When Johnson & Johnson committed $2 billion to resolve talc claims two years ago, Plaintiffs’ attorney Mikal Watts declined the offer.
But now that the embattled company’s offshoot LTL Management is offering $8.9 billion in bankruptcy court, he thinks it’s a good deal.
“It puts money in the pockets of sick plaintiffs soon and into the future,” said Watts, capital partner with Watts Guerra law firm in San Antonio. “I have seen – and won – many tough fights for my clients, and I have the scars to prove it. But I also know when to recognize a win achieved at the settlement table.”
Watts represents more than 17,000 claimants, but not all plaintiff’s attorneys agree with him.
“There are a few, mostly mesothelioma lawyers, who are opposed,” he said in an interview. “I'm not going to sit here and argue the point that certain good lawyers couldn't get more money in the tort system, but the vast majority of the women will not, and that's a concern.”
At issue is cancer's latency. Both ovarian and mesothelioma cancer are said to have a dormant period of up to 50 years before the disease manifests itself. As a result, if a person was exposed in 2010, he or she may not develop cancer until 2060.
"In cases with latency periods, it's very difficult to achieve a global resolution of tort liability, either if you're in the shoes of the company or if you're in the shoes of representing claimants against companies where they want to get rid of the present cases, but they've got years and years of future new cases coming," Watts said. "There's no way to get rid of them."
The bankruptcy process requires 75 percent of claimants to vote in favor of a plan to get approved however they may not get the opportunity to vote on the offer if LTL’s bankruptcy is dismissed.
As previously reported in Legal Newsline, New Jersey Bankruptcy Court Chief Judge Michael B. Kaplan currently is considering a motion to dismiss.
“If the bankruptcy is dismissed, the cases would land in MDL or the regular tort system, and what will happen there is Johnson and Johnson will take that $8.9 billion and pay a bunch of defense lawyers instead of the plaintiffs,” Watts told Legal Newsline. “That gives them a lot of running room to defend these cases for decades.”
If the tentative settlement agreement is approved, the LTL Management subsidiary, which holds the talc liabilities, would be put into Chapter 11 bankruptcy for a second time.
"We look forward to allowing all claimants the opportunity to vote on the plan," said Erik Haas, worldwide vice president of litigation at Johnson & Johnson. "Opposition to this plan is coming from a small, vocal group of plaintiffs’ lawyers who have a financial incentive to keep the litigation in the tort system, contrary to their client’s best interests.”
Kaplan is expected to rule on the motion the week of July 31.