The Texas Two-Step: Johnson&Johnson Declares Bankruptcy

[Chad Fuck 17659]

4 minutes ago, Bevo said:

Because I saw him use it like crazy when I visited. Plus, I'm sure that my dad and aunt would say the same thing if I asked them. Honestly, wouldn't you need receipts instead of hearsay?

If you're an eye witness, that isn't hearsay.  You would be a first hand witness.  So would your Dad and your aunt.

This is evidence.  The evidence would be put to the trier of fact (the jury) and they would decide.

 

[Dahobbs 17525]

4 minutes ago, GringoSalado said:

Longhorn Lawyer, a poster here, was, I thought, an attorney in a suit against J&J. I thought, wrongly(?), he had prevailed.

 

Are you an attorney also, because I thought I was clear by surly standards.

Right, but what is your question? A lot of people have had suits against J&J over the years. The talc cases are being treated differently by J&J right now, but I can guarantee if this ploy succeeds then it'll be expanded to pretty much every type of tort case (and probably business cases as well).  As for talc cases, while there have been verdicts and even preliminary settlements, I don't believe J&J has actually paid anyone (although I might have missed some early payments). It stayed pretty much everything with this bankruptcy move. 

Edited April 4, 2022 by Dahobbs

[Bevo 13564]

2 minutes ago, Chad Fuck said:

If you're an eye witness, that isn't hearsay.  You would be a first hand witness.  So would your Dad and your aunt.

This is evidence.  The evidence would be put to the trier of fact (the jury) and they would decide.

 

That sounds like a shitastic case, though. The user is dead. There isn't extensive histological evidence as far as I know about the lung cancer (lots of cancers spread to the lungs). And his history of usage is from his kids and grandkids. My uncle is a retired bankruptcy attorney who does VC so he probably has some thoughts on the subject. I know that my dad would be against going to court and it isn't like my aunt and uncle need the money.

[Chad Fuck 17659]

Just now, Bevo said:

That sounds like a shitastic case, though. The user is dead. There isn't extensive histological evidence as far as I know about the lung cancer (lots of cancers spread to the lungs). And his history of usage is from his kids and grandkids. My uncle is a retired bankruptcy attorney who does VC so he probably has some thoughts on the subject. I know that my dad would be against going to court and it isn't like my aunt and uncle need the money.

I handle cases like your grandfather's every day of my life and have for nearly 20 years now.  It really depends on a lot of factors.  What kind of cancer did your grandfather have?  Was he a smoker?  Did he have exposures to other asbestos containing products?  

I'm not suggesting you go to court or that there's an actual case here.  I'm using it as an example to show how these cases work in the real world.  

What you need to win is (1) diagnosis of an asbestos related disease; (2) proof of exposure to a specific asbestos containing product (J&J talc, for example); (3) proof that product had asbestos; (4) proof that the defendant knew that product contained asbestos and could injure people.  (1) and (2) are going to be provided by you, the client.  (3) and (4) are going to come from attorneys like me who've been doing it forever.  That's the real world.  

As to your uncle being a retired bankruptcy attorney, I have a whole lot of ideas about why bankruptcy attorneys think about the civil justice system and vice versa.  

[Hank Scorpio 17729]

It’s going to be interesting to see how many companies follow J&J’s lead. I would think 3M almost certainly will. 

[Chad Fuck 17659]

Just now, Hank Scorpio said:

It’s going to be interesting to see how many companies follow J&J’s lead. I would think 3M almost certainly will. 

Why wouldn't they all?  This is our concern, Hank.

But yes, 3M is likely at the top of the pile for the short term.

[TwiceHorn 31438]

12 minutes ago, Chad Fuck said:

As to your uncle being a retired bankruptcy attorney, I have a whole lot of ideas about why bankruptcy attorneys think about the civil justice system and vice versa.  

Haha, bankruptcy lawyers do pick up that anti-creditor bias, don't they?

Most of my bankruptcy clients were epic, epic financial dumbshits.  But stiffing their creditors was fun and I remain pro-consumer bankruptcy.

[Hank Scorpio 17729]

4 minutes ago, Chad Fuck said:

Why wouldn't they all?  This is our concern, Hank.

