Purdue Pharma, the Sacklers, and the U.S. Supreme Court

Those of you who have been following the opioid lawsuits know that on Monday, December 4, 2023, the Supreme Court will hear oral arguments over whether to allow the billionaire Sackler family behind Purdue Pharma to glom on to Purdue's bankruptcy without declaring bankruptcy itself.

But do you know what's at stake for mass torts? Professors Abbe Gluck (Yale), Adam Zimmerman (USC Gould), and I explore that question in a new paper forthcoming in Yale Law Journal Forum. As we explain, the case provides a critical opportunity to reflect on what is lost when parties in mass torts find the “behemoth” litigation system unable to bring mass disputes to a close, when they charge multidistrict litigation as a “failure,” and when defendants contend that sprawling lawsuits across national courts have thrown them into unresolvable crisis that only bankruptcy can solve. Harrington v. Purdue Pharma L.P. is just one of many recent examples of extraordinarily unorthodox and creative civil procedure maneuvers—in both the bankruptcy and district courts—that push cases further away from the federal rules and the trial paradigm in the name of settlement.

Unlike ordinary state and federal trial courts, bankruptcy courts don’t generally lay blame for millions of deaths; they efficiently distribute resources. Petitioners in bankruptcy aren’t called “victims” or “plaintiffs”; they are “creditors” with limited voting rights over the distribution of an estate. Bankruptcy courts don’t develop state tort doctrines. They don’t engage in broad discovery designed to reveal accountability and spur policy reform. They rarely utilize juries or hear testimony from tort victims anxious to have their day in court; instead, testimony tends to focus on the debtor’s financial health.

Yet diverse defendants—many of whom, notably, are not even in financial distress—from Catholic Diocese and Boy Scout abuse cases, to Johnson & Johnson talc, 3M’s earplugs, Revlon hair straighteners, and many more, have now looked to the bankruptcy court to use its inherent authority to invent new forms of procedure to find a path to global peace. Bankruptcy courts are attractive in part because they possess some powers that, ironically, state and Article III federal courts do not—they are the only American courts that can overcome federalism’s jurisdictional boundaries; they are only courts with the power to commandeer both state and federal litigants into a single forum and halt all other civil litigation no matter what court it is in. They also have stretched their own equitable powers to allow innovative corporate maneuvers, as in Purdue, that cabin liability and preclude future litigation even for entities not in financial trouble. But bankruptcy court is not supposed to be a superpower of a court that trumps all others in public litigation; it is instead, an Article I court designed for efficient, private resolution of claims, centered on capturing private value for private actors–not the elaboration and development of law and public norms.

You can read more here if you're interested.

And if you're wanting to catch up on the issues before SCOTUS next week, check out Charlotte Bismuth & Jonathan Lipson's podcast, Bankruptcy for Billionaires, where the three of us talk about MDL, opioids, and bankruptcy. All credit goes to Charlotte and Jonathan for the great image at the top!