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Supreme Court could hear first case over the opioid epidemic, thanks to an unusual suit brought by Arizona

Key Points
  • The Supreme Court could for the first time take a case that strikes at the heart of the American opioid epidemic, thanks to an unusual lawsuit brought by the state of Arizona.
  • The suit was filed against members of the Sackler family and their pharmaceutical business Purdue Pharma.
  • Arizona alleged that the family behind the OxyContin maker unlawfully transferred billions of dollars over the last decade out of Purdue to enrich themselves and avoid having to pay up for the company's role in fueling the drug crisis.
Republican Gov. Mike DeWine is taking a multiprong approach to the problem, including targeting opiod distributor Purdue Pharma, maker of OxyContin, and big drug distributor McKesson.
George Frey | Reuters

The Supreme Court could for the first time take a case that strikes at the heart of the American opioid epidemic, thanks to an unusual lawsuit brought by the state of Arizona against members of the Sackler family and their pharmaceutical business Purdue Pharma.

In a petition filed with the justices this week, Arizona Attorney General Mark Brnovich alleged that the family behind the OxyContin maker unlawfully transferred billions of dollars over the last decade out of Purdue to enrich themselves and avoid having to pay up for the company's role in fueling the drug crisis.

"As lawsuits and regulatory scrutiny continued to mount, the Sacklers recognized the dangers Purdue was facing," Brnovich wrote. "Despite these massive potential liabilities, the Sacklers regularly depleted Purdue of its assets."

Arizona is seeking to "claw back" those transfers, the suit says.

The suit names eight members of the Sackler family — Richard Sackler, Theresa Sackler, Kathe Sackler, Jonathan Sackler, Mortimer Sackler, Beverly Sackler, David Sackler and Ilene Sackler Lefcourt.

Arizona alleged that the Sacklers have transferred $4 billion to themselves since 2008 and at least another $2 billion to companies they control. According to Arizona, the transfers run afoul of the Uniform Fraudulent Transfer Act, a law on the books in 43 states.

The case is unusual because, unlike nearly all the disputes that the top court reviews each year, Arizona's case has not been ruled on by a lower court, and was filed first in the Supreme Court.

A chart included in Arizona's Supreme Court petition, filed July 31, 2019. Purdue transferred more than $4 billion to the Sacklers, Arizona alleged.
Arizona Attorney General's office.

Arizona argued that Article III of the Constitution requires the Supreme Court to hear "Controversies … between a State and Citizens of another State." The high court has avoided such cases in the past, though Justices Clarence Thomas and Samuel Alito suggested as recently as 2016 that it does not have the discretion to do so.

Each year, the court receives upward of 7,000 petitions. Since 1960, fewer than 200 have argued the top court has "original jurisdiction," or the ability to be the first court to hear the case, according to government data.

Purdue Pharma is battling thousands of lawsuits in venues across the country over its aggressive marketing of prescription painkillers. Nearly 400,000 people have died from opioid overdoses in the United States over the last two decades, according to the Centers for Disease Control and Prevention.

In March, the company agreed to a $270 million settlement with the state of Oklahoma. The company also faces challenges similar to the one brought by Arizona, over the funds transfers, in state courts.

In a statement, Purdue Pharma said the Supreme Court was the "improper forum to conduct a trial of the claims being made by Arizona."

"This petition was filed solely for the purpose of leapfrogging other similar lawsuits, and we expect the Court will see it as such," the company said.

Brandon Messina, a spokesperson for the Sackler family, said in a statement that "we strongly deny these allegations, which are inconsistent with the factual record, and will vigorously defend against them."

In its filing, Arizona argues that even if the top court does not reason that it is required to hear the case, it should take up the case because of the importance of the issue and its unique ability to resolve the matter nationally.

"The nationwide opioid epidemic is an unprecedented public-health crisis," Brnovich wrote. "The human toll is unimaginable. By some estimates, moreover, it has cost more than a trillion dollars due to increased spending on health care, social services, and criminal justice, as well as in lost wages, economic productivity, and tax revenue."

"Absent resolution in a single forum, these disputes will be fought over and over in nearly every State in the Nation. This is likely to take years, lead to inconsistent judgments, and create an inequitable distribution of money damages," he wrote.

The Supreme Court will decide whether it will hear Arizona's case when the justices return from their summer recess in the fall.