Motherfucker I am aware, I’m about to become a bankruptcy lawyer along with every other mass tort lawyer. 

Edited April 4, 2022 by Hank Scorpio

[TwiceHorn 31438]

2 minutes ago, Chad Fuck said:

Why wouldn't they all?  This is our concern, Hank.

But yes, 3M is likely at the top of the pile for the short term.

Earplugs?

Although 524(g) is limited to asbestos, a similar trust/injunction thing is available for almost anything isnt it?

[Chad Fuck 17659]

Just now, Hank Scorpio said:

Motherfucker I am aware, I’m about to become a bankruptcy lawyer. 

[TwiceHorn 31438]

1 minute ago, Chad Fuck said:

I was going to ask if your bankruptcy experience was an unhappy coincidence or has that always been your "specialty" within PI stuff.

[Chad Fuck 17659]

4 minutes ago, TwiceHorn said:

Haha, bankruptcy lawyers do pick up that anti-creditor bias, don't they?

Most of my bankruptcy clients were epic, epic financial dumbshits.  But stiffing their creditors was fun and I remain pro-consumer bankruptcy.

I was a corporate bankruptcy lawyer before I was an asbestos plaintiffs' lawyer.  It's how I came to this crossroads.  I am intimately familiar with the culture of both camps and there is a vast chasm between them which is my pet theory as to why it's so difficult to get bankruptcy judges to understand our plaintiff/creditor issues.  We are not dealing with Jim Bob's trailer home lien, we are dealing with complex issues of what a life is worth and what portion of their demise the Debtor is accountable for.  It makes their heads spin.  

[Bevo 13564]

26 minutes ago, Chad Fuck said:

As to your uncle being a retired bankruptcy attorney, I have a whole lot of ideas about why bankruptcy attorneys think about the civil justice system and vice versa.  

I really have no idea what his thoughts are on civil justice. I only bring it up because he would be the driver in any case. My dad would be against suing. I wouldn't go against my dad so I would be out also. But, if my aunt and uncle were interested then they would move forward and my dad wouldn't interfere. Quite frankly, my biggest issue would be broaching the subject with my aunt and uncle. I would be very concerned what they would think of me and what they might tell my dad about me.

[Dahobbs 17525]

22 minutes ago, Hank Scorpio said:

It’s going to be interesting to see how many companies follow J&J’s lead. I would think 3M almost certainly will. 

 

20 minutes ago, Chad Fuck said:

Why wouldn't they all?  This is our concern, Hank.

But yes, 3M is likely at the top of the pile for the short term.

Funny thing about that, 3M would have a much more legitimate argument that it needs bankruptcy protection given the volume of claims against it. 

[Chad Fuck 17659]

8 minutes ago, Bevo said:

I really have no idea what his thoughts are on civil justice. I only bring it up because he would be the driver in any case. My dad would be against suing. I wouldn't go against my dad so I would be out also. But, if my aunt and uncle were interested then they would move forward and my dad wouldn't interfere. Quite frankly, my biggest issue would be broaching the subject with my aunt and uncle. I would be very concerned what they would think of me and what they might tell my dad about me.

I understand family dynamics.  Like I said, I was just using the case of your grandfather as an example.  If you ever want to do anything about it, know that in most states the statute of limitations runs 2 or 3 years from date of diagnosis or death.  The law does not reward procrastination.  

This is a whole other rant, but the fact that people think addressing their deserving grievances in the civil justice system - a system set up specifically so the working man could catch a break without resorting to violence - is some mark of failure or shame, drive me nuts.  

If you were walking down the street with your grandfather, and someone shot him dead, you'd want that person to suffer the full weight of the law.  Yet it sounds as if some in your family are saying if a company did the same thing to him on the installment plan, giving him something that would kill him without telling him it would kill him, it'd be embarrassing to call the weight of the law to bear.  It's a sham that's been sold to the public by perpetrators of torts that they don't need the justice system to work for them.  

Edited April 4, 2022 by Chad Fuck

[TwiceHorn 31438]

3 minutes ago, Dahobbs said:

 

Funny thing about that, 3M would have a much more legitimate argument that it needs bankruptcy protection given the volume of claims against it. 

