Silencing Litigation Through Bankruptcy

*Pamela Foohey is a Professor of Law at Benjamin N. Cardozo School of Law, Yeshiva University. Christopher K. Odinet is a Josephine R. Witte Professor of Law and Affiliate Professor of Finance at the University of Iowa. The Authors thank Ralph Brubaker, Melissa Jacoby, Edward Janger, Jonathan Lipson, Diane Lourdes Dick, Thomas Gallanis, Andy Grewal, Derek Muller, Todd Pettys, Anya Prince, John Reitz, Maya Steinitz, Sean Sullivan, and the other participants of the Summer Faculty Workshop Series at the University of Iowa College of Law for their helpful comments, critiques, and suggestions on earlier versions of this Article. The Authors also thank Madison Hall (Iowa Law Class of 2024) for her excellent research and editorial support. Any errors belong to the Authors alone. Show More

Bankruptcy is being used as a tool for silencing survivors and their families. When faced with claims from multiple plaintiffs related to the same wrongful conduct that can financially or operationally crush the defendant over the long term—a phenomenon we identify as onslaught litigation—defendants harness bankruptcy’s reorganization process to draw together those who allege harm and pressure them into a swift, universal settlement. In doing so, they use the bankruptcy system to deprive survivors of their voice and the public of the truth. This Article identifies this phenomenon and argues that it is time to rein in this destructive use of bankruptcy. Whereas the current literature largely discusses mass tort bankruptcy from a doctrinal, constitutional, or economic perspective, this Article examines how bankruptcy proceedings like these cause direct harms to survivors, to public trust in the justice system, and to the corporate economy. It traces the evolution of defendants’ use of bankruptcy to resolve mass torts from asbestos, IUD, and breast implant product liability litigation to its present-day use in controversies involving the Catholic Church, Purdue Pharma, the Weinstein Companies, USA Gymnastics, the Boy Scouts of America, Alex Jones’s Infowars, and Johnson & Johnson. The Article shows how the prior use of reorganization for mass torts created the necessary conditions to allow defendants to use bankruptcy to silence people and facilitate cover-ups in a wider variety of onslaught litigation. It concludes with a normative proposal for the narrow circumstances in which courts should allow bankruptcy to be used to deal with onslaught litigation, while still preserving the voices of those harmed.

Introduction

“I do not forgive you.”¹ 1.Jeremy Hill, ‘I Do Not Forgive You:’ Opioid Victims Address Sacklers Directly, Bloomberg (Mar. 10, 2022), https://www.bloomberg.com/news/articles/2022-03-10/sacklers-to-hear-from-opioid-victims-live-in-bankruptcy-court [https://perma.cc/2EHY-S4VW].Show More

That is what over two dozen individuals told three members of the Sackler family, the owners of the now-notorious Purdue Pharma drug company, as part of a larger recounting of how the immensely addictive painkiller OxyContin destroyed lives and killed loved ones.² 2.Id.; see also Brian Mann, For the First Time, Victims of the Opioid Crisis Formally Confront the Sackler Family, NPR (Mar. 10, 2022, 4:51 PM), https://www.npr.org/2022/‌03/10/1085174528/sackler-opioid-victims [https://perma.cc/6X8K-MRVB] (detailing the testimonies).Show More The Sacklers had to confront, in person, stories of dead children, lost spouses, and babies born with opioid dependencies.³ 3.Hill, supra note 1.Show More

This opportunity for survivors and families of victims to be heard took place during Purdue Pharma’s chapter 11 bankruptcy case through which it sought to reorganize.⁴ 4.Id.Show More Survivors and their families fought hard for the chance to face the Sacklers directly, which may ring as atypical for a legal proceeding that would resolve the claims that they held against Purdue Pharma and the Sacklers.⁵ 5.See Mann, supra note 2 (noting the Sacklers’ lack of an apology for years during the opioid crisis).Show More That they asked and were allowed to confront the Sacklers as part of Purdue Pharma’s reorganization proceeding indeed was atypical for a bankruptcy case and also was unusual of most civil lawsuits. But the essence of what survivors and families of victims sought—for their allegations to be heard and to have some closure regarding their experiences—is precisely part of what the Sacklers were trying to avoid via Purdue Pharma’s chapter 11 case.

