AG Bonta Announces $6 Billion Settlement with Purdue Pharma, Sackler Family
This week, California Attorney General Rob Bonta announced a $6 billion settlement with Purdue Pharma and the Sackler Family over their role in the opioid epidemic. Under the agreement, if Purdue’s bankruptcy reorganization plan is approved, the Sackler Family will pay up to an additional $1.675 billion to help abate the opioid crisis nationwide, bringing total plan relief to as much as $6 billion.
If the plan is ultimately approved, California is estimated to receive approximately $486 million from the settlement to fund opioid addiction treatment and prevention. Further, the Sackler Family must allow removal of the Sackler name from all buildings and institutions. Also, as part of the settlement plan with Purdue, the Sackler Family is no longer provided with nonconsensual releases from state law enforcement claims. The plan still, however, provides nonconsensual releases from private claims against the Sackler Family by individuals directly harmed by their misconduct. Attorney General Bonta notes that this practice is not consistent with law and urges the U.S. Court of Appeals for the Second Circuit to block the Purdue plan confirmation until it is addressed.
If the settlement plan is approved, provisions of Purdue’s bankruptcy plan will be kept intact, including those that require the company to be dissolved or sold by 2024 and prohibiting the Sackler Family from the opioid business.
The Attorney General’s Office filed a lawsuit against Purdue Pharma and the Sackler Family in 2019 for unlawful practices in the promotion and sale of opioids. After Purdue Pharma filed for bankruptcy in September 2019, bankruptcy court approved a plan blocking states from pursuing claims against the Sackler Family. A series of states, including California, objected to and ultimately appealed the plan. Then, in December 2021, the U.S. District Court vacated the bankruptcy order, siding with states and their ability to seek claims against the Sackler Family.
The settlement announced this week is subject to court approval and creation of a final settlement documentation. Additional information from the Attorney General’s Office is available here.