The billionaire owners of Purdue Pharma LP
must face a New York lawsuit claiming they triggered the U.S. opioid epidemic,
a judge ruled, handing an early victory to states and local governments seeking
to recoup billions of dollars in social costs from the drugs.
A state judge on Friday denied the
Sacklers’ request to dismiss the lawsuit, filed by 58 counties and two dozen
cities in New York. The ruling, in Suffolk County on Long Island, is the first
by any court denying a motion by the Sacklers to throw out a suit by a state or
county and allowing for pretrial fact-finding to proceed against the individual
defendants and their trusts, said Paul Napoli, an attorney representing the New
York governments.
The ruling will require the Sacklers “to
undergo depositions that will start to get to the bottom of their relationship
between each other and their relationship to their conduct on the board and
here in New York,” Napoli said in an interview.
State and local governments have targeted
the Sackler family’s marketing of the Oxycontin painkiller, and their wealth,
to recover the social costs of opioid addiction, such as payments for opioid
prescriptions and Medicaid benefits that wouldn’t have been approved if the
risks had been known. Some 2,000 suits against opioid makers have been
consolidated in federal court in Ohio, and other cases are pending in state
courts. The Sacklers were worth an estimated $13 billion as of early March.
Profit Over Patients
The Sacklers were separately sued over the
addiction epidemic by New York Attorney General Letitia James in March, two
days after Purdue agreed to pay $270 million to settle similar claims by
Oklahoma. James’s suit, also in New York State Supreme Court, added the Sackler
family to her complaint against Purdue and its biggest competitors and
distributors, including Johnson & Johnson and Cardinal Health Inc.
New York says the defendants pushed doctors
to issue prescriptions, lied about the risk of addiction and ignored red flags
from suspicious pharmacies.
“Simply put, they put profit over
patients,” James said at a news conference in March announcing the new claims.
The Sacklers “profited off the suffering, the death of New Yorkers,” she said.
Purdue Pharma and a representative of the
Sacklers didn’t immediately respond to emails seeking comment on Friday’s
ruling, by Supreme Court Justice Jerry Garguilo.
“Expanding this baseless lawsuit to include
former directors of Purdue Pharma is a misguided attempt to place blame where
it does not belong for a complex public health crisis,” the family said in a
statement about James’s suit in March.
Directors’ Liability
Garguilo on Friday ruled that the court may
have jurisdiction over the family “on the ground that some or all of them acted
as Purdue’s agents in perpetrating the alleged scheme.” He rejected the
Sacklers’ argument that they cannot be held liable for actions that can be
attributed to the company’s board of directors as a whole or for the conduct of
any other defendant unless they personally participated in the alleged
wrongdoing.
Under New York law, he wrote, “a director
may be held individually liable for a corporate tort if he or she participated
in its commission or else directed, controlled, approved or ratified the
decision that led to the plaintiff’s injury.”
Garguilo also rejected the family’s
argument that the case was filed too late, saying the plaintiffs have “alleged
a continuing wrong, perpetrated by all the defendants, involving deceptive
marketing practices that began over a decade ago and that have continued up to
the time of the commencement of this action.”
The ruling comes as a judge in Oklahoma is
presiding over the first trial in which a state seeks to hold a drugmaker,
Johnson & Johnson, responsible for contributing to the epidemic, a preview
of how similar claims may play out in October. That’s when opioid-drug makers
and distributors go on trial in Cleveland, where more than 1,900 such cases
have been gathered before a federal judge, who has been pushing for a
settlement.
