Judge Overturns Purdue Pharma’s Opioid Settlement
In a stunning turn-a-round, the “Law of Cause & Effect” has prevailed, illustrating that What Goes Around Does Come Around. It’s good news! The vile Sackler family is back on the hot seat.
They thought they had escaped with a settlement that would shield them from personal liability for the death & destruction of hundreds of thousands of lives, wrought by the opioid crisis they created and has enriched them to the tune of more than $10 billion.
Thank you Judge Colleen McMahon of the U.S. District Court for the Southern District of New York for stepping up to do the right thing now. It was the step needed to bring this evil family to justice sooner rather than later.
The “Law” says they will get their just due and that the longer it takes, the deeper the pit they dig for themselves. But all things being equal, now would be as good time as any to get those members responsible to face the music.
It will also save many lives to shine the light now, on the destructive power of opioids for all the world to see.
https://www.nytimes.com/2021/12/16/health/purdue-pharma-opioid-settlement.html?smid=em-share
Judge Overturns Purdue Pharma’s Opioid Settlement
The ruling said the company’s owners, members of the Sackler family, could not receive protection from civil lawsuits in return for a $4.5 billion contribution.
A federal judge on Thursday evening unraveled a painstakingly negotiated settlement between Purdue Pharma and thousands of state, local and tribal governments that had sued the maker of the prescription painkiller OxyContin for the company’s role in the opioid epidemic, saying that the plan was flawed in one critical area.
The judge, Colleen McMahon of the U.S. District Court for the Southern District of New York, said that the settlement, part of a restructuring plan for Purdue approved in September by a bankruptcy judge, should not go forward because it releases the company’s owners, members of the billionaire Sackler family, from liability in civil opioid-related cases.
Although the Sacklers did not file for personal bankruptcy protection, they had made immunization from opioid claims an absolute requirement in exchange for contributing payments amounting to $4.5 billion to the agreement.
But the bankruptcy code, Judge McMahon said, does not explicitly permit a judge to grant such releases, which she called “the great unsettled question.”
The Sacklers did not respond to requests for comment on Thursday evening.
Lawyers for a small group of states that had appealed the plan immediately hailed the ruling. “This is a seismic victory for justice and accountability that will re-open the deeply flawed Purdue bankruptcy and force the Sackler family to confront the pain and devastation they have caused,” said William Tong, the attorney general of Connecticut.
In recent months, members of Congress have proposed legislation called “The Sackler Act” to preclude owners from receiving such protections unless they file for bankruptcy themselves. But even if eventually passed, it is unlikely to become law in sufficient time to resolve the Purdue case.
In her ruling, Judge McMahon all but openly invited the U.S. Court of Appeals for the Second Circuit to weigh in. Various appellate courts disagree on the matter and, in her meticulous, 142-page assessment, Judge McMahon wrote that “the lower courts desperately need a clear answer.”
Within hours of the ruling, Purdue said it would appeal. Judge McMahon’s ruling “will delay, and perhaps end, the ability of creditors, communities, and individuals to receive billions in value to abate the opioid crisis,” said Steve Miller, chairman of the company’s board of directors. “These funds are needed now more than ever as overdose rates hit record-highs, and we are confident that we can successfully appeal this decision and deliver desperately needed funds to the communities and individuals suffering in the midst of this crisis.”
The fates of Purdue and the Sacklers have been perhaps the most closely watched among the web of litigation brought against companies in the pharmaceutical industry seeking to hold them accountable for the epidemic of opioid addiction in the United States, which has claimed more than a half-million lives.
Under the crush of thousands of lawsuits, Purdue filed for bankruptcy restructuring in September 2019, which automatically put a hold on all the claims against it.
Nearly two years later, Judge Robert Drain, the bankruptcy court judge in White Plains, N.Y., confirmed a plan that had been approved by a majority of creditors who voted. Purdue would be formally dissolved and would re-emerge as a new company called Knoa Pharma that would still produce OxyContin but also other drugs. The new company’s profits would go to states and communities to fund opioid treatment and prevention efforts.
