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Californian investigators said a power line owned by PG&E Corp. started the second-largest wildfire in the state’s history, Bloomberg News reported. The Dixie fire last year was caused by a tree contacting electrical distribution lines west of Cresta Dam, The California Department of Forestry and Fire Protection, known as Cal Fire, said in a statement on Tuesday. The July blaze torched nearly 1 million acres and destroyed over 1,300 structures, it said. The tree was one of more than 8 million within strike distance of PG&E lines, the company said in a statement. PG&E has committed to burying 10,000 miles of lines and will continue to be tenacious in its efforts to stop fire ignitions from its equipment, it said. The result of the probe is the latest blow for embattled PG&E, which emerged from bankruptcy in 2020 after agreeing to settle damage claims from previous wildfires. The company had said that it was likely liable for the Dixie Fire and in November estimated that it would take a $1.15 billion loss from the blaze.

Bankruptcy Judge Robert Drain yesterday ordered mediation in the Purdue Pharma bankruptcy, calling for the company, the Sackler family members that own it and nine states to determine whether they can reach a new opioid litigation settlement by Jan. 14, Reuters reported. Judge Drain issued an order directing the parties to negotiate changes to a previous deal rejected by another judge in December that provided the Sacklers protection against future opioid litigation. Bankruptcy Judge Shelley Chapman is serving as the mediator. If they do not reach agreement by then, the mediation will end and an appeal by Purdue against the deal's rejection will continue. Judge Chapman presided over prior mediation that led to the earlier settlement, under which the Sacklers said they would contribute $4.5 billion to Purdue’s reorganization plan, which directs money toward opioid abatement programs. In exchange, the Sacklers, who have denied wrongdoing, received legal protections known as nondebtor releases.

Eleven states yesterday argued that cities and counties nationally were trying to "usurp" their authority by suing McKinsey & Co Inc for turbocharging the U.S. opioid epidemic, after McKinsey already agreed last year to settle with every U.S. state for $642 million, Reuters reported. A coalition of states led by Ohio Attorney General Dave Yost filed a brief in San Francisco federal court backing the consulting firm's contention that local governments were barred from suing it separately over the settled claims. The attorneys general warned U.S. District Judge Charles Breyer that allowing the local governments to proceed with their "copy-cat" claims would handicap states in future litigation and make it harder for statewide settlements to be achieved. "The problem will only grow worse if this Court does not act early to rule that a State can indeed provide the 'universal peace' of extinguishing all claims, present or future, brought by the State and its component parts," the states argued. The other states that signed onto the amicus brief are Arkansas, Connecticut, Idaho, Indiana, Kansas, Louisiana, Montana, Nebraska, North Dakota and Texas. All but Connecticut have Republican attorneys general, and several previously have taken stances adverse to those of local governments in the broader litigation against drug companies accused of contributing to the epidemic. McKinsey last year reached agreements with state attorneys general to pay $642 million to resolve claims it helped drug manufacturers, including OxyContin maker Purdue Pharma LP, design marketing plans and boost sales of painkillers.

Purdue Pharma is seeking to appeal to the 2nd U.S. Circuit Court of Appeals a judge's decision to unravel its restructuring plan that would have insulated its owners from liability in civil opioid-related cases, according to a court filing late on Thursday, Reuters reported. The appeal came after U.S. Bankruptcy Judge Robert Drain in White Plains, N.Y., extended temporary protections until Feb. 1 against opioid-related litigation for the Sackler family members who own Purdue Pharma, giving Purdue and the Sacklers time to pursue the appeal. The decision Purdue seeks to appeal was made on Dec. 16, when U.S. District Judge Colleen McMahon overturned Drain's ruling that freed the billionaire Sackler family from liability in civil litigation over opioids in exchange for a $4.5 billion payment. In the court's decision on the OxyContin maker’s bankruptcy settlement, McMahon found the bankruptcy court did not have authority to grant the release and had asked the appeals court to address whether such releases were legally acceptable. Purdue argued in the Thursday filing that the Bankruptcy Code permits non-consensual third-party release in its case. It also says the U.S. Trustee, which appealed Drain’s approval of the plan, does not oppose its ability appeal to the 2nd Circuit. Purdue filed for bankruptcy in September 2019 amid 3,000 lawsuits accusing the company and Sackler family members of contributing to a public health crisis that has claimed the lives of about 500,000 people since 1999.

Johnson & Johnson disputed assertions that it was stalling and failing to cooperate in investigating claims related to its bankrupt talc unit, LTL Management LLC, Bloomberg News reported. “There was and continues to be no basis” for the talc claimants to demand that J&J respond on behalf of LTL, Gregory Starner, a partner at White & Case, said in a Dec. 29 letter to the judge overseeing the case. J&J has responded to requests in a timely manner, he said, and “promptly and correctly objected” to requests that it respond on behalf of LTL. J&J’s letter followed a day after a lawyer for claimants suing J&J over its baby powder asked the judge to compel the pharma company to produce requested information. The claimants “issued broad discovery requests” that were privileged or weren’t relevant to the motion to appoint the future claims legal representative, Starner said. J&J spun its talc liabilities into the LTL subsidiary and put the unit into bankruptcy in October. Some Democratic members of Congress have proposed banning the move, colloquially known as the Texas Two-Step, saying that it lets profitable companies exploit rules written decades ago to compensate asbestos victims. The company is facing 38,000 lawsuits charging that its talc products caused cancer and has pushed to create a trust to pay victims. LTL submitted its own response to the claimants’ letter. The company worked “diligently and quickly” to respond to claimant requests, Gregory M. Gordon, a partner at Jones Day, wrote in a Dec. 29 letter.

