Products Liability & Mass Torts Class Action Review – 2025

Opioid litigation has led state and local governments to use public nuisance claims to address social issues. Specifically, In Re National Prescription Opiate Litigation alleges that the companies’ marketing and distribution of opioids constituted a public nuisance. Trumbull County asserts that between 2000 and 2014, the pharmacies distributed 68 million doses of opioids, or the equivalent of 320 pills for every resident. Finally, the U.S. Supreme Court held oral arguments and ruled as to the bankruptcy proceedings concerning Purdue and its affiliates. The case, Harrington, United States Trustee, Region 2 v. Purdue Pharma L.P., 144 S. Ct. 2071 (2024), involved a challenge to Purdue’s Chapter 11 bankruptcy plan and the broad releases of liability it sought for various parties, including the Sackler family, which owned the company. In 2019, Purdue Pharma filed for Chapter 11 bankruptcy protection as part of an effort to address the thousands of lawsuits filed against it by state and local governments, municipalities, and individuals, all related to the opioid epidemic. The lawsuits claimed that Purdue’s aggressive marketing and distribution of OxyContin contributed to widespread opioid addiction and overdose deaths. As part of its bankruptcy proceedings, Purdue proposed a reorganization plan that would involve restructuring the company and creating a public-benefit trust to handle its assets and liabilities. Under the plan, Purdue would pay out billions of dollars to settle opioid-related claims. Additionally, a significant portion of the settlement was earmarked for treatment programs, harm reduction initiatives, and other community-based efforts to address the opioid crisis. One of the most controversial aspects of Purdue’s bankruptcy plan was the proposal to grant a release of liability to the Sackler family, the owners of Purdue. The Sacklers were accused of personally profiting from Purdue’s aggressive marketing strategies that helped fuel the opioid epidemic. However, as part of the bankruptcy settlement, the Sacklers were seeking protection from further litigation, which would shield them from being held personally liable for the company’s role in the opioid crisis. Under the proposed plan, the Sacklers would pay billions of dollars into the settlement trust but would not be held personally accountable for the opioid epidemic, nor could they face any future lawsuits related to their actions at Purdue. Several state attorneys general argued that this provision allowed the Sacklers to avoid full accountability for their role in the crisis. Andrew V. Harrington, the U.S. Trustee for Region 2 (a division of the U.S. Department of Justice responsible for overseeing bankruptcy cases), filed an objection to Purdue’s bankruptcy plan. Harrington argued that the proposed bankruptcy plan was unfair and illegal, particularly the provision that would grant the Sacklers broad legal immunity from further opioid-related lawsuits. Harrington contended that the bankruptcy court lacked the authority to grant the Sacklers a release from personal liability, particularly when they had not filed for bankruptcy themselves and were not technically part of the bankruptcy proceedings. The U.S. Trustee argued that the releases violated established bankruptcy law, which generally does not allow for the release of third parties (such as the Sacklers) from liability unless they are directly involved in the bankruptcy. The objection also focused on the fairness of the bankruptcy plan. The U.S. Trustee argued that the plan unfairly favored the Sacklers over the victims of the opioid epidemic, who would not receive full compensation for their harm under the proposed terms. The objection also argued that the proposed release of the Sacklers and the settlement terms did not adequately reflect the public policy interest in holding corporations and their owners accountable for actions that harm public health and safety. The bankruptcy court initially approved Purdue’s bankruptcy plan, including the releases of liability for the Sacklers. In 2021, the Second Circuit issued a decision to allow Purdue’s bankruptcy plan to proceed with certain modifications. In particular, the Second Circuit upheld the bankruptcy court’s ruling granting releases to the Sackler family, but it did so with some revisions and further scrutiny over how the trust would operate and the amount of money the Sacklers would contribute. The U.S. Supreme Court agreed to hear the case in 2023. After hearing oral argument in early 2024, the Supreme Court ruled in June of this past year that the bankruptcy code does not authorize a release or injunction as part of a Chapter 11 reorganization plan that seeks to discharge claims against a non-debtor, such as the Sacklers, without the consent of the affected claimants. When a debtor files for bankruptcy, it creates an estate that includes nearly all the debtor’s assets. Under Chapter 11, the debtor must propose a reorganization plan to govern the distribution of those assets. This plan is subject to bankruptcy court approval. A confirmed bankruptcy plan can discharge the debtor from certain pre-petition debts, but in this case, the Sacklers did not file for bankruptcy themselves. Despite this, they sought a release that essentially would have discharged them from future claims. The Supreme Court found that there is no provision in the bankruptcy code that allows such a discharge for non-debtors. The Supreme Court stated that § 1123(b) of the Bankruptcy Code outlines the types of provisions that may be included in a Chapter 11 plan. While some provisions apply to the debtor’s responsibilities, a catch-all provision allows for other provisions deemed “appropriate.” Id. at 726. However, the Supreme Court ruled that this catch-all does not authorize a bankruptcy court to discharge the debts of non-

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