The Sacklers would renounce their ownership, eventually sell their foreign pharmaceutical companies as well, and contribute $4.5 billion of their fortune to the state and local opioid abatement funds.
In exchange, all lawsuits against Purdue would be extinguished, a benefit typical of bankruptcy. What made the settlement so contentious was the Sacklers’ insistence on being released from all Purdue-related opioid claims, although they had not personally filed for bankruptcy.
In court, lawyers said there are more than 800 lawsuits that name the Sacklers.
After Judge Drain approved the plan, it was immediately appealed by the United States Trustee, a branch of the Justice Department that monitors bankruptcy cases; eight states, including Maryland, Washington and Connecticut; the District of Columbia; and about 2,000 individuals. The appeal was filed in federal district court.
Lawyers challenging the plan argued that the Sacklers had essentially gamed the bankruptcy system. Moreover, they argued, Judge Drain lacked the authority to shut off a state’s power to pursue the Sacklers under its own civil consumer protection laws.
“Today’s ruling is a critical development that restores the state’s ability to protect the safety of Marylanders by holding fully accountable those who created or contributed to the opioid crisis, particularly members of the Sackler family,” said Brian E. Frosh, the Maryland attorney general.
During oral arguments, Judge McMahon said she was troubled by what she saw as a red flag: the more than $10 billion that the Sacklers withdrew from Purdue between 2008 and 2018, as the opioid epidemic was cresting. The Sackler dividends were largely deposited in offshore accounts and trusts that are inaccessible to American authorities.
And notably, she said, the withdrawals escalated after Purdue and three top executives pleaded guilty in 2007 to federal criminal and civil charges related to aggressive marketing of opioids, paying more than $600 million.
As Judge McMahon wrote: “Concerned about how their personal financial situation might be affected, the family began what one member described as an ‘aggressive[]’ program of withdrawing money from Purdue almost as soon as the ink was dry on the 2007 papers.”
Those withdrawals left the company without deep cash reserves to resolve thousands of opioid lawsuits that, by late 2019, forced Purdue to seek shelter in bankruptcy. But to settle the lawsuits and emerge from bankruptcy, Purdue needed the Sacklers’ contribution.
That reliance put the Sacklers in a position to make a line-in-the-sand demand: They would only give the money if they received immunity from all opioid-related cases filed in civil courts.
Purdue and lawyers for creditors who approved the plan had argued that Judge Drain’s authority to grant such sweeping immunity was in fact grounded in the bankruptcy code, as well as in precedent from the Second Circuit, under whose jurisdiction the Purdue case falls. Without the Sackler contribution, the lawyers said, Purdue would likely be dissolved, leaving plaintiffs who are in sore need of resources largely uncompensated.
“There is no question that the Sacklers are bad actors,” wrote lawyers for an oversight committee of creditors that ultimately supported the settlement plan. But it was the knowledge of those acts, gleaned in a scorched-earth 18-month investigation of the family’s finances, they said, that gave the plaintiffs the leverage to extract such a large settlement sum from Purdue’s owners.
But lawyers for the U.S. Trustee argued that shutting down the ability of plaintiffs to sue the Sacklers violated the plaintiffs’ due process rights. The Sacklers, they argued, should not be rewarded for their contribution because they “created the need for that money” by taking it out of the company in the first place, setting up the situation where they would be protected from lawsuits “by piggybacking on the bankruptcy of their company.”
On Thursday night, after the ruling, Attorney General Merrick B. Garland said in a statement, “The bankruptcy court did not have the authority to deprive victims of the opioid crisis of their right to sue the Sackler family.”
In her opinion, Judge McMahon said that the case raised constitutional questions but that she did not need to reach them, having found no authority for a judge to grant immunity to parties who do not seek bankruptcy protection.
The Sackler lawyers argued that the withdrawals had not been done in anticipation of a bankruptcy filing that occurred years later, after family members had stepped down from the Purdue board. Instead, they said, the hefty withdrawals coincided with a decade in which a key patent issue was addressed in Purdue’s favor and the company was flush with cash.
During that same period, Purdue’s sales force continued to fan out across the country. The use and illegal diversion of prescription opioids skyrocketed.
