The Volokh Conspiracy

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Bankruptcy on the Sunrise Side of the Mountain

Justice Kavanaugh is very, very upset about the Sackler bankruptcy case.


I won't pretend to understand the intricate bankruptcy issues at play in Harrington v. Purdue Pharma L.P. What I can tell you is that Justice Kavanaugh is very, very upset. Apart from the nuances of the legal issue, Justice Kavanaugh repeatedly expresses sympathy and concern for those affected by the opioid crisis. Here are a few highlights:

Today's decision is wrong on the law and devastating formore than 100,000 opioid victims and their families.

To be sure, many Americans have deep hostility toward the Sacklers.

The opioid victims and their families are deprived of their hard-won relief. And the communities devastated by the opioid crisis are deprived of the funding needed to help prevent and treat opioid addiction. As a result of the Court's decision, each victim and creditor receives the essential equivalent of a lottery ticket for a possible future recovery for (at most) a few of them. And as the Bankruptcy Court explained, without the non-debtor releases, there is no good reason to believe that any of the victims or state or local governments will ever recover anything. I respectfully but emphatically dissent.

Opioid victims and other future victims of mass torts will suffer greatly in the wake of today's unfortunate and destabilizing decision. Only Congress can fix the chaos that will now ensue. The Court's decision will lead to too much harm for too many people for Congress to sit by idly without at least carefully studying the issue. I respectfully dissent.

I'm reminded of a common W. Bushism, which Justice Kavanaugh often repeats–we should be on the sunrise side of the mountain, not the sunset side.

For good measure, Kavanaugh includes several citations to an amicus brief from the Boy Scouts and the Conference of Catholic Bishops, who had their own bankruptcy issues. And he stresses how much bipartisan support is behind the arrangement:

Since then, even more victims and creditors have gotten on board. Now, all 50 States have signed on to the plan. The lineup before this Court is telling. On one side of the case: the tens of thousands of opioid victims and their families; more than 4,000 state, city, county, tribal, and local government entities; and more than 40,000 hospitals and healthcare organizations. They all urge the Court to uphold the plan.

Justice Kavanaugh also included a table of contents for his dissent, which was about twice as long as the majority opinion:

To map out this dissent for the reader: Part I (pages 5 to 18) discusses why non-debtor releases are often appropriate and essential, particularly in mass-tort bankruptcies. Part II (pages 18 to 31) explains why non-debtor releases were appropriate and essential in the Purdue bankruptcy. Part III (pages 31 to 52) engages the Court's contrary arguments and why I respectfully disagree with those arguments. Part IV (pages 52 to 54) sums up.

Not sure that I've seen anything like this before.

In an alternate universe, during the debate last night, a candidate would have referred to this decision as having an impact on the opioid crisis.