The third time is a charm for New Jersey’s Johnson & Johnson, as the pharmaceutical and biotech giant attempts to get a court-issued seal of approval on its long-awaitedsettlement offer and subsidiary bankruptcy plan, which is sitting before a Houston federal courtroom this week.

Red River Talc LLC, the subsidiary tasked with handling the thousands of lawsuits related to J&J’s talc-based baby powder product and alleged ovarian cancers in female consumers, has so far been stymied by two bankruptcy courts in other jurisdictions, as well as by plaintiff lawyers angling for a larger settlement package.

What’s at stake in this trial is not just the legacy of a household name like J&J, or the women who have been injured, but also the future of injury and liability law in the US. A lot could change about how courts deal with convoluted corporate structure, victim compensation an defense against frivolous claims.

Though the company’s settlement offer of $10 billion garnered overwhelming support from 83% of the plaintiffs in the combined case, far beyond the 75% required in bankruptcy law, lawyers representing the holdouts aim to question the legitimacy of the bankruptcy altogether. One such group, the Coalition of Counsel for Justice for Talc Claimants, has reportedly questioned whether the vote was held in good faith, and factions of legal firms representing plaintiffs have been suing each other in court for a larger share of the settlement payouts.

The validity of that vote, as well as the legitimacy of the Red River Talc LLC’s bankruptcy, will soon be decided on by US Bankruptcy Judge Christopher Lopez.

The process of a subsidiary bankruptcy to settle claims against a firm is nicknamed the “Texas Two Step,” a process of splitting the assets and liabilities of a single entity as laid out in the Texas Business Organizations Code. Under Texas law, and increasingly in other states, this legal process, officially known as a “divisive merger”, is meant to protect company assets if a specific business unit comes into debt or faces a civil lawsuit that threatens other parts of the company.

Many opponents of the Texas Two Step believe it relieves larger firms of responsibility when they face lawsuits, but it has the advantage of being able to process settlements more swiftly and disperse payments through a bankruptcy proceeding than in a typical court trial. The latter approach can last years or decades.

This maneuver also avoids the well-known phenomenon of a “race to the courthouse,” where successive injury lawyers begin advertising and recruiting for similar cases once a settlement has been paid out, hoping to net more business for their firms by attracting a larger class of plaintiffs. Allegations that some firms have outstanding payments to litigation funders who’ve backed the baby powder case only add to the complication with J&J’s case.

Because the trial is now in bankruptcy court, relying on accountants and number crunchers instead of scientists and expert witnesses, it would be most prudent to finally settle the case and have the bankruptcy proceed to pay the victims what they’re due.

Allowing the trial to linger without a satisfactory ruling only further complicates how courts can settle mass tort claims in the future. The outcome is likely to embolden law firms in targeting certain companies for their size and prestige rather than the legitimacy of any injury claims.

This has been evident from the ongoing backlog of asbestos exposure cases from decades ago, where most firms and executives involved, as well as any victims, have already passed away.

If consumers are legitimately injured due to a company’s product or its services, no matter how large, there should be every tool available to compensate them in the timeliest way possible.

The Texas Two Step offers a solution for compensating those who can claim injury while avoiding the worst of our highly litigious legal system and its perverse incentives for injury lawyers to always claw for more instead of taking care of their clients promptly. This case could determine whether justice moves at corporate speed or that of human lifespans.

Allowing a controlled process of bankruptcy to address pressing claims and dispense justice to plaintiffs who want closure is the only reasonable path forward. It’s reasonable, and fair, not just for victims of today, but for the future of America’s legal system going forward.

Originally published here

With a big tech-powered magnifying glass on federal websites, spending contracts, and government payment systems, Elon Musk’s band of DOGE system admins have been turning Washington inside out in their hunt for waste, fraud, and abuse. One of the most prized agencies on the chopping block is the Consumer Financial Protection Bureau, heralded by progressives as an indispensable force for helping consumers wronged by financial institutions, but derided by fintech investors and conservatives as little more than a government “shakedown agency.” Consumers will be better off without the CFPB breathing down the neck of American companies. 

Since the inauguration of President Trump, the CFPB’s temporary leadership put an immediate halt on all work, also informing the Federal Reserve, which directly funds the agency, that it would no longer seek new funding. 

Sen. Elizabeth Warren, the intellectual force behind the agency’s founding, has been apoplectic. She’s argued that Trump is “firing the financial cop on the beat that makes sure your family doesn’t get scammed.”

