A judge will issue a temporary order to hear U.S. Trustee’s motion.
In Manhattan, New York, U.S. District Judge Colleen McMahon, nominated to her post by former U.S. President Bill Clinton, issued a temporary restraining order pausing Purdue Pharma’s proposed reorganization plan (to become a public benefit trust) as part of its opioid litigation settlement. Doing so allows the U.S. Trustee, William Harrington – the watchdog for the Department of Justice (DOJ) – and a few states the ability to file an appeal. In the interim, Judge McMahon will hear arguments on a motion filed asking for a more long-term stay.
Purdue and members of the Sackler family secured bankruptcy and settlement approval in September under U.S. District Judge Robert Drain. Approximately 40 states agreed with the approval as well as many municipalities, Native American tribal communities, medical facilities, personal injury claimants, and other parties involved in the OxyContin maker’s legal case.
Of the settlement, the DOJ explained in September, “Under a separate civil settlement, individual members of the Sackler family will pay the United States $225 million arising from the alleged conduct of Dr. Richard Sackler, David Sackler, Mortimer D.A. Sackler, Dr. Kathe Sackler, and Jonathan Sackler (the Named Sacklers). This settlement resolves allegations that, in 2012, the Named Sacklers knew that the legitimate market for Purdue’s opioids had contracted. Nevertheless, they requested that Purdue executives recapture lost sales and increase Purdue’s share of the opioid market.”
However, there are some plaintiffs who were not entirely convinced of this and in agreement with the settlement’s terms. They feel that both the company and the family behind it were not sufficiently held accountable for their role in fueling the opioid crisis. This prompted the U.S. Trustee appeal.
“The DOJ settlement mandates the preservation of the OxyContin business under the government’s protection as a Public Benefit Company. This requirement in the settlement is improper, corrosive to public faith in government, and offensive to the tens of thousands of families who have been harmed,” said a group of families at a previous hearing.
The DOJ responded that the agreement “was significant because it requires Purdue Pharma to plead guilty to three felonies and steers money to communities ravaged by opioid abuse.” These terms, the agency contended, essentially hold the family liable for its involvement and allow plaintiffs to recoup some of their losses.
Members of the Sackler family are contributing around $4.5 billion as part of the settlement and are protected from any further civil lawsuits. U.S. Trustee Harrington filed an appeal backed by some of the states mainly concerning the protections put into place for the family. He said in court papers, “The U.S. 2nd Circuit Court of Appeals has previously found substantial consummation when only a few steps have been taken to put the plan into effect, making a stay necessary.”
In her decision, McMahon will hear the motion. She said she has “no intention of allowing the issues on appeal to be equitably mooted.” And, McMahon added, “As long as I have jurisdiction to enter a stay pending appeal I fully intend to do so, unless some opponent comes up with an argument that I cannot presently anticipate.”