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    Mass Torts: #25 Litigation Spotlight: #25

    Top 5 Mass Torts of 2021

    Top 5 Mass TortsAs 2022 commences, we look back on the top torts of last year—from litigations that saw significant movement and resolution, to those emerging and others still on the horizon.

    Here are our Top 5 Mass Torts of 2021, starting with those closest to the finish line and ending with those just getting started.

    1) Talc

    By the end of 2020, talc appeared to be moving toward resolution, but in 2021 rumors of potential legal maneuvering rang true, causing a shift in the proceedings.

    Lawsuits accusing Johnson & Johnson (“J&J”) of manufacturing, designing, selling and distributing cancer causing talcum powder products began in 2007. Now, over 37,000 claims alone are pending in the federal multidistrict litigation (“MDL”), In re: Johnson & Johnson Talcum Powder Products Marketing, Sales Practices and Products Liability Litigation, MDL No. 2738, in the District of New Jersey.

    In the earlier stages of litigation, J&J released a statement asserting that “Consumers can be assured that more than 40 years of independent scientific evaluations confirm that Johnson’s Baby Powder is safe, does not contain asbestos and does not cause cancer.”

    Despite these assurances by the company, on October 18, 2019, J&J voluntarily recalled 33,000 bottles of its baby powder after a U.S. Food and Drug Administration test revealed evidence of asbestos in one bottle. Later, in May 2020, J&J announced it would permanently halt production of its controversial talc-based baby powder products in the North American market. The company indicated, however, that the decision was made for economic reasons and not tied to the product safety concerns alleged in the lawsuits.

    Soon thereafter, in October 2020, it was reported that J&J reached an over $100 million settlement of 1,000 talc cases, prompting some to believe the company could be on the verge resolving a vast majority of claims pending against it.

    However, in 2021, a rumor emerged that J&J was contemplating a legal maneuver known as the “Texas two-step” instead. The “Texas two-step” has been employed by corporations to transfer certain liabilities to a new entity, which then files for bankruptcy protection.

    In early October 2021, parties saw those rumors ring true. J&J created subsidiary, LTL Management, LLC (“LTL”) as part of a corporate restructuring. In the move, all liabilities associated with talc-related claims were transferred to LTL. Two days after formation in North Carolina, LTL filed for Chapter 11 bankruptcy. LTL acknowledged that the restructuring was executed to allow for LTL to “resolve talc-related claims through a chapter 11 reorganization” without exposing parent company J&J to the bankruptcy proceedings.

    On November 10, 2021, Judge Craig Whitley, of the U.S. Bankruptcy Court in the Western District of North Carolina, issued an order transferring claims against J&J related to its talc-based products to a federal court in New Jersey where the MDL is currently pending and where a considerable amount of work in the litigation was already completed.

    The claims alleging that J&J’s talc products cause cancer have been stayed for 60 days to allow the New Jersey transferee judge time to review the proceedings. A tort committee has filed a motion to dismiss the bankruptcy calling it in “bad faith.” Plaintiffs’ briefs to support the motion have attacked the move. The court has yet to rule on the motion which will have implications on the pending claims.

    2) 3M Earplugs

    The 3M Combat Arms Earplugs Litigation saw 10 active trials in 2021 with more scheduled in 2022. This active docket received a lot of attention in 2021.

    On April 3, 2019, the Judicial Panel on Multidistrict Litigation (“JPML”) consolidated federal suits involving claims that 3M Combat Arms Earplugs, Version 2, or CAEv.2 (“Combat Arms Earplugs”) are defectively designed into an MDL in the Northern District of Florida under Judge M. Casey Rodgers, In re: 3M Combat Arms Earplug Products Liability Litigation, MDL No. 2885. Now, there are more than 285,000 cases against 3M from veterans and service members.

    Combat Arms Earplugs are small, dual ended earplugs that were designed with the specific purpose of providing servicemembers a single set of earplugs with two options for hearing attenuation. One option is “closed” and is designed to function as a traditional earplug to block sounds out completely. The other option is “open” in order to dampen the sounds of explosions on the battlefield, while still allowing the wearer to be able to communicate and hear commands.

