The texas two step is not used to skirt liabilities. Its point is to consolidate all the cases in one court to reduce lawyer headaches and ensure each claimant is paid fairly.
No, GP makes a fair point. If it were true that all this does is benefit claimants and plaintiffs, the adversaries of the one taking the action, why would they do it?
Of course it would benefit J&J too. You get to consolidate your cases in one court. You get to be in federal court, which is by conventional wisdom believed to be more defendant-friendly. You get to achieve legal certainty in a shorter period of time. It also benefits all the plaintiffs who weren't early to the party, since they are guaranteed a slice of the pie (if they win), instead of the first few successful plaintiffs eating the whole thing.
> It also benefits all the plaintiffs who weren't early to the party, since they are guaranteed a slice of the pie (if they win), instead of the first few successful plaintiffs eating the whole thing.
The pie is much smaller though. Georgia Pacific was faced with 62,000+ claims. They went through this same process. Spun off their subsidiary. "Pledged" to fund it with an "initial" billion dollars, and that GP would fund all claims.
Never happened. They actually only funded $175M. Less than $3,000 per claimant for asbestos related injuries. Less than $3,000 before legal fees.
And there was nothing defendants could do, because there was no legal obligation that could be created to force GP to fully fund. "That entity is independent and is in bankruptcy. So sad, too bad."
It absolutely is used to reduce payouts. The fact that it limits the potential for very large punitive jury judgments is an argument made by supporters of the texas two step.
It's basically a way of forcing everyone suing you into something akin to a class action, but one where you lose most of the legal rights you would have in a class actions.
