Another round up? + bankruptcy?
3M Lawyers Sanctioned in the larges MDL in US History
Your monthly legal news update from Legalcalls.com by Attorney Jeff Keiser
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In this issue:
- Talc Litigation
- Hernia Mesh
- 3M Combat Arms Earplug Litigation
- Opioid Litigation
Three Orders – Judge Chhabria of the U.S. District Court for the Northern District of California issued three Orders on July 23, 2021 in MDL 2741, and at least one directly implicates the ability for plaintiff’s lawyers to get paid. The holdback order in PTO 236 has been removed, opening the door for attorney fees, costs, and expenses to start being paid to lawyers involved in the MDL. A second order implies the settlement is progressing, giving Special Master Ken Feinberg the power to start processing settlement claims. In a separate order, Judge Chhabria required the use of plaintiff fact sheets to make this process more manageable for lawyers, clients and the Special Master. Time will tell how this process works, but it appears that the door has been opened for settlements to proceed.
In late May 2021, Judge Chhabria denied the motion to preliminarily approve the Roundup class settlement agreement. Naturally, Bayer was disappointed with this decision, once again citing the science behind glyphosate’s safety. “The court’s decision closes the door on an MDL court-supervised national class solution to manage potential future litigation, which would have been the fairest, most efficient mechanism for all parties,” said the company in a press release. “Still, we have legal and commercial options that together will achieve a similar result in mitigating future litigation risk, and we will pursue them as quickly as possible. Significantly, the weight of scientific evidence and the conclusions of all expert regulators worldwide continue to support the safety of glyphosate-based herbicides. The trial starting in California (below) may provide further guidance on how these cases will ultimately be resolved.
Still on the Market
Bayer said recently it is considering pulling Roundup products from the U.S. market for residential users, though not from farm use.
California Trial Starts
On July 26, 2021, and Roundup Trial in California began before Judge Gilbert Ochoa. Monsanto is 0-3 in trials like this, suffering over $2b in damages (even if those verdicts have been reduced on appeal). Donnetta Stevens was diagnosed with NHL in 2017 and has suffered other serious health problems. Thus far, the only setback for the plaintiff has been the Court’s preemption of “failure to warn” claims. Jury selection continues.
Is there another Roundup type case in the future? Many lawyers are saying “YES,” with litigation against the makers of another weed killer, Paraquat, heating up over recent months. Rather than NHL, the suits claim that Paraquat causes Parkinson’s Disease, and that the manufacturers and distributors should be liable. There are currently more than 200 cases pending in state and federal courts, and an MDL (#3004) was centralized in June in the Southern District of Illinois. Sygenta and Chevron are the defendants and are vigorously defending these claims. Time will tell, but this is one case to monitor in the future. Lawyers spent $812,280 on paraquat ads in March and April 2021, compared to $160,600 in January and February, a 406% increase, according to Kantar Media CMAG. The number of ads related to paraquat in that period correspondingly rose 418%, from 1,957 to 10,131. No other nationwide product liability mass tort showed a comparable rise.
On June 1, 2021, the U.S. Supreme Court refused to hear J&J’s appeal against a $2.21 billion ruling from 2018 in favor of 20 women that developed cancers after using talc. The Supreme Court did not issue any opinion or guidance as to reasoning, but there is nowhere else for J&J to go at this point. Such a high dollar amount is likely to push them towards settlement.
Talc is #2
As of July 2021, the Talc MDL is the 2nd largest MDL in US history with 34,090 plaintiffs having filed claims. Johnson & Johnson has set aside nearly $4b to cover the costs associated with settling these cases, per an SEC filing earlier this year. This amount has not been discussed or approved by any court but is an indication of the liability they face.
Last year, Johnson & Johnson agreed to pay $100M to just over 1,000 plaintiffs for cancer diagnoses following the use of talcum powder. That works out to $100,000 per plaintiff, though these were considered the most severe. This settlement amount may not be consistent across plaintiffs, but the amounts contemplated may indicate sizeable payouts for all affected plaintiffs.
