Harrington v. Purdue Pharma L.P.
The Supreme Court ruled 5-4 that the bankruptcy code does not allow the Sackler family to use Purdue Pharma's bankruptcy to permanently end opioid victims' lawsuits against them without the victims' individual consent.
The ruling upends a $5.5–6 billion settlement that more than 100,000 opioid victims had negotiated and supported, and it bars courts from using this kind of forced third-party immunity in all future mass-tort bankruptcies — a widely used tool in major cases involving asbestos, the Boy Scouts, and the Catholic Church.
How it got here: Bankruptcy court approved the plan; district court vacated it; Second Circuit reversed; the Supreme Court granted review to resolve a circuit split.
The Case in Depth
What happened
Purdue Pharma, owned and controlled by the Sackler family, marketed the addictive opioid painkiller OxyContin using false safety claims, helping fuel a crisis that killed roughly 247,000 Americans by 2019. Facing massive lawsuits, the Sacklers withdrew approximately $11 billion from Purdue before the company filed for bankruptcy in 2019. In the bankruptcy, the Sacklers offered to contribute $5.5 to $6 billion back in exchange for a court order permanently canceling all opioid-related claims against them — without each victim's consent.
The question before the Court
Can a bankruptcy court permanently cancel opioid victims' lawsuits against the wealthy Sackler family — without the victims' agreement — as part of Purdue Pharma's bankruptcy?
The Court's answer
No — the bankruptcy code does not allow a court to permanently cancel claims that opioid victims hold against the Sackler family without those victims' agreement, simply because the Sacklers' company filed for bankruptcy.
The key provision at issue — a catchall that lets a reorganization plan include "any other appropriate provision" — must be read in light of the five specific examples preceding it, all of which concern only the bankrupt company's own obligations and creditor relationships. The Sacklers were seeking something far beyond that: immunity from fraud and wrongful-death claims without placing nearly all their assets on the table, benefits that even a regular bankruptcy filer could not receive. Congress authorized courts to end claims against non-filing parties without consent in exactly one situation — asbestos bankruptcies — and that narrow carve-out confirmed courts have no such general power.
Curious how the Court got there? See the step-by-step legal reasoning →
Why it matters
More than 100,000 opioid victims who had negotiated a settlement now face renewed uncertainty about any recovery. Companies and individuals involved in future mass-tort bankruptcies — covering asbestos, defective products, and other widespread harms — can no longer force victims to permanently give up their claims against closely connected wealthy people who never filed for bankruptcy themselves.
What changes now
The Second Circuit's decision is reversed and the case is sent back for further proceedings. Purdue's reorganization plan — which had been on hold — must now be revisited without the provision shielding the Sacklers. The Court left open whether the parties can negotiate new consensual settlements and explicitly declined to address whether already-completed bankruptcies with similar third-party releases can be unwound. Congress could potentially address the gap by creating opioid-specific bankruptcy rules, as it did for asbestos.
What this does not decide
The ruling explicitly leaves open whether consensual third-party releases — where the victims themselves agree — remain valid, whether a plan providing full payment for claims against a non-filing party would be permissible, and whether already-completed and substantially consummated bankruptcy plans with similar provisions can be undone.
Concurrences and dissents
Dissent — Justice Kavanaugh
Justice Kavanaugh argued the majority misreads the bankruptcy code's broad 'appropriate provision' catchall, which bankruptcy courts have used for decades to approve nonconsensual third-party releases in major mass-tort cases involving asbestos, silicone implants, the Dalkon Shield, the Boy Scouts, and the Catholic Church. He contended the Sackler releases were not a bankruptcy 'discharge' but a negotiated settlement, and that the majority's categorical prohibition deprives more than 100,000 opioid victims of a hard-won $5.5–6 billion recovery and leaves them with no viable path to compensation — while also destabilizing future mass-tort bankruptcies.
How the Court got there
The legal reasoning, step by step
- The Court focused on §1123(b)(6) of the Bankruptcy Code, the 'catchall' provision allowing a reorganization plan to include 'any other appropriate provision' not inconsistent with the code. Using the ejusdem generis canon — an interpretive rule that reads a catchall phrase in light of the specific examples preceding it — the Court observed that every one of §1123(b)'s first five paragraphs concerns the debtor's own rights and creditor relationships, not outsiders who never filed for bankruptcy.
- Because all the specific examples in the list focus on the debtor, the catchall cannot reach the 'radically different' power to cancel claims against third parties who never filed for bankruptcy, without those claimants' consent. Congress could have written that power explicitly — as it did elsewhere — but did not do so here. The dissent's counter-argument that the 'purpose' of bankruptcy overrides this contextual reading was rejected: statutory purpose cannot substitute for text.
- The broader bankruptcy code reinforced this reading. Discharge — the legal cancellation of debts — is reserved for debtors who surrender virtually all their assets and does not cover fraud or willful-injury claims. The Sacklers sought to cancel fraud and wrongful-death claims against themselves while contributing only a fraction of their total wealth — obtaining greater protection than even a regular bankruptcy filer could legally receive.
- Congress created a specific, detailed exception in §524(g) authorizing courts to bar claims against third parties without consent — but only in asbestos bankruptcies. The existence of that narrow carve-out confirmed that when Congress wants to grant courts this unusual power, it says so expressly in the code. No comparable provision exists for opioid cases or any other mass-tort context.
- Pre-code historical practice further confirmed the reading. Every major American bankruptcy law from 1800 through 1978 — when the current code was enacted — consistently reserved discharge benefits for the debtor alone, requiring a 'fair and full surrender of property.' Nothing in that history suggested courts ever had power to cancel claims held by non-filing parties without claimant consent.
- The Court declined to resolve the case on policy grounds alone. Whether victims would actually recover more by suing the Sacklers directly is a dispute for Congress, not courts, to resolve. If Congress wants special rules for opioid bankruptcies — as it created for asbestos — it is free to enact them; courts cannot invent that authority from statutory silence.
Doctrinal impact
Cases affected by this decision
Reaffirms Epic Systems Corp. v. Lewis (584 U. S. 497)
Reaffirmed as the source of the ejusdem generis canon the Court applied to limit the bankruptcy code's catchall provision.
Distinguishes United States v. Energy Resources Co. (495 U. S. 545)
Distinguished as supporting broad but not unlimited catchall authority; it did not authorize canceling third-party claims without consent.