Supreme Court Rejects $6B Purdue Pharma Settlement Granting Sackler Family Immunity from Opioid Lawsuits

On June 27, 2024, the U.S. Supreme Court blocked Purdue Pharma’s $6 billion bankruptcy settlement that would have granted the Sackler family—who extracted over $10 billion from Purdue while the company fueled the opioid epidemic—broad immunity from all current and future civil lawsuits. The 5-4 decision rejected the bankruptcy court’s authority to provide sweeping legal protections to billionaires who had not filed for bankruptcy themselves, exposing how the Sackler family attempted to use bankruptcy law to shield wealth extracted through conduct that killed hundreds of thousands of Americans.

The Original Settlement: $6 Billion for Blanket Immunity

In 2021, Purdue Pharma’s bankruptcy court approved a reorganization plan with extraordinary provisions:

Financial Terms:

• Sackler family would pay $6 billion over nine years
• Purdue Pharma would cease to exist as a for-profit entity
• New entity would focus on addiction treatment and naloxone distribution
• Funds distributed to states, municipalities, and individual victims

The Immunity Provision:

• Sackler family members granted lifetime legal shield from all civil lawsuits
• Protection covered past, current, and all future claims related to opioids
• Applied to claims by states, individuals, and any other parties
• Blanket immunity despite family never filing personal bankruptcy
• Protected estimated $10+ billion the family had already extracted from Purdue

The Trade-Off: States and victims faced impossible choice:

• Accept $6 billion settlement with Sackler immunity
• Or reject deal, get nothing, and face years of litigation against family’s offshore wealth
• Settlement structured to make rejecting it economically irrational despite moral objections

Dissenting States: Refusing to Accept Immunity

Despite enormous pressure, several states refused to accept the settlement:

Objecting Parties:

• California, Connecticut, Delaware, Maryland, Oregon, Rhode Island, Vermont, Washington, and the District of Columbia
• United States Trustee (Department of Justice arm)
• Individual victims and advocacy groups

Arguments Against:

• Bankruptcy court lacked authority to force states to release claims against non-bankrupt parties
• Sacklers never filed personal bankruptcy, yet received bankruptcy protections
• Family extracted billions, then used bankruptcy to shield wealth
• Immunity provision exceeded bankruptcy court jurisdiction
• Allowed billionaires to buy immunity from civil justice system

The Supreme Court Decision: Rejecting Billionaire Immunity

The Supreme Court’s 5-4 majority opinion held:

Key Holdings:

• Bankruptcy courts lack authority to grant blanket immunity to non-debtors (Sacklers)
• Cannot force creditors (states and victims) to release claims against third parties who haven’t filed bankruptcy
• Sackler family immunity provision exceeded bankruptcy court’s statutory authority
• Settlement structure violated the Bankruptcy Code

Justice Gorsuch’s Majority Opinion: Emphasized that:

• Sacklers extracted billions from Purdue before bankruptcy
• Family never filed personal bankruptcy
• Bankruptcy law doesn’t permit non-debtors to discharge liabilities they haven’t assumed
• Allowing such immunity would create “loophole” for wealthy individuals to evade accountability

Dissent (Justice Kavanaugh): Argued:

• Settlement provided billions to victims who would otherwise receive nothing
• Pragmatic solution even if legally questionable
• Victims and most states supported settlement
• Perfect should not be enemy of good

The Sackler Extraction: $10+ Billion Withdrawn

The Supreme Court decision focused attention on how much wealth the Sacklers extracted before Purdue’s bankruptcy:

Known Transfers (2008-2018):

• $10.7 billion withdrawn from Purdue Pharma by Sackler family members
• Transfers accelerated after 2007 guilty plea when legal risks became apparent
• Money moved to offshore accounts, trusts, and shell companies
• Complex structures designed to shield wealth from creditors and lawsuits

Timing:

• 2007: Purdue pleads guilty to misbranding, pays $600 million fine
• 2008-2018: Sacklers withdraw $10.7 billion from company
• 2019: Purdue files bankruptcy citing opioid litigation liabilities
• Family retained extracted wealth while company faced lawsuits

Asset Protection Strategies:

