A U.S. Supreme Court decision stripping protections for the billionaire owners of OxyContin maker Purdue Pharma means it could be years before North Carolina sees payouts from the company for its role in the nationwide opioid crisis.
However, Thursday’s ruling does not affect the vast majority of the roughly $1.5 billion that North Carolina will collect over the next few years in settlements with more than a dozen other companies involved in the epidemic.
Multistate lawsuits have been pending for years against Purdue and members of the Sackler family, who controlled the company, alleging the company misleadingly marketed its profitable opioid as less addictive than other painkillers.
Under a settlement and bankruptcy plan announced in 2021, the company and the Sacklers agreed to pay billions to state and local governments across the country, an amount that included an estimated $100 million for North Carolina.
But the Supreme Court blocked that plan Thursday, ruling that the agreement was flawed because it could not legally protect Sackler’s family members from future lawsuits — a provision of the settlement that was challenged by the trustee who oversaw Sackler’s bankruptcy on behalf of the U.S. government Purdue.
Attorney General Jos Stein said in a statement Thursday morning that the Supreme Court’s ruling “means we must now return to the negotiating table.”
“Purdue and the Sacklers must pay so that we can save lives and help people live free from addiction,” Stein said in the statement. “If they don’t want to pay, I will take them to court.”
Associate Justice writes for a 5-4 majority that splits the conservative and liberal blocs Neil Gorsuch noted that such arrangements generally require debtors to seek legal immunity file for bankruptcy and “putting substantially all of their assets on the table.”
The Sacklers, Gorsuch wrote, did not do that.
“Yet they seek an order dismissing a wide range of current and future claims against them, including claims for fraud and intentional injury,” Gorsuch wrote in his opinion, joined by Justices Clarence Thomas, Samuel Alito, Amy Coney Barrett and Ketanji Brown Jackson. “In all of these ways, the Sacklers seek to pay less than the code normally requires, and to receive more than is normally allowed.”
As part of the company’s settlement and bankruptcy terms, the Sacklers had agreed to pay billions into a fund that would eventually go to states to help ease the impact of the opioid epidemic.
Purdue and its owners made billions from sales of OxyContin, released in 1995 amid a marketing blitz that portrayed the narcotic as a safe and effective way to manage pain. Their efforts, Stein said in Thursday’s statement, “helped create and fuel an opioid crisis that continues to kill North Carolinians — an average of 12 people overdose every day.”
However, after lawsuits against the company over its role in the opioid epidemic began to mount, the Sacklers took steps to protect themselves.
“Fearing that the lawsuit would ultimately impact them directly, the Sacklers initiated a ‘milk program,’ withdrawing approximately $11 billion from Purdue—about 75% of the company’s total assets—over the next decade,” said the decision of the Supreme Court.
Stein first filed suit against Purdue in 2018, and the Sacklers separately more than a year later. Since then, the state has joined in multi-state actions against other manufacturers, distributors, pharmacies and marketing companies involved in the opioid market.
Some of the first payments under these plans came in the 2021-2022 budget year and are expected to continue through at least 2038-2039, across the state and more than 100 counties and municipalities in North Carolina.
According to the North Carolina Department of Health and Human Services, more than 36,000 North Carolinians have died from drug overdoses, including prescription and illicit opioids, between 2000 and 2022.
