The federal government announced settlementswith opioid manufacturer Purdue Pharma and the family that runs it this week. The First State still has its own suits pending against them.
The State of Delaware sued Purdue and several other pharmaceutical companies in 2018, alleging they misled consumers about the safety of their products. The next year, the state sued members of the Sackler family who owns Purdue over their role in the opioid epidemic. Delaware was among the states that refused to settle with Purdue last fall.
Thousands of Delawareans have died from drug overdoses in recent years—nearly three hundred this year alone.
Geeta Tewari, assistant professor at Widener University Delaware Law School, says criminal guilty pleas Purdue agreed to alongside this week’s settlement could help Delaware’s case.
Purdue admitted it had conspired to defraud the United States by misleading the Drug Enforcement Administration and had conspired to violate the federal anti-kickback statute.
“Delaware’s argument can be bolstered by the fact that punitive damages were applied here,” said Tewari. “Punitive damages are not usually applied in contract cases unless it’s an egregious example of misconduct. So the fact that $2.8 billion in civil penalties were applied here, and that Purdue Pharma took this federal plea deal, is a testament to the fact that they acknowledged that they had not complied with corporate social responsibility.”
But Tewari says the $225 million civil settlement the Sackler family agreed to will not help Delaware’s case.
“It is difficult to say what will happen with Delaware’s civil suit against the Sackler Family,” Tewari said. “The Sackler family had not admitted wrongdoing. It is the company that had admitted wrongdoing. It is challenging to make the case against the family, and it’s more challenging than making the case against the company.”
DOJ spokesman Mat Marshall said in an email Friday that nothing has “materially changed” about the timeline of the state’s suits or the strength of its arguments.
The federal settlements are subject to approval by a bankruptcy court.
Tewari says the pending litigation by Delaware and other states not settling is put on hold until the federal settlement is approved.
“It really delays justice,” said Tewari.
The company is entering into bankruptcy, which Tewari says may mean less money for Delaware to collect if the state’s litigation is successful.
Even the federal government will wait in line alongside states, communities and creditors. The company is not expected to pay the entire $8 billion it agreed to in the deal announced this week.
Delaware Attorney General Kathy Jennings said in a statement that the settlements the U.S. Department of Justice announced this week “took the easy way out” ahead of an election—and did not hold the Sacklers fully accountable. She noted that opioid addiction continues to plague communities throughout Delaware.
“We cannot bring back the loved ones, friends, and neighbors who have been taken by the opioid crisis—but we can and must continue to seek justice and accountability for the victims of the Sacklers’ avarice, callousness, and fraud,” she said. “I’ll continue working with my fellow attorneys general to ensure that the Sacklers pay every dime they owe the people of Delaware and of this nation – no matter which overseas account it’s hidden in.”
Jennings signed a letterwith 24 other Attorneys General last week urging the U.S. Department of Justice not to allow Purdue’s OxyContin business to be preserved as a public benefit company.
They argued the public deserves assurance that no opioid business is given the special protection of being placed under a “public umbrella”— and that the government will enforce the law against Purdue just like any other company.
“I'm especially disappointed and angered at the notion that the government would preserve one of the worst corporate parents of the opioid epidemic, rather than holding it fully and unequivocally accountable for the havoc it wreaked,” Jennings said Friday. “But I’m not giving up.”
The U.S. Department of Justice defended the agreement in a press release Wednesday.
“With criminal guilty pleas, a federal settlement of more than $8 billion, and the dissolution of a company and repurposing its assets entirely for the public’s benefit, the resolution in today’s announcement re-affirms that the Department of Justice will not relent in its multi-pronged efforts to combat the opioids crisis,” said Deputy Attorney General Jeffrey A. Rosen.
Purdue Pharma frames the agreement as a step toward delivering $10 billion “in value” to claimants and communities.
“Purdue deeply regrets and accepts responsibility for the misconduct detailed by the Department of Justice in the agreed statement of facts,” said Steve Miller, chairman of Purdue’s board. “Resolving the DOJ investigations is an essential step in our bankruptcy process.”
