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J&J wants Congress to halt litigation-funded mass torts ‘money play.’ Are lawmakers listening?

On Wednesday, a lawyer for Johnson & Johnson testified before the United States House Oversight and Accountability Committee that outside sponsorship of mass torts personal injury claims had transformed the civil justice system into "a money play: driven, funded, and distorted by legal and financial entrepreneurs."

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Sept 25 (The Justice Now) —On Wednesday, a lawyer for Johnson & Johnson testified before the United States House Oversight and Accountability Committee that outside sponsorship of mass torts personal injury claims had transformed the civil justice system into “a money play: driven, funded, and distorted by legal and financial entrepreneurs.”

J&J associate general counsel Aviva Wein asked Congress to pass legislation (or support suggested modifications to the federal rules for civil action) requiring disclosure when outside financiers support plaintiffs. The statement was written and submitted. She also urged lawmakers to regulate the litigation finance sector and to stop using potentially deceptive advertising to promote mass tort claims.

Several business associations, including the National Association of Manufacturers, the Pharmaceutical Research and Manufacturers of America, and the U.S. Chamber of Commerce, saw the oversight committee hearing on Wednesday as an opportunity to warn Congress about the risk posed by third-party litigation funding. In their letters, the groups praised the committee for holding the hearing and echoed J&J’s call for increased congressional oversight of the litigation finance sector.
NAM, PhRMA, and J&J urged Congress to require lawsuit financiers to make disclosures. However, Congress was unlikely to take action soon, based on questions from both sides of the aisle on Wednesday’s hearing.

In addition to Wein, other witnesses at the three-hour hearing, “Unsuitable Litigation: Oversight of Third-Party Litigation Funding,” included litigation finance expert Maya Steinitz of Boston University, legal ethics specialist Kathleen Clark of Washington University in St. Louis, and representatives from the offshore energy and Minnesota mining industries. They discussed how litigation by environmental groups has slowed business initiatives.

A few Republican lawmakers, most notably Lisa McClain of Michigan and William Timmons and Russell Fry of South Carolina asked Steinitz and Wein detailed questions about possible legislative measures to control lawsuit spending. Timmons, for example, questioned if lawmakers considered enforcing a “loser pays” policy. Republicans from other parties emphasized the lack of concrete statistics on the size of litigation money and the possibility that foreign nations like China may covertly fund to advance its geopolitical goals.

Although Republicans have claimed that left-leaning activists have “hijacked” congressional and federal agency power by funding “sue and settle” impact cases that impose new regulations on businesses, oversight committee Democrats have shown no interest in either claim, beginning with an opening statement from Jamie Raskin of Maryland.

Supervision committee Democrats criticized Republicans for saying that mass tort defendants needed congressional assistance to avoid lawsuits and defended litigation funding as a way for individual plaintiffs to access the legal system to prove claims against large firms like J&J.

Florida Democrat Max Frost stated, “Shame on Republicans for hosting this hearing.

Raja Krishnamoorthi, an Illinois congressman, questioned J&J’s Wein about the decision to offer a $8.9 billion settlement to talc plaintiffs when all of their claims were unfounded. (Wein emphasized numerous times that J&J talc products are risk-free and do not contain asbestos. She said the payment was part of a possible global bankruptcy.)

It is noteworthy that the only witness called by Democrats at the hearing on Wednesday, ethics professor Clark, spent the majority of her testimony discussing something else entirely: what she called “the ethics crisis currently facing the U.S. Supreme Court” following revelations that Republican-appointed justices had failed to disclose travel and other gifts from wealthy patrons.

Democrats on the oversight committee hammered hard at that subject, claiming that if there is a “dark money” crisis in civil litigation, it has its roots on the right wing of the political spectrum, where activists have supported legal action to repeal affirmative action and abortion rights. (In fact, a coalition of Republican state attorneys general opposed disclosure requirements for litigation funders in a letter to Republican lawmakers last spring because they would have a chilling effect on conservative activists. The letter got omitted at the hearing on Wednesday.)

Raskin began his opening remarks by observing that “our colleagues appear perplexed.” Everyone has the right to the 1st Amendment, due process, and equal protection, but no one has the right to bribe judges or lavish them with extravagant gratuities.

Republican Nancy Mace of South Carolina voiced frustration with Democrats’ contention that “dark money” had corrupted the Supreme Court when she took over for committee head Comer near the end of the meeting.

She questioned, “How many times is the left going to talk about dark money?”

Mace then spent several minutes summarizing the broad-brush “dark money” charges made against President Joe Biden by the oversight committee. After promising to “try to get back on topic,” she eventually called for the legislative record to include the letters that business organizations had sent.

Congressional and oversight committee Republicans are more interested in criticizing Biden than disclosing third-party litigation money.

The supposed violations alleged by J&J and its allies could not be the sole topic of discussion during any of the oversight committee’s hearings. That is not encouraging for the creation of any laws.

After the hearing, I questioned a J&J representative about whether the corporation thought it was successful. She added that J&J was “appreciative for the opportunity to shine a light” and that they admired the chairman’s willingness to carry out more research.

 


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