Yeah, I saw what 270,000?  Geezus.

My Dad spent half a world war in close proximity to 5/38 cannon, and 40 and 20mm guns and didn't get no stinkin ear plugs.  Even shitty ones.  He was pretty deaf, though.

[Chad Fuck 17659]

4 minutes ago, Dahobbs said:

 

Funny thing about that, 3M would have a much more legitimate argument that it needs bankruptcy protection given the volume of claims against it. 

Volume does not equal quality.  That's another nuance of the whole thing.  

[TwiceHorn 31438]

1 minute ago, Chad Fuck said:

Volume does not equal quality.  That's another nuance of the whole thing.  

And I guess they aren't death cases, either.  Hearing loss is quite a ways from cancer.  It sucks, but not quite like that.

[Chad Fuck 17659]

Just now, TwiceHorn said:

And I guess they aren't death cases, either.  Hearing loss is quite a ways from cancer.  It sucks, but not quite like that.

Spot on. 

My clients will die because of an entirely preventable disease that the defendants knew their product could cause.  

[Gale Snoats 242]

8 minutes ago, Chad Fuck said:

I was a corporate bankruptcy lawyer before I was an asbestos plaintiffs' lawyer.  It's how I came to this crossroads.  I am intimately familiar with the culture of both camps and there is a vast chasm between them which is my pet theory as to why it's so difficult to get bankruptcy judges to understand our plaintiff/creditor issues.  We are not dealing with Jim Bob's trailer home lien, we are dealing with complex issues of what a life is worth and what portion of their demise the Debtor is accountable for.  It makes their heads spin.  

I have carved out a niche representing injured plaintiffs in (typically large energy related) bankruptcies and it's rewarding but often frustrating work.  We've had good luck protecting our clients' claims from the traps in the big reorg plans debtors are filing but it takes a ton of back and forth with biglaw br sections to reach an agreement (and, often times, just when you think you have a deal the carrier or PI club's lawyer will throw a wrench in the process with some crazy redline that guts the protection you've worked so hard to craft) but for the reasons discussed above it is risky to take it to the mat in br court.  Throw in a springing maritime lien and you get a lot of funny looks from the adverse parties and the Court.   

[Chad Fuck 17659]

4 minutes ago, Gale Snoats said:

I have carved out a niche representing injured plaintiffs in (typically large energy related) bankruptcies and it's rewarding but often frustrating work.  We've had good luck protecting our clients' claims from the traps in the big reorg plans debtors are filing but it takes a ton of back and forth with biglaw br sections to reach an agreement (and, often times, just when you think you have a deal the carrier or PI club's lawyer will throw a wrench in the process with some crazy redline that guts the protection you've worked so hard to craft) but for the reasons discussed above it is risky to take it to the mat in br court.  Throw in a springing maritime lien and you get a lot of funny looks from the adverse parties and the Court.   

We should have a drink sometime.

[GringoSalado 1651]

1 hour ago, Dahobbs said:

Right, but what is your question? 

 

1 hour ago, GringoSalado said:

I'm only interjecting to observe 

 

  Don't have one thought we'd page LL because you can never have enough attorneys

[GringoSalado 1651]

1 hour ago, TwiceHorn said:

Thujone got one of the early verdicts, IIRC, on talcum powder.  Maybe the first.

GoLL doesn't practice in that area.

thanks, nvm, and I'm an idiot

[Dahobbs 17525]

28 minutes ago, Chad Fuck said:

Volume does not equal quality.  That's another nuance of the whole thing.  

Completely get that. But the volume of claims combined with the verdicts so far and the size of 3M, I think it has a much stronger argument that real bankruptcy is in play. 

Edited April 4, 2022 by Dahobbs

[Bevo 13564]

25 minutes ago, Chad Fuck said:

If you were walking down the street with your grandfather, and someone shot him dead, you'd want that person to suffer the full weight of the law.  Yet it sounds as if some in your family are saying if a company did the same thing to him on the installment plan, giving him something that would kill him without telling him it would kill him, it'd be embarrassing to call the weight of the law to bear.  It's a sham that's been sold to the public by perpetrators of torts that they don't need the justice system to work for them.  

