J&J begins crucial battle over $10 billion baby powder settlement, deeply conservative prosecutors head for exits as Trump shakes the DOJ ??
Reuters Legal
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?? Good morning from The Legal File! Here is the rundown of today's top legal news:
?? J&J begins crucial battle over $10 billion baby powder settlement
Johnson & Johnson?faces a critical test over its $10 billion proposal to end litigation alleging that its baby powder caused ovarian cancer, as it tries to convince a judge to sign off on its third attempt to resolve thousands of lawsuits through a subsidiary's bankruptcy.
U.S. Bankruptcy Judge Christopher Lopez?in Houston will decide the fate of the company's latest Chapter 11 during a weeks-long court hearing weighing competing demands to approve the settlement or end the bankruptcy altogether. The marathon hearing is expected to last until the end of February.
J&J is attempting to use a subsidiary's bankruptcy to resolve lawsuits from more than 62,000 plaintiffs alleging its baby powder and other talc products were contaminated with asbestos and caused ovarian and other cancers, a claim that J&J denies. Courts have rejected J&J’s two previous efforts to resolve the talc litigation through a subsidiary's bankruptcy, but the company is trying again in a different bankruptcy court.
Courts have rejected J&J’s two previous efforts to resolve the talc litigation through a subsidiary's bankruptcy, but the company is trying again in a different bankruptcy court. It says the third effort can succeed where the others faltered because it now has votes showing a broad level of support for its settlement proposal.
Erik Haas, J&J's vice president for litigation, said in a statement that the bankruptcy proposal has "overwhelming support" from cancer victims and "affords claimants a far better recovery than they stand to recover at trial."
Opponents of the deal argue that the bankruptcy settlement should not bind those who do not like the terms and would prefer to take their chances in court.
??? As Trump shakes Justice Department, deeply conservative prosecutors head for exits
President Donald Trump's drive to shake up the U.S. government drove out a rising star in conservative legal circles. Manhattan US Attorney Danielle Sassoon quit last week rather than go along with a Justice Department order to drop a criminal corruption case against Democratic New York Mayor Eric Adams
The department ordered the case dropped, citing the city's approaching November mayoral election and saying that prosecuting Adams could interfere with his ability to assist with a crackdown on immigration, a top Trump priority. Trump has said he did not personally order the charges against Adams dropped.
The resignation illustrated the tensions between the traditional U.S. conservative Republican legal movement and Trump's desire to exert far more direct control of the federal government, challenging standards of prosecutorial independence that have stood for a half century.
Beyond shaking up the criminal justice system that Trump believes was turned against him during his years out of power, he has vowed to shutter Cabinet departments, succeeded in installing a defense secretary through the narrowest possible Senate margin and challenged constitutional rights that have stood for more than 150 years.
Trump's sweeping assertions of executive power during his first weeks back in office appear headed for showdowns at the U.S. Supreme Court where conservatives hold a majority, but it remains an open question whether or how much the justices might act to check his authority.
?? Delaware bill would limit investor lawsuits as companies threaten to leave the state
Delaware lawmakers proposed changes to the U.S. state's widely used corporate law that would limit shareholder lawsuits after several high-profile companies said they might move their legal home to another state.
The bill sets out steps that corporate boards could take to insulate directors and controlling shareholders from litigation over alleged conflicts. The bill would also limit the kinds of internal records that shareholders can access, which they need to build their cases. The bill is sponsored by leaders of both parties in both houses of Delaware's state assembly.
Several companies, including Meta Platforms, Dropbox, and Bill Ackman's management company, recently have said they were moving or considering moving their incorporation out of Delaware, which prompted the bill, according to the sponsor, Delaware state Senator Bryan Townsend, a Democrat and senate majority leader.
"And it also comes at a time when you have a couple other jurisdictions in particular that are seeming to gain some traction with being viewed as legitimate alternatives to Delaware," Townsend told Reuters.
Delaware's corporate law governs relations between company boards and their investors for around two-thirds of the S&P500 index. Companies tend to charter their businesses in the state for its stable law and well-respected courts and the fees those companies pay to the state generate around a third of Delaware's general budget revenue.
?? Trump administration turns to US Supreme Court in bid to fire agency head
President Donald Trump's administration has asked the U.S. Supreme Court to intervene in its bid to fire the head of an independent U.S. agency that protects government whistleblowers, bringing its first legal battle involving Trump's actions to the nation's highest judicial body since he took office in January.
The Justice Department asked the court to immediately lift a federal judge's February 12 order that temporarily blocked Trump's removal of Hampton Dellinger as the head of the Office of Special Counsel while litigation continues in the dispute, according to a copy of the filing reviewed by Reuters.
The case could offer a preview of how the Supreme Court will view Trump's aggressive moves to remake the federal government, including by removing heads of independent agencies. The court has a 6-3 conservative majority and includes three members appointed by Trump during his first term in office.
The judge's action blocking the termination is an "unprecedented assault on the separation of powers," Acting Solicitor General Sarah Harris said in the filing. "This court should not allow lower courts to seize executive power by dictating to the President how long he must continue employing an agency head against his will," Harris wrote.
Appointed by former President Joe Biden, Dellinger's five-year term was set to expire in 2029. He sued after receiving an email on February 7 informing him that Trump had fired him from the watchdog role, "effective immediately."
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