• Offshore trusts in jurisdictions with strong asset protection laws
• Complex holding structures obscuring ownership
• Family offices managing extracted wealth
• Legal structures designed to be “judgment proof”

The Opioid Death Toll: Context for Accountability

The settlement and immunity controversy occurred against backdrop of catastrophic human cost:

Deaths:

• Over 500,000 Americans died from opioid overdoses since OxyContin launch (1996-2024)
• Epidemic directly linked to Purdue’s aggressive marketing and Sackler family direction
• Deaths continued while Sacklers withdrew billions and sought immunity

Addiction and Harm:

• Millions of Americans addicted to prescription opioids
• Families destroyed, communities devastated
• Transition from prescription opioids to heroin and fentanyl
• Ongoing public health crisis with annual costs exceeding $100 billion

Sackler Family Role:

• Directed Purdue’s marketing strategies emphasizing OxyContin was “less addictive”
• Knew drug was highly addictive and widely diverted
• Continued aggressive marketing despite mounting evidence of harm
• Extracted billions in profits from drug killing Americans

Bankruptcy as Wealth Protection Strategy

The Purdue bankruptcy revealed how billionaires exploit bankruptcy law:

The Strategy:

1. Extract wealth from profitable company
2. Create liabilities through illegal or harmful conduct
3. File corporate bankruptcy when liabilities become unmanageable
4. Negotiate settlement offering fraction of extracted wealth
5. Secure immunity from future claims through bankruptcy court
6. Retain majority of extracted wealth protected offshore

Why It Works:

• Creditors (states and victims) desperate for any recovery
• Alternative (years of litigation) offers uncertain recovery
• Bankruptcy forces creditors to choose between bad options
• Courts often approve settlements despite legal concerns
• Non-debtor releases becoming common in mass tort bankruptcies

Who Benefits:

• Wealthy individuals who extracted money before bankruptcy
• Shareholders and family members who received distributions
• Those with sophisticated asset protection planning

Who Loses:

• Victims who receive pennies on dollar of harm caused
• States and taxpayers bearing opioid crisis costs
• Civil justice system’s deterrent function undermined
• Public accountability for corporate wrongdoing

The New Settlement: $7.4 Billion Without Blanket Immunity

After Supreme Court rejected immunity deal, parties negotiated revised settlement:

Increased Payment:

• $7.4 billion total ($1.4 billion more than original)
• Sacklers contribute approximately $6.5 billion over 15 years
• Purdue pays approximately $900 million up front
• Payments accelerated compared to original deal

Modified Immunity Provisions:

• Creditors can opt out of releasing claims against Sacklers
• No blanket automatic immunity for family
• Addresses Supreme Court’s concern about forcing releases
• However, practical enforcement challenges remain

Other Terms:

• Ends Sackler family control of Purdue
• Prohibits Sacklers from selling opioids in U.S.
• Creates public benefit company focused on addiction treatment
• Releases Purdue documents related to opioid marketing

Approval:

• All 50 states and territories agreed to revised settlement (2025)
• Bankruptcy Judge Sean Lane approved plan (November 2025)
• Settlement takes effect ending decade-long bankruptcy process

The Accountability Gap: No Criminal Charges

Despite overwhelming evidence of wrongdoing, no Sackler family members faced criminal prosecution:

Criminal Immunity:

• Settlement includes no admission of wrongdoing
• No Sackler prosecuted for role in opioid epidemic
• Corporate guilty pleas (2007, 2020) didn’t implicate individuals
• DOJ declined individual prosecutions despite documented knowledge of harm

2020 DOJ Settlement:

• Purdue pleaded guilty to criminal charges
• $8 billion settlement (mostly theoretical given bankruptcy)
• Individual Sackler family members not charged
• Pattern of corporate accountability without individual consequences

Evidence of Knowledge: Internal documents showed Sacklers:

• Knew OxyContin was highly addictive
• Directed marketing strategies downplaying addiction risk
• Were informed of widespread abuse and diversion
• Continued aggressive sales push despite knowledge of deaths
• Withdrew billions as legal risks became apparent

Why No Individual Prosecutions:

