Don’t let Sacklers off the hook for role in opioid crisis

We’re backing legislation to prevent the billionaire Sackler family from using the corporate bankruptcy to avoid personal liability

We’re backing legislation to prevent the billionaire Sackler family from using the corporate bankruptcy of a company it controls, Purdue Pharma (makers of Oxycontin and other opioids), to avoid personal liability in ongoing lawsuits by some 24 state Attorneys General attempting to bring some justice to the families of the victims of the opioid crisis. The Sackler Act, HR 2096, introduced by Reps. Carolyn Maloney (NY) and Mark DeSaulnier (CA) and co-sponsored by 52 Representatives, would prevent non-debtor corporate directors and owners from shielding their own personal assets from government or tribal enforcement actions.

The legislation is necessary because last week, a bankruptcy judge cleared the way for an expected August 9th final decision that would protect remaining family fortunes as part of the Purdue Pharma corporate bankruptcy. As Attorney General Maura Healey of Massachusetts, the first state to sue the Sacklers, said in a December letter to the U.S. House Committee on Oversight and Reform, chaired by Rep. Maloney:

“In 2007, prosecutors built a case against Purdue and its executives, but they were not allowed to take it to trial. Our nation paid the price, including thousands of people who should still be alive today. What we do now matters. If we let powerful people cover up the facts, avoid accountability, or create a government-sponsored OxyContin business — that’s not justice. This time, we have to get it right.”

The Committee heard from General Healey (D) and Idaho Attorney General Lawrence Wasden (R) and other witnesses at a hearing Tuesday June 8 . You can access a video archive at that link.

In April, the Oversight Committee estimated that the “Sackler family has built an enormous fortune-collectively $11 billion-in large part through sales of OxyContin.” Members of the Sackler family have had majority ownership and control of the company now known as Purdue Pharma, which family members established in 1952. In 1996, it debuted Oxycontin, a time-release opioid drug for pain management.

According to the Oversight Committee in December 2020, “Purdue Pharma has generated more than $30 billion since bringing OxyContin to market in 1996, and the Sackler family has withdrawn more than $10 billion from the company. Nearly 450,000 people in the United States have lost their lives to the opioid epidemic over the past two decades.”

In 2007, Purdue and 3 executives settled misdemeanor charges with the U.S. Department of Justice. In November 2020, Purdue pleaded guilty to 3 felony offenses, admitting to a variety of misrepresentations to the DEA, including that it facilitated “the dispensing of its opioid products, including OxyContin, without a legitimate medical purpose, and thus without lawful prescriptions.” Christina Nolan, U.S. Attorney for Vermont, said in that DOJ release: “As today’s plea to felony charges shows, Purdue put opioid profits ahead of people and corrupted the sacred doctor-patient relationship…”.

Now, however, a bankruptcy judge wields the power to extinguish 24 pending state lawsuits intended to bring a modicum of justice to the families victimized by the opioid crisis.

As reporter Libby Lewis explained recently in the American Prospect, that “leaves the Sackler family members with unknown billions of dollars-unknown because the individual Sacklers are not in bankruptcy-now protected from any future lawsuits, or civil investigations, over the opioid epidemic that helped make their fortune.”

As Professor Ralph Brubaker explained to Libby Lewis, some lawyers have convinced some bankruptcy courts to extend “the idea of a liability release to go beyond protecting the property of the bankrupt company, to protecting people who aren’t in bankruptcy. “It’s been twisted to do something that wasn’t originally intended: to release somebody from personal liability,” said Brubaker.

Another expert, Professor Adam Levitin, told the New York Times: “It’s not even clear that the bankruptcy court has the jurisdiction to do this,” as the Sacklers are not parties to the bankruptcy themselves.”

Families of opioid victims have established a Sackler Act explainer page. Its history page includes this: “1995: In America, the Sacklers launch OxyContin. Richard Sackler orders Purdue’s sales representatives to create “a blizzard of prescriptions.” A sales rep later described Richard: “This is the dude that made it happen.”

One branch of the Sackler family has created a rebuttal page. Of course they did. It accuses plaintiffs’ attorneys of creating a “strategically invented false narrative” and state Attorneys General of spreading “false claims” from state lawsuit to state lawsuit.

You can decide who caused the opioid crisis. The Sackler Act simply says, no matter who did, bankruptcy law cannot be “twisted…to release somebody from personal liability.” Tomorrow’s hearing will stream online.

Cover graphic above by Mike Licht via Flickr; Some rights reserved.

Originally published at https://uspirg.org.