The opioid epidemic has devastated communities across the United States, causing a massive public health disaster, hundreds of thousands of deaths, and immense social and economic harm.1 Although overdose deaths appear to be — for the first time in decades — lessening,2 the need for opioid abatement has never been more urgent.3 Seeking to remediate “the extraordinarily harmful effects” of Purdue Pharma’s “primary product,” OxyContin,4 many brought lawsuits against Purdue and its owners, the Sackler family, to the tune of “over $140 trillion in aggregate liability — more than the whole world’s gross domestic product.”5 Facing down such “enormous claims,” Purdue Pharma (but, critically, not the Sackler family) filed for bankruptcy in 2019.6 Purdue Pharma’s ensuing bankruptcy proceedings culminated in a groundbreaking reorganization plan for the company that “hinged on” a controversial deal: In exchange for kicking in “$5.5–6.0 billion to the bankruptcy,” the Sacklers would receive an injunction that “permanently extinguish[ed] virtually all opioid-related claims against” them — including claims for fraud — “without the consent” of all the victims who could sue the Sacklers.7 Last Term, in Harrington v. Purdue Pharma L.P.,8 the Supreme Court held, over a blistering dissent, that bankruptcy courts lack statutory authority to approve such nonconsensual releases of third-party claims as part of a Chapter 11 reorganization plan.9 In reaching this conclusion, the Court relied primarily on the “text and context” of the Bankruptcy Code, rejecting arguments based on policy considerations and necessity.10 But perhaps what the Court didn’t rely on — the emerging substantive canon against altering property rights absent “exceedingly clear language” — speaks louder than the comparatively run-of-the-mill textual analysis on display in Harrington v. Purdue Pharma L.P.11
In 1952, Arthur, Mortimer, and Raymond Sackler purchased Purdue Frederick Company, the predecessor to Purdue Pharma L.P.12 The Sacklers dominated leadership positions at Purdue and, until 2018, sat on its board of directors.13 During their time at Purdue’s helm, the Sacklers personally “pushed sales targets” and “accompanied sales representatives on ‘ride along’ visits” encouraging doctors to prescribe more of their company’s drugs.14 In 1995, Purdue launched OxyContin, a controlled-release opioid painkiller known generically as oxycodone.15 What followed was an unprecedented and aggressive marketing campaign that catapulted OxyContin to blockbuster status “while downplaying” its addictive potential.16 Purdue more than doubled its sales force, using it to distribute “OxyContin fishing hats, stuffed plush toys, coffee mugs,” and other OxyContin-branded promotional items to doctors, an unheard-of practice for a Schedule II opioid according to the U.S. Drug Enforcement Agency.17 Eager to convert new patients into long-term customers, Purdue offered starter coupons for free 30-day courses of OxyContin — tens of thousands redeemed the coupons.18 This aggressive promotion worked; by 2001, annual OxyContin sales had exploded to $1 billion, making it the nation’s “most prescribed brand-name narcotic medication.”19 By 2012, Americans’ yearly consumption of the drug reached an unimaginable level: an average of about 250 milligrams of oxycodone per capita.20 This commercial triumph came at a devastating public health cost, nearly $1.5 trillion in 2020 alone, and hundreds of thousands of opioid overdose deaths since Purdue began marketing OxyContin.21 (Four Sackler family members who testified in the bankruptcy court were each “asked if they would apologize for their role and conduct related to Purdue” — none did.22)
State and federal governments quickly took notice, and soon, Purdue faced an onslaught of lawsuits — brought by individuals, cities, states, Native American tribes, hospitals, and thousands of other entities — for various tort, fraud, and consumer protection claims.23 In 2007, as the first wave of opioid litigation began to crest, twenty-six states and the District of Columbia settled, for $19.5 million, their claims against Purdue for the company’s “promotional and marketing practices regarding OxyContin.”24 Some of the Sacklers “were very aware of the risk” that future opioid claims would bankrupt Purdue — and with it the vast bulk of their family’s wealth.25 David Sackler emailed Jonathan and Richard Sackler “expressing concern” about their family’s “personal liability” for their role in causing America’s opioid crisis and, in that email, asked: “We’re rich? For how long? Until suits get through to the family?”26 Thus recognizing their 2007 settlement was only the start, not the end, of their legal woes, the Sacklers looked for a way out. They settled on “a time-honored strategy for defeating one’s liability”27: drain money from Purdue and scatter it to offshore companies owned by the Sacklers that “could not be reached in bankruptcy” because of their ubication in “places like the Bailiwick of Jersey.”28 The Sacklers (in what Jonathan Sackler called a “‘milking’ program”29) transferred $11 billion from Purdue to themselves, “draining Purdue’s total assets by 75% and leaving it in ‘a significantly weakened financial’ state.”30