     The Combat Arms Earplugs were originally developed, marketed and sold by Aearo Technologies (“Aero”) until it was acquired by 3M in 2008. Due to the supposed technologically-advanced design and quality of the Combat Arms Earplugs, Aearo (and subsequently 3M) won a series of Indefinite-Quantity Contracts (“IQCs”) to be the exclusive supplier of selective attenuation earplugs to the U.S. military between 2003 and 2012. In connection with the contract and as a prerequisite for bidding, Aearo and 3M represented that the Combat Arms Earplugs would meet specific performance criteria established by the U.S. Government.

    The plaintiffs in the Combat Arms Earplugs litigation allege that the defendants were aware that the performance criteria representations that they made to the government were false and that they knew the Combat Arms Earplugs were defective as early as 2000 when the product failed in-house Noise Reduction Rating (“NRR”) testing—three years prior to the time when it was first provided to the U.S. military. According to the plaintiffs, Aearo manipulated not only test protocol, but also the fitting instructions for the Combat Arms Earplugs in order to compensate for the design defect, so it could achieve a satisfactory NRR score.

    Due to the imperceptibility of flaws in the design to wearers, the defect in the product went undetected for more than a decade. Injuries relating to usage of the Combat Arms Earplugs have become one of the largest ongoing medical costs incurred by the military each year. According to the claims, the Veterans Administration spends around $1 billion per year treating hearing damage in more than 800,000 servicemembers. 

    On July 25, 2018, 3M agreed to settle similar claims asserted in a qui tam action, in U.S. ex rel. Moldex-Metric Inc. v. 3M Co., Case No. 3:16-cv-1533, for $9.1 million. In the suit, the relator argued that 3M made false statements to the U.S. Government regarding its “dangerously defective” dual-ended Combat Arms Earplugs which it sold to the U.S. military for more than ten years without disclosing the defective design. The relator further argued that the Combat Arms Earplugs were not long enough to permit adequate insertion into the ear. The faulty design prevented the Combat Arms Earplugs from maintaining a tight fit and thus the earplugs would subtly dislodge, leaving servicemembers unaware that they had little or no hearing protection.

    With respect to the MDL, the first bellwether trials began in 2021. As of December 10, 2021, eight bellwether trials reached their conclusion. Plaintiffs have won five of the bellwether trials. The jury verdicts have resulted in the following awards: $22 million; $13million; $8.2million; $7.1million and; $1.7million. 3M has claimed three defense verdicts in the bellwether trials. Two more trials are currently in progress and six more are set for 2022.

    3) Zantac

    The Zantac litigation was consolidated into an MDL one month before the pandemic began. Despite that timing, the litigation has been on a fast-track. 2021 saw significant discovery along with a proposed trial plan.

    In February of 2020, the JPML consolidated the litigation in the Southern District of Florida to U.S. District Judge Robin L. Rosenberg, In re: Zantac (Ranitidine) Products Liability Litigation, MDL No. 2924. There are also state court consolidated proceedings in California and other venues across the country.

    Zantac is a popular over-the-counter (“OTC”) heartburn medication that is widely used and became a part of daily life for many Americans because it can be used to treat a variety of conditions. It was recalled because it was discovered that the active ingredient in Zantac turns into NDMA, a carcinogen, when metabolized in the body.

    The FDA began preliminary investigations into NDMA levels in Zantac in September 2019. Shortly thereafter, several manufacturers voluntarily stopped distribution of the product. Ultimately, in October of 2019, the FDA mandated that all manufacturers of ranitidine (the active ingredient in Zantac) conduct testing for NDMA in their products, which uncovered that the amounts exceeded the safe levels set by the FDA for human consumption.

    Currently, approximately 1,800 lawsuits are pending in the MDL. Earlier in the year, generic manufacturers and distributors/retailers were dismissed as preempted; however, the Court held that claims against the branded manufacturers could stand.