The origin of the CFPB goes back to the rubble of the 2008 financial crisis when legislators saw this proposed agency as a viable response to the populist backlash engulfing Washington and Wall Street. Instead of penalizing wrongdoers, Congress funded bank bailouts and launched a “watchdog” group. The 2010 Dodd-Frank Financial Reform Act mandated new standards for lending, restricted capital that could be tapped for bank loans, and created the CFPB to police consumer finance. 

All functions performed by the five former federal banking supervisory agencies were rolled into the CFPB, granting it sole jurisdiction over non-depository firms and financial institutions with over $10 billion in assets. This empowered the agency to issue regulatory guidance, demand information from financial institutions, and launch civil actions in federal court.

Supporters of the CFPB point to an impressive record of close to $20 billion in consumer relief, as well as an additional $5 billion in civil penalties. Without the CFPB, fraudsters and scams would metastasize and consumer injustice would run wild, so they say. But this couldn’t be further from the truth.

As a regulatory agency with civil litigation authority, the CFPB is emboldened to file high-dollar lawsuits against financial firms. An estimate of the CFPB’s database of enforcement actions reveals that roughly 85% of all cases are settled out of court before a final ruling.

Companies often choose to settle, but this shouldn’t be mistaken for an admission of guilt. In a litigious societysuch as the United States where companies are routinely targeted in frivolous lawsuits, the court of public opinion matters just as much as the court of law. 

Firms prefer settling cases over having their name dragged through the mud for months on end in the media, something tort lawyers call a “nuisance settlement.” These expected costs are baked into large firms’ financial projections and are sometimes factored into pricing their goods and services for consumers. 

The CFPB is more akin to a state-backed tort law firm that can tap the nation’s central bank for resources while exploiting its do-gooder reputation for easy PR victories.

Rather than smart regulatory guidance to oversee a new generation of consumer finance firms, CFPB has relied on quick settlements out of court to squash innovative upstarts.

While CFPB enforcement has been successful in penalizing banks and lenders for how loans are structured or advertised, it does not take much imagination to see how this has impacted the investing climate for new competitors. Since CFPB’s founding, there are now 35% fewer financial institutions remaining for consumers to choose from, down from 15,000 to just roughly 9,000 today.

While there is high consumer demand for fintech, payment apps, and account offerings, including Bitcoin and cryptocurrency banks, CFPB’s chilling actions have slowed that innovation, leading to the recent calls for the agency to be gutted. And they’re right.

Most of CFPB’s functions are mirrored at the FTC on everything but finance. Regional Federal Reserve banks are also responsible for bank oversight and regulation, not to mention state banking regulators. Existing regulators have the reach, experience, and know-how to police would-be fraudsters and outright deceptive practices among banks. Why not let them?

For consumers who want next-level services and financial products, there is no question that CFPB’s litigious approach has impacted their ability to access credit and financial services. There must be a better way to regulate our financial institutions and protect consumers than a tort law firm with government authority. Congress could fold elements of the CFPB into the FTC, OCC, or even FDIC, and bad actors will still be policed. 

Consumers deserve to be protected, and they will be, but they also deserve a regulatory structure that rewards innovation and brings financial products to market that they can choose between.

The CFPB is due for defanging.

Originally published here

Congressman Darrell Issa, chairman of the House Judiciary Subcommittee on Courts, Intellectual Property, Artificial Intelligence and the Internet, has joined colleagues in reintroducing legislation to regulate third-party financed civil litigation.

The Republican who represents East County was joined by Rep. Scott Fitzgerald of Wisconsin and Rep. Mike Collins of Georgia in introducing the Litigation Transparency Act of 2025.

This proposed legislation — like that Issa also put forth in October 2024 — would require the disclosure of parties receiving payment in civil lawsuits.

Issa’s office said that in hundreds of cases yearly and with increasing frequency, civil litigation is being funded by undisclosed third-party interests as an investment for return — including from hedge funds, commercial lenders, and sovereign wealth funds operating through shell companies.

Third-party litigation funding also poses unique challenges in patent litigation cases, where investor-backed entities often seek large settlements against American companies, distorting the market and stifling innovation, according to the bills sponsors.

Read the full text here

Should Coke be forced to use cane sugar again? Which food coloring will be banned next? What’s the fate of seed oils in the American diet and school lunches?

