Purdue Pharma Brings a Single Adversary Proceeding to Enjoin Thousands of Lawsuits
As expected, Purdue Pharma has commenced proceedings in the Bankruptcy Court to obtain injunctive relief, seeking to put a stop to the numerous pending lawsuits brought against Purdue and its affiliates in connection with the opioid crisis. Purdue’s adversary complaint, filed Wednesday evening, names 893 separate defendants (the caption portion of the complaint alone runs 24 pages) and identifies more than 26,000 lawsuits that Purdue wants halted. Along with the complaint, Purdue has also filed a motion for preliminary injunction (also not unexpected) 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 many states. The adversary proceeding and the motion for preliminary injunction of course beg the question as to why injunctive relief is even necessary, given the automatic stay. 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 section 362(b)(4) of 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. The States of Connecticut and New York, and their respective Attorneys General, are named defendants in the adversary proceeding, as well as numerous municipalities in both states.
An initial hearing on the application for preliminary injunction is currently scheduled for October 11, 2019. Given the number of defendants involved in the adversary proceeding, all of whom have the right to file papers in opposition to the preliminary injunction, the October 11, 2019 hearing date seems ambitious, if not entirely unrealistic. It is likely that Purdue’s attempt to fast track the preliminary injunction phase will generate numerous objections.