    The litigation is well into discovery and on October 25, 2021, parties participated in a court conference via Zoom to present to Judge Robin L. Rosenberg a proposed joint plan for selection of bellwether cases in the Zantac litigation. The plan targets the first trial beginning July 17th, 2023.

    4) Paraquat

    Paraquat was in the fast lane in 2021 from the formation of an MDL to selection of leadership.

    Over 480 claims involving Paraquat, herbicide manufactured by Syngenta, are pending in a federal MDL, In re: Paraquat Products Liability Litigation, MDL No. 3004. Additionally, other cases concerning the product have been filed in state courts, including a consolidated proceeding in a California Judicial Council Coordination Proceeding (“JCCP”).

    Paraquat has been available in the U.S. market since 1964. It is used to kill weeds and grasses and is designed to withstand rain, but is so potent and dangerous that it has been banned in over 50 countries.

    While the herbicide is not banned in the U.S., it is classified as a Restricted Use Pesticide. Restricted Use denotes that it can only be purchased and used by commercially-licensed professionals, most commonly commercial farmers.

    In 2009, studies began to emerge regarding a potential link between Paraquat and Parkinson’s Disease. For instance, in 2011, the National Institutes of Health published a study that “positively associates” exposure to Paraquat with the development of Parkinson’s Disease.

    In 2017, the first lawsuit was filed against Syngenta and Growmark alleging Paraquat caused Parkinson’s disease. In June of 2021, the Paraquat litigation gained additional traction with the formation of a MDL, appointment of a leadership committee and special master, and establishment of a common benefit fee and expense fund.

    Additionally, it has been reported that one group of cases in the California JCCP settled in June of 2021.

    The discovery process in the MDL is set to end in March of 2022. The first bellwether trials are targeted for November 2022, setting the stage for a busy and active upcoming year for the Paraquat litigation.

    5) CPAP

    This litigation is in the early stages but is moving quickly with the establishment of an MDL in the fourth quarter of 2021.

    On October 8, 2021, the JPML consolidated several federal suits against Dutch sleep apnea therapy machine manufacturers Koninklijke Philips N.V., Philips North America LLC and Philips RS North America LLC (collectively, “Philips”), alleging that through the degradation of a noise-abating insulation foam used in the majority of Philips’ defective sleep products, users were exposed to toxic chemicals. In re: Philips Recalled CPAP, Bi-Level PAP, and Mechanical Ventilator Products Liability Litigation, MDL No. 3014.

    Philips manufactures, sells and markets a wide variety of products to help treat breathing deficiencies. However, on June 14, 2021, the defendant issued a massive recall of between three and four million defective breathing machines after it was discovered that the PE-PUR foam insulation used on the majority of Philips products has the potential to degrade and become toxic.

    The plaintiffs in the action allege that the degraded foam can cause low-level health problems such as skin irritation, as well as life-threatening illnesses, such as cancer and serious lung problems. They further contend that while the recall advises patients to discontinue use of the products, many sleep apnea patients rely on a Philips device to sleep safely. The plaintiffs argue that patients are now faced with the choices of risking of a life-threatening event due to their sleep apnea, toxic exposure through continued use of the device, or alternatively, purchasing an expensive new Philips DreamStation 2 CPAP machine that does not contain PE-PUR foam.

    The MDL is venued in Pittsburgh, Pennsylvania, as a result of its proximity to the factory where the recalled machines were primarily built. Accordingly, the JPML’s order states that, “many of the witnesses and much of the documentary evidence relevant to this litigation likely will be located within the Western District of Pennsylvania.”

    According to the Order, the causes of action are putative consumer class actions asserting overlapping claims for violations of state consumer protection statutes, breach of warranties and unjust enrichment. Nearly 100 cases from across the country have been transferred to the Western District.

    Following the October consolidation, the first status conference was set for mid-December 2021.

    As we forge ahead into 2022, continue to keep an eye on these litigations as many are poised to begin trials or continue to see progress. For more on these and other mass torts, visit the Finance Corner.

    Categories: Mass Torts, Litigation Spotlight

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