“Engulfed in a veritable tsunami of litigation,” Purdue Pharma — but not the Sacklers — filed for bankruptcy in September 2019.31 Claims against Purdue (now also the “Debtor”) thus became subject to an automatic stay, a feature of bankruptcy law that halts creditors’ claims once a debtor declares bankruptcy.32 But because the Sacklers did not file for bankruptcy, claims against them “were not subject to the automatic stay,” so Purdue sought an additional injunction to stay the “over 400” lawsuits against the family “concerning [their] liability for OxyContin.”33 A month later, the U.S. Bankruptcy Court for the Southern District of New York agreed to enjoin all OxyContin-related litigation against the Sacklers, and that injunction was upheld by the district court on appeal.34 The enjoined claims against the Sacklers and Purdue Pharma were together estimated to exceed $40 trillion — those claims form the heart of this case.35
The injunction, staying litigation targeting the Sacklers for their role in America’s opioid crisis, was a precursor to the more comprehensive third-party release (sometimes called “the Sackler discharge”) proposed in Purdue Pharma’s reorganization plan.36 While the injunction temporarily halted litigation against the Sacklers during the bankruptcy reorganization process, the third-party releases sought to permanently extinguish all OxyContin-related claims against the Sacklers — even over the objection of a small number of victims37 — in exchange for the Sacklers returning at least $5.5 billion “of the $11 billion they had withdrawn from the company” over the previous decade.38 This “deal” is not a new one to bankruptcy; third-party releases, even nonconsensual ones, “have existed for decades,” largely because they: (i) protect judicial resources from duplicative litigation; (ii) enlarge the pie of funds available to creditors (in this case victims of the opioid crisis); and, perhaps most importantly, (iii) resolve the collective action problem posed by “holdout creditors” who refuse to settle in hope of extracting a better deal.39 The question presented in this case was whether the Bankruptcy Code permits such a “deal” when not all creditors consent to the same.40
Writing for the majority, Justice Gorsuch held that the Bankruptcy Code does not authorize bankruptcy courts to approve releases that extinguish claims against non-debtors (like the Sacklers) without the consent of all the claimants whose suits would be permanently barred by those releases.41 The Court’s analysis centered on § 1123(b)(6) of the Code, a catchall provision, which allows a reorganization plan to “include any other appropriate provision not inconsistent with the applicable provisions of this title.”42 Applying the “ancient interpretive principle” of the ejusdem generis canon, the Court read § 1123(b)(6) in light of the “long and detailed list of specific directions” found in § 1123(b)(1) through (5).43 The majority held that paragraphs (1)–(5) all “concern the debtor” (i.e., Purdue Pharma) and not third parties who haven’t declared bankruptcy (i.e., the Sacklers).44 Consequently, the Court concluded that the catchall provision in paragraph (6) could not “be fairly read” to allow the “‘radically different’ power to discharge” claims against third parties without consent from those who might bring them.45 Focusing closely on § 1123(b)(6)’s text, the Court sliced its analysis of the provision into two subclauses: “any other appropriate provision” and “not inconsistent with the applicable provisions of this title”; it then walked through why both halves led to the majority’s ultimate result.46
First, the Court noted that the term “appropriate” is a “quintessentially ‘context dependent’ term,” which oftentimes “draws its meaning” from neighboring provisions.47 And because the neighboring paragraphs, § 1123(b)(1)–(5), all “concern the debtor,” the Court held that it “naturally” follows that the catchall “should be similarly constrained” to permit only debtor, and not third-party, nonconsensual releases.48 Second, the Court determined that the Sackler discharge was “inconsistent with” various “applicable provisions of” the Bankruptcy Code.49 The majority noted that various Code provisions reserve debt discharge as a benefit that runs to “the debtor alone,” such that “effectively affording” a discharge “to a nondebtor” (like the Sacklers) defies those provisions.50
Turning to context, the Court observed that the Sackler discharge would grant nondebtors benefits that wouldn’t be available if those same individuals had themselves declared bankruptcy.51 For example, the majority noted that the Bankruptcy Code requires people seeking a discharge of their debts “to come forward with virtually all” their assets, and the Sacklers did not put “anything close to all their assets on the table” here.52 Not only did the Sacklers “seek to pay less than” what the Code requires, they also would have gotten a sweeter deal than the Code permits: Claims for “fraud” and “willful and malicious injury” are never dischargeable when a person declares bankruptcy, and yet the releases sought here “would extinguish virtually all” fraud claims against the Sacklers.53 Finally, the majority reasoned that the Code’s explicit authorization of nonconsensual nondebtor releases in asbestos cases implies their impermissibility in opioid and other non-asbestos cases.54
