Just when you think the debate about the legal, ethical or practical implications surrounding third-party releases in mass tort chapter 11 cases cannot get any more convoluted, another real-world example rears its ugly head and makes our brains hurt again, according to a new commentary from Tom Salerno of Sintson LLP (Phoenix). Truth is indeed stranger than fiction! In last Monday’s Law360, it was reported that LTL Management LLC (LTL), the Johnson & Johnson (J&J) subsidiary into which its talcum powder claims were deposited, is suing a doctor who published a report linking talcum powder (specifically asbestos in talcum powder) to personal injuries (mesothelioma). Of course, we are all aware that prior to this announcement, J&J and LTL had been dealing with thousands of claims that talcum powder produced by J&J caused cancer (the “Cancer Talcum Claims”). It is unclear how widespread the victim class is for this new aspect of poisonous talcum powder (the “Asbestos Talcum Claims”), but let’s posit for a moment that this becomes a large class of victims. To set the stage, we are all aware that LTL has been bounced out of bankruptcy not once, but twice by the Third Circuit based on essentially lack of good faith and the unavailability of third-party releases for mass tort trust settlement devices to deal with the Cancer Talcum Claims. Let’s call this the “Mass Tort Settlement Protocol,” which funnels victims’ claims into a trust funded by the debtors and third parties (such as insurance companies and, in the Purdue Pharma case, Sackler family members and controlled entities), and which provides releases to those third parties who fund the trust, exchanging civil liability for payments to the trust. Not surprisingly, third-party releases are an integral and essential part of the Mass Tort Settlement Protocol. No release, no funding. Read the full commentary.
*The views expressed in this commentary are from the author/publication cited, are meant for informative purposes only, and are not an official position of ABI.
Salerno will be one of the featured panelists on the "SCOTUS Crossfire: Will Purdue Be the Last Mass Tort Bankruptcy?" abiLIVE webinar on Oct. 4. See the full panel of experts and register today for FREE by clicking here.
