My NY Times OpEd - "The Sacklers Could Get Away With It"

The billionaire Sacklers who own Purdue Pharma, maker of the OxyContin painkiller that helped fuel America’s opioid epidemic, are among America’s richest families. And if they have their way, the federal court handling Purdue’s bankruptcy case will help them hold on to their wealth by releasing them from liability for the ravages caused by OxyContin.

The July 30 deadline for filing claims in Purdue’s bankruptcy proceedings potentially implicates not just claims against Purdue, but also claims against the Sacklers. The Sacklers may yet again benefit from expansive powers that bankruptcy courts exercise in complex cases.

So far, the bankruptcy court has granted injunctions stopping proceedings in several hundred lawsuits charging that Sackler family members directed the aggressive marketing campaign that led to millions of addicted patients and the deaths of several hundred thousand.

The Sacklers have offered $3 billion in the hope that the bankruptcy court will impose a global settlement of OxyContin litigation. Under this settlement, all claims against the Sacklers, even by families who lost loved ones to opioids, would be forever extinguished.

The Sacklers would walk away with an estimated several billion of OxyContin profits while leaving unresolved a crucial question asked by victims and their families: Did the Sacklers create and coordinate fraudulent marketing that helped make their best-selling drug a deadly national scourge? With that question left unanswered, many of those injured by OxyContin would feel victimized again.

In a bankruptcy filing, debts are forgiven — “discharged,” in legal terms — after debtors commit the full value of all of their assets (with the exception of certain types of property, like a primary home) to pay their creditors. That is not, however, what the Sacklers want, and indeed the members of the family have not filed for bankruptcy themselves.

What they propose instead is to be shielded from all OxyContin lawsuits, protecting their tremendous personal wealth from victims’ claims against them. What’s more, a full liability release would provide the Sacklers with more immunity than they could ever obtain in a personal bankruptcy filing, which would not protect them from legal action for fraud, willful and malicious personal injury, or from punitive damages.

Appallingly, legal experts expect the court to give the Sacklers what they want. The precedent is a 1985 case in which the A.H. Robins Company, the manufacturer of the Dalkon Shield contraceptive device, filed for bankruptcy protection. Plaintiffs charged that members of the Robins family and others had fraudulently concealed evidence of the Dalkon Shield’s dangers. None had themselves filed for bankruptcy, but the court discharged all of them from liability. The releases even went so far as to prohibit injured women from suing their doctors for medical malpractice claims. Other bankruptcy courts have since embraced this concept of a shield from liability for those who have not filed bankruptcy.

The Constitution vests only Congress with the power to enact bankruptcy law, the essence of which is prescribing by statute how much wealth a debtor must surrender to creditors in order to obtain a discharge. But Congress has never given a green light for the courts to create a liability discharge process for those — like the Sacklers — who have not submitted all of their assets to the control of a bankruptcy court by filing bankruptcy.

This extraordinary practice presents serious obstacles for those injured by OxyContin. If granted, it will be nearly impossible to get a full and transparent assessment of the Sacklers’ role in the opioid crisis without either the appointment of an independent examiner in the bankruptcy case or congressional investigations.

Allowing the bankruptcy court to impose a global OxyContin settlement may at first appear to be an efficient way to resolve litigation that could drag on for years. But the Sacklers will benefit from this expediency at the expense of victims.

At stake is whether there will ever be a fair assessment of responsibility for America’s deadly prescription drug epidemic. Protection from all OxyContin liability for the Sackler family would be an end-run around the reckoning that justice requires.

Gerald Posner (@geraldposner) is the author of “Pharma: Greed, Lies and the Poisoning of America.” Ralph Brubaker teaches bankruptcy law at the University of Illinois.