When Purdue filed for bankruptcy, its relationship with its owners became strained — simultaneously cooperative and adversarial. The company relies on the Sacklers to fund settlements. Yet as the debtor, Purdue conducted a forensic accounting of all of its assets, including the billions withdrawn by the Sacklers.
A congressional committee found that the Sacklers are worth about $11 billion.
While the Purdue Pharma bankruptcy plan — and its disbursements to help prevention and addiction treatment — is on indefinite pause, wending its way through the courts, the opioid epidemic, indifferent to negotiation, persists. Last month, federal data showed that deaths from opioids — fentanyl, heroin and illegally diverted prescription painkillers — only continue to trend upward.
Jan Hoffman writes about behavioral health and health law. Her wide-ranging subjects include opioids, tribes, reproductive rights, adolescent mental health and vaccine hesitancy. @JanHoffmanNYT
Kirkus Reviews, the gold-standard for independent & accurate reviews, has this to say about
What Goes Around Comes Around:
A stable, positive, non preachy, objective voice makes the book stand apart from others in the genre. A successful guide that uses anecdotes to reveal powerful truths about life.
~ Kirkus Reviews
“I’ve read a number of books that focus on sharing a similar message, including “The Secret” by Rhonda Byrne, “The Answer” by John Assaraf & Murray Smith, “The Celestine Prophecy” by James Redfield, “Think and Grow Rich,” by Napoleon Hill, and I must say that I find Rob’s to be my favorite.” – Sheryl Woodhouse, founder of Livelihood Matters LLC
Judge Overturns Purdue Pharma’s Opioid Settlement
Judge Overturns Purdue Pharma’s Opioid Settlement
Here’s a case of “Group malfeasance, blamed on poor judgement, from the consumption of too much wine!” A nine month investigation of the American chapter of “The Court of Master Sommeliers” has revealed a widespread expectation/demand of sexual favors in return for mentoring female applicants, undergoing the rigorous exam process, required for membership and recognition as an official Sommellier.
This follows the complaint of 21 women that their supposed mentors, had pressured them for sex, apparently a well-established condition with a long history. So far 22 men have been investigated.
The point being, that when a lowly activity becomes “institutionalized” in a grouping of people, ie: company, sport, union, association, religion, etc, it can go on undetected for a long time. It may even acquire an almost “accepted as part of the game” kind of cover, with those participating considering it, “just one of their perks”, and no big deal! That is, until someone blows the lid off.
That’s when everything changes for those who took part. It is not after all, that they didn’t know there was something amiss about the game they were playing. They just thought they had a really good cover! Instead, that cover just went poof, as all covers eventually do. Just another example that, “What Goes Around Comes Around!” Its just difficult to predict when.
Colombo Family Crime Boss and 12 Others Are Arrested, Prosecutors Say
An indictment unsealed on Tuesday accuses the organization of orchestrating a two-decade scheme to extort a labor union.
For two decades, the leadership of the Colombo crime family extorted a Queens labor union, federal prosecutors said — an effort that continued unabated even as members of the mob clan cycled through prison, the family’s notorious longtime boss died, and as federal law enforcement closed in.
Over time, what began as a Colombo captain’s shakedown of a union leader, complete with expletive-laced threats of violence, expanded into a cottage industry, prosecutors said, as the Colombo organization assumed control of contracting and union business, with side operations in phony construction certificates, marijuana trafficking and loan-sharking.
On Tuesday, 11 reputed members and associates of the Colombo crime family, including the mob clan’s entire leadership, were charged in a labor racketeering case brought by the U.S. attorney’s office in Brooklyn.
All but two of the men were arrested Tuesday morning across New York and New Jersey, prosecutors said. Another was surrendered to the authorities on Tuesday; another defendant, identified as the family consigliere, remained at large, prosecutors said.
The indictment accuses the Colombo family of orchestrating a two-decade scheme to extort an unnamed labor union that represented construction workers, using threats of violence to secure payments and arrange contracts that would benefit the crime family.
