Welcome to Critical Mass, Law.com's weekly briefing for class action and mass tort attorneys. Two separate federal appeals courts heard the first oral arguments in the country on whether Bristol-Myers applies to class actions. As trial looms, could other opioid manufacturers use Purdue's bankruptcy as a means for settlement? Find out who the lawyers are who won a $40 million talcum powder verdict in California.

Feel free to reach out to me with your input. You can email me at [email protected], or follow me on Twitter: @abronstadlaw

Dual Appeals Delve into Bristol-Myers Debate

The first two federal appeals courts to consider whether the U.S. Supreme Court's decision in Bristol-Myers Squibb v. Superior Court of California applies to class actions heard oral arguments last week. But their answers could prove elusive.

Case #1: The U.S. Court of Appeals for the D.C. Circuit heard argument from Whole Foods, repped by Gregory Casas (Greenberg Traurig), which is appealing a district court decision denying its motion to dismiss, based on Bristol-Myers, a nationwide class action brought by its employees over unpaid bonuses. Judge Laurence Silberman questioned why plaintiff's attorney Matthew Wessler (Gupta Wessler) couldn't file his case where Whole Foods was incorporated or headquartered, rather than in D.C., while Judge David Tatel wondered whether the whole issue was premature given that the case hadn't been certified.

Case #2: The U.S. Court of Appeals for the Seventh Circuit heard argument from IQVIA Inc., a healthcare information company hoping to affirm a district court decision that cited Bristol-Myers in striking nationwide class allegations from a TCPA case brought in Illinois federal court. Chief Judge Diane Wood and Judge Amy Barrett grilled IQVIA attorney Joseph Palmore (Morrison & Foerster). Among their remarks: Unnamed class members were not parties in the case, and Bristol-Myers did not involve a federal lawsuit. Dan Edelman (Edelman Combs) represented the plaintiff.

Howard Erichson (Fordham Law) told me why the growing debate over Bristol-Myers and class actions matters so much:

"Lawyers on both sides of class actions are going to be anxious to see what the Seventh Circuit and D.C. Circuit do in these cases, but ultimately it's not going to stop here. This is a question that is very likely to go to the Supreme Court. It is a hard question, where courts are going to end up going both ways, and it's a really important issue. It's not just a theoretical question for proceduralists. It is an on-the-ground important issue for people who handle class actions: When you're bringing a nationwide class action, do you have to bring it in the state where the defendant is headquartered or incorporated, or can you bring it in the state where the plaintiff chooses to bring it, which is what they've always done?"

   

Purdue Bankruptcy Among New Wrinkles in Opioid Case

In preparation for the first jury trial over the opioid crisis, scheduled for Oct. 21, both sides have filed court documents providing the first glimpse of their arguments. Of course, that's assuming the trial still happens. On Tuesday, U.S. District Judge Dan Polster opposed Ohio AG Dave Yost's petition to halt the trial, after the U.S. Court of Appeals for the Sixth Circuit asked the judge and plaintiffs' attorneys to respond. Also on Tuesday, several of the defendants renewed their effort to disqualify Polster with this petition to the Sixth Circuit.

Also on Tuesday, several of the defendants renewed their effort to disqualify Polster with this petition to the Sixth Circuit, and Johnson & Johnson agreed to pay $20.4 million to settle with the two Ohio counties serving as plaintiffs in the trial.

Then there's this: According to this report on Monday by The Wall Street Journal, some of the defendants, like Endo and Johnson & Johnson, are attempting to elbow their way into Purdue Pharma's Chapter 11 bankruptcy as a means to reach a global settlement. Purdue has reached its own proposed settlement, but several states have opposed the deal. The WSJ report says the effort by other drugmakers, if successful, could end or diminish the opioid litigation, which now involves more than 2,000 lawsuits.

I reached out to Lindsey Simon (University of Georgia School of Law), who's been following the developments. Here's what she had to say about the bankruptcy idea:

"I think the reported approach is a flagrant misuse of the bankruptcy process because it would allow non-debtor defendants to use powerful bankruptcy tools (such as channeling injunctions and releases) to resolve their massive opioid liabilities without enduring any of the costs. In this instance, it's not apparent to me whether or how the non-debtor defendants are intertwined with Purdue or necessary in any way to its effective reorganization. Under the current legal framework, simply throwing a big pile of money before the bankruptcy court will not be enough for these companies to take advantage of the automatic stay and plan confirmation process. Yes, the opioid crisis must be resolved, but in our quest for solutions we cannot forget that process and procedure matter."

   

Who Got the Work?

A Los Angeles Superior Court jury awarded $40 million to a woman who claimed that Johnson & Johnson's baby powder caused her to get mesothelioma. Shareholders David Greenstone and Stuart Purdy, with associate Marissa Langhoff (Simon Greenstone), won the Sept. 27 verdict for Nancy Cabibi, diagnosed in 2017, and her husband, Phil. Another shareholder at Simon Greenstone, Chris Panatier, won a $37.3 million talc verdict last month in New Jersey's Middlesex County Superior Court. In that case, Panatier has a pending contempt motion against Johnson & Johnson attorney Diane Sullivan (Weil Gotshal), whose entire closing argument was struck after she made repeated statements attacking the plaintiffs' attorneys. For the California case, Johnson & Johnson, which vowed to appeal the jury's award, turned to a Kirkland & Ellis team led by F. Chadwick Morriss, Kimberly Branscome, Jay Bhimani and Benjamin Maxwell Sadun.

Here's what else is happening:

Juul Jam: Lawyers packed a Los Angeles courtroom last week for the U.S. Judicial Panel on Multidistrict Litigation's hearing—and half of them were suing Juul Labs. I covered the hearing, which was standing room only. Lawyers on both sides want the Juul lawsuits to go to either U.S. District Judge Brian Martinotti in New Jersey or the Northern District of California before U.S. District Judge William Orrick. Also on the MDL panel's docket were cases brought over Capital One's data breach last year. Plaintiffs' lawyers pitched venues like the Western District of Washington, the District of Columbia or the Eastern District of Virginia, which Capital One prefers.

Share This: Facebook and Johnson & Johnson beat back shareholder lawsuits brought over recent scandals plaguing the companies. On Sept. 27, U.S. District Judge Freda Wolfson in New Jersey dismissed a shareholder's lawsuit brought over reports that Johnson & Johnson's baby powder contained asbestos. And, on Sept. 25, U.S. District Judge Edward Davila, of the Northern District of California, dismissed a shareholder suit alleging the Cambridge Analytica privacy scandal caused Facebook's stock to drop. He gave investors an opportunity to amend their lawsuit later this month.

Taxotere Trial: The first trial of about 12,000 lawsuits alleging breast cancer drug Taxotere caused a woman to lose her hair permanently ended in a defense verdict. A federal jury in New Orleans, where most of the lawsuits are pending in multidistrict litigation, returned the Sept. 26 verdict for defendant Sanofi-Aventis after a few hours of deliberations. Shook, Hardy & Bacon and Irwin Fritchie Urquhart & Moore represented the defendant, while lead plaintiffs' counsel were from Bachus & Schanker, Fleming Nolen Jez, Gibbs Law Group and PBC.

Thanks for reading Critical Mass! I'll be back next week.