Harrington v. Purdue Pharma L.P.
| Harrington v. Purdue Pharma L.P. | |
|---|---|
 | |
| Argued December 4, 2023 | |
| Full case name | William K. Harrington, United States Trustee, Region 2 v. Purdue Pharma L.P., et al. |
| Docket no. | 23-124 |
| Case history | |
| Prior | Bankruptcy Court's Confirmation Order and related Advance Order vacated, In re Purdue Pharma, 635 B.R. 26 (S.D.N.Y., 2021), order affirmed in part, reversed in part, In re Purdue Pharma LP, 69 F. 4th 45 (2nd Cir., May 30 2023); cert. granted (Aug. 10, 2023) |
| Questions presented | |
| Whether the Bankruptcy Code authorizes a court to approve, as part of a plan of reorganization under Chapter 11 of the Bankruptcy Code, a release that extinguishes claims held by nondebtors against nondebtor third parties, without the claimants’ consent. | |
| Court membership | |
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Harrington v. Purdue Pharma L.P., (Docket No. 23-124), is a pending United States Supreme Court case regarding Chapter 11 of the Bankruptcy Code.[1] This case is about the settlement by Purdue Pharmaceutical for Opioid victims who overdosed with the OxyContin drug produced by their company.
Background[edit]
In 1995, the Purdue Pharmaceutical company developed and produced OxyContin, a form of opioid. This drug was subsequently approved by the Food and Drug Administration. From 1996 to 2001, Purdue excessively marketed OxyContin to both doctors and patients, claiming their low risk of addiction. This drastically increased the abuse of the drug across the nation. This subsequently resulted in what is now dubbed as the "opioid epidemic in the United States".[2]
From 2000, the side effects of Opioids was starting to be more prevalent, resulting in an influx of lawsuits in the years to come.
Anticipating that they might be liable in these lawsuits, both civilly and criminally, the Sackler family decided to reallocate revenue from Purdue Pharma to their own trusts and holding companies. This reduced the financial standing of Purdue Pharma to fend the incoming lawsuits. Eventually, by 2019, all Sackler family that was on the board of directors of Purdue Pharma have resigned.
In 2019, the Department of Justice (DoJ) brought criminal and civil charges against Purdue Pharma, alleging that their acts defrauded the United States and violated federal kick-back statues.[2]
In the same year, Purdue Pharma filed for Chapter 11 Bankruptcy, whereas the Sackler family did not.[2] As part of their bankruptcy proceedings, Purdue Pharma sought an injunctive stay on all the lawsuits, towards the company and the Sacklers.
Lower Courts[edit]
The United States Bankruptcy Court for the Southern District of New York sided with Purdue Pharma and granted the stay.
In Accordance to the Bankruptcy Code, a mediation was opened to avoid the liquidation of the company. Eventually, a plan was agreed by the company, the Sacklers and 15 other non-consenting states. The plan was for the Sacklers to contribute 4.325 billion, in exchange any third-party lawsuits against the Sacklers would be enjoined. This meant that any claims made towards the Sacklers would not be tried and the Sacklers would be free of those liabilities.
This agreement was eventually agreed to by the Bankruptcy Court as it was deemed to have satisfied 3 of the court's criteria.[3]
Supreme Court[edit]
Representing the United States Bankruptcy Trustees, the Justice Department, appealed the Court of Appeals for the Second Circuit decision to the Supreme Court of the United States seeking a stay in the lower court's decision.
This comes after the Biden administration urged the court to review the entire bankruptcy proceeding by Purdue Pharma, calling it an "unprecedented agreement" that will protect the Sackler's family from opioid-related civil claims.[4]
On August 10, 2023, the Supreme Court granted a stay in the lower court's decision and granted certiorari. [5] The case was heard on December 4, 2023.[6]
References[edit]
- ^ "Justices put Purdue Pharma bankruptcy plan on hold". SCOTUSblog. 2023-08-10. Retrieved 2023-08-11.
- ^ a b c "In re: Purdue Pharma L.P., No. 22-110 (2d Cir. 2023)". Justia Law. Retrieved 2023-08-11.
- ^ "Harrington v. Purdue Pharma (In re Purdue Pharma ), 21 cv 7969 (CM) | Casetext Search + Citator". casetext.com. Retrieved 2023-09-10.
- ^ Vogue, Devan Cole,Ariane de (2023-08-10). "Supreme Court blocks $6 billion opioid settlement that would have given the Sackler family immunity | CNN Politics". CNN. Retrieved 2023-08-11.
{{cite web}}: CS1 maint: multiple names: authors list (link) - ^ "HARRINGTON, WILLIAM K. V. PURDUE PHARMA, L.P., ET AL. (CERTIORARI GRANTED)" (PDF). Supreme Court of the United States.
- ^ "HARRINGTON, WILLIAM K. V. PURDUE PHARMA, L.P., ET AL. (Oral Argument - Audio)". Supreme Court of the United States.