The Supreme Court held its first day of oral arguments in a major bankruptcy case regarding an opioid crisis settlement for Purdue Pharma, the manufacturer of OxyContin.
Justices questioned lawyers for roughly two hours regarding the deal, which would see Purdue release $6 billion to victims of the drug crisis while also granting immunity to the Sackler family, the company's owners.
The deal, initially approved by a New York court in May, ran into a roadblock when the U.S. Trustee Program, a division of the DOJ, requested a review by the Supreme Court. The program argued that Purdue was abusing the bankruptcy system to secure protections for the Sackler family and was infringing on the rights of victims to pursue restitution on their own terms.
If the Sacklers were to file for bankruptcy individually, they would not be eligible for the protections from future opioid-related lawsuits afforded in the current deal. The DOJ highlighted that the deal would even protect the family from civil suits related to fraud.
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The DOJ insisted that victims of the opioid crisis should have the right to pursue a civil case against the Sacklers if they wish.
"If it's a significant claim and somebody doesn't want to waive it, we think that you don't have to consider that person a nutcase to say that it's their right to decide whether or not they get to waive their personal property rights," the DOJ stated.
Justices Brett Kavanaugh and Amy Coney Barrett and others expressed the central concern that if the $6 billion deal does not go through, Purdue could fold and victims of the opioid crisis may never see any restitution.
"What if there's just liquidation of the company, which is what the other side raises the specter of? So there's liquidation of the billion, there's no contribution [from the Sacklers], and everyone's left with a lottery ticket to try to get something in litigation years from now?" Kavanaugh asked.
Lawyers for the DOJ responded that there is a "very good chance" that another deal could be made if the current one is rejected, but Kavanaugh later argued that the DOJ was "not accounting for the uncertainty" of a future better deal.
The court is set to resume oral arguments Tuesday morning.
