Mass Torts Bankruptcies: The Who, the Why, and the How

Abstract

For the last several decades, federal and state courts, with varying degrees of cooperation from the parties and lawyers involved, have developed ways of managing the complex mass tort cases confronting them. A key development was the emergence of the idea of using consolidation techniques to achieve global peace in the resolution of these often seemingly intractable cases. In the wake of the Supreme Court's decisions in Amchem and Ortiz, however, the use of class actions to achieve global peace became problematic. Meanwhile, Chapter 11 proceedings under the bankruptcy laws emerged as a vehicle for achieving global peace. Especially after Amchem, it appears that the use of Chapter 11, despite the problems raised for a defendant corporation, may be the best tool for achieving global peace. This working paper provides a brief history of the three leading mass tort bankruptcy cases: the Johns Manville Chapter 11 case involving asbestos personal injury claims, the A.H. Robins Chapter 11 case involving Dalkon Shield claims, and the Dow Corning Chapter 11 case involving breast implant claims. The purpose of the review of these cases is to highlight the important practical and doctrinal issues raised by the use of Chapter 11 as a vehicle for resolving mass tort litigation.