By Jonathan Lipson (Temple University Beasley School of Law)
[Editor’s Note: The author represented, on a pro bono basis, an individual claimant in the bankruptcy of Purdue Pharma.]
In late 2022, counsel for opioid-maker Purdue Pharma posted an essay on the Harvard Bankruptcy Roundtable (HBRT), “Please Don’t Forget the Victims: Mass Torts, Third Party Releases and the U.S. Bankruptcy Code” (“Forget”). Forget largely restated arguments they made to the Second Circuit Court of Appeals in their bid to reinstate controversial nonconsensual nondebtor “releases” (NDRs) of collateral civil liability arising from the OxyContin-maker’s confessed drug-marketing crimes. HBRT asked me to respond to Forget because I was pro bono counsel to one of those they would have us remember: Peter Jackson, whose daughter Emily died after taking a single OxyContin in 2006.
While the sentiment to “remember the victims” is laudable, the substance of Forget renders its title a cruel irony. Forget says almost nothing about the victims of a public health crisis that has taken over half a million lives and in which Purdue Pharma, and its wealthy and secretive owners, the Sacklers, apparently played a singular role. Instead, Forget would honor survivors of this crisis through the use of legally dubious NDRs.
Forget conspicuously omits or distorts problems in the Purdue Pharma case and precedent on which its NDRs would rest. It ignores the fact that nondebtor “releases” and “settlements” are contractual in nature, and cannot be forced onto the unwilling; that over 80% of creditors cast no vote on Purdue Pharma’s plan, so there was hardly “overwhelming” support for it; and that the precedent on which they rely—historic mass tort and Supreme Court cases—are readily distinguishable from Purdue Pharma.
Forget would have us forget just how problematic Purdue Pharma—and its quest to insulate the Sackler family—has been, thereby seeking to induce a kind of “bankruptcy amnesia.”
The full article is available here.