Supreme Court to hear Purdue Pharma bankruptcy case that shields Sackler family Under the deal, Purdue agreed it owed $8 billion in criminal and civil fines. That deal is at the center of Monday's case because it releases the Sacklers from personal liability.

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Purdue Pharma, Sacklers' OxyContin settlement lands at the Supreme Court

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STEVE INSKEEP, HOST:

In this country, the Supreme Court today reviews an effort to hold people accountable for their role in the opioid crisis. It's the deal involving Purdue Pharma, the maker of the painkiller OxyContin. The Sackler family controlled that company, and they've agreed to pay to fight the crisis in exchange for protection from civil lawsuits. So should they get to walk with their remaining wealth? Here's NPR legal affairs correspondent Nina Totenberg.

NINA TOTENBERG, BYLINE: Just what happened at Purdue Pharma and what the Sacklers did was not known for a long time. Now, however, their role in the companies have been well documented in movies, books and documentaries like this one entitled "Crime Of The Century."

(SOUNDBITE OF DOCUMENTARY, "THE CRIME OF THE CENTURY")

UNIDENTIFIED PERSON #1: Within the last 20 years, more than 500,000 Americans have been killed by overdoses.

UNIDENTIFIED PERSON #2: This was a new drug cartel.

(SOUNDBITE OF MUSIC)

UNIDENTIFIED PERSON #2: There were drug dealers wearing suits and lab coats.

TOTENBERG: By 2020, Purdue Pharma pleaded guilty to three criminal charges, and the company agreed that it owed $8 billion in criminal and civil fines to be paid to state and local governments handling the fallout of the opioid crisis. Most of the money was conditioned on the company reaching a deal in bankruptcy court that would reimburse the victims. It is that deal that is at the center of today's case because it releases the Sacklers from personal liability, despite the fact that all three of the original Sackler brothers who bought Purdue and ultimately developed OxyContin were doctors and that six Sacklers sat on the board of the company including the board chairman, Richard Sackler, who closely directed the firm's aggressive and deceptive marketing strategy of OxyContin.

Under the original bankruptcy deal with the company, the Sacklers kicked in $4 billion to be divided among the state and local governments, but at the same time, the Sackler family members were to be released from any further liability. When eight states and the District of Columbia balked at the amount, the Sacklers upped the ante to 6 billion, and the objecting states withdrew their opposition. In addition, 95% of the state, local and tribal governments, as well as groups of individuals, voted to approve the settlement.

But United States Trustee William Harrington, who oversees bankruptcy cases in New York, Connecticut and Vermont, objected to the deal. Representing him in the Supreme Court today, the Biden administration will argue that the bankruptcy law does not authorize bankruptcy courts to approve a release from liability for third parties like the Sacklers. Georgetown University law professor Adam Levitin says that the Sacklers' $6 billion, to be paid over eight years, is buying them not only a release from liability; it's ensuring that they will not have to testify about their misdeeds in future litigation, and they will be able to keep about half of their money and other assets.

ADAM LEVITIN: The Sacklers do not want to have to be in the bankruptcy fishbowl. They're wanting to get bankruptcy at half price.

TOTENBERG: What's more, Levitin notes that the release from liability covers more than just the Sacklers. It also includes lots of Sackler acolytes - from their lawyers and consultants and doctors to former Senator Luther Strange, who was a Purdue lobbyist after leaving the Senate. None of them have to pay a dime, but all of them would be released from liability in the deal.

LEVITIN: Bankruptcy is supposed to provide relief for honest but unfortunate debtors. And those are people who file for bankruptcy and pay the price. They come clean about their assets, and they give up all of their assets to their creditors. The Sacklers are not doing either of those things.

TOTENBERG: Not all bankruptcy experts agree that the deal is not a good one.

EDWARD MORRISON: I think it's backseat driving to say that it's not good enough.

TOTENBERG: Columbia law professor Edward Morrison.

MORRISON: The perfect can't be the enemy of the good.

TOTENBERG: Indeed, as Morrison notes, the Sacklers have had 20 years to hide their money in overseas places that may be possible to reach, but costly to reach - costly and time-consuming.

MORRISON: Do we want to burn up value reaching those assets and those people, or do we want to just pay the money that's available to the victims? Maybe it's a trade-off that we wouldn't make in an ideal world, but we don't live in a perfect world.

TOTENBERG: Bankruptcy court has a special role to play, particularly in large cases like this one, he argues, because this is the one place where a settlement can be reached with so many victims from so many places and so many diverse interests. That said, though, the Supreme Court of late has signaled its skepticism about bankruptcy judges, viewing them as a lesser form of judge because they serve for limited terms and are appointed by courts of appeal, not the president. And yet, as Morrison points out, bankruptcy court serve as something of a safety valve for dealing with mass injuries. So if the justices do reverse the Purdue Pharma deal, Morrison says, it will be a, quote, "huge mess."

Nina Totenberg, NPR News, Washington.

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