multidistrict litigation

3M Unit Bankruptcy Toss Is Second Blow to Mass Tort Defense Play

The termination of 3M Co. unit Aearo Technologies LLC’s bankruptcy casts fresh doubt on the tactic of using Chapter 11 bankruptcy as a legal strategy in mass tort litigation, likely emboldening plaintiffs.

The June 9 decision from Judge Jeffrey J. Graham of the US Bankruptcy Court for the Southern District of Indiana hewed closely to the US Court of Appeals for the Third Circuit’s analysis earlier this year in its dismissal of a Johnson & Johnson subsidiary’s bankruptcy on similar grounds.

The two rulings are a pair of major setbacks for solvent companies eyeing bankruptcy to handle mass tort liabilities—a practice that has seen substantial growth in recent years.

Graham’s decision, along with the Third Circuit’s ruling on J&J unit LTL Management LLC, creates “hurdles that may be absent from the bankruptcy code,” said attorney Douglas Mintz of Schulte Roth & Zabel LLP.

“I think the biggest application here is it will empower plaintiffs to push more aggressively outside of bankruptcy and leave tort defendants with fewer tools in their toolbox or less certainty that one of the tools will work,” Mintz said.

Graham held that Aearo’s attempt to use bankruptcy to settle approximately 230,000 lawsuits over allegedly defective military

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June 15, 2023 by ATTORNEY

Cancer Victims’ Lawyers Vow to Fight J&J Proposed Settlement

Attorneys who have led the charge in litigating cancer claims against Johnson & Johnson denounced the company’s deal with talc claimants as a sham and disgrace to many people who say J&J’s products gave them cancer.

J&J on Tuesday announced a $8.9 billion agreement with talc claimants as it placed subsidiary LTL Management LLC into bankruptcy for the second time. The proposed deal would compensate people who say J&J’s talc-based powders caused cancer, the company said.

The deal, which would pay claimants over the course of 25 years, would bring about a global resolution to the legal saga, J&J said. But many of the firms that have litigated against J&J on behalf of cancer victims for years, representing tens of thousands of claimants, say they were intentionally left out of the settlement. The proposal, they say, offers victims far less than they deserve.

“I strongly believe that the law firms that understand the case, the seriousness of the injury, the costs to the claimants in medical care, couldn’t possibly support something like this,” said Michelle Parfitt, a partner at Ashcraft & Gerel who as co-head of the talc litigation steering committee has helped oversee more than 40,000 claims during multidistrict

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April 12, 2023 by ATTORNEY

3M earplug bankruptcy creates “corrosive” tension with other courts, attorney says

The 3M logo is seen at its global headquarters in Maplewood, Minnesota. REUTERS/Nicholas Pfosi

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(Reuters) – A 3M Co subsidiary on Wednesday criticized the way federal courts have handled 290,000 consolidated lawsuits over allegedly defective earplugs it made for the U.S. military, saying that the “broken” legal system allowed claims to balloon and threatened the company’s ability to settle them.

3M subsidiary Aearo Technologies LLC pressed for, but did not get, a court order that would protect its parent company from the lawsuits at its first hearing in U.S. bankruptcy court in Indianapolis. Instead, it reached a more limited agreement with plaintiffs to pause work for three weeks, interrupting witness depositions and expert reports scheduled in the lawsuits, which have been consolidated in the largest-ever multidistrict litigation (MDL) in U.S. court.

Plaintiffs sued Aearo and 3M over the company’s Combat Arms Earplugs version 2 (CAEv2), claiming they are defective and damaged their hearing. The cases ballooned to a peak of more than 290,000 last year and now account for nearly one-third of all cases pending in all federal courts, according to a court filing.

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August 12, 2022 by ATTORNEY
April 2024
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