$60 Mil NEC Verdict, Bayer Bankruptcy, Hair Relaxer MDL, Social Media Lawsuits – 3/21/24 – Tort Talk Thursday

By Susan Barfield
March 20, 2024

Susan B. (0:00:05) – Hello, everyone. Welcome to another episode of Tort Talk Thursday. I’m here with Joe Fantini of Rosen Injury Lawyers. Why do I talk to Joe every week? Because Joe knows everything. He knows all the news and all the insights that’s happening in the industry. So, Joe, tell us, I know you’ve got a hit list of a few things that we’re going to talk about today, but why don’t we start off with something that’s exciting that happened, and that is the NEC verdict.

Joe F. (0:00:33) – Yes, Susan, thanks for having me again. But the buzz this week is about the NEC verdict. So, as you mentioned last week, the jury came back and returned a verdict of $60 million in this case that was venued in state court in Illinois. So these NEC cases involved allegations that manufacturers of this cow based baby formula knew, or should have known that their products was dangerous, and it caused NEC, which unfortunately, 15 to up to 40% of the time, could lead to the premature babies ultimately passing away. So what happened in this case was the jury spoke and we got a verdict for 60 million. And what was pretty impressive about it was the plaintiffs had only asked for 25 million. So unfortunately involved a case where a premature baby received this cow based baby formula and ultimately passed away. So the plaintiff was the surviving mother, and it was a good result in this litigation overall. We haven’t spoken about it much because it’s not on everybody’s radar, but it should be going forward. So we have an MDL that’s in place. There’s about 400 cases filed in the MDL, which also is in Illinois. It’s been going on for about a year and a half. And so bellwether process should pick up later this year. But simultaneously there’s state court proceedings going on in a number of locations, including Illinois, Pennsylvania, Missouri. So expect to hear more about this in the coming year. I don’t think it’s going to be a mass tort with a huge number of cases, might get up to 5000, but we’ll be buzzing about it here at mass tort made perfect, I’m sure.

Susan B. (0:02:14) – For sure. No, that was a great victory. Exciting to hear last week. Roundup. Tell us what is going on with Roundup and this talk about potential Texas two-step.

Joe F. (0:02:24) – Roundup, we had some positive momentum going with some great jury verdicts. But when you get into the billion dollar range, what the defendants do is they try to talk about potentially filing for bankruptcy. So, as you know, over the last couple of years, we’ve dealt with this bankruptcy maneuver called the Texas two-step. And what that is, Texas has a law which allows companies to merge or split off into two companies. And what they do is then they put all the liabilities into one company. That company then files for bankruptcy while the sovereign parent company is able to continue to operate outside of the bankruptcy court. And the idea is that you ultimately get the releases for the parent company through the bankruptcy court so that they don’t have any liability. So this maneuver has been around for a number of years here. Previously we’ve seen it in some asbestos litigation where it’s been successful, but more recently we saw it in the 3M litigation and then also with Johnson and Johnson in the talc powder litigation. They tried it twice and it got denied. So the rumors are that Bayer is considering all options to bring this litigation to an end. They recently said they hope to resolve it in the next 24 to 36 months. And what they’re doing is examining bankruptcy through the Texas two-step. I don’t personally believe it’s a viable option for them with the parent company worth 50 billion plus. But we’ll see what happens. I expect to hear more news later this summer when some trials pick up about either potential settlements or this Texas two-step bankruptcy filing.

Susan B. (0:04:02) – Okay, so we’ll learn more this summer. What is going on with hair relaxer?

Joe F. (0:04:07) – Hair relaxer is another growing mass tort here. It was formed in the beginning of last year. Right now there’s a little under 8500 cases pending in the MDL. And a year into the litigation, things are starting to pick up. So we’re seeing the usual arguments from the defendants about discovery. Plaintiffs are trying to get as much documentation and information about what the defendants knew and when they knew it. So right now we’re arguing about production of documents from some of their legacy systems, specific search terms in order to get documents. That’s what the plaintiffs are pressing the defendants on. Meanwhile, the defendants are making arguments to the court that they’re not going to be in a position to select the bellwether cases later this summer because the plaintiffs are failing to comply with their requirements related to the plaintiff fact sheet. So the plaintiff fact sheet is any litigation, almost a long questionnaire that the plaintiff needs to serve, similar to interrogatories after they serve the complaint. So here the defendants raised at the recent case management conference that they’re not going to have enough information because 75% of the due fact sheets won’t be substantially complete by the June deadline for them to select bellwether cases. They’re asking for additional time which would then push back the discovery and then also the expert discovery. So we have a hearing coming up on April 11 where we’ll get some guidance on these issues, but hopefully we can keep to this selection date here, which ultimately would give us our first trial towards the end of next year, 2025, or more likely beginning of 2026.

Susan B. (0:05:41) – Perfect. What is going on with social media?

Joe F. (0:05:45) – Social media is another litigation, which I would say right now is kind of flying under the radar. So we have two litigations going on. We have an MDL and then also a consolidated action in California state court. The MDL is also in a district court in California, and these cases are almost proceeding at the same pace. We have a little over 400 cases pending in each litigation. And the allegations are that the big social media companies like Meta or Google knew or should have known that their products caused addiction, which then led some minors to suffering anxiety, depression, those type of injuries. Earlier, we were able to successfully defeat and win arguments on the motion to dismiss in both of the litigations. That’s usually the initial hurdle in these mass torts. The defendants come forward and move and say based upon everything that’s alleged in the complaint, we still win the case. Fortunately, the judge ruled in our favor in both instances, said the cases are proceeding. Right now. We’re working and starting to gear up to discovery, where it’s going to be a battle to get the information from these companies about what did they know, when did they know it. We already have some whistleblower testimony that kicked off this litigation, but these discovery disputes are likely to last throughout the summer before things really pick up. But I think this is going to be one of the litigations that’s also going to be getting a lot of buzz later this year, and we’ll see the filings drastically increase.

Susan B. (0:07:17) – Fantastic. Joe, as always, thank you for spending a little bit of time on this Thursday and bringing all the updates and insights to us.

Joe F. (0:07:24) – Thanks for having me, Susan.

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