by manovermachine | Apr 10, 2023 | 3M Earplugs Hearing Loss
Federal appeals court judges on Tuesday heard from Paul Clement, a lawyer for Aearo Technologies, a subsidiary of 3M. Clement urged the three-judge panel of the 7th Circuit Court of Appeals in Chicago to reverse a bankruptcy court order which allowed plaintiff lawsuits to move forward against 3M.
Aearo manufactured the combat arms earplugs and filed for bankruptcy last July. Clement argued that there is “complete overlap” between the facts and legal defenses in earplug lawsuits against the two companies, and stated that the “automatic stay” which shields Aearo from lawsuits while it is bankrupt should also apply to 3M.
Judges appeared skeptical of this argument. Judge Frank Easterbrook pressed Clement on Tuesday to explain how there can be exceptions to the bankruptcy law, which applies the shield only to the bankrupt company. He said the U.S. Supreme Court has consistently ruled against exceptions in bankruptcy law.
“If this maneuver works, why won’t it automatically happen every time a defendant in an MDL gets uncomfortable with the MDL court’s rulings?” Judge David Hamilton asked.
David Frederick, representing the plaintiffs, told the panel that 3M “contrived this bankruptcy to help itself, not Aearo or its creditors.”
He argued that as long as 3M is able to cover the earplug liability, there is no reason it should be shielded, and that if 3M ever became unable to pay, it should have to file for bankruptcy itself.
“The point of the bankruptcy process is to take the bitter with the sweet,” he said.
Veterans and service members have called for the dismissal of Aearo’s bankruptcy, as has the judge overseeing the consolidated MDL in Florida, who called the bankruptcy “wholly contrived.”
The litigation against 3M and Aearo is the largest-ever MDL in U.S. history, with nearly 330,000 cases filed and nearly 260,000 pending cases, according to court statistics from March 16. The next-largest MDL, the Johnson & Johnson talc litigation, has 38,000 cases.
3M has lost 10 of the 16 cases that have gone to trial so far, with about $265 million being awarded in total to 13 plaintiffs.
by manovermachine | Apr 10, 2023 | Ovarian Cancer and Talcum Powder
Johnson & Johnson announced on April 4 that its subsidiary LTL Management LLC (LTL) has re-filed for voluntary Chapter 11 bankruptcy protection to obtain approval of a reorganization plan that they believe will equitably and efficiently resolve all claims arising from cosmetic talc litigation against the Company and its affiliates in North America. To that end, the Company has agreed to contribute up to a present value of $8.9 billion, payable over 25 years, to resolve all the current and future talc claims, which is an increase of $6.9 billion over the $2 billion previously committed in connection with LTL’s initial bankruptcy filing in October 2021. LTL also has secured commitments from over 60,000 current claimants to support a global resolution on these terms.
– Source: Yahoo News
This follows on the heels of the 3rd Circuit Court of Appeals in Philadelphia ruling last Friday that Johnson & Johnson and its subsidiary LTL Management could not delay a court order dismissing the Chapter 11 bankruptcy they initially filed in October of 2021. The reason for dismissing the bankruptcy filing in the first place was that J&J is not facing financial distress, and is therefore not entitled to the bankruptcy protection filed by its subsidiary.
Plaintiff Response
Andy Birchfield, a plaintiffs’ lawyer at law firm Beasley Allen, said on Tuesday that claims “could easily be resolved if Johnson & Johnson would stop playing games and abusing the bankruptcy court process.”
The judge overseeing the case on Tuesday said he planned to dismiss the J&J unit’s bankruptcy as soon as today. That would allow lawsuits and trials to resume in courts across the United States.
Securing widespread agreement among plaintiffs for a settlement could ease the path of J&J’s subsidiary if it files a second bankruptcy. In the first case, litigants resisted settling, balking at the company’s initial $2 billion offer. Court-ordered mediation sessions failed to produce an agreement.
Even with a prearranged settlement, however, a minority of talc plaintiffs could ask the bankruptcy judge to dismiss the Chapter 11 filing yet again, triggering the same hearings and rulings that led the appeals court to invalidate the tactic in the first place.
– Source: Reuters
The J&J Statement
“The Company continues to believe that these claims are specious and lack scientific merit,” said Erik Haas, Worldwide Vice President of Litigation, Johnson & Johnson. “However, as the Bankruptcy Court recognized, resolving these cases in the tort system would take decades and impose significant costs on LTL and the system, with most claimants never receiving any compensation. Resolving this matter through the proposed reorganization plan is both more equitable and more efficient, allows claimants to be compensated in a timely manner, and enables the Company to remain focused on our commitment to profoundly and positively impact health for humanity.
by manovermachine | Apr 3, 2023 | Ovarian Cancer and Talcum Powder
Chapter 11 bankruptcy dismissed
The 3rd U.S. Circuit Court of Appeals based in Philadelphia on Friday ruled that Johnson & Johnson, on behalf of its subsidiary, LTL Management, could not delay a court order dismissing its bankruptcy. Johnson & Johnson had sought to stay the court order while the company plans to appeal to use the bankruptcy to resolve tens of thousands of lawsuits over its talc products. LTL has not yet filed a formal petition to the U.S. Supreme Court.
In January, the 3rd Circuit had ruled that neither LTL nor J&J were in financial distress, and therefore did not have a legitimate need for bankruptcy protection. The judge overseeing the case, U.S. Bankruptcy Judge Michael Kaplan indicated that as soon as the 3rd Circuit issued a formal mandate to end the bankruptcy, he would allow talc lawsuits to resume. The 3rd Circuit on Friday directed Judge Kaplan to dismiss LTL’s Chapter 11 case.
There are more than 38,000 lawsuits alleging that the company’s baby powder and other talc products are contaminated with asbestos and have caused ovarian cancer and mesothelioma. J&J maintains that its consumer talc products are safe and asbestos-free. They stopped selling the talc baby powder in the U.S. and Canada in 2020 and announced that they intended to discontinue the product worldwide in 2023.