Supreme Court blocks $6 billion opioid settlement that would have given the Sackler family immunity

The Supreme Court on Thursday blocked Purdue Pharma from going forward with bankruptcy proceedings, which the Biden administration has called an “unprecedented” arrangement that would ultimately offer the Sackler family broad protection from opioid-related civil claims.

In agreeing to pause the settlement, the court also said it would take up the case and hear arguments this December.

The case arose after the reorganization in bankruptcy of OxyContin manufacturer Purdue Pharma – stemming from litigation arising from claims over its role in fueling the opioid addiction crisis.

Until recently, Purdue was controlled by the Sackler family, who withdrew billions of dollars from the company before it filed for bankruptcy. The family has now agreed to contribute up to $6 billion to Purdue’s reorganization fund on the condition that the Sacklers receive a release from civil liability.

“We are confident in the legality of our nearly universally supported Plan of Reorganization, and optimistic that the Supreme Court will agree,” Purdue Pharma said in a statement.

“Even so, we are disappointed that the US Trustee, despite having no concrete interest in the outcome of this process, has been able to single-handedly delay billions of dollars in value that should be put to use for victim compensation, opioid crisis abatement for communities across the country, and overdose rescue medicines,” the company said.

The government, representing the US Trustee, has called the plan “exceptional and unprecedented” in court papers, noting that lower courts have divided on when parties can be released from liability for actions that caused societal harm.

“The plan’s release ‘absolutely, unconditionally, irrevocably, fully, finally, forever and permanently releases’ the Sacklers from every conceivable type of opioid-related civil…