Well there is also the fact that despite having friend who are attorneys most doctors pre-tort reform have grown to hate attorneys. We all have stories where a woman is choking to death on a chicken bone, you save her life with an emergency tracheotomy and get sued for putting a hole in her throat. Sure you win if it ever went to court but what exactly did you win?

[Chad Fuck 17659]

46 minutes ago, Bevo said:

Well there is also the fact that despite having friend who are attorneys most doctors pre-tort reform have grown to hate attorneys. We all have stories where a woman is choking to death on a chicken bone, you save her life with an emergency tracheotomy and get sued for putting a hole in her throat. Sure you win if it ever went to court but what exactly did you win?

Do we all have those stories?  I don't.  

I have tried to engage you honestly and directly, but frankly, this sounds like your slinging bullshit at me.  

In any case, I could speak to your grandfather's case, but I'm not a medical malpractice attorney so I can't run down this particular road with you.  I'm not even sure if medmal attorneys exist as a thing in Texas anymore.

If they do, I'm sure one will be along to discuss medmal in Texas with you.

 

Edited April 4, 2022 by Chad Fuck

[Ag with kids 581]

3 hours ago, Chad Fuck said:

The employees of J&J needn't have any such fears.  There was never any chance of them losing their jobs.  The only ones losing here are the plaintiffs who were injured by J&J's asbestos containing talc-products.  That's it.  That's the bottom line.

The continuum you mention, current company/employees potentially losing a source of employment/profits for the sins of the companies past damages to others, is always at play in Bankruptcy.  Everyone has to take a hair cut because no one can be made whole - the company has to pay something  but not all they owe.  The plaintiffs may not get everything they deserve, but they get something.  The current operations continue.  We hold our noses and make the deal.

But J&J would never have to make this deal.  The numbers TwiceHorn posted upthread are numbers exaggerated by J&J to plead their case.  They aren't even in the remotest sense accurate. It is taking an absolute worst case scenario of very high outlier verdicts and saying, "every single case will be this way." J&J could pay these cases at trial for infinity and never be in danger of insolvency.  They just don't want to.

So, you think that if J&J has to pay out a lot more than $2 billion that there won't be layoffs?  And layoffs from the rank and file that had NOTHING to do with anything involved in this case?  Maybe that's true.  But, generally when companies have a lot of extra expenses, they have to find ways to cut costs elsewhere.  And many times that's with RIFs...

I have ZERO problem if people that lied and hid information are punished.  And I DO understand that some punishment HAS to come from the corporation.  But, I also realize the corporation is made up of a lot of people that don't deserve punishment.

[Chad Fuck 17659]

So, you think that if J&J has to pay out a lot more than $2 billion that there won't be layoffs?  And layoffs from the rank and file that had NOTHING to do with anything involved in this case?  Maybe that's true.  But, generally when companies have a lot of extra expenses, they have to find ways to cut costs elsewhere.  And many times that's with RIFs...
I have ZERO problem if people that lied and hid information are punished.  And I DO understand that some punishment HAS to come from the corporation.  But, I also realize the corporation is made up of a lot of people that don't deserve punishment.

They had $82B in revenue last year. If J&J lays people off, that’s on J&J.

How much punishment will stop J&J from killing more of my clients? Or from whatever they’re doing now that will kill or injure people in the future?

How much will dissuade them? Especially when they know they can just create a subsidiary that can evade any real accountability?

Why must my clients bear the burden of J&J’s gross negligence?

[Bevo 13564]

1 hour ago, Chad Fuck said:

Do we all have those stories?  I don't.  

I have tried to engage you honestly and directly, but frankly, this sounds like your slinging bullshit at me.  

In any case, I could speak to your grandfather's case, but I'm not a medical malpractice attorney so I can't run down this particular road with you.  I'm not even sure if medmal attorneys exist as a thing in Texas anymore.

If they do, I'm sure one will be along to discuss medmal in Texas with you.

