J&J Texas Two Step?
Texas Two Step?
Your monthly legal news update from Legalcalls.com by Attorney Jeff Keiser. To download our freshly updated price list, Click here.
As we wind down in 2021, we’ll start to think about what the new year will bring in terms of new mass tort litigation and how some of the long-term players may develop. The JPML will have one more hearing, on December 1st, so there may still be some new MDLs and transfer orders to consider in 2021, but first, let’s take a look at some developments since our last newsletter.
Texas Two Step
In the talc litigation, Johnson & Johnson continued their strategy to avoid liability through creating a new corporate entity as a shield.1 This strategy, known as the ‘Texas Two Step’, is currently the subject of a hearing about whether the courts will accept it. In October, J&J created LTL Management to absorb all talc litigation liability, with the promise that they would create a $2b trust to cover the liability.
Judge Craig Whitley is hearing the issue in federal bankruptcy court, and we should soon hear whether the Texas Two Step will be allowed in this case. The first bellwether trials are expected to start in April 2022 in New Jersey.
Last month, the JPML centralized MDL 3015 to handle another case involving Johnson & Johnson products.2 On July 14, 2021, J&J voluntarily recalled five product lines of sunscreen products because outside studies found benzene in their formulations. The JPML found that all actions share common questions of fact, making the MDL appropriate. Interesting, the Court fashioned the MDL as a consumer class action case but did leave open the possibility of including any related personal injury cases as tagalongs. This case is just heating up so watch this space for more information as it becomes available.
A Loss Gives Pause
The Bard Hernia Mesh trial took an unfortunate turn in October when the defense won the first bellwether trial in the MDL.3 C.R. Bard Inc. is currently defending more than 12,000 lawsuits over their hernia mesh devices causing injuries and complications for surgery patients. Bellwether plaintiff Steven Johns lost on all claims giving Bard a complete win following a 22-day trial.
Obviously, the bellwether trial system is designed to give us all a view of what our cases may look like, and when the first one results in a defense win, it gives every plaintiff attorney pause. While this is most certainly bad news, it may not be as bad as it appears.
The exact same thing happened more than 10 years ago in the Kugel Mesh litigation. Bard won the first bellwether there too, but then found itself facing a $1.5m verdict in the second, prompting Bard to settle the case globally.
Prominent lawyers are saying that this will have only a minimal impact on the outcome of the case, holding firm that the average settlement payout once we get there will be in the neighborhood of $80,000. The second bellwether trial is set for January 2022.
In other bellwether news, the 3M Earplug MDL has set an incredibly aggressive schedule.4 There have already been 5 trials that have gone to jury, and five more are scheduled over the next several months. So far, plaintiffs have scored victories in three trials, leaving two as defense victories. In the most recent bellwether, plaintiff Michelle Blum said she sustained hearing loss while using the earplugs in the U.S. Army Reserves, National Guard and Army. The 3M earplug litigation has become the largest MDL ever, with more than 259,000 cases. Although the round five loss was disappointing, it was hardly surprising because the case was a defense pick that the plaintiff sought to dismiss prior to trial.
The good news is that plaintiffs will not be waiting long to try and regain their form. The sixth and seventh bellwether trials are currently underway in Florida. These should be complete by the end of November, with another trial scheduled after Thanksgiving. Four more bellwethers are to be tried before February 2022. By then, we should have a better picture about payouts at trial, or hopefully in a global settlement. So far, plaintiff wins have resulted in verdicts of $2.4m and $1.1m.
In June 2021, the JPML consolidated the Paraquat litigation in front of Judge Nancy Rosenstengle in the Southern District of Illinois.5 Much of this case parallels the Roundup litigation (see update below) and follow a number of scientific studies that have linked the product to Parkinson’s disease. One study has found that use of Paraquat can indicate a 25% more likely to contract Parkinson’s. The product has been banned or is being phased out in most of the world but remains on the market in the United States. The first bellwether trials in the paraquat MDL are expected to begin in November 2022.
In Round-Up, the JPML discussed the litigation further at a hearing on October 8. Following that hearing, the panel closed the door on a proposed settlement agreement for a small number of cases.6 This settlement was found to potentially restrict the scope of the MDL, seeking to resolve the claims of individuals who have been diagnosed with non-Hodgkin’s lymphoma (NHL) but who have not yet retained counsel, as well as the claims of individuals who later develop NHL. In its order, the judicial panel transferred the lawsuits and the proposed settlement to U.S. District Judge Vince Chhabria in San Francisco, who presides over the larger cancer-related MDL.
Judge Chhabria has previously rejected two settlements proposed by Monsanto. The court found the proposal “clearly unreasonable” due to its failure to adequately protect future claimants, and essentially found the proposal inequitable. Further, while potential claimants could opt out of the compensation program and file suit, they would relinquish their right to seek punitive damages, while Monsanto gained a significant reduction in its settlement and litigation exposure.
Last month, we introduced what may be one of the biggest MDLs for 2022 and beyond in the Phillips CPAP machine. As many as 4 million devices were recalled on June 14, 2021 due to carcinogenic off gassing.7 As we predicted, following a September 30, 2021 hearing, the JPML has centralized the case in the Western District of Pennsylvania. As this case is just starting up, some law firms are starting to estimate the value of these cases. One national law firm said that individuals with the most serious injuries may receive $100,000-$500,000 in compensation. But these are estimates. Stay tunes for more developments. Personally, I think this is the most exciting MDL in years.
Zantac Keeps On Chugging
The Zantac litigation keeps on chugging along, even though we don’t expect to see any bellwether trials or global settlements for at least a year.8 While Judge Rosenberg recently ordered that Zantac manufacturers GlaxoSmithKline, Sanofi, Pfizer and Boehringer Ingelheim can face liability for people seeking medical monitoring damages, she also released all generic manufacturers under federal preemption rules. Despite that activity, the first bellwether trial in the MDL is not scheduled until mid-2023. We may see decisions from state court trials before the first bellwether, as Tennessee has the first trial in the nation scheduled for Spring 2022, with Texas (May 2022) and California (October 2022) following right behind.
We will be back in December for the last update of the year. In the meantime, stay safe out there, keep on getting those great clients, and hopefully, we’ll see a positive resolution to some of these longstanding MDLs.
See you next month with more!
Craig H. Alinder, Vice President