Purdue Pharma, the company responsible for selling the opioid drug OxyContin, commenced a proceeding in the bankruptcy court Sept. 18 to end the lawsuits being brought against it by a slew of states and municipalities, including Milford.
Purdue’s request for injunctive relief, which seeks to put a stop to the lawsuits brought against it and its affiliates in connection with the opioid crisis, comes on the heels of the company’s chapter 11 bankruptcy filing on Sept. 15. The filing is an integral part of a deal between Purdue and some 24 states to settle more than 2,000 lawsuits against the company arising from Purdue’s alleged role in nation’s current opioid crisis.
Purdue and the settling states expect to use the chapter 11 bankruptcy case to restructure Purdue as a public trust from which profits derived from the sale of the company’s opioid products will be directed to state and local governments for use in programs designed to address the crisis. Connecticut and New York are among the states that are not part of the settlement and are expected to oppose the bankruptcy restructuring.
The new request names 893 separate defendants and identifies more than 26,000 lawsuits that Purdue wants halted. The State of Connecticut, state attorney general William Tong, and 37 Connecticut municipalities are among the named defendants in the case, including Milford.
Purdue has also filed a motion for preliminary injunction as well as a motion to approve a scheduling order for the preliminary injunction. In its motion for preliminary injunction, Purdue indicates that it has been expending close to $5 million per week in internal and external legal costs dealing with all the lawsuits, and the company argues that allowing the lawsuits to continue will jeopardize Purdue’s ability to move ahead with the settlement plan already reached with 25 other states.
There was already an automatic stay on the lawsuits imposed by the Bankruptcy Code when Purdue filed its bankruptcy petition. But government units, which constitute the majority of plaintiffs in the pending cases against Purdue, are expected to argue that their cases fall within the governmental “police power” exception to the automatic stay found in the Bankruptcy Code.
Purdue asserts that the exception does not apply to the pending lawsuits, but even if it did, the injunction should be granted.
An initial hearing on the application for preliminary injunction is currently scheduled for Oct. 11. It is likely that Purdue’s attempt to fast track the preliminary injunction phase will generate numerous objections.