 

First, there was no slinging. Doctors who lived in Texas pre-tort reform have a certain disdain for "ambulance chasers" and this disdain carried over to the entire legal profession. OTOH, most of these doctors who went through practicing in the days of "ambulance chasers" have friends who are attorneys. So, the disdain did not generally carry over to non-work related relationships. But, they still are very much anti-lawsuit because they saw what it did to them and their colleagues. An interesting story is that I had a family member who had a heart attack at an attorney's office over a non-medical related case brought against him which he eventually won. Doctors have to routinely get BPs and pulses but I would venture that visits to the attorney when you are being sued are more stressful than routine visits to the doctor.

Second, the reason for bringing this up was your comment, "It's a sham that's been sold to the public by perpetrators of torts that they don't need the justice system to work for them".  My family's reason for being against suing had nothing to do with your supposition. It has to do with not needing the money, not needing to feed attorneys to get pennies from some class action suit (A friend of mine did the 1-800-bad-drugs ads and until the law changed acted as marketing agency that collected millions as it passed "leads" to the trial attorney), and having a generally negative impression of suing. And for me personally, I worked in the pharmaceutical industry and have seen wrongdoing firsthand with regard to Redux and some other things but still have a problem with bringing down pharmaceutical companies with a rich history who have added trillions to the US economy for the sake of a relatively small number of clients.

As for your question on medmal, medical malpractice still exists but frivolous cases are pretty rare as the cost to bring a case is significant. So, generally only real cases are brought forward. The exception to that is when a novice or starving attorney brings a weak case. These are usually settled for some nominal amount by the insurance carrier because a court case costs around $100K for the insurance company to defend. And afterwards, doctors simply need to declare that there was a settlement when they are filling out their re-credentialing forms so overall the stress and loss of time are manageable. The novice attorney will quickly learn though that the juice isn't worth the squeeze. And it does end up being a big hassle for the doctor but it generally doesn't cause the family and health problems that were created in the pre-reform era.

 

Edited April 4, 2022 by Bevo

[Anastasis 23458]

The pivot to ovarian cancer was the legal profession's version of label expansion. 

[TwiceHorn 31438]

I just heard an intro on NPR for All Things Considered that was basically "Should Companies Be Able to Escape Liability by Filing Bankruptcy?"  

Dammit.  The obvious answer there is yes.

Again, being non-specific about the two-step thing.

[closetohumping 17434]

Moral of the story here is us poors need better lawyers

[Captainant 27631]

34 minutes ago, TwiceHorn said:

I just heard an intro on NPR for All Things Considered that was basically "Should Companies Be Able to Escape Liability by Filing Bankruptcy?"  

Dammit.  The obvious answer there is yes.

Again, being non-specific about the two-step thing.

I think the difference in my mind is a financial obligation like a bad business bet - vs - giving people fucking cancer and knowing about it and not telling them.

Those two financial obligations should not be considered fungible with each other. There's a material difference in damages. But I don't think the law is that nuanced (please tell me otherwise, I'm only married to a lawyer)

[DalTxHornFan 3097]

I've been researching that plaintiff asbestos expert William Longo.  He's been excluded as often as he's been allowed to testify.  His mantra is that any asbestos exposure, no matter how minute, is potentially life threatening.  Very weak causal link from baby powder usage to any actual illnesses.  Way different than the actual industrial asbestos cases, though the Baron & Budd deposition coaching manuals raised my eyebrows a bit about those cases.

The takeaway:  If you keep bringing the same case long enough -- you'll eventually hit the lotto!    

[MonkeyDoughnut 10227]

9 hours ago, Dahobbs said:

There is no risk of J&J disappearing. If that is what you've taken from this thread then you've completely missed the point. It is abusing the law to avoid having to pay money to people it has hurt. That's all that is happening here. Feeling sympathy for J&J in this thread is completely inappropriate. 

Since they were ordered to pay $26.5M, $55M and $72M to 3 different plaintiffs on these suits, I would think complete dissolution is on the table, no? Is there a cap other then the stunt they are trying to pull now?

[Dahobbs 17525]

3 minutes ago, MonkeyDoughnut said:

Since they were ordered to pay $26.5M, $55M and $72M to 3 different plaintiffs on these suits, I would think complete dissolution is on the table, no? Is there a cap other then the stunt they are trying to pull now?

