Big Pharma is forging a legal path that wealthy corporations are rushing to follow. Corporatists are using a new approach to crush patients and other consumers seeking justice in the civil system by claiming that drugmakers and other big corporations have hurt them with faulty and dangerous products or demonstrable misconduct.

The United States Constitution recognizes the fundamental right of plaintiffs to have their cases heard by the courts of first instance. But drugmakers and other companies are hoping to overturn accepted norms, sending large-scale liability cases to federal bankruptcy courts that lawyers say were never meant to hear such cases. As Bruce Markell, a professor at Northwestern Pritzker School of Law and a retired bankruptcy judge, told the Wall Street Journal of this rapacious corporate tactic:

“This is an attack on the US tort system.”

In effect. This is not just a disagreement between lawyers, jurists and academics. It touches on the fundamentals of the American civil justice system and how it works. To see its inequity, we must look at the differences between ordinary civil courts and bankruptcy courts. Both operate at the federal level. But the authority of the former is constitutional, while the bankruptcy courts were a creation of Congress. As the US Bankruptcy Court explains:

“A fundamental purpose of federal bankruptcy laws enacted by Congress is to give debtors a financial “fresh start” from heavy debt. The Supreme Court made this remark about the purpose of bankruptcy law in a 1934 decision: ‘[I]It gives the honest but unhappy debtor… a new opportunity in life and a clear field for future endeavours, unhindered by the pressure and discouragement of pre-existing debt.

At a time when the country’s economy was dominated by people running small businesses, legislators both wanted to encourage not just failure that could lead to later success. They also wanted petty traders and the like to avoid the age-old shadow of ordinary people unable to innovate – and, indeed, to be slammed in lifelong debt and worry, as happened in the Old World, sanctions such as debtors’ prisons.

But Purdue Pharmaceuticals, and now Johnson & Johnson, have shaken the foundations for bankruptcy. They argue – in the case of Purdue, successfully for a time, and with J&J in a major case still pending – that profitable companies, or their legal fictions, should be allowed to file for bankruptcy to evade plaintiffs. who claim corporate wrongdoing.

In Purdue’s case, the company picked a bankruptcy judge and had him buy a plan that provided billions of dollars to resolve claims from states, counties, cities, Indian tribes and others that the drugmaker has caused giant damage with its powerful painkiller. OxyContin. The deal protected the plutocratic family that founded and controlled the company for decades, allowing them to keep billions of dollars of their personal wealth, avoid lawsuits, and never acknowledge any role in the crisis of opioid abuse and drug overdoses that has killed 500,000 Americans. in a decade and is still raging.

J&J, facing billions of dollars in claims over its iconic baby powder and whether the company knew it was contaminated with carcinogenic asbestos, edged out Purdue in the bankruptcy plan. Here’s how Reuters investigative reporters summed up the company’s strategy, which the news service said is “valued at more than $450 billion” and “had approximately $31 billion in cash and in marketable securities at the end of the third quarter”. :

“Reuters exclusively reported the outline of the bankruptcy strategy explored by J&J in July. The company implemented the plan in October, offloading responsibility for [its talc liability] case to [a] new subsidiary, which then filed for bankruptcy. Prior to the filing, the company was facing costs of $3.5 billion in verdicts and settlements, including one in which 22 women won a judgment for more than $2 billion, according to bankruptcy court records. Now J&J is offering to give the bankrupt subsidiary $2 billion to put in a trust to compensate the 38,000 current claimants, as well as all future claimants.

As Reuters also reported, the plaintiffs and others have ripped into the creation of J&J, arguing that it is a sham tactic, creating a fake company and bankrupting it almost in its infancy, in order to prevent the parent company from facing the full force of justice in the civil system. The federal bankruptcy judge presiding over J&J’s plan decides its legal merits.

The news service reported that whatever the bankruptcy judge decides, J&J will appeal — and the case will have enough legal significance that the case could drag on for years.

In the meantime, the company will benefit, Reuters reported, as many of those suing the company only pursued their claims after falling seriously ill. Their lawsuits may be frozen and they may die of cancers and other complications before their case can be heard.

