Harrington v. Purdue Pharma
Case Overview
Purdue Pharma filed for bankruptcy while facing billions in opioid liability, and the Sackler family — who owned Purdue and had already extracted roughly 1 billion from the company — agreed to contribute several billion dollars to a settlement fund in exchange for a provision shielding them from future opioid lawsuits, even though they hadn't filed for bankruptcy themselves. The Supreme Court ruled 5-4 in June 2024 that the bankruptcy code does not permit this kind of third-party liability release — a bankruptcy court can't give non-bankrupt individuals a sweeping shield from civil suits as part of a reorganization plan. The decision threatened to unravel the Purdue settlement and left the opioid litigation in a complicated posture. Bryan covers it as a case about who gets to use the bankruptcy system and on what terms, and as a case that touches the entire architecture of mass-tort litigation settlements.
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The Conclusion
**The Supreme Court held 5-4 that bankruptcy courts may not release non-bankrupt third parties from civil liability as part of a reorganization plan.** Purdue Pharma's settlement proposed shielding the Sackler family from future opioid-related lawsuits in exchange for their multibillion-dollar contributions, but the Court ruled this arrangement exceeded the bankruptcy code's scope.
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