DELAWARE – In a substantial set of cases extensively covered by the Asbestos Case Tracker, Johnson & Johnson and Johnson & Johnson Consumer Inc.’s (J&J) motion to fix venue was ruled on in the District Court of Delaware. The motion requested transfer of approximately 2,400 state court tort cases pursuant to 28 U.S.C. Sections 157(b)(5) and 1334 (b). Numerous parties filed briefs in opposition to the instant motion.
The state court actions allege the following against J&J:
- They are directly liable for placing asbestos-containing talc products into the stream of commerce
- They failed to warn customers against known risks
- They breached express and implied warranties
- They acted intentionally and/or negligently leading to the development of ovarian and non-ovarian cancers.
The talc in J&J products has historically been provided by Imerys Talc America, Inc. or their successors in interest (Imerys).
J&J entered into various agreements with Imerys or their predecessors containing indemnity clauses. However, these agreements contained the following language: “provided however that Seller [Imerys] shall not indemnify [J&J] for any such liabilities to the extent that such liabilities arise from (i) the acts or omissions of [J&J]; or (ii) the acts or omissions of Seller which were directed by [J&J].”
On February 13, 2019, Imerys filed for Chapter 11 in the United States Bankruptcy Court for the District of Delaware. On April 18, 2019, J&J filed the instant motion to fix venue, arguing that this court has jurisdiction over the claims pursuant to 28 U.S.C. Section 1334(b). Contemporaneously with that filing, J&J began filing notices of removal for all state court tort claims. In the months following, 346 cases have been remanded back to state court. Additionally, no federal district judge has found subject matter jurisdiction over a removed state court tort claim against J&J.
J&J, in the instant motion, argued that the court should fix venue for the tort cases in the District Court of Delaware because:
- 28 U.S.C. provides the court with “related to” jurisdiction over the many state law claims because they affects Debtors’ estates
- Abstention over the state court tort claims is not warranted because “these claims are overwhelming nationwide state courts.”
The court held that J&J’s motion failed to establish “related-to” jurisdiction for the following three reasons:
- Potential indemnification is not sufficient to establish “related-to” subject matter jurisdiction
- J&J failed to establish that shared insurance further impacts the debtors’ estates
- J&J failed to establish that the parties share an “identity of interest”
The court further opined that even if subject matter jurisdiction over talc claims existed, the court would abstain from transferring those claims to the District of Delaware. Under Section 1334(c)(1), “nothing in this section prevents a district court in the interest of justice, or in the interest of comity with state courts or respect for state law, from abstaining from hearing a particular proceeding arising under title 11 or arising or related to a case under title 28 U.S.C. Section 1334(c)(1).”
In deciding whether abstention is proper, the courts have utilized a twelve-factor test. The court held that “[A] review of the factors, and the necessary weighing thereof, counsels the court that discretionary abstention is proper.”
Ultimately, J&J’s motion to fix venue was denied.