In the next several weeks, a federal judge in Texas will decide the fate of a case that will have significant implications, both for the ability of local victims to receive swift justice and for the broader business competitiveness of the state.
For years, mass tort litigation has spiraled out of control, flooding courts with high-dollar lawsuits usually driven by aggressive trial lawyers, often at the expense of real victims and businesses. Now, Texas has a chance to lead the way in legal reform by allowing an innovative settlement approach that streamlines compensation for victims and curbs trial lawyer abuse.
At the center of this case is Johnson & Johnson, facing claims that its talc-based baby powder contained asbestos, allegedly leading to ovarian cancer in some consumers. Trial lawyers have spent years recruiting claimants through relentless ad campaigns, resulting in tens of thousands of lawsuits. While the science behind these claims has been contested, with some courts even rejecting the testimony of plaintiffs' experts, the legal system has struggled to process these cases efficiently.
After years of legal wrangling and two failed previous attempts to resolve these lawsuits, it appears that all the parties involved are coalescing around a settlement. A decision reached late last year by a federal court judge that allowed the settlement plan to be considered in Texas further signaled that this case, despite its messy history, may finally be resolved cleanly and collectively.
For the thousands of claimants waiting for justice to be served, this development has given them relief that the end is in sight for a case that has dragged on for far too long. For businesses seeking respite from a recent spike of frivolous mass tort litigation cases, meanwhile, there is cautious optimism that a new avenue may be possible to respond to a complex legal problem that has backlogged our courts and cost the U.S. economy nearly $450 billion in 2020 alone.
With arguments in the case wrapping on the last day of February, the fate of the settlement now rests with this Southern District of Houston Federal Judge. The key question is whether or not the novel approach that Johnson and Johnson has proposed to resolve the litigation and facilitate the settlement – which is a corporate restructuring taken under Texas state law combined with Chapter 11 proceedings in federal bankruptcy court – will pass legal muster.
The defendants believe that they are well within their rights to undertake such an action and assert that it will lead to a faster resolution for victims that will put more money into their pockets. Claimants seem to be similarly inclined to move forward. In fact, more than 80% of them support the plan, which would see the case settled in bankruptcy court and pay out $9 billion over the next 25 years. The deal has “overwhelming support” from attorneys representing claimants as well.
While victims overwhelmingly support this plan, a small but powerful group of trial lawyers is working to block it, not in the interest of justice It appears, but potentially to protect their firm’s bottom line. It’s quite possible that some of these attorneys, many of whom have made fortunes from dragging out mass tort litigation, are pushing these challenges in an effort to keep the case alive in traditional courts, where larger legal fees and prolonged trials benefit them more than their clients. Ultimately, though, dragging this case out any longer would have little benefit.
These victims, many of whom have survived or are living with cancer, have been put through the wringer. Their cases have been drawn out year after year as the justice system lacks the capacity to try cases at this volume. Those that have moved forward with trials, meanwhile, have failed to catch flawed expert testimony and prevent the use of unreliable research that failed to link talc exposure to ovarian cancer. This has led to lengthy appeals and in the end, the justice system itself has delayed the compensation these women deserve.
Companies on the other hand, are seeking to flee the high taxes and onerous regulations of other parts of the country and are looking for a place to do business with a more predictable and reasonable legal system. Should this settlement move forward, Texas could be at the forefront of creating a more fair and efficient way of resolving mass tort litigation and reap the outside investment and economic development as a result.
This Texas court now faces a pivotal decision that will shape both the immediate future for thousands of victims and the state's long-term business climate. The time has come to move forward with this settlement and allow both justice and progress to prevail.
Chris Carmona is a Managing Attorney of the Texas-based Carmona Firm, PLLC