The Sacklers were not misguided in their expectations of what bankruptcy might provide them. That survivors and their families—in bankruptcy terms, claimants or creditors—had a voice in Purdue Pharma’s reorganization, including vis-à-vis related third parties like the Sacklers, was extraordinary. Some claimants in Purdue Pharma received confrontational justice. More typical of civil lawsuits, including multidistrict litigation of complex cases, is that plaintiffs have a robust ability, through their counsel, to engage in discovery about the alleged harms, to participate in the litigation, and to possibly gain some closure.

This process for the vindication of rights provides procedural justice, which supports the participation and dignity values that are vital for people to perceive legal processes as legitimate, and which is part of the fundamental constitutional principle of due process.⁶ 6.See Pamela Foohey, A New Deal for Debtors: Providing Procedural Justice in Consumer Bankruptcy, 60 B.C. L. Rev. 2297, 2313–16 (2019) (discussing procedural justice); David Resnick, Due Process and Procedural Justice, in 18 Nomos 206 (J. Roland Pennock & John W. Chapman eds., 1977) (linking due process and procedural justice); infra Section IV.A.Show More Without procedural justice, those who allege harm suffer further from an inability to “have their wills ‘counted’[] in societal decisions they care about,” and people more generally lose faith in the legal system.⁷ 7.Victor D. Quintanilla & Michael A. Yontz, Human-Centered Civil Justice Design: Procedural Justice and Process Value Pluralism, 54 Tulsa L. Rev. 113, 115, 140–41 (2018) (quoting Frank I. Michelman, The Supreme Court and Litigation Access Fees: The Right to Protect One’s Rights—Part I, 1973 Duke L.J. 1153, 1172).Show More The disappearance of opportunities for would-be plaintiffs to litigate their claims against defendants like the Sacklers when businesses seek to reorganize is exactly why for-profit and nonprofit corporations,⁸ 8.In this Article, we generally use the term “corporation” to refer to the for-profit and nonprofit business entities that file chapter 11. Although not all businesses that have filed chapter 11 are organized as corporations, such as some of the Catholic dioceses, the majority are. For simplicity, we refer to businesses as “corporations.”Show More and the people associated with those businesses, are increasingly using chapter 11 to deal with what we term in this Article onslaught litigation.⁹ 9.This term is inspired by the U.S. Court of Appeals for the Second Circuit’s discussion of the trust established in Johns-Manville’s chapter 11 case, which it filed to deal with mass tort litigation. Kane v. Johns-Manville Corp. (In re Johns-Manville Corp.), 843 F.2d 636, 640 (2d Cir. 1988) (“[T]he Plan seeks to ensure that health claims can be asserted only against the Trust and that Manville’s operating entities will be protected from an onslaught of crippling lawsuits that could jeopardize the entire reorganization effort.” (emphasis added)). Jonathan Lipson recently similarly defined what he terms “social debt” bankruptcies: “Social debt is financial liability for serious (e.g., criminal) misconduct, often involving violations of health and safety laws, made unsustainable due to persistent governance failures of transparency and accountability.” Jonathan C. Lipson, The Rule of the Deal: Bankruptcy Bargains and Other Misnomers, 97 Am. Bankr. L.J. 41, 43 (2023) [hereinafter Lipson, The Rule of the Deal]. Our definition of “onslaught litigation” is broader. It focuses less on the normative qualities of the underlying harms and more on the operational and time resources, including public relations resources, that a corporation may project it will have to devote to the litigation. Onslaught litigation includes violations of health and safety laws, sexual harassment, and criminal misconduct, but also may include, for example, allegations of underpaying workers, of price fixing, or of deceptive trade practices.Show More

