SACRAMENTO, Calif. (October 10, 2023): The Insolvency Law Committee (ILC) of the Business Law Section of the California Lawyers Association filed an amicus curiae brief in the Supreme Court of the United States in William K. Harrington, United States Trustee, Region 2, v. Purdue Pharma L.P., et al., a case arising out of the bankruptcy of Purdue Pharma, the manufacturer of OxyContin, in which Purdue Pharma and related entities filed for bankruptcy. Members of the Sackler family, the owners of Purdue Pharma, did not file for bankruptcy but agreed to contribute $6 billion to fund the bankruptcy plan. In exchange, the Sacklers would be released from liability for opioid-related claims.
“The Supreme Court’s resolution of this case will have a significant impact nationwide,” said Christopher Passarelli, Immediate Past Chair of the Business Law Section’s Executive Committee, which oversees the Insolvency Law Committee. “The Business Law Section is proud to provide the expertise of its committee members while the Supreme Court considers the crucial issues in this case.”
Non-consensual third-party releases, which release parties who have not declared bankruptcy from liability without the consent of all claimants, are frequently used in mass injury as well as other types of cases. The federal circuits are currently split on whether bankruptcy courts have statutory authority to approve this type of release.
As amicus curiae, ILC has not taken a position on the ultimate disposition of this case, an issue that will certainly be fully briefed by the parties. Instead, ILC has encouraged the Supreme Court to consider various concerns in reaching its decision, emphasizing that the impact of any decision on future third-party releases in bankruptcy cases will depend on the scope of the Court’s opinion. ILC urges the Supreme Court to limit its decision to addressing whether the Bankruptcy Code authorizes nonconsensual releases such as those at issue in this particular case, without deciding the validity of other types of nonconsensual releases of third-party claims against nondebtors.
“It is the responsibility of California Lawyers Association to provide the perspective of California practitioners on issues of nationwide significance, in furtherance of our commitment to fairness in the administration of justice and the rule of law,” said Betty Williams, President of California Lawyers Association. “Preparation of this brief provides a stellar example of collaboration among our member leaders. I am particularly grateful for the contributions of Leonard Gumport of the ILC and CLA Amicus Committee members, Leah Spero and Reuben Ginsburg.”
The Supreme Court will hear oral argument in this case in December 2023 and will issue an opinion by the time the Court recesses for the summer in late June or early July 2024.
About California Lawyers Association
Established in 2018 and headquartered in Sacramento, California Lawyers Association is the statewide voluntary bar association for all California attorneys. CLA’s mission is to promote excellence, diversity, and inclusion in the legal profession and fairness in the administration of justice and the rule of law. Visit us at www.calawyers.org to learn more about CLA or follow us on Instagram, Facebook, LinkedIn, or Twitter.
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