These aren’t the musings of some fringe online health influencer; these are the rumored policy priorities of attorney and former Democratic-turned-independent presidential candidate, Robert F. Kennedy Jr., whose Senate confirmation hearing for the position of Secretary of the Department of Health and Human Services finally happens Wednesday morning.

RFK is one of many recent enigmas in American politics to be propelled into the inner circle of President Trump.

As a Democrat and then an independent candidate for president, RFK felt the wrath of both progressive dark money groups and the Democratic National Convention itself. He was stymied by rule changes and lawsuits to prevent him from getting on the ballot in states he needed to qualify. His one-time running mate, Nicole Shanahan, claims left-leaning groups created dozens of well-funded PACs with the singular goal of blocking RFK’s access to run as an independent.

Ironically, what curbed Kennedy’s presidential ambitions before he dropped out was the very tactic he’d championed and perfected his entire career – extreme lawfare.

There has already been plenty of ink spilled on RFK’s views on vaccines, corruption of federal agencies, or even whether he’s a secret fan of nicotine pouches like Zyn. But little has been said about his very public career as a tort lawyer, one hell-bent on stopping innovation, development, and even clean energy projects.

Name a high-profile lawsuit against a major company or project and RFK has had some hand in it: DuPont, Monsanto, the Dakota Access pipeline, and the shuttering of the Indian Point nuclear power station in New York City, which decimated NYC’s carbon-neutral electricity generation goals, just to name a few.

As counsel for the infamous injury law firm Morgan & Morgan, the green group Riverkeeper, as well as his own firm, Kennedy and Madonna LLP, RFK made his name on environmental cases that scored him six-figure attorney fees from companies rushing to settle. For years, RFK was the preeminent plaintiff attorney who could sway a jury or a judge for high-dollar settlements.

His name recognition alone was chief to his practice of injury law.

While many of RFK’s cases took on obvious pollution that harmed people, such as mountaintop removal miningof coal or dumping in the Hudson River, his crusades against nuclear power, hydroelectricity, oil pipelines, and even wind power have left many concerned that his legal pursuits from this past life will bleed over into his new one serving in the Trump administration.

Even President Trump acknowledged this when he promised on the campaign trail to “keep Bobby away from the liquid gold,” a nod of recognition to RFK’s history of legal battles with oil firms that could unlock Trump’s goal of a “golden age.”

How will he now use his power if he’s confirmed to a cabinet-level position to oversee the government’s largest civilian bureaucracy? Will it be open season on medical device companies that offer life-saving products and are regulated by Kennedy’s agency? Will industrial farmers who feed our country have to dodge hordes of both private sector and HHS lawyers to avoid costly verdicts or fines?

“There’s more opportunities for plaintiffs’ lawyers and those involved in mass tort to be more bullish in the next four years,” said Steve Nober, founder and CEO of Consumer Attorney Marketing Group, in comments to Bloomberg Law.

Many consumer advocates who care about innovation and affordable goods are leery about elevating a well-heeled lawyer who has spent most of his career tearing down and obstructing free enterprise to lead such a powerful agency like HHS.

Though there are a myriad of health care and diet issues in the United States that HHS could credibly take action on, it isn’t clear that RFK will discriminate between his agenda and Trump’s.

If RFK is opening the taps to his former colleagues in the trial bar, attorneys who can smell an opportunity for a large lawsuit or settlement a mile away, then consumers are in for a long and costly ride. Trump’s “golden age” would be lost.

Originally published here

One of the most complicated tort trials in history continues to unfold in a Texas bankruptcy court. The cases against Johnson & Johnson’s baby powder and its alleged link to illnesses caused by asbestos-contaminated talc have ground on for the better part of a decade. Finally, after years of legal wrangling, the case is poised for a significant hearing on February 18 with US Bankruptcy Judge Christopher Lopez.

This bankruptcy hearing will determine whether Johnson & Johnson’s proposed settlement plan can move forward and whether the company’s Chapter 11 bankruptcy case will survive dismissal. For tens of thousands of cancer victims, the stakes couldn’t be higher.

The Department of Justice, as an overseer of bankruptcy cases, filed its own motion to dismiss the Chapter 11 bankruptcy trial in November 2024, arguing that despite the settlement plan agreed to by plaintiffs, there is “no legitimate purpose in allowing the Debtor to remain in bankruptcy while it pursues a futile strategy”.