No to the first. No technical cap, but the reality is that verdicts and actual paid value are very different for a large number of reasons. 

[TwiceHorn 31438]

5 minutes ago, Dahobbs said:

No to the first. No technical cap, but the reality is that verdicts and actual paid value are very different for a large number of reasons. 

I'm not trying to argue with you, I just want to sort of puzzle this out.  There are 38k claimants in the MDL, some other number outside the MDL, I assume fairly small.  And then another what, 30k future claimants?

Some reasonably credible site of plaintiffs attorneys calculated an average verdict of I think 4.7M.  Of course, that's subject to appeal and negotiation downward in the face of bankruptcy, etc.

You objected to my SWAG of $1M per claim, so what do you think the exposure is here?

[TwiceHorn 31438]

37 minutes ago, DalTxHornFan said:

I've been researching that plaintiff asbestos expert William Longo.  He's been excluded as often as he's been allowed to testify.  His mantra is that any asbestos exposure, no matter how minute, is potentially life threatening.  Very weak causal link from baby powder usage to any actual illnesses.  Way different than the actual industrial asbestos cases, though the Baron & Budd deposition coaching manuals raised my eyebrows a bit about those cases.

The takeaway:  If you keep bringing the same case long enough -- you'll eventually hit the lotto!    

The Garlock litigation that Chad Fuck mentioned isn't a "Texas two step," exactly, but the evidence of false or exaggerated exposure claims (itself seemingly exaggerated) fucked up that case royally.

[TwiceHorn 31438]

1 hour ago, Captainant said:

I think the difference in my mind is a financial obligation like a bad business bet - vs - giving people fucking cancer and knowing about it and not telling them.

Those two financial obligations should not be considered fungible with each other. There's a material difference in damages. But I don't think the law is that nuanced (please tell me otherwise, I'm only married to a lawyer)

It's always unfortunate that non-contractual claimants in a bankruptcy get stiffed.  Moreso when it's an injury claim.  And infuriating when it gets toward an intentional tort.  If it actually gets to be an intentional tort, then it would be excepted from discharge.

Unintentional tort claims have always been discharged by bankruptcy, it's hard to conceive how they could be rationally excluded from the discharge.

[Dahobbs 17525]

27 minutes ago, TwiceHorn said:

I'm not trying to argue with you, I just want to sort of puzzle this out.  There are 38k claimants in the MDL, some other number outside the MDL, I assume fairly small.  And then another what, 30k future claimants?

Some reasonably credible site of plaintiffs attorneys calculated an average verdict of I think 4.7M.  Of course, that's subject to appeal and negotiation downward in the face of bankruptcy, etc.

You objected to my SWAG of $1M per claim, so what do you think the exposure is here?

The mass tort average is something like 20-50k per case. Even horrific injuries only go up to averages of like 100k. The highest average for a mass tort case was like 400k (phen phen). The transvaginal mesh cases had massive verdicts, but then actual per case average was under 100k. 

Trials are expenses. Product liability cases many times more so. And the reality is that the massive verdicts are typically for the best cases (with many defense verdicts are weaker cases in between). And while defendants are happy to try cases until the end of time, plaintiffs die in the interim. 

[TwiceHorn 31438]

6 minutes ago, Dahobbs said:

The mass tort average is something like 20-50k per case. Even horrific injuries only go up to averages of like 100k. The highest average for a mass tort case was like 400k (phen phen). The transvaginal mesh cases had massive verdicts, but then actual per case average was under 100k. 

Trials are expenses. Product liability cases many times more so. And the reality is that the massive verdicts are typically for the best cases (with many defense verdicts are weaker cases in between). And while defendants are happy to try cases until the end of time, plaintiffs die in the interim. 

Yeesh.

[ERhine 1894]

Dammit.  The obvious answer there is yes.

Is it?

[FartingMonk 3606]

3M is about to get their shit packed in for AFFF.  Fire fighting foam.  Causes cancer apparently.

[DalTxHornFan 3097]

22 minutes ago, TwiceHorn said:

It's always unfortunate that non-contractual claimants in a bankruptcy get stiffed.  Moreso when it's an injury claim.  And infuriating when it gets toward an intentional tort.  If it actually gets to be an intentional tort, then it would be excepted from discharge.

