During the three-week reprieve, Purdue Pharma agreed to address one of the key concerns — access to more information about the Sacklers’ finances — raised by state attorneys general who objected to including the family in the temporary injunction.
“We are disappointed by the court’s ruling, but pleased that it is limited in time to less than 30 days. We will use this time to ensure that we get access to the Sacklers’ financial information,” Connecticut Attorney General William Tong said in a statement.
New York Attorney General Letitia James, who also objected to including the Sacklers in the injunction, said: “We’re pleased with the court’s desire for transparency and its recognition of the public’s need to know the facts that led to this national epidemic. We look forward to further proceedings and holding the Sacklers responsible for the role they played in the opioid crisis.”
Purdue had asked for an 180-day injunction. After more than seven hours of arguments — during which Judge Drain became visible frustrated — some state attorneys voluntarily agreed to a much shorter pause in their cases. They have until Nov. 6 to work out some of their differences.
In a statement after the hearing, Purdue said the decision "is an essential next step in preserving Purdue’s assets for the ultimate benefit of the American public. The company will work tirelessly and collaboratively during this pause in the litigation to continue to build support for the settlement structure.“
The company argued that halting litigation was necessary to allow progress on a tentative settlement with more than 2,600 plaintiffs who have accused Purdue of deceptively marketing its blockbuster opioid pain pill, OxyContin. Without that protection, the Sacklers had said they may back out of the settlement, valued at $10 billion to $12 billion. As part of that deal, the Sacklers agreed to relinquish control of their firm and contribute at least $3 billion to the settlement.
The drugmaker would inevitably be dragged into any litigation against the family, draining resources that could otherwise go to addressing the opioid crisis, Purdue Pharma’s attorneys argued. “Litigation against the Sacklers is litigation against Purdue,” Ben Kaminetzky, an attorney for Purdue Pharma, told the court. “Continued litigation harms everyone.”
The states that objected cited, among other things, deposition testimony stating that the Sackler family took $12 billion to $13 billion in cash out of Purdue Pharma. In light of those sums, the states contend, the Sacklers’ proposed $3 billion contribution to the settlement is not enough.
“The problem is that the Sacklers who have $13 billion, $14 billion are getting a free pass by putting in $3 billion,” said Beth Kaswan, an attorney for 20 municipalities, including 13 in Massachusetts. “I would like to see financial statements for all of the shell companies. [Otherwise] how will I know if they are further transferring assets that are already in shell companies?”
But Drain repeatedly raised his voice and cut off attorneys for states objecting to the injunction. The state attorneys general “could be assured that the Sacklers are not getting a free ride on disclosures,” he said. “I think reasonable people can negotiate information sharing.”
“It appears clear to me that the continued pursuit of litigation would materially affect the debtors,” referring to Purdue Pharma, he said. If one state’s lawsuit was allowed to continue, others would jump back into court as well, he said.