Bankruptcy Judge Robert Drain in White Plains, N.Y., has extended temporary protections against opioid-related litigation for the Sackler family members who own Purdue Pharma until Feb. 1 after another judge overturned the OxyContin maker’s bankruptcy settlement this month, Reuters reported. Judge Drain extended the litigation shield yesterday, giving Purdue and the Sacklers time to discuss a path forward. The judge in September had approved Purdue’s reorganization plan and underlying settlement that aimed to resolve widespread litigation accusing the company and the Sacklers of fueling the U.S. opioid epidemic through deceptive marketing. The settlement included protections for the Sacklers against future opioid-related lawsuits in exchange for a $4.5 billion contribution to the plan, which would steer money toward opioid abatement efforts. The protections, known as nondebtor releases, prompted appeals from several states and the U.S. Department of Justice’s bankruptcy watchdog. U.S. District Judge Colleen McMahon reversed Drain’s approval of the deal on Dec. 16, finding the bankruptcy court did not have authority to grant the releases. Purdue, which plans to appeal that decision, then asked Judge Drain to extend temporary protections for the Sacklers that have been in place for two years. The current protections were set to expire on Thursday, meaning lawsuits on hold could have resumed absent an extension. Judge Drain approved Purdue’s request over objections from two states that argued that negotiations would be more effective without the shield. He also warned that if the parties, including the Sacklers, did not negotiate in good faith over the next month on an amended deal, there would be “consequences.”

A lawyer for claimants suing Johnson & Johnson over its baby powder wants a bankruptcy judge to force the pharma giant to produce requested information, saying it’s hindering efforts to investigate the case, Bloomberg News reported. “There has been what appears to be a concerted effort to obstruct, limit and delay discovery,” in the case, Michael S. Winograd, co-counsel to two official claimants’ committees, wrote in a Dec. 28 letter. A Dec. 23 response from J&J saying it wouldn’t fulfill the requests “has necessitated a forthcoming motion to compel,” wrote Winograd, a partner at Brown Rudnick. J&J spun its talc liabilities into a separate unit, LTL Management LLC, and put the unit into bankruptcy Oct. 14, adding to the complexity of the case and sparking controversy because it’s a profitable company. It’s facing 38,000 lawsuits charging that its talc products caused cancer and has pushed to create a trust to pay victims. Winograd said the original claimant committee emailed information requests to J&J counsel on Dec. 16. After “radio silence for four days,” J&J said it wouldn’t accept requests about future claims for LTL.

The Boy Scouts of America’s bankruptcy plan for resolving 82,200 claims of childhood sexual abuse hinges on promises of legal immunity for the youth group’s partners, affiliates and insurers, similar to the liability releases that have upended the planned reorganization of opioid manufacturer Purdue Pharma LP, WSJ Pro Bankruptcy reported. In a surprise ruling last week, a New York federal judge overturned a $4.5 billion settlement between bankrupt Purdue and its owners, members of the Sackler family. Purdue’s bankruptcy plan included legal releases shielding the Sacklers, who aren’t in bankruptcy, from pending and future lawsuits over opioid addiction, despite objections from a handful of state attorneys general. The ruling, which will be appealed, said that bankruptcy courts have no authority to sign away creditors’ claims against third parties to a chapter 11 case, like the Sacklers. That has implications for the Boy Scouts, a group that is similarly depending on releases for entities that aren’t themselves in bankruptcy to encourage contributions to a settlement fund. The Boy Scouts entered chapter 11 protection last year in the largest-ever bankruptcy filed over childhood sexual abuse. The group has come up with a settlement plan, now nearing $3 billion, that it hopes will allow it to leave bankruptcy, although lawyers on different sides of the issue have given conflicting information on what abuse victims can expect to receive. Abuse survivors have until Dec. 28 to vote on the Boy Scouts’ settlement offer, which if approved in bankruptcy court would resolve all abuse claims, even those from people who voted no on the plan.

Federal prosecutors said yesterday that a New Orleans-based oil company has agreed to turn over a $432 million cleanup trust fund and pay an additional $43 million to settle a federal lawsuit over cleaning up abandoned wells leaking since 2004, the Associated Press reported. “This settlement represents an important down payment to address impacts from the longest-running oil spill in U.S. history,” Nicole LeBoeuf, director of the National Oceanic and Atmospheric Agency’s National Ocean Service, said in a news release from the U.S. Department of Justice. Attorneys for Taylor Oil Co., which agreed to drop three lawsuits challenging government cleanup orders and measures, did not immediately respond to an email requesting comment. As is common in such agreements, the proposed settlement said Taylor does not admit any liability. U.S. District Judge Greg Gerard Guidry will decide whether to approve the proposed consent decree after a 40-day public comment period. Taylor’s website states that it sold all its oil and gas assets in 2008 and exists now only to respond to the toppled platform. The company has agreed to turn over all remaining assets after liquidation, the government said. The trust fund was created to plug the wells, permanently decommission the facility and clean contaminated soil. One of Taylor’s suits, filed in 2016, sought to get back the remaining money, claiming regulators had broken the agreement requiring it to put $666 million into the fund.