Onslaught litigation, as we define the term, refers to alleged wrongful conduct that produces claims from multiple plaintiffs against the same defendant or group of defendants. When collected, the magnitude of claims and lawsuits presents the possible financial or operational crippling of the defendants over the long-term, or else will require the defendant to devote tremendous operational resources and time to the litigation because of its public saliency. Mass tort litigation is an example of onslaught litigation, such as the opioid liability faced by Purdue Pharma and the Sacklers, or the asbestos multidistrict and class action litigation that started in the 1980s.¹⁰ 10.Infra Sections II.C, III.B.Show More

Although onslaught litigation typically presents as mass tort claims, it encompasses many more kinds of lawsuits.¹¹ 11.Mass tort litigation refers to the situation where many individuals have tort-based claims against a single or a handful or persons (or entities). See Douglas G. Smith, Resolution of Mass Tort Claims in the Bankruptcy System, 41 U.C. Davis L. Rev. 1613, 1616–26 (2008) (overviewing mass tort litigation); infra Section I.B.Show More It includes claims stemming from alleged harms that affect a smaller group of people and may yield only a handful of lawsuits, but which reflect very poorly on a corporation and its directors, officers, and owners. Examples of this type of onslaught litigation include allegations of rampant sexual abuse and harassment, such as Harvey Weinstein’s abuse and harassment of almost one hundred women.¹² 12.See Amelia Schonbek, The Complete List of Allegations Against Harvey Weinstein, N.Y.: The Cut (Jan. 6, 2020), https://www.thecut.com/2020/01/harvey-weinstein-complete-list-allegations.html [https://perma.cc/KE2C-Z5KK] (listing allegations).Show More Onslaught litigation also encompasses the prominent defamation cases against Alex Jones and Infowars for Jones’s repeatedly calling the 2012 shooting at the Sandy Hook Elementary School in Connecticut a “giant hoax.”¹³ 13.Alex Jones, Infowars, and the Sandy Hook Defamation Suits, First Amend. Watch (Dec. 2, 2022), https://firstamendmentwatch.org/deep-dive/alex-jones-infowars-and-the-sandy-hoo‌k-defamation-suits [https://perma.cc/YX2J-BTJN].Show More

The critical connection among these examples is the significance of the accusations and lawsuits to a corporation’s continued smooth functioning now or continued function in the future. Magnitude refers both to the number of potential lawsuits, such as with mass torts, and to the public outrage and shock over even a few allegations and lawsuits. The prominence and public saliency of the allegations make the resulting lawsuits onslaught litigation. When faced with onslaught litigation, corporations’ directors, officers, and owners naturally want to truncate the lawsuits and minimize additional public discussion of the allegations.

Reorganizing via chapter 11 promises to collect and resolve most or all of the lawsuits and claims arising from the alleged wrongdoing. It also has the potential to decrease information available to the public about the allegations. ¹⁴ 14.A chapter 11 filing, initially, will require a corporation to disclose more information than it would be required to disclose in civil litigation, especially given the use of protective orders. This Article is concerned with the totality of information that may be exposed via news stories about litigation and through litigation filed over decades, which a chapter 11 filing will cut off. Stated differently, corporations are trading the possibility of alleged wrongdoings circulating in the public for decades (or longer) for chapter 11’s immediate, short-term, and predictable information disclosure.Show More When corporations file chapter 11 in the wake of onslaught litigation, what they seek is two-fold: to bypass procedural justice and to shut down discussion of their purported wrongdoings.

Based on past chapter 11 proceedings, corporations’ directors and officers expect that negotiations will be allowed to take place between only a subset of parties, that discovery requests can be pushed back against forcefully, and that requests for examiners can be successfully fought. They also expect that related claims against business entities and people arising from the alleged wrongdoings that do not file bankruptcy will be swept into the reorganization case. They further expect that calls for shortening the reorganization process will be heeded and that bankruptcy law provisions designed to ensure claimants can vote on the proposed plan will only be nominally followed—usually under the guise of ensuring that victims receive as much money as possible.

Silencing people and sweeping the alleged harms under the proverbial rug