Unintentional tort claims have always been discharged by bankruptcy, it's hard to conceive how they could be rationally excluded from the discharge.

Kill the company.  Sue the executives.  Pretty soon there isn't much money left (other than to pay lawyers.)  Bankruptcy can be a reasonable way to find a middle ground in these situations.

[TwiceHorn 31438]

58 minutes ago, ERhine said:

 

Is it?

 

Well, historically, yes.   I suppose we could "re-imagine" the whole bankruptcy thing.

We're into nearly a half century of asbestosis and meso litigation and Johns-Manville, which was as bad an actor or worse than J/J, filed bankruptcy 40 years ago.  So it seems a little late to be finally raising this question.

Apart from the two-step atrocity, of course.  That deserves all the negative publicity and public outrage it can get.

And there's probably some tweaks to dismissal/bad faith when the majority of the debt arises from tort claims, without regard to other shenanigans.

Edited April 5, 2022 by TwiceHorn

[TwiceHorn 31438]

8 hours ago, TwiceHorn said:

Well, historically, yes.   I suppose we could "re-imagine" the whole bankruptcy thing.

We're into nearly a half century of asbestosis and meso litigation and Johns-Manville, which was as bad an actor or worse than J/J, filed bankruptcy 40 years ago.  So it seems a little late to be finally raising this question.

Apart from the two-step atrocity, of course.  That deserves all the negative publicity and public outrage it can get.

And there's probably some tweaks to dismissal/bad faith when the majority of the debt arises from tort claims, without regard to other shenanigans.

I was thinking more about this and, yeah, it's probably time to give bankruptcy a hard look.  And I mean a harder look than Liz Warren writing obscure law review articles and I mean more than the "Texas Two Step."  A look at the whole code and whether it does what it should and or what it was intended to do.  And not some politically motivated "reform."

I think all laws should get more scrutiny then what they do.  There used to be "sunset" provisions in some Texas laws and a committee that reviewed laws with sunset provisions to determine whether to keep them, amend them, or repeal them.  My recollection was that that was a mostly Texas thing and may still exist to some limited extent.  I think it should be done with basically all laws.  Too many of em just sit around unquestioned for decades or centuries.

I like NPR.  I listen to it all the time.  So I hold it to a pretty high standard and, although I am reasonably sure the All Things Considered on the subject treated this problem well, the article in the OP and the lede for the All Things Considered segment were a bit hysterical for my taste.

I'm not generally a fan of new criminal laws. But the tort system is not supposed to punish, or really even deter (I don't think most laws of any kind deter much anyway), it's supposed to compensate.  And bankruptcy gets in the way of compensation, sometime probably pretty unjustly.

But in a lot of these mass tort situations, I think it's fair to say that people and corporations need to actually be punished.  Some singular tort situations, too.  And probably not by most existing laws, but by a new set of laws that puts corporations and executives "under the gun" for malfeasance like this.  Something new like Criminally Negligent Operation of a Business Resulting in Death or Injury.  Business criminals like the Sacklers get away with too much.

None of this will happen, but it would be nice if it did.

 

[TexasEd 8066]

7 hours ago, TwiceHorn said:

I was thinking more about this and, yeah, it's probably time to give bankruptcy a hard look.  And I mean a harder look than Liz Warren writing obscure law review articles and I mean more than the "Texas Two Step."  A look at the whole code and whether it does what it should and or what it was intended to do.  And not some politically motivated "reform."

I think all laws should get more scrutiny then what they do.  There used to be "sunset" provisions in some Texas laws and a committee that reviewed laws with sunset provisions to determine whether to keep them, amend them, or repeal them.  My recollection was that that was a mostly Texas thing and may still exist to some limited extent.  I think it should be done with basically all laws.  Too many of em just sit around unquestioned for decades or centuries.

I like NPR.  I listen to it all the time.  So I hold it to a pretty high standard and, although I am reasonably sure the All Things Considered on the subject treated this problem well, the article in the OP and the lede for the All Things Considered segment were a bit hysterical for my taste.

