Pharmaceutical company is considering filing for bankruptcy protection
By Anita Snow and Geoff Mulvihill
Associated Press
PHOENIX (AP) - Arizona's attorney general on Wednesday asked the U.S. Supreme Court to force the Sackler family, which owns OxyContin-maker Purdue Pharma, to return billions of dollars they took out of the company.
The court filing marks the first time the high court has been asked to weigh in directly on the nation's opioid crisis.
Arizona Attorney General Mark Brnovich said the filing is meant to ensure that Purdue has enough money to pay any future judgments or settlements. Nearly all other opioid-related cases brought by states, including a separate one filed last year by Arizona, are in state courts.
"We need to do everything we can to stop the opioid manufacturers from profiting from this crisis," Brnovich said in an interview. "They have siphoned off billions of dollars from the company, and I want to make sure that any money will end up with states and victims of the crisis - not in an account in the Cayman Islands or a Swiss bank."
A spokesman for the Sackler family said they deny the allegations in the claim. Brandon Messina said Arizona's claims are "inconsistent with the factual record."
The filing is the latest maneuver from a state seeking to hold the drug industry accountable for a crisis that costs more American lives each year than vehicle crashes.
"It's a power play," Abbe Gluck, a law professor at Yale Law School, said of Arizona's filing with the Supreme Court.
She said a ruling by the high court on the opioid issue, although a longshot, would have national impact.
Attorney Travis Lenkner, managing partner at a Chicago law firm representing Arizona in the Supreme Court case, said there were concerns that Sackler family members were sending some of the money abroad.
With sales down and legal liabilities looming, Purdue Pharma said earlier this year that it was considering filing for bankruptcy protection - potentially complicating the opioids lawsuits.
"This sort of seems like an end-run around the bankruptcy process," said Elizabeth Burch, a University of Georgia law professor who is following the opioid litigation.
Most U.S. states have sued Purdue over the toll of the national opioid crisis. At least 17 of them have now named members of the Sackler family, which owns the Stamford, Connecticut-based drug company.
The family includes major philanthropists who have given to museums and universities around the world. Some institutions, including New York's Metropolitan Museum of Art, have announced this year that they will no longer accept money from the family.
Some 2,000 local and tribal governments have sued Purdue and other companies that make and distribute drugs. Most of those cases are in federal court and are overseen by a judge in Cleveland. Judge Dan Polster is pushing the parties to negotiate a settlement but also has scheduled the first trial for October.
The negotiations are being conducted in secret, but there are signs of animosity between local and state governments over control of any money the settlements would generate.
Opioids, a class of drugs that includes prescription medications such as OxyContin and Percocet and illicit drugs including heroin and fentanyl, have been blamed for more than 400,000 deaths in the U.S. since 2000. The drugs were linked to more than 47,000 deaths in both 2017 and 2018 - more than auto accidents.
Arizona's lawsuit alleges that the family has pulled "billions of dollars out of the company in recent years. The law does not permit the Sacklers to reap a windfall while Purdue's creditors absorb a massive loss."
The filing notes that the U.S. Constitution allows the Supreme Court to have jurisdiction over controversies between a state and citizens of another state.
Published: Fri, Aug 02, 2019
