You don’t often read accounts of the Supreme Court like this. Yet, I have read three similar accounts, in Reuters, in AP, and here in The New York Times:
Supreme Court
Appears Split Over
Opioid Settlement
for Purdue Pharma
Under debate was the practical effect of unraveling the agreement, painstakingly negotiated for years for victims and families who have urgently sought settlement funds, and broader concerns over whether releasing the Sacklers from liability would free them from further scrutiny over their role in the opioid crisis.
“The opioid victims and their families overwhelmingly approve this plan because they think it will ensure prompt payment,” Justice Brett M. Kavanaugh said. He asked why the government was pushing to end a tactic approved over “30 years of bankruptcy court practice.”
Justice Amy Coney Barrett raised what a victory for the U.S. trustee would mean “for other victims of mass torts,” including plaintiffs who have accused the Boy Scouts of America and the Catholic Church of sexual abuse. Those settlements have included similar releases of liability, known as third-party nonconsensual releases.
[Another article, in NPR, simplified the issue as one of practicality vs principle.]
Inside the crowded courtroom, the justices appeared deeply engaged, leaning forward periodically during two hours of argument.
Their questions did not appear to line up along ideological lines, signaling the decision could be closely divided.
Justice Ketanji Brown Jackson seemed skeptical that releases of liability were the only way to compensate opioid victims, asking why the agreement needed to be reached through bankruptcy court.
A lawyer for victims’ groups, Pratik A. Shah, insisted that the releases were critical to the deal. Otherwise, he said, members of the Sackler family would not sign on to an agreement, which risked leaving victims with nothing.
“Without the release, the plan will unravel,” he said. “There will be no viable path to any victim recovery.”
“Well, that sounded very emphatic,” Justice Elena Kagan replied, to laughter.
Justice Kagan appeared to be puzzling through her views from the bench. She seemed doubtful of the U.S. trustee’s position and asked whether the government was standing in the way of an agreement that had the overwhelming approval of victims. They are among those “who think that the Sacklers are pretty much the worst people on Earth,” she added.
But she later pointedly asked whether such deals subverted the bankruptcy process: Did the settlement allow wealthy people like the Sacklers to shield themselves from lawsuits, including claims of fraud, without putting “anything near their entire pot of assets on the table?”
“In some ways, they’re getting a better deal than the usual bankruptcy discharge,” Justice Kagan said, because “they’re being protected from claims of fraud and claims of willful misconduct.”
Justice Jackson seemed to share those concerns. She described frustrations voiced by the original bankruptcy judgethat the Sacklers had moved money out of Purdue into offshore accounts. The Sacklers “took the assets from the company, which started the set of circumstances in which the company now doesn’t have enough money to pay the creditors,” she said.
"We don't normally say that a non-consenting party can have its claim for property eliminated in this fashion without consent or any process of court," conservative Justice Neil Gorsuch told a lawyer for the debtors.