J&J, which has long marketed itself as a family-friendly health company, says it is pursuing every legal avenue available to it. The company has tried to prevent media coverage of its dodge, offering what it claims is just compensation to those who claim to have been harmed. Imagine that – denying the irregularity and then fixing the price. How does that blue joke go on the bar pickup with the retort that says, “We know what you are, we’re just blubbering about the price…”?

The Wall Street Journal reported that the bankruptcy strategy is becoming a kind of legal and corporate contagion:

“The new legal tactic shifts the balance of power in favor of the defendant companies Johnson & Johnson, Georgia-Pacific LLC as well as the U.S. units of Ireland’s Trane Technologies PLC and France’s Compagnie de Saint-Gobain SA, which have affiliates accused of previously selling products that contain carcinogenic mineral asbestos J&J, Georgia-Pacific, Trane and Saint-Gobain did not file for bankruptcy but used a Texas law to transferred at least 250,000 personal injury cases to bankruptcy court through newly created subsidiaries with limited business operations, a strategy developed by law firm Jones Day, according to court records. companies fill their new subsidiaries with legal liability for pending and future personal injury litigation before those units file for Chapter 11. Bankruptcies have suspended pending lawsuits against parent companies or their US subsidiaries, excluding tort claimants. system and preventing them, at least for now, from submitting their claims to juries. These four companies are receiving Chapter 11 legal and financial benefits without risking the likely loss in equity value that would result from putting entire business divisions out of business.

In my practice, I see not only the harms that patients experience when seeking medical services, but also the harm that can be inflicted on them by unsafe drugs and also the injuries that they can suffer from faulty products and at risk, especially those in the health care variety.

It is a privilege for my colleagues and I to help ordinary people and to witness the courage they must show when they experience harm and decide to seek justice in the often intimidating civil system. Malpractice and product liability cases can be time-consuming and exhausting. Testifying and exposing your life in court can be scary. But plaintiffs are pursuing legitimate claims, not just because they will often need lifelong financial support after their injury. They also sincerely demand justice and reparation for the serious damage done to them. They want to make sure systemic harms are righted so others don’t suffer like them.

Corporatists should not be allowed to shop around and water down the bankruptcy system in profit-maximizing schemes. Bankruptcy judges should reject this scheme. They know that in the federal system, the role of the bankruptcy system is the orderly and reasonable dissolution of businesses – not the determination of larger, complex and difficult issues, including whether wrongdoing has been committed and how justice might be better rendered.

If the federal system doesn’t nullify — pronto — corporate antics, what confidence will patients, consumers, and the public have in our courts? Will we see toy companies create divisions like BabyOops Inc. for bankruptcies that effectively penalize harming or killing infants? Will automakers have new subsidiaries like Junker Ltd. for bankruptcies that avoid injuries or deaths from wrecks with faulty or unsafe cars, trucks and motorcycles? Will every professional under the sun, doctors in particular, suddenly sprout second-life corporate entities that will file for bankruptcy when egregious acts occur with patients?

In the bankruptcy system, the first level of appeal occurs with US district judges, and one of them has already rejected Purdue’s bankruptcy settlement. U.S. District Judge Colleen McMahon of the Southern District of New York has urged the courts above her to resolve growing and unresolved questions about the bankruptcy actions, including granting the Sackler family immunity from lawsuits against them for the misconduct of their business. She stressed that these courts should not pioneer legal avenues, but stick to what Congress authorizes through detailed legislation.

Of course, lest any jurist question the wisdom of a broader role for bankruptcy courts, it is worth recalling the great regret expressed by US Bankruptcy Court Judge Robert Drain at White Plains, NY In an hour-long speech from the bench, he expressed frustration at his court’s inability to resolve critical issues in the Purdue case, including the ultimate sums settled and the Sacklers taking l money from their company which could not then be paid to the injured parties.

As the New York Times reported his remarks, the judge said this, clarifying:

“It’s a bitter result. BITTER.”

We have a lot of work to do to ensure Americans have free and fair access to civil courts to seek justice when they feel wronged.