Mass Tort brief
Corporate Firewalls and the Fight for Mass Tort Liability
Judges and state attorneys general test the legal boundaries of corporate bankruptcies, spinoffs, and steering fees across major injury dockets.
Mass Tort
The bankruptcy court closed the door on 2,700 talc cancer lawsuits — locking victims into a $535M administrative pool while insulating Berkshire Hathaway from open jury trials.
BackgroundWhittaker, Clark & Daniels was once a dominant American supplier of raw cosmetic talc for baby powders and makeup. The distributor filed for Chapter 11 bankruptcy in New Jersey after facing more than 2,700 lawsuits alleging its talc contained lethal asbestos fibers.
- Bankruptcy Judge Michael Kaplan signed off on the agreement funded by Berkshire Hathaway subsidiary National Indemnity, establishing a dedicated trust for current and future claimants.
- Attorneys representing terminal mesothelioma victims opposed the deal, arguing that the $535 million pool pays pennies on the dollar compared to expected jury awards.
- The approved claims matrix pays fixed amounts based on disease severity, barring plaintiffs from bringing individual lawsuits before state juries.
- The decision permanently protects Berkshire Hathaway from direct tort litigation, ending one of the nation's most contentious cosmetic talc bankruptcy proceedings.
Mass Tort
Twenty-one state AGs are asking the Supreme Court to dismantle the Texas Two-Step — challenging the bankruptcy trick solvent firms use to freeze mass tort lawsuits.
BackgroundThe Texas Two-Step exploits state merger laws to split a company into an operating business and an underfunded liability shell that promptly enters bankruptcy. Federal appeals courts remain sharply split over whether solvent parent corporations can take shelter behind bankruptcy's automatic stay.
- California Attorney General Rob Bonta led 20 state peers in filing an amicus brief in Herlihy v. DBMP, urging justices to reverse a Fourth Circuit ruling that froze civil litigation.
- State prosecutors warned that shielding healthy corporate parents from pending mesothelioma trials usurps state authority and evades consumer protection enforcement.
- The petition escalates pressure on the high court just as congressional lawmakers weigh legislation to restrict bankruptcy protections for non-debtor affiliates.
Mass Tort
A federal judge ended hundreds of baby food autism lawsuits by tossing the plaintiffs' scientific experts — shielding packaged food giants from sweeping neurological liabilities.
BackgroundParents brought hundreds of lawsuits alleging commercial baby foods contained toxic levels of lead, arsenic, and cadmium that caused neurological injuries in young children. Under federal Daubert standards, trial judges must exclude expert medical testimony that fails to meet rigorous scientific criteria.
- US District Judge Jacqueline Scott Corley excluded the plaintiffs' general causation experts, finding no admissible epidemiological studies proving trace metals in food cause autism or ADHD.
- The ruling shields major food conglomerates including Gerber, Beech-Nut, Hain Celestial, Plum Organics, and Walmart from billions in potential trial exposure.
- Claims alleging other neurodevelopmental injuries, such as measurable IQ point reduction, were excluded from the order and proceed through fact discovery.
- Lead counsel for the plaintiffs pledged an immediate appeal to the Ninth Circuit, arguing the court improperly weighed scientific evidence meant for juries.
Mass Tort
Abbott is spinning off its Similac nutrition business into a separate public firm — insulating its medical device core while 1,700 infant formula lawsuits remain unresolved.
BackgroundAbbott and rival Reckitt Benckiser face coordinated litigation alleging cow's-milk formulas cause necrotizing enterocolitis, a destructive intestinal disease, in vulnerable premature infants. Abbott agreed to pay $670 million to resolve roughly 2,000 cases earlier this year, but thousands more remain active.
- The planned divestment shifts baby formula brand Similac and adult shake Ensure onto a separate balance sheet away from Abbott's core business.
- More than 1,700 lawsuits covering roughly 12,700 injured infants remain pending across federal multidistrict proceedings and coordinated state dockets.
- Plaintiffs' attorneys warned the spinoff could complicate ongoing settlement talks by shifting liability risk to a newly capitalized corporate entity.
- Healthcare investors cheered the announcement, viewing the separation as a corporate firewall that insulates medical devices and diagnostics from unpredictable jury verdicts.
Mass Tort
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