ATRA Applauds Decision by Bankruptcy Judge

Press Releases | January 24, 2022

Association says the decision follows the law and rejects excessive costs and delays in reorganization

Last week, a New Jersey bankruptcy judge overturned an order from the U.S. Trustee’s Office that restructured the tort committee in Johnson & Johnson’s bankruptcy case.

Statement from American Tort Reform Association (ATRA) President Tiger Joyce:

“This sound ruling comes at an important time. In December, U.S. Trustee Andrew Vara announced that the office disbanded the original tort claimants committee and replaced it with two committees – one for ovarian cancer claimants and one for mesothelioma claimants. The original committee was created by U.S. Bankruptcy Judge J. Craig Whitely in North Carolina last October before transferring the case to New Jersey in November.

Judge Kaplan’s decision to reinstate the single, original tort committee will help to expedite resolution of liability claims as part of the bankruptcy, and it will reduce legal costs that otherwise would go to creditors.

Critics of the bankruptcy process have misdiagnosed the underlying problems. For example, the House Judiciary Committee recently held a hearing that examined the treatment of lawsuits in the bankruptcy process. ATRA believes that Congress and others should focus on curbing the mass tort litigation abuses that have driven too many companies into bankruptcy in the first place.”

Multi-district litigation, or MDLs, are another mass tort problem these companies face. MDLs are a tool used by the federal courts to efficiently consolidate some lawsuits and save time; however, two law professors noted in an article last spring: “MDL’s gravitational pull over thousands of cases demolishes all of the normal expectations of individual process and federalism.”

ATRA’s Tiger Joyce also penned an op-ed in October 2021, when Congress held its hearing on the bankruptcy process, detailing the need for Congress to prioritize national interests over the profit motives of plaintiffs’ lawyers and address the real issues driving the bankruptcy process.