Judge Overrules DOJ to Let Settlement Proceed

Judge Overrules DOJ to Let Settlement Proceed

(RightWing.org) – During the COVID-19 pandemic, the opioid crises took a back seat. Still, it didn’t go away, and in fact, the problem got worse. In November, the Centers for Disease Control and Prevention (CDC) reported that from April 2020 to April 2021, 75,673 people died due to opioid overdose. That was up from 70,630 in 2019.

In 2019, Purdue Pharma filed bankruptcy after thousands of lawsuits alleged the company and the Sackler family, who owns the business, were responsible for causing the epidemic through deceptive marketing practices of OxyContin. In 2007 and 2020, the company pleaded guilty to fraud and misbranding branding charges. Now, a bankruptcy judge is allowing a settlement case to proceed over objections from the Department of Justice (DOJ).

Judge Overrules DOJ

On Wednesday, March 9, US Federal Bankruptcy Judge Robert Drain approved a $6 billion opioid settlement approved by the Sackler family. The Sacklers would personally contribute the money to a trust that would pay claims made by states, victims, hospitals, and others who claim OxyContin was largely responsible for the opioid epidemic.

There’s just one catch – the Sackler family wants complete legal immunity. The family says it did nothing wrong and regrets that OxyContin became part of the crisis. Judge Drain said the settlement agreement was a significant improvement over previous offers, and blasted the DOJ for reprehensible opposition to a settlement in the bankruptcy court.

The new $6 billion deal replaces a previous $4.3 billion one that got scuttled after 9 state attorneys general and others argued against the Sacklers getting immunity and other legal protections.

The DOJ opposed the deal over concerns that the bankruptcy court didn’t have the authority to approve a settlement while an appeals court decides if the Sacklers can receive immunity as part of a payout.

Needless to say, things aren’t sitting well with DOJ prosecutors over the bankruptcy judge’s decision. They argued the judge’s decision to let the Sacklers off the hook was premature while an appeals court awaits a verdict. In turn, Judge Drain raised his voice numerous times, alleging the DOJ was uninterested in improving a deal and was looking for ways to kill it.

States Object to New Deal

Despite the 9 state AG’s who opposed the previous deal, 20 signed on it. Now, the state AGs are aligning against the new deal. They say the settlement includes a $277 million payment exclusively to states that negotiated it, creating an unfair imbalance in distribution payments from the trust fund.

Drain said the states have plenty of time to negotiate, but may not get a choice in the matter. He said they risk inviting a protracted and bitter litigation process if the settlement fails. That would mean victims would have to wait longer for compensation and it could be reduced in court proceedings. The judge appeared to argue this deal was the best one they might get and that the DOJ and states should take it.

Afterward, the Justice Department said it stood alongside their prosecutors.

It seems the judge has made his decision. The question is, will the DOJ and states buy in or fight on?

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