Our nation was built by hardworking Americans and American companies, Unfortunately, both have seen hard times over the last few years with COVID-19, inflation, outsourcing of jobs and a struggling economy. These problems and more have made it very difficult for many Americans. And what they don’t need now are the extra problems caused by litigation with a huge number of plaintiffs that our courts are ill equipped to handle.
Predatory plaintiffs’ attorneys are harming Americans across the board With claims which, even when representing real injuries, clog the judicial system and profit themselves vastly more than their putative clients. Who among us has not received a notice that a claim has been settled and we are entitled to a few cents in compensation?
The Bankruptcy Courts are uniquely competent to deal with real, broad based injuries.
As a former Member of the House Judiciary Committee and Chairman of the Subcommittee on Commercial and Administrative Law where I oversaw the last major bankruptcy reform, I have some insight into this issue.
While I believe that corporations need to be rightfully held accountable when it comes to product safety and consumer protections, in many cases the legal liabilities are exaggerated, certain players are unfairly villainized and the lawyers get rich.
In March 2021, the National Association of Attorneys General (NAAG) received $15 million as part of McKinsey’s $600 million settlement for the company’s role in marketing opioid prescriptions on behalf of the plaintiffs’ bar. The NAAG is a non-profit organization made up of current state attorneys general, whose time might be better spent protecting and defending the interests of their constituents and consumers in civil lawsuits rather than empowering trial lawyers to take hundreds of multimillion dollar with a pittance for their office parties.
And the plaintiffs’ attorneys aren’t just partnering with state attorneys general; they are also partnering with PR and marketing firms to distort public opinion through traditional and digital advertisements in favor of the plaintiffs’ bar on their various cases. By cherry-picking information and leveraging the system, plaintiffs’ attorneys can force a company to settle for millions even if they are not guilty, making a mockery of legal procedure.
This happens so often that the Wall Street Journal did an investigation and found that, “the system makes it easy for lawyers to file nearly identical complaints in rapid succession, with just a few paragraphs changed about each plaintiff, giving defendants little to go on to gauge the legitimacy of any given case.”
Companies have recently begun combatting these tactics with the new legal strategy of filing bankruptcy under to shield the unrelated and more economically productive parts of the company from the tentacles of litigation.
This most recently took place when Minnesota manufacturer 3M placed one of their subsidiaries, Aearo Technologies, into Chapter 11 to resolve their Combat Arms Earplugs litigation which was being managed as a Multidistrict Litigation (MDL) out of a US District court in Pensacola, Florida, It has ballooned into one of the largest mass tort cases in the nation’s history with over 250,000 plaintiffs! However that number continues to change as tens of thousands of claims have been dismissed, 20,000 in one day. While the specifics of the bankruptcy process are still being sorted out, this type of move, by a company that manufactures many of the essential products we use, should be welcomed so all involved can find an equitable solution without protracted litigation.
In another case against Bestwall LLC, an affiliate of Georgia-Pacific LLC, the company spent 40 years and almost three billion dollars ($3,000,000,000) in litigation regarding asbestos claims. Finally in 2017, as litigation was expected to continue at least through 2050, they filed a voluntary petition for Chapter 11 relief. The Justice Department filed a statement of interest in support in 2020 saying, “It has become increasingly common for claimants’ counsel to seek duplicative recoveries from multiple sources by misrepresenting the asbestos products to which claimants were exposed.”
Instead of allowing plaintiffs lawyers to get judgments that bankrupt companies, hurting the companies and customers and plaintiffs, it would be better to allow companies to solve these mass tort issues in Bankruptcy Courts which are set up to handle complicated issues including creditors, shareholders, people harmed and other customers and even attorneys more fairly and efficiently. Companies can plan how to emerge from reorganization before filing, easing the burden on the court and the injured parties can get compensation much quicker. This last point is critical because justice delayed is justice denied,