• Difficulty proving individual criminal intent beyond reasonable doubt
• Sackler family’s extensive legal resources
• Political considerations and lobbying influence
• DOJ focus on corporate rather than individual accountability
• Revolving door between DOJ and white-collar defense firms

Comparing Sackler Wealth to Settlement

The settlement amount, while substantial, pales compared to extracted wealth:

Extracted: $10.7+ billion (documented withdrawals) Settlement: $7.4 billion (paid over 15 years) Retained: $3+ billion conservatively, potentially much more

Time Value:

• $7.4 billion paid over 15 years worth much less in present value
• Sacklers retain use of billions during payment period
• Investment returns on retained wealth exceed payment obligations
• Family remains extraordinarily wealthy despite “largest settlement”

Per Death:

• 500,000+ opioid deaths since 1996
• $7.4 billion settlement = ~$14,800 per death
• Does not account for addiction, disability, family destruction
• Vastly undercompensates harm caused

Precedent: Bankruptcy Shield for Billionaires

The Purdue bankruptcy established troubling precedents despite Supreme Court intervention:

Before Supreme Court Decision:

• Non-debtor releases becoming routine in mass tort bankruptcies
• Wealthy individuals using corporate bankruptcies to shield personal wealth
• Bankruptcy courts granting immunity to non-bankrupt parties
• Strategy replicated in other corporate misconduct cases

After Supreme Court Decision:

• Blanket non-debtor immunity prohibited
• But opt-out provisions may provide similar practical effect
• Wealthy can still use bankruptcy to limit liability
• Settlement structure still allows billionaires to retain extracted wealth

Other Cases Using Similar Structure:

• Boy Scouts of America bankruptcy
• USA Gymnastics bankruptcy (Larry Nassar abuse cases)
• Catholic Church diocese bankruptcies
• Pattern of institutions using bankruptcy to limit liability for abuse and wrongdoing

The Deterrence Failure

The settlement’s terms fail to deter future pharmaceutical industry misconduct:

No Individual Accountability:

• Sackler family members remain wealthy and free
• No prison time for anyone who directed opioid marketing
• Future pharmaceutical executives observe: worst case is paying fraction of profits

Corporate Liability:

• Purdue’s bankruptcy allows reorganization without punitive damages
• $7.4 billion settlement small compared to profits generated
• Settlement costs distributed over 15 years, reducing present value impact
• No structural reforms to prevent similar conduct

Industry Impact:

• Pharmaceutical companies continue aggressive marketing of profitable drugs
• Regulatory capture ensures minimal FDA/DEA enforcement
• Civil liability manageable through settlements and bankruptcy
• Criminal prosecution of executives extremely rare

The Lesson: Purdue case demonstrates that:

• Even most egregious pharmaceutical misconduct leads only to financial settlements
• Executives and owners can extract billions, pay fraction back, avoid prison
• Bankruptcy provides shield for wealthy individuals
• Harm to hundreds of thousands insufficient for meaningful accountability

Political Influence and Lobbying

The Sackler family’s decade-long fight against accountability relied on political influence:

Direct Lobbying:

• Purdue spent millions lobbying against opioid regulation and prescribing limits
• Sackler family members made political contributions to key legislators
• Industry allies lobbied for favorable bankruptcy treatment

Philanthropy as Reputation Laundering:

• Sackler name on museums, universities, medical schools
• Hundreds of millions in philanthropic giving
• Cultural institution naming rights provided legitimacy
• Philanthropy continued even as opioid deaths mounted

Reputation Management:

• Extensive PR campaigns portraying Sacklers as legitimate businesspeople
• Media relationships cultivated through philanthropic giving
• Legal threats against journalists and critics
• Narrative control attempting to separate family from Purdue’s conduct

Post-Scandal:

• Museums removed Sackler name from buildings and exhibitions
• Universities renamed Sackler-funded facilities
• Philanthropic legacy tainted by opioid epidemic
• Family became synonymous with pharmaceutical greed and death

Regulatory Capture: FDA and DEA Failures

The opioid epidemic occurred despite multiple regulatory agencies with authority to intervene:

FDA Approval (1995):

