on Monday grappled with a challenge by President Joe Biden's administration to the legality of OxyContin maker Purdue Pharma's bankruptcy settlement, a deal that if approved would shield its wealthy Sackler family owners from lawsuits over their role in the country's opioid epidemic.
Purdue's owners under the settlement would receive immunity in exchange for paying up to $6 billion to settle thousands of lawsuits filed by states, hospitals, people who had become addicted and others who have sued the Stamford, Connecticut-based company over misleading marketing of the powerful pain medication OxyContin.
Some of the justices during arguments in the case seemed to convey skepticism toward the administration's challenge to the bankruptcy plan.
«Bankruptcy courts for 30 years have been approving plans like this,» conservative Justice Brett Kavanaugh told a lawyer arguing on behalf of the administration, asking why the court should say such plans are «categorically inappropriate.»
Some justices seemed wary of extending protections to the Sacklers under bankruptcy law when the family members themselves were not debtors under the plan.
«In some ways, they're getting a better deal than the usual bankruptcy discharge,» liberal Justice Elena Kagan told Gregory Garre, a lawyer representing Purdue, adding that the Sacklers under the deal would be «protected from claims of fraud and willful misconduct,» which does not happen in a typical bankruptcy proceeding.
The justices in August paused bankruptcy proceedings concerning Purdue and its affiliates when they agreed to take up the administration's appeal of a ruling by the Manhattan-based 2nd U.S. Circuit of
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