Bankruptcy on the Horizon (?)
On July 18, 2021, Johnson & Johnson indicated that they may attempt to offload their liability under the talc litigation through a bankruptcy plan. Regarding settlement discussions, this could affect any plaintiffs holding out for a larger payout or an independent trial of their own. Procedurally, this shield could be used under Texas’s merger law, allowing a company to split to shield liability through a two-step bankruptcy. n 2017, Brawny paper towels manufacturer Georgia-Pacific used the Texas law to move asbestos liabilities to an entity that later filed for bankruptcy in North Carolina. Keep an eye on this, as it could affect all plaintiffs and plaintiff attorneys.
The parties are currently preparing a group of “bellwether” cases for trial, which are likely begin by early next year. Coronavirus has had an impact on all court scheduling orders, and the talc powder cases are no exception. Multiple trials already set in Missouri, Illinois, and Pennsylvania have been pushed to the second half of 2021, but are more likely to be delayed further. Other trials are likely to be scheduled in 2022.
RICO Claims Dismissed
On June 31, 2021, MDL 2924 dismissed plaintiffs’ RICO claims against all defendants. These claims were based on purported class representatives having purchased Zantac sold by defendants in violation of 18 U.S.C. § 1962(c) through “racketeering activity” consisting of “an enterprise to deliberately and unlawfully misrepresent the safety risks” of the drug though a “decades-long marketing and promotional campaign to mislead the public,” “misleading communications with federal regulators,” and “efforts to manipulate key opinion leaders and industry groups.” The Court disagreed, finding that the indirect purchaser rule was an “unsurmountable hurdle for Plaintiffs.” All RICO claims were dismissed with prejudice.
Bellwether Trials on the Horizon (?)
Previous updates indicated that we could expect to see bellwether trials in 2022, but Judge Robin L. Rosenberg appears to have thrown some cold water on that idea. On June 14, 2021, she issued an Order indicating that the complexity of the case would further delay these bellwethers until 2023, at least. Coronavirus has certainly not helped the progression of this case, but in the short term, we must all be patient. Following the bellwether trials, if the drug makers fail to reach Zantac settlements or another resolution for the cases, thousands of individual cases may end up remanded back to courts nationwide for individual trial dates for years to come.
Some lawyers have started to speculate about the value of these cases. A nationwide mass tort attorney recently estimated a top tier case in this litigation may be worth $500,000. Lower-tier cases drop to as low as $100,000, but these cases still have extremely high value. These are valuable cases that should be pursued, even if it is premature to make any plans based on a global settlement.
The Hernia Mesh lawsuits are moving ahead in state and federal courts across the nation, involving defective hernia mesh products manufactured, sold and distributed by Bard, Ethicon, Atrium, and Covidien. These are all separate and distinct litigations, but we can see trends that apply to all. The following are some current key events in the pending litigations:
This litigation is the biggest hernia mesh litigation, based solely on market share. The major state litigation is venued in Rhode Island (where Bard is headquartered), and the federal Multidistrict Litigation (MDL) is venued in the Southern District of Ohio. On June 28, 2021, the Court ruled that experts may not offer opinions on the intent or state of mind of a corporation, and that a historical recounting of internal company documents is not permissible expert testimony. The decision limits the ability of plaintiffs to exploit corporate documents in expert reports and testimony without appropriate expert analysis. This ruling was part of the first bellwether trial in a multidistrict litigation involving allegations that a hernia mesh product caused complications like omental adhesions.
The Ethicon Hernia Mesh litigations mainly focus on Physiomesh and include claims involving certain Proceed and Prolene product lines. The major state litigation is venued in New Jersey (where Ethicon is headquartered), while the federal Multidistrict Litigation (MDL) is venued in the Northern District of Georgia. Currently. The first bellwether trial was scheduled to begin on June 7, 2021, but was continued indefinitely per the Court’s order of May 18, 2021. The Court made no indication as to its reasoning for the delay, nor did it offer any new dates for the trial to commence. No settlement has been reached as of the publication of this newsletter.