• Approved OxyContin based on Purdue claims of lower addiction risk
• Claims not supported by adequate evidence
• Label included unprecedented language about addiction potential
• FDA official who approved drug joined Purdue shortly after (Curtis Wright)

DEA Enforcement:

• Authorized production quotas for oxycodone that increased dramatically
• Failed to act on reports of widespread diversion
• Allowed Purdue to continue distributing despite red flags
• Political pressure limited aggressive enforcement

Revolving Door:

• FDA officials joined pharmaceutical companies after approving their drugs
• DEA officials joined drug distributors and manufacturers
• Regulatory agencies captured by industries they oversee
• Personal financial interests aligned with industry, not public health

International Accountability: Sackler Lawsuits Worldwide

The opioid crisis and Sackler accountability extended beyond U.S. borders:

International Litigation:

• Canadian provinces sued Purdue and Sacklers
• U.K. investigations into Purdue marketing practices
• Israel and other countries examined Sackler family role
• Pattern of aggressive marketing globally, not just U.S.

Asset Recovery Efforts:

• States attempted to claw back Sackler wealth moved offshore
• International cooperation to trace and freeze assets
• Complex legal structures made recovery difficult
• Many assets remain beyond U.S. legal jurisdiction

Global Public Health:

• Purdue’s OxyContin marketing strategy exported to other countries
• International opioid prescribing increased following U.S. pattern
• Sackler family sought new markets as U.S. scrutiny increased
• Global harm extended beyond U.S. epidemic

The Cost of Delayed Accountability

From Purdue’s 2007 guilty plea to 2025 final settlement represents 18 years of delayed accountability:

During 18-Year Delay:

• Hundreds of thousands additional opioid deaths
• Sacklers withdrew $10.7 billion from Purdue
• Epidemic spread from prescription opioids to heroin to fentanyl
• Families destroyed, communities devastated
• Costs to states and taxpayers exceeded hundreds of billions

Why So Long:

• Sackler family’s extensive legal resources
• Bankruptcy process designed to favor debtors
• Complex asset structures requiring investigation
• Political influence delaying enforcement
• Regulatory capture limiting aggressive action

What Faster Action Could Have Achieved:

• Earlier end to aggressive OxyContin marketing
• Prevented some of the $10.7 billion extraction
• Deterred other pharmaceutical companies from similar conduct
• Saved lives through earlier prescribing restrictions
• Reduced transition to illicit opioids

Conclusion: Billions Retained, Immunity Purchased, Deaths Unpunished

The Purdue Pharma bankruptcy settlement exemplifies how America’s wealthiest evade accountability for even the most catastrophic corporate misconduct:

The Sackler Family:

• Extracted $10+ billion from company killing Americans
• Used bankruptcy to shield extracted wealth
• Attempted to purchase blanket immunity
• Will retain billions after settlement
• Face no criminal prosecution
• Remain extraordinarily wealthy despite “accountability”

The Victims:

• 500,000+ dead from opioid epidemic
• Settlement provides $14,800 per death
• Families receive fraction of harm caused
• No ability to pursue justice against Sacklers beyond settlement
• Society bears ongoing costs of addiction and death

The System:

• Bankruptcy law exploited to protect billionaire wealth
• Corporate misconduct leads to financial settlements, not prison
• Regulatory capture enabled decade of harm before intervention
• Political influence delayed accountability for decades
• Civil justice system subordinated to bankruptcy efficiency

The Supreme Court’s rejection of blanket Sackler immunity represents a small victory for legal accountability, but the underlying failure remains: the family that directed corporate conduct killing hundreds of thousands of Americans will retain billions in wealth, face no criminal charges, and buy legal peace through a settlement that compensates victims at pennies on the dollar while ending their ability to pursue justice.

The message to future pharmaceutical executives is clear: even the most egregious misconduct, even deaths numbering in the hundreds of thousands, leads only to negotiated financial settlements that leave billionaire families wealthy and free. The American legal system has demonstrated it cannot or will not hold the wealthiest accountable for mass death when that death generates sufficient profits and political influence.

The opioid epidemic continues. The Sacklers remain billionaires. No one goes to prison. This is American justice for the wealthy in the 21st century.