I'm not generally a fan of new criminal laws. But the tort system is not supposed to punish, or really even deter (I don't think most laws of any kind deter much anyway), it's supposed to compensate.  And bankruptcy gets in the way of compensation, sometime probably pretty unjustly.

But in a lot of these mass tort situations, I think it's fair to say that people and corporations need to actually be punished.  Some singular tort situations, too.  And probably not by most existing laws, but by a new set of laws that puts corporations and executives "under the gun" for malfeasance like this.  Something new like Criminally Negligent Operation of a Business Resulting in Death or Injury.  Business criminals like the Sacklers get away with too much.

None of this will happen, but it would be nice if it did.

 

Erin Brockovich approves this message.

 

[wildcat09 29345]

J&J is trying to add Neal Katyal to their legal team:

Quote

The United States is objecting to a Johnson & Johnson subsidiary’s bid to add Hogan Lovells partner Neal Katyal to its legal team in a high-stakes bankruptcy case, citing his hourly rate of $2,465 — a possible new legal industry high.

Johnson & Johnson is using the proceedings to try to resolve claims that its baby powder and other talc-based products caused cancer. The company, which maintains the products are safe, in October assigned thousands of talc lawsuits to a new subsidiary, LTL Management LLC, and placed it in bankruptcy.

The U.S. trustee in the Chapter 11 case on Friday asked a federal bankruptcy judge in New Jersey to block LTL from retaining Katyal, calling his hourly rate “significantly higher” than that of partners from the seven other law firms already involved in the case.

LTL asked the judge for approval to add Katyal to its legal team earlier this month, citing his and Hogan Lovells' expertise in federal appeals. Multiple talc claimants have appealed the February ruling that allowed LTL's bankruptcy to move forward.

Partner billing rates at large law firms are considered competitive business information and are typically not public. But they are disclosed in some court filings, especially in bankruptcy cases where a debtor's legal fees must be approved by a judge.

Katyal’s hourly rate would rank among the highest publicly available figures in the legal industry. Former U.S. attorney general Eric Holder Jr, a partner at Washington, D.C.-based Covington & Burling, last year billed at $2,295 an hour according to a contract the firm signed with an Oregon university to conduct a workplace culture investigation.

Lynn LoPucki, a professor at the University of California at Los Angeles School of Law who tracks bankruptcy cases, said Monday that Katyal's rate of nearly $2,500 is the highest he has seen.

Katyal, a former acting U.S. solicitor general who has argued dozens of cases before the U.S. Supreme Court, declined to comment on the objection Monday. Hogan Lovells did not immediately respond to requests for comment. The trustee, Andrew Vara, declined to comment through a Justice Department spokeswoman, and representatives for Johnson & Johnson did not respond to requests for comment.

According to the trustee’s objection, the hourly rate among LTL’s lawyers from Jones Day topped out at $1,350. Skadden, Arps, Slate, Meagher & Flom charged as high as $1,195; Weil, Gotshal & Manges' top rate was $1,579; and Orrick Herrington & Sutcliffe's was $1750. Lawyers from King & Spalding and Shook, Hardy & Bacon are also representing LTL.

The trustee previously sought to disqualify both Jones Day and Skadden from LTL's legal team because they represent Johnson & Johnson in other matters, but the effort was unsuccessful.

Top approved billing rates in bankruptcy cases have been creeping toward the $2,000 mark over the past year. Kirkland & Ellis’ partner hourly billing rate hit $1,895 in three separate 2021 bankruptcies, while Simpson Thacher & Bartlett partners charged up to $1,850 per hour in the bankruptcy of Chilean bank holding company Corp Group Banking SA last year.

 

[Chad Fuck 17659]

1 hour ago, wildcat09 said:

J&J is trying to add Neal Katyal to their legal team:

 

Truly a company in dire financial distress in need of the economic safe harbor Chapter 11 was meant to provide. 

[Brisketexan 105061]

1 hour ago, wildcat09 said:

hourly rate of $2,465

Back in the day, I remember something a relatively high hourly rate attorney said about rates that were more insanely high than his - "I can't think of a single thing I'd pay that much for where you still keep your clothes on."