Concluding that “text and context supply two strikes against the plan,” the Court undertook a historical analysis focused on pre-Code practice to find a “third” strike against the legality of the Sackler discharge.55 The Court observed that every law it surveyed from 1800 until the enactment of the current Bankruptcy Code in 1978: (i) reserved the benefits of discharge to debtors who offered a “fair and full surrender of” their property and (ii) revealed no evidence of courts having “enjoyed the power” to discharge claims of “nondebtors against other nondebtors” without “the consent of those affected.”56 This historical backdrop, the Court reasoned, underscored the implausibility of construing the current Code to authorize such a significant departure from pre-Code practice.57
On pragmatics, the Court rejected arguments that the releases’ permissibility should turn on whether they were necessary to preserve Purdue’s estate or enable the Sacklers’ settlement payment.58 While plan proponents claimed that there would be “no viable path” for victim compensation without the releases, the Court sided with the ultimate conclusion of the U.S. Trustee, who argued that exposing the Sacklers to lawsuits might lead to a better settlement for victims.59 The Court noted that the Sacklers had already increased their contribution during the appeal, suggesting there remained room for negotiation.60 The Court also considered broader concerns about nonconsensual third-party releases potentially allowing tortfeasors to misuse the bankruptcy system, an approach that could “provide a ‘roadmap for corporations and wealthy individuals to misuse the bankruptcy system’ in future cases ‘to avoid mass-tort liability.’”61 While acknowledging potential merits of such releases, the Court emphasized it was “the wrong audience” for such arguments, and while Congress might someday add special rules for opioid-related bankruptcies (as it did for asbestos cases), the Court’s role is strictly “to interpret and apply the law as [it] find[s] it.”62
In its final paragraph, the Court carefully limited its ruling’s scope. It stated explicitly that the decision ought not be construed as questioning consensual third-party releases, as these involve “different questions” potentially relying “on different legal grounds.”63 The Court avoided any discussion of the Constitution — including whether Congress even has power to legislate nonconsensual releases — while implicitly assuming the constitutionality of statutorily authorized nonconsensual releases for asbestos claims.64 The Court refrained from defining what constitutes a consensual release or ruling on plans that provide “full satisfaction of claims” against third parties.65 It also clarified that, since the case involved only a stayed reorganization plan, it was not addressing whether its interpretation “would justify unwinding” plans already “substantially consummated.”66 Self-aware of the complex implications of its decision, the Court acknowledged leaving these “important” questions to bankruptcy judges in the first instance, at least for now.67
In a forceful, fifty-four-page dissent, Justice Kavanaugh — joined by Chief Justice Roberts, Justice Sotomayor, and Justice Kagan — argued that the majority’s decision misinterpreted the Bankruptcy Code and eliminated a critical tool for resolving mass-tort bankruptcies, one that prevents competing plaintiffs from racing “to the courthouse to dismember the debtor.”68 Indeed, Justice Kavanaugh centered the vast bulk of the dissent around the “overarching objective” of our nation’s bankruptcy system: resolving this “collective-action or holdout problem.”69 Proceeding from that background premise, the dissent contended that 11 U.S.C. § 1123(b)(6) “confers broad discretion”70 on bankruptcy courts to approve “appropriate” plan provisions, including nonconsensual nondebtor releases, where they are “essential” to solve complex collective-action problems and “ensure fair and equitable recovery” for victims.71 Justice Kavanaugh criticized the majority’s application of the ejusdem generis canon to § 1123(b)(1) through (5) as both “factually incorrect” (citing a distinction between direct and derivative claims) and disregarding the statute’s “evident purpose,” which he viewed as maximizing recovery for creditors in the wake of bankruptcy’s inherent collective-action problems.72 The dissent also rejected what it called the majority’s “minimally explained arguments” that the Sackler release was “inconsistent with” any Bankruptcy Code provisions, emphasizing that such releases “are not a discharge” partly because they “do not offer the umbrella protection of a discharge in bankruptcy.”73 Finally, Justice Kavanaugh took aim at the majority’s historical analysis, writing that “citations to pre-Bankruptcy Code cases are an off-point deflection” since, he argued, the relevant analysis ought to be with reference to cases decided after the current Code was enacted.74 The dissent concluded with a warning and call to action: Because “everyone has an incentive to race to the courthouse to sue the Sacklers pronto,” it falls to Congress to “fix the chaos that will now ensue.”75