J&J’s Texas-based subsidiary, Red River Talc LLC, is now the entity claiming bankruptcy and offering the settlement originally proposed by the LTL Management entity earlier this year, and has set aside nearly $12 billion to settle the mesothelioma claims against it.

Last August, 75 percent of plaintiffs voiced their support for a $6.5 billion settlement paid out over 25 years by then LTL Management (now Red River). After a second round in September for an increased amount of $8 billion, over 83 percent of plaintiffs voted to accept the plan.

While most attorneys representing victims in the case have supported the vote’s conclusions, others have pounced on rejecting the vote in the hopes of extracting a larger settlement. Now that Johnson & Johnson has increased the settlement amount to over $9 billion, there is some hope that victims and their families can have closure in this case.

Considering the tens of thousands of Americans involved in this case who’ve claimed injuries and cancer diagnoses, including many who’ve battled in the courts for years, the prospect of a resolution should bring relief and comfort. Indeed, they deserve it.

The multi-district litigation has advanced through multiple courts for over a decade, continuously denying victims their ability to finally receive just compensation.

Considering the legal teams in this case could receive up to a third of the final settlement, it’s no wonder that the case has continued on in a byzantine fashion.

For years, Americans have been exposed to hundreds of commercials related to baby powder cases, used by injury attorneys to grow their roster of plaintiffs in the lawsuit. Even now, many legal firms around the country are still advertising talc claims to potential victims, hoping to continuously beef up their client count.

This practice of mass tort advertising and recruitment is standard fare in today’s legal system and has been largely responsible for delivering some of the largest settlements to date. Of course, this comes at the cost of precious time to victims and the legal system as a whole. The ongoing Johnson & Johnson case, unfortunately, will be no different.

Originally published here

One of the most followed corporate trials of the decade is drawing nearer to a close. Johnson & Johnson’s Red River Talc subsidiary in Texas filed a third time for bankruptcy in the Southern District of Texas while a majority of affected plaintiffs have indicated they wish to settle. With more than 75 percent of plaintiffs on board, this case should be allowed to conclude instead of being held up by lawyers grasping for more cash.

In mid-August, a vote was held in another of the major baby powder cases where 83 percent of plaintiffs voiced their support for a whopping $6.5 billion settlement to be paid out over 25 years by LTL Management, J&J’s Texas-based subsidiary. About 61,000 lawsuits would be settled for 99.75 percent of the plaintiffs, leaving only a small amount of mesothelioma suits to be settled.

Now, it will be up to the judge to decide whether the settlement is appropriate and fair.

Though attorneys representing some of the victims in the case have supported the plan, others have decided to stick out the trial in the hopes of extracting a larger settlement. However, Johnson & Johnson’s recent commitments to increase the total amount of the settlement up to $9 billion may shore up more support for their proposal and boost the prospect of a final settlement among victims and their families.

Considering the tens of thousands of Americans involved in this case who claim injuries and cancer diagnoses, including many who’ve battled in the courts for years, the prospect of a resolution should bring relief and comfort. However, it is unclear whether that message will be pressed in court.

One lawyer in the case has warmed to the deal for his clients, but others are likely to seek an even larger payday that could come if they strike for a bigger deal and more delay. No surprise. It’s estimated that attorneys in this case could receive up to a third of the final settlement.

For years, Americans have seen hundreds of commercials related to baby powder cases used by attorneys to grow their roster of plaintiffs in the lawsuit.

This practice of mass tort advertising and recruitment is standard fare in today’s legal system and has been mainly responsible for delivering some of the largest settlements to date. However, many groups have warned that unchecked advertising could be creating more problems than solutions for vulnerable Americans.

The American Medical Association and the American Association of Retired Persons have made clear that “fear-mongering” legal ads are making elders reluctant to seek additional care. “Nothing could be more invidious than the exploitation of the aged. These pressures that plague older persons place their health in jeopardy and further deplete their reduced incomes,” said AARP’s founder, Ethel Percy Andrus.

Legal firms defend the practice as an effective method of reaching potential victims who may not otherwise know that a case exists, for which there is a kernel of truth.

After many years of delay and legal maneuvering, observers of the Johnson & Johnson case should have learned a few lessons about balancing plaintiff recruitment efforts and restoring faith in an otherwise bloated court system.

The voting mechanism by plaintiffs has proven to be an effective method to achieve a comprehensive settlement that will aid victims. We can only hope that the presiding judge will allow this settlement vote to be realized and seen through to its end.

Originally published here