As a coalition of lawmakers tries to hold the billionaire Sackler family accountable for their role in the opioid crisis, Washington’s most powerful business lobby group has now jumped into an intense battle over whether courts will grant broad legal immunity to those accused of a corporate crime. can provide.
The issue is a feature of bankruptcy law known as a non-debtor release, which the Sackler family—owners of opioid maker Purdue Pharma—is trying to use. Build your entire corporate empire From current and future litigation. Facing a flurry of lawsuits over its role in the opioid epidemic, Connecticut-based Purdue declared bankruptcy in a New York court, which is known for being friendly to corporate litigants.
Last month, Judge Robert Drain approved the Sackler family’s comprehensive immunity plan in the U.S. bankruptcy court for the Southern District of New York. The Biden administration is now appealing that decision.
Earlier this year, Democrats introduced the Stop Shielding Assets from Corporate Known Liability by Repealing Non-Debt Release (SACKLER) Act, a bill that prevented sacklers from receiving a liability release. Although the law has 63 co-sponsors, the measure has been withheld in committee since March, more than five months before the court accepted Purdue’s plan.
Meanwhile, federal records show that the US Chamber of Commerce, one of the nation’s most-funded corporate lobbying groups, has joined Purdue Pharma in lobbying the bill.
Lobbying records filed with the Senate show that the chamber began lobbying on the Sackler Act between April and June. A chamber aide, the Institute for Legal Reform, has also jumped into the fray. The revelations reveal that the group hired a former Republican aide to the Senate Judiciary Committee to lobby on the issue.
Federal records show only that the Chamber and the Legal Reform Institute are lobbying the bill, which will help determine whether the family is able to defend its hard-earned immunity. The chamber did not respond to a request for comment on what specifically they are lobbying for or against.
For years, the Chamber has been leading a massive legislative campaign to try to protect corporations from legal liability. In the case of the Sackler Act, the Chamber and its members would be trying to forge an attractive legal shield not only for the Sackler family, but for corporate America as a whole.
Other interests lobbying the bill include hospital chain Tenet Health, as well as drugmaker Johnson & Johnson, which has a direct link to the opioid crisis, as it supplies the poppies used in Purdue pills. Johnson & Johnson reported a donation of up to $500,000 to the Chamber in 2020, while Tenet gave $150,000.
A recent investigation by The Intercept revealed that Purdue has spent $1.2 million on lobbying over the past year and a half, despite telling the court that it is insolvent. In federal disclosure records, the company says it is “monitoring” the Sackler Act.
push for immunity
The lobbying move comes as Sacklers is making it clear how much they value the legal immunity provisions of a pending bankruptcy settlement. Last month, the family threatened to scrap the entire settlement and fight each individual case in court unless the current court agreed to halt all current and future civil and criminal proceedings against the family and its empire.
Although Purdue is headquartered in Stamford, Connecticut, and incorporated in Delaware, the Sacklers were able to bring their bankruptcy case in White Plains, New York, because Congress has not passed bipartisan legislation preventing so-called platform purchases by corporations. . Without that reform, companies can pick and choose the courts whose jurisprudence gives them the best chance to protect their assets and give them immunity from liability and prosecution.
Right now, the issue of non-debtor release from liability in bankruptcy cases is a division between the federal circuit courts of appeals. The Ninth and Tenth Circuits do not allow such releases under any circumstances. The Second, Fourth and Sixth Circuits, on the other hand, allow the release of non-agreed, non-debtors to third parties who contribute funds to restructuring plans.
The SACKLER Act would have settled the matter in favor of the Ninth and Tenth Circuit approaches, barring the courts from granting nonrefundable liability waivers—at least against claims by governments. But that law is stalled.
closing the loophole
Now, a group of House and Senate Democrats are trying to pass new legislation designed to explicitly prohibit such settlement arrangements, and short-circuit a deal they mistaken for a drug kingpin. whose products have killed hundreds of thousands of Americans.
Introduced in late July, The Nondeter Release Prohibition Act 2021 is being led by censors Elizabeth Warren (Mass.), Dick Durbin (Ill.), and Richard Blumenthal (Conn.), as well as Reps Jerry Nadler and Mr. Caroline Maloney of New York and David Cicelin of Rhode Island. The law would likewise prevent courts from granting non-debtor releases where creditors do not agree to a liability waiver.
“Ever since Purdue Pharma filed for bankruptcy, the Sackler family has tried to use non-debtor releases, or non-consensual third-party releases, to protect themselves and their assets from the opioid crisis.” connected litigation,” the lawmakers wrote in a press release. “This loophole in bankruptcy law is increasingly being exploited by bad actors who have not filed for bankruptcy to avoid personal accountability for their actions by defending themselves through the bankruptcy proceedings of another corporation or entity.” The Nondeterrence Release Prohibition Act of 2021 will virtually eliminate the use of non-consensual, nondeductible releases in private claims and claims brought by the government.”
Lobbying disclosures for this new bill are not yet available. While House Judiciary Committee Chairman Nadler introduced the legislation, it has been meeting on his committee from July 28—more than a month before a judge approved Purdue’s settlement plan.