Oregon Files New Lawsuit Naming Members of Sackler Family; Owners of Purdue Pharma

May 16, 2019
• Posted in , ,

Oregon Attorney General Ellen Rosenblum today filed a new lawsuit against Purdue Pharma, the maker of OxyContin, and the company’s owners, who are members of the Sackler family. The Attorney General’s new complaint alleges that Purdue and the Sacklers fraudulently transferred billions of dollars out of Purdue while at the same time engaging in unlawful marketing and promotion of OxyContin, a dangerous and addictive prescription opioid.

The Attorney General’s earlier lawsuit against Purdue Pharma, filed last year, named only the company and alleged that Purdue deceived and recklessly endangered Oregon’s seniors as well as misrepresenting the risks and benefits of OxyContin, in an effort to maximize profits.

The new complaint, filed in Multnomah County Circuit Court, alleges that the Sackler family has known for nearly two decades that OxyContin is highly addictive, dangerous, and deadly.  By 2007, when Oregon settled its original lawsuit against Purdue Pharma, they also knew that their company was aggressively and unlawfully marketing the drug, which they knew could expose Purdue to catastrophic liability. Fearing that their company would collapse under the weight of criminal and civil investigations and lawsuits, the family engaged in a concerted effort to siphon billions of dollars out of Purdue Pharma and transfer it to themselves and other entities that they controlled. In doing so, they starved the company of cash, stifled its growth, and left it unable to satisfy the enormous legal liability the company would face from unlawfully marketing OxyContin.

“Twelve years ago, Oregon settled with Purdue for deceptively marketing OxyContin, and for blatantly ignoring the alarming rate of addiction that their drug was causing,” said Attorney General Rosenblum. “Over the past decade, the destruction that OxyContin has caused has skyrocketed—and it is clear we must go even further to ensure this company is held to account for its egregious misconduct, including violating their 2007 negotiated agreement. The time has come to hold these members of the Sackler family personally responsible.”

Oregon is the first state to seek to find the family liable by “piercing the corporate veil,” a legal doctrine used to hold owners accountable. Only members of the Sackler family who served as members of the Purdue Pharma Board of Directors are named in the lawsuit.

From page three of the complaint: “Over the following ten years… [the Sacklers] starved the company [Purdue] of cash, stifled its growth, and left it unable to satisfy its enormous legal liability resulting from its continuous unlawful conduct. At every turn, the Sacklers have used Purdue and all the entities in the Sackler Pharmaceutical Enterprise as their alter egos to avoid personal liability and the jurisdiction of this and other courts nationwide.”

The Sacklers’ Conduct:

The Sackler family set up a massive network of shell companies and subsidiaries, referred to in the complaint as the Sackler Pharmaceutical Enterprise, to shield themselves from liabilities created by their company’s illegal marketing of OxyContin. “The Sacklers exercise complete dominion and control of Purdue Pharma L.P., Purdue Pharma, Inc., and the related shell companies, holding companies, and national and international subsidiaries, partners, and affiliates,” reads page 8 of the complaint.

The Sacklers’ Personal Knowledge:

The Sacklers’ have known for nearly 20 years that OxyContin is dangerous, highly addictive, and deadly. As stated on pages 9 of the complaint, “Richard [Sackler], with the support, consent, and assistance of the Sacklers, continued to directly control Purdue Pharma L.P.  He frequently contacted employees to obtain information about sales, issue instructions, and pressure the sales team to sell more opioids.”

The Sacklers’ Fraudulent Attempt to Avoid Liability:

Realizing Purdue Pharma was facing devastating legal liabilities in 2007 that could potentially destroy the company, the Sacklers set up a separate company, Rhodes, to be used, according to a former senior Purdue manager, “as a ‘landing pad’ for the Sackler family…to prepare for the possibility that they would need to start afresh following the crisis then engulfing OxyContin,” as stated on page 13 of the complaint. Between then and now, despite their knowledge of the catastrophic liabilities the company faced, the Sacklers continued siphoning money out of Purdue Pharma.

“By holding the Sackler family personally responsible for Purdue Pharma’s actions—actions which the Sackler family had a direct hand in—Oregon is sending the message that justice cannot be denied. Hiding behind shell companies and intentionally bankrupting a company will not work. We must make sure that the people who own a company, sit on its board, and direct high-level decisions are also held accountable for the trail of heartbreak this drug has caused both in Oregon and nationally,” said Attorney General Rosenblum.

The Oregon Department of Justice (DOJ) is led by Attorney General Ellen Rosenblum, and serves as the state’s law firm. The Oregon DOJ advocates for and protects all Oregonians, especially the most vulnerable, such as children and seniors.