While many aspects of this case merit close scholarly analysis, one noteworthy omission in both the majority opinion and dissent is any discussion of the property rights clear statement canon, which was repeatedly invoked by the U.S. Trustee as a basis for construing § 1123(b)(6)’s text against allowing nonconsensual extinguishment of objecting creditors’ claims.76 Engaging with this interpretive principle could have strengthened the Court’s conclusion and provided guidance on a “newly” emerging substantive canon that carries the potential to dramatically affect statutory interpretation in public law areas like environmental regulation,77 administrative law, and bankruptcy.78
Start, as the U.S. Trustee does, with the uncontroversial notion that causes of action (i.e., claims for money against the Sacklers) belong to victims and “are a constitutionally protected property interest” of theirs.79 Now consider what has been termed the substantive “property rights canon,”80 first articulated in 2020: Congress is required to “enact exceedingly clear language if it wishes to significantly alter . . . the power of the Government over private property.”81 As the U.S. Trustee points out, the nonconsensual Sackler discharge “unquestionably effectuates an alteration in the government’s power over private property” since it extinguishes victims’ causes of action — that is, it effectively seizes victims’ property — over their voiced objections, but, the government continues, § 1123(b)(6)’s text does not contain “the exceedingly clear language required to sustain that result.”82 True, the majority saw “no ambiguity in § 1123(b)(6),”83 but it is also true that it elected not to deploy the property rights clear statement canon as an additional basis for its ultimate conclusion that § 1123(b)(6)’s text ought not “significantly alter” creditors’ “private property” rights.84 Moreover, the majority’s decision to not even lord that “exceedingly” high bar over the dissent’s textual analysis potentially signals not all in the majority agree with the substantive canon’s role, or even existence.85
Applying this canon would have shifted the interpretive burden, requiring respondents to demonstrate that § 1123(b)(6) contains the “exceedingly clear language” authorizing such a significant alteration, indeed extinguishment, of individuals’ property rights.86 This higher bar could have made the majority’s textual analysis even more compelling, as § 1123(b)(6)’s general language about “appropriate” provisions would likely fall short of this stringent standard. And precisely because the “property rights canon” is both “newly coined” and “has the potential to make it even harder than under the Major Questions Doctrine for” the government to prevail in statutory interpretation questions where one reading would “significantly alter . . . the power of the Government over private property,” the Court’s analysis applying this canon would have been profoundly useful to lower courts and advocates.87
Running § 1123(b)(6)’s text through the substantive property rights canon shows why its employment could also offer a more robust foundation for the Court’s textual analysis. As written, Justice Kavanaugh’s opinion seems to get the better of Justice Gorsuch’s textual analysis, especially given the dissent’s framing around the Bankruptcy Code’s context and purpose: solving collective-action problems.88 Justice Gorsuch could have secured the upper hand by invoking the substantive property rights canon, which appears to provide a perfect textual rejoinder to the context and purpose upon which Justice Kavanaugh relies. At the very least, under the banner of a textualist approach, the property rights clear statement rule would have trumped the (albeit admittedly compelling) background purpose of bankruptcy, invoked “[t]hroughout” the dissent.89 Instead of relying solely on the ejusdem generis canon and contextual readings, the Court could have established a higher interpretive threshold for statutory provisions that impact constitutionally protected property rights, as the U.S. Trustee repeatedly argued should apply in this case.90 Moreover, invoking this canon could have helped the Court navigate the complex interplay between bankruptcy law’s collective goals and individual constitutional protections. And by framing the issue in terms of property rights, the Court could have provided clearer guidance on how to balance these competing interests in future cases involving third-party releases, shedding critically needed light on, for example, what constitutes consent in this context. Given all this, the Court’s unanimous decision to avoid engaging with the substantive property rights canon likely reflects concerns about the canon’s scope and its impact on the law of statutory interpretation.91