The Atrium Hernia Mesh litigations are mainly focused on the C-Qur product line. The major state litigation is venued in New Hampshire (where Atrium was headquartered at one time), while the federal Multidistrict Litigation (MDL) is venued in the District of New Hampshire. The first bellwether trial was scheduled to begin on July 7, 2021. However, on the eve of that trial, settlement was reached. No detail was available about the amount of the settlement, but two other bellwether trials remain on the docket and will be scheduled for late 2021 or early 2022.
This litigation is smaller, based largely upon market share. There is a major state litigation is venued in Massachusetts (where Covidien was headquartered at one time). Currently, there are no bellwether trials scheduled.
All Signs Point to Settlement
These signs point towards a global settlement, or at least a settlement by MDLs individually. These delays are frustrating to every plaintiff’s attorney. However, the settlement of one case before trial indicates that the defendants were concerned about the outcome if decided by a jury. Bellwether trials tend to trigger settlement discussions and resolutions. Again, patience is the magic word.
3M Combat Arms Earplug Litigation
Largest MDL in US History – With more than 230,000 cases filed in the MDL, this case has become the largest in US history, at least since the MDL system was implemented in 1968. The sheer number of plaintiffs is one of the biggest selling points of the case to any plaintiff attorney, and these numbers show no signs of slowing down. The plaintiffs, mostly U.S. military veterans and service members, allege that they suffered hearing damage as a result of using 3M’s Combat Arms Earplugs, Version 2 (CAEv2), which they say were defective.
3M Lawyers Sanctioned
3M’s lawyers from Dechert were sanctioned $12,000 for improper behavior during the third bellwether trial. Judge Rodgers determined that they had “willfully violated” an order that she could not display a slide during the hearing containing a debatable statistic unless she told jurors she was using the slide only “to challenge the credibility of a plaintiff’s expert witness, not to suggest the truth of the crucial statistic.”
Three bellwether trials have gone to verdict, and 3M has lost two and won one. The first one, with three plaintiffs, resulted in a verdict of more than $7m in damages, with about $6m coming in as punitive damages. The second, with a single plaintiff, resulted in a verdict for defendants. That plaintiff served in the U.S. Army from 2008 to 2011. He experienced an IED explosion in Afghanistan in 2009 that started his tinnitus symptoms. Those symptoms worsened when he returned from his deployment and was stationed at Fort Richardson, Alaska. The third bellwether, again with a single plaintiff, resulted in a verdict in favor of plaintiff, with damages of $1.7m. There, the jury found the defendants 62% at fault, meaning that the final verdict against them will be reduced accordingly.
Judge Rodgers shows no signs of slowing down her pace. The next trials are scheduled to begin on September 20, 2021 and October 18, 2021. An additional three cases have been consolidated into one trial starting in January 2022. The resolution of these cases will likely point towards settlement, at least if things continue with verdicts in favor of the plaintiffs.
On July 21, 2021, a coalition of state attorneys general reached a settlement in the opioid litigation for $26b in compensation against Johnson & Johnson, AmerisourceBergen, Cardinal Health and McKesson. This has not been approved and will require the states and localities to formally approve the settlement within 30 days (for states) and 150 days (for localities). Attorney General Patrick Morrisey of West Virginia has already signaled his opposition. If this agreement is embraced by a majority of states, the AmerisourceBergen, Cardinal Health and McKesson will spread their $21 billion payments over 18 years. Johnson & Johnson will contribute $5 billion over a nine-year span.
As of April 7, 2021, Judge Polster, the federal judge overseeing the opioid MDL, selected five more cases for bellwether trials against the big pharmacy chains in Durham County, NC (Fourth Circuit), Tarrant County, TX (Fifth Circuit), Montgomery County, OH (Sixth Circuit), Santa Fe County, NM (Tenth Circuit), and Cobb County, GA (Eleventh Circuit). The Georgia bellwether trial is expected to start sometime in 2022.
Craig H. Alinder, Vice President