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California attorney general announces $6 billion multistate settlement with Purdue Pharma, Sackler family

California will receive $486 million of the settlement, paid out over 18 years, to fund drug addiction treatment.

OAKLAND, Calif. (CN) — California’s attorney general praised a $6 billion settlement with Purdue Pharma and the billionaire Sacklers over their role in spawning and enabling the nation’s opioid crisis, while vowing to continue opposing a provision that forces people to release their private claims against Sackler family members for the direct harm they caused.

“No amount of money can ever be enough. Today’s announcement cannot bring back lives or return lives to the way they were. They can't heal the devastating pain families still deal with, but that shouldn't stop us from doing all we can to ensure accountability and prevent future death, future physical and emotional pain for our communities,” Attorney General Rob Bonta said Thursday.

California will receive $486 million of the settlement, paid out over 18 years, to fund drug addiction treatment.

The agreement also secures critical non-monetary relief that holds the Sacklers accountable for their misconduct, including allowing academic, scientific, and cultural institutions to strip the Sackler name from their buildings, foundations and scholarships.

Purdue must also make public a trove of documents it previously withheld under attorney-client privilege regarding its lobbying, marketing and opioid sales strategy. The documents will be held in a repository co-hosted by the University of California, San Francisco, which currently holds an archive of documents from the tobacco industry.

Victims’ family members and opioid addiction survivors may also be able to confront the Sacklers in court at a public hearing being urged by bankruptcy mediator Judge Shelley Chapman.

In 2019, Purdue sought bankruptcy protection in the face of thousands of lawsuits claiming the company pushed doctors to prescribe its signature painkiller OxyContin. It eventually reached an agreement under which the Sacklers agreed to pay $4.3 billion over nine years.

But U.S. District Judge Colleen McMahon in New York overturned the deal last December, finding a bankruptcy judge didn’t have the authority to bless a provision protecting Sackler family members from private lawsuits. McMahon’s decision is up on appeal before the Second Circuit.

The agreement Bonta announced Thursday no longer shields the Sacklers from state law enforcement claims.

The Sacklers agreed under the new deal to pay an additional $1.7 billion above the initial $4.3 agreement after McMahon rejected the initial bankruptcy plan. But the nonconsensual third party releases remain intact, meaning private individuals cannot go after the Sacklers in court.

“This settlement also underscores a profound injustice in the federal bankruptcy system. The Sacklers persuaded the bankruptcy court in New York to provide them with nonconsensual third party releases — a liability shield that would have protected them against California’s claims even though the Sacklers themselves had never filed for bankruptcy, only Purdue had,” Bonta said. “This was wrong.”

Bonta said California maintains that non-consensual third-party releases are illegal and should not be allowed.

“That is an ongoing issue that will be briefed and argued and ultimately decided by our federal court system. We don’t know what the final outcome will be, but we will make our case and maintain that these third party consent agreements are illegal,” Bonta said. "Should the court not agree with us, we have secured a resolution here that provides support for families that are hurting throughout California and the nation, and also secures important non-monetary consideration in the form of acknowledgment of their role in the crisis.”

Congress is currently considering a bill to prevent wrongdoers like the Sacklers from using the bankruptcy court to shield their assets.

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