The charges are an ambitious effort by the U.S. attorney’s office in Brooklyn and the Federal Bureau of Investigation to take down one of the city’s five Mafia families. In addition to the union extortion scheme, which is the heart of the racketeering charge, the indictment charges several misdeeds often associated with the mob, including drug trafficking, money laundering, loan-sharking and falsifying federal labor safety paperwork.
Detention hearings for the defendants in Brooklyn federal court continued into the evening Tuesday, as they entered not-guilty pleas to the charges; prosecutors had asked the court to keep 10 of the defendants in custody.
“Everything we allege in this investigation proves history does indeed repeat itself,” Michael J. Driscoll, F.B.I. assistant director-in-charge, said in a statement. “The underbelly of the crime families in New York City is alive and well.”
Around 2001, prosecutors said, Vincent Ricciardo — a reported captain in the family, also known as “Vinny Unions” — began to demand a portion of a senior labor union official’s salary. When Mr. Ricciardo was convicted and imprisoned on federal racketeering charges in the mid-2000s, prosecutors said, his cousin continued to collect those payments.
Starting in late 2019, prosecutors said, the senior leadership of the Colombo family became directly involved in the shakedown, which extended to broader efforts to siphon money from the union: for example, manipulating the selection of union health fund vendors to contract with entities connected to the family, and diverting more than $10,000 each month from the fund to the family.
Andrew Russo, 87, who prosecutors describe as the family boss, is accused of taking part in those efforts, as well as a money-laundering scheme to send the proceeds of the union extortion through intermediaries to Colombo associates. He was among nine defendants charged with racketeering.
Mr. Russo appeared in court virtually from the hospital Tuesday; he is set to be detained upon his release, pending a future bail hearing.
The family’s infamous longtime boss, Carmine J. Persico, died in federal custody in North Carolina in March 2019.
Federal law enforcement learned of the extortion scheme about a year ago, prosecutors wrote in a court filing Tuesday; investigators gathered thousands of hours of wiretapped calls and conversations recorded by a confidential witness, wrote the prosecutors, who also described law-enforcement surveillance of meetings among the accused conspirators.
The authorities said they repeatedly captured Mr. Ricciardo and his associates threatening to kill the union official. “I’ll put him in the ground right in front of his wife and kids,” Mr. Ricciardo was recorded saying in June.
On another occasion cited by prosecutors in the memo seeking his detention, Mr. Ricciardo directed the union official to hire a consultant selected by the Colombo family, saying: “It’s my union and that’s it.” Prosecutors said his activities were overseen by a Colombo soldier and the consigliere who remains at large.
Much of the activity outlined in the indictment took place while the defendants were either in prison or on supervised release for prior federal mob-related convictions. Theodore Persico Jr., described as a family captain and soldier, was released from federal prison in 2020 and, despite a directive not to associate with members of organized crime, “directed much of the labor racketeering scheme,” prosecutors said.
Mr. Persico, 58, is set to inherit the role of boss after Mr. Russo, prosecutors wrote.
Several of the defendants were named in what prosecutors described as a fraudulent safety training scheme, in which they falsified state and federal paperwork that is required for construction workers to show they have completed safety training courses.
One of the defendants, John Ragano — whom prosecutors say is a soldier in the Bonanno crime family — is accused of setting up phony occupational safety training schools in New York, which prosecutors said were “mills” that provided fraudulent safety training certificates to hundreds of people.
In October 2020, prosecutors said, an undercover law enforcement officer visited one of the schools in Ozone Park, Queens, and received, from Mr. Ricciardo’s cousin, a blank test form and an answer sheet; weeks later, the agent returned to pick up his federal safety card and paid $500.
The purported schools were also used for meetings with members of La Cosa Nostra — the group of crime families commonly known as the Mafia — and to store illegal drugs and fireworks, according to the indictment.
Mr. Ragano wasn’t charged on the racketeering count, although prosecutors also sought his detention pending trial. In addition to the racketeering count, several defendants, including Mr. Ricciardo and his cousin, were charged with extortion, conspiracy, fraud and conspiracy to make false statements.
William K. Rashbaum contributed reporting.
Correction:
An earlier version of this article misstated the number of people identified in an indictment as members of the Colombo crime family. It is 11, not more than a dozen.