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The founder of OxyContin sought an agreement that would prevent the owner of the Sackler family from being barred from future litigation.
A U.S. federal judge a extensive liquidation of bankruptcy Purdue reached out to Pharma Pharma producer OxyContin, which sought to suspend thousands of lawsuits related to the company’s role in the opioid epidemic.
Federal Judge Colleen McMahon ruled Thursday that a key provision of the agreement – members Sackler family, the owner of the company, could not file a separate lawsuit, it was not legal.
In its ruling, the insolvency code “because it does not confer jurisdiction, the order confirming the plan must be left blank.”
The plan was previously approved by 43 U.S. states, but was challenged by the Justice Department and a few other states. They argued that the victims were denied the right to sue the company.
U.S. Attorney General Merrick Garland has applauded Thursday’s verdict.
“The bankruptcy court had no jurisdiction to remove the victims of the opioid crisis from suing the Sackler family,” he said.
A lawsuit was settled out of court in September after the Sackler family lost ownership of Perdue Pharma and paid $ 4.5 billion. Under the terms of the agreement, the company would be sold by 2024 to be replaced by a new entity managed by a trust. Its participation in the sale of opioid products would be limited.
The entity’s profits would be channeled to deal with the ongoing crisis in the U.S., which has had an impact. More than 500,000 overdose deaths. Under the agreement, the company would develop new drugs against addiction and overdose and provide them at little or no cost.
In his ruling, Judge McMahon acknowledged that the waiver of immunity granted to Sacklers would “almost certainly lead to the dismantling of a carefully crafted plan that will lead to many wonderful things, including funding for programs to combat opioid addiction.”
Meanwhile, Steve Miller, chairman of Purdue’s board of directors, said the ruling would “delay and possibly end the ability of creditors, communities and individuals to receive billions in value to alleviate the opioid crisis.”
The company has said it will appeal the ruling.
For his part, Connecticut Attorney General William Tong, who was among some state officials who wanted to dissolve the deal, called the verdict a “seismic victory of justice and responsibility.”
Tong said the verdict “will open up a profound defeat for the Purduins and force them to deal with the pain and destruction caused by the Sackler family.”
Among the lawsuits between individuals and local and state governments, Purdue Pharma was found guilty last year of three criminal charges for boosting OxyContin sales as a result of a painful prescription addiction.
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