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Arizona Files Novel Lawsuit in Supreme Court Over

Opioid Crisis
By Adam Liptak

July 31, 2019 By Nytimes.

WASHINGTON — Saying the opioid crisis requires bold measures, the

state of Arizona filed an audacious lawsuit in the Supreme Court on

Wednesday asking the justices to order members of the Sackler family,

which owns Purdue Pharma, to return what the state said were billions

of dollars looted from the company.

“We want the Supreme Court to make sure that we hold accountable

those individuals who are responsible for this epidemic,” said Mark

Brnovich, Arizona’s attorney general. “We allege that the Sacklers have

siphoned billions of dollars from Purdue in recent years. They did this

while knowing the company was facing massive financial liabilities.”

Lawsuits making similar claims have been brought in several state

courts. What distinguishes the new suit is that it was filed directly in

the Supreme Court, which almost never hears cases until after lower

courts have considered them.

“I do think it’s a long shot,” Mr. Brnovich said. “It’s a little different. It’s

a little unorthodox. Sometimes you’ve just got to throw deep.”

He added that the urgency of the crisis warranted the unusual move.

“We don’t have time for this to take years to wind through the

courts,” he said. “The Supreme Court has jurisdiction, and we think

they have to act.”A spokesman for members of the Sackler family called

the accusations in the new lawsuit “inconsistent with the factual

record” and said the family “will vigorously defend against them.” A

lawyer for Purdue, which makes the opioid OxyContin, did not

respond to requests for comment.

In papers filed in the Supreme Court on Wednesday, lawyers for

Arizona wrote that the opioid crisis had contributed to hundreds of

thousands of deaths in the last two decades and cost the United States

economy more than $78 billion annually. Over the years, the lawyers

wrote, Purdue earned more than $30 billion from sales of OxyContin.

Between 2008 and 2016, Purdue transferred more than $4 billion to the

Sacklers, according to the new lawsuit. It is commonplace and lawful,

of course, for a company’s owners to withdraw profits. But the suit

contends that the transfers were intended to frustrate efforts by victims

of the opioid crisis to obtain compensation.

“These transfers,” the suit said, “all took place at times when company

officials, including the Sacklers, were keenly aware that Purdue was

facing massive financial liabilities and that these transfers could prevent

it from satisfying eventual judgments.”

The Sacklers are one of the richest families in the United States, and its

members have made significant donations to museums and other

cultural institutions. Several museums have announced that they will

no longer take money from the family, and the Louvre Museum in

Paris recently said that it had removed the Sackler name from its

Sackler Wing of Oriental Antiquities.

The Constitution gives the Supreme Court “original jurisdiction” to

hear disputes “in which a state shall be party.” In such cases, the

Supreme Court acts much like a trial court, appointing a special master
to hear evidence and issue recommendations.Though the Constitution

seems to require the court to hear cases brought by states, the court has

ruled that it has discretion to turn them down and often does. When the

court does exercise its original jurisdiction, it is usually to adjudicate

disputes between two states over issues like water rights.

In 2016, the justices turned down a request from Nebraska and

Oklahoma to file a challenge to Colorado’s legalization of recreational

marijuana. The states said the Colorado law had spillover effects, taxing

neighboring states’ criminal justice systems and hurting the health of

their residents.

Justice Clarence Thomas, joined by Justice Samuel A. Alito Jr.,

dissented, saying that the case presented a substantial question and that

the court was required to hear it.

“Federal law does not, on its face, give this court discretion to decline to

decide cases within its original jurisdiction,” Justice Thomas

wrote.Drawing on that dissent, Arizona asked the Supreme Court to

overrule decisions that allowed it to turn down cases filed by states

directly in the court. Failing that, Arizona asked the court to allow it to

sue in the Supreme Court as a matter of discretion.

“Absent resolution in a single forum,” the state’s lawyers wrote, “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.”William S.

Consovoy, one of Arizona’s lawyers, said there was no time to waste.

“The urgency is a big deal here.” he said. “It’s very important that we

get this resolved expeditiously, and that’s one of the key reasons why

the Supreme Court is the right place to do this and to do this now.”

Mr. Consovoy is also representing President Trump in legal clashes

with House Democrats seeking his tax returns and business

records.Arizona’s lawsuit is based on the Uniform Fraudulent Transfer

Act, which has been adopted in most states and forbids companies from

making some kinds of transfers of assets when they are insolvent or

likely to run out of money to pay creditors. The Supreme Court does

not ordinarily hear cases based on asserted violations of state laws.The

unusual Supreme Court filing may reflect jockeying among states and

local governments for a leading role in settlement negotiations. Vast

sums may be at stake.

In March, the company and the family agreed to pay $270 million in

connection with the settlement of a suit brought by the State of

Oklahoma. In October, Judge Dan Aaron Polster of the Federal District

Court in Cleveland is scheduled to preside over trials in a test case even

as he seeks to resolve some 2,000 federal lawsuits brought by cities,

counties and Native American tribes against key players in the opioid

crisis.