Democracy Dies in Darkness

Sacklers lay out strategy for defending opioid-related lawsuits

The billionaire family that owns Purdue Pharma is signaling they intend to fight lawsuits against them by challenging the use of public nuisance laws.

6 min
Attorneys for Sackler family members disclosed their lines of defense as part of a court filing Monday in the long-running bankruptcy saga of Purdue Pharma. (Mark Lennihan/AP)

The billionaire family that owns Purdue Pharma is signaling they intend to fight lawsuits against them by challenging the use of public nuisance laws, a legal strategy that has already led to billions of dollars in settlements between drug companies and communities ravaged by the opioid crisis.

Attorneys for Sackler family members disclosed their lines of defense as part of a court filing Monday in the long-running bankruptcy saga of Purdue Pharma. Creditors are also seeking to recover billions of dollars they claim the Sacklers withdrew from the company in the years before the bankruptcy to evade future claims, an allegation the family denies.

The Connecticut company declared bankruptcy in 2019 while facing a flood of lawsuits that allege it helped fuel the U.S. opioid crisis by aggressively promoting the blockbuster painkiller OxyContin while downplaying the risk of addiction. After the Supreme Court last summer upended a controversial bankruptcy plan, the Sacklers have been engaged in court-ordered mediation with Purdue and creditors that include states, local municipalities and opioid victims, among others.

If a new settlement deal is not struck, lawsuits against the Sacklers may proceed and offer high-profile tests of the novel strategy of going after opioid companies using public nuisance laws.

State, local and tribal governments and others have filed thousands of public nuisance lawsuits targeting the opioid industry, arguing it unleashed the flood of pain pills over years, wreaking havoc on communities and stretching thin public safety and health resources. Drug manufacturers, distributors and pharmacy chains have agreed to more than $50 billion in settlements with states and communities to settle such claims, according to plaintiffs’ attorneys.

Such claims against Purdue “have never been, and cannot be, established,” attorneys for the family of Raymond Sackler, a company co-founder, argue in their filing. It pointed to a handful of court rulings around the country that found the laws do not apply to the misuse of opioids prescribed lawfully by doctors.

The strategy has resulted in a mixed track record in trials. Purdue in 2019 settled a public nuisance lawsuit filed by Oklahoma. Two years later, the Oklahoma Supreme Court overturned a judge’s decision in a historic trial against another drug company, Johnson & Johnson, ruling the public nuisance law doesn’t apply to the manufacture, marketing and sales of prescription opioids.

Two years ago, a federal judge in West Virginia ruled that the nation’s three major drug distributors did not cause a public nuisance by shipping millions of pain pills to one community devastated by the crisis. The West Virginia Supreme Court is considering an appeal of the case.

But federal courts in California and Ohio have found opioid players liable under public nuisance claims, as did a New York state court jury that ruled against Teva Pharmaceuticals after governments accused the Israeli drugmaker of engaging in misleading marketing practices. In another test of public nuisance laws, the city of Baltimore, which opted out of a national settlement with drug distributors, is in trial against distribution companies McKesson and Cencora, formerly known as AmerisourceBergen.

The court filing Monday marks the first time the Sacklers have publicly outlined their defenses since Purdue filed for bankruptcy protection and suggests they are digging in for protracted litigation even as they remain in settlement talks through a court-ordered deadline of Nov. 1.

In a statement, the family of Raymond Sackler said mediation remains the best way to address the opioid crisis while “the required legal filing shows why we are confident about prevailing in any future litigation should mediation fail, though the consequence of litigation would be years of costly and chaotic legal proceedings in courtrooms across the country.”

An attorney representing Nassau County, N.Y., and dozens of local governments in pending lawsuits against Purdue and the Sacklers on Monday dismissed the arguments and predicted the Sacklers will be held liable at trial. “To suggest Purdue has no liability for the opioid epidemic because no jury has determined it yet is patently absurd,” attorney Hunter J. Shkolnik said.

Years of complicated negotiations resulted in the controversial plan that, if implemented, would have shielded Sackler family members — who themselves did not file for bankruptcy — from further liability in opioid litigation. The Justice Department objected to the plan. A divided Supreme Court in June struck down the plan, ruling that bankruptcy law does not allow the Sacklers to be protected from lawsuits from parties that did not consent. The plan had required family members to pay up to $6 billion during 18 years to settle opioid lawsuits while relinquishing control of the company.

Purdue has supported a move by a court-appointed committee of creditors seeking to sue Sackler family members they allege drained more than $11 billion in cash and property from the company as it faced massive liability. The committee, in a July court filing, said it will seek to claw back that money to compensate Purdue’s “countless public and private victims, rather than continuing to line the Sacklers’ pockets and fund their billionaire lifestyles.”

The Sackler family has long insisted that the transfers were part of normal business activities and that almost half of that money went toward taxes. In its response filed Monday, a branch of the Sackler family asserted the transfers between 2008 and 2017 occurred as Purdue “was in robust financial health” and before a tsunami of lawsuits. Between 2008 and 2016, the filing said, the company made at least $1.5 billion in gross sales each year — surpassing more than $3 billion in many of them.

Lawsuits against the Sacklers, some of whom sat on the Purdue board, allege company sales representatives ramped up marketing to doctors after the company pleaded guilty in 2007 to misleading regulators about the dangers of its blockbuster drug OxyContin. In 2020, the company also pleaded guilty to three felonies stemming from conduct between 2009 and 2017. The Sacklers denied wrongdoing and agreed to pay $225 million as part of a civil settlement; the Justice Department said family members requested company executives “recapture lost sales and increase Purdue’s share of the opioid market.”