Cancer Victims Applaud Senate Judiciary Committee Probe into Corporate Manipulation of Chapter 11 Bankruptcy

Johnson & Johnson lawyer endures withering criticism from Democrat, Republican Senators

Sen. Durbin: "This is not what Congress intended when it created bankruptcy"

Sen. Hawley: "Americans don't trust huge corporations because of companies like yours"

WASHINGTON, Sept. 19, 2023 /PRNewswire/ -- Johnson & Johnson's discredited "Texas two-step" bankruptcy efforts came under fire today from witnesses and members of the Senate Judiciary Committee chaired by Sen. Dick Durbin.

Senators from both parties pushed back against claims by J&J lawyer Erik Haas that by creating a shell company and then putting it into bankruptcy, the company was seeking a "fair and equitable" resolution to thousands of consumer lawsuits alleging that its asbestos-laced talc products cause ovarian cancer and mesothelioma.

When Haas asserted to Senators that most plaintiffs lose at trial, Sen. Josh Hawley reminded Haas that a jury in Sen. Hawley's home state of Missouri found J&J liable and awarded $4.69 billion dollars in damages. Eventually, the U.S. Supreme Court upheld a $2.2 billion damage award for 22 plaintiffs. 

Sen. Hawley told Haas, "Your company panics and what you do is you then decide, 'Oh my gosh, we can't possibly do this. We can't pay these plaintiffs this kind of money.' So, you then create a separate company for the sole purpose of declaring bankruptcy and making sure that tens of thousands of other plaintiffs get scraps." See the entire exchange here.

"Americans saw today that J&J and other huge corporations will try virtually anything to avoid responsibility when their products cause massive amounts of harm and suffering," says Leigh O'Dell of the Beasley Allen law firm and co-chair of the plaintiffs steering committee in the talc multidistrict litigation in New Jersey federal court. "Plaintiffs with legitimate claims are united and determined to continue to seek justice."

As plaintiffs await their day in court, they continue to speak out against J&J's abusive practices. Their comments, recorded on video, can be found here.

In his remarks, Sen. Durbin gave voice to his view that an increasing number of major corporations are abusing the bankruptcy process. He noted:

• The Texas two-step allows large profitable corporations to "shirk responsibility for the damage their products have caused."
• It denies individuals their day in court.
• It encourages forum-shopping by corporations to take advantage of more favorable locations.
• It forces victims who may be suffering fatal progressive diseases to endure protracted bankruptcy proceedings, robbing them of "precious time." 

An appellate court and a bankruptcy judge have twice dismissed J&J's bankruptcy maneuvers, finding that they were filed in bad faith. After a long delay caused by the bankruptcy litigation, attorneys for plaintiffs are gearing up to renew trying their cases before juries.

"J&J continues to pursue the lie that a majority of victims want to settle their cases in bankruptcy and continues to attempt to bully claimants into accepting woefully inadequate compensation for their injuries and loss," says Andy Birchfield of the Beasley Allen law firm, which represents thousands of women and families in litigation against Johnson & Johnson. "After today's hearing, it's obvious that legislators from both parties are serious about protecting the rights of individuals to have their claims tried where they belong, before judges who are qualified to consider individual matters of right and wrong, and before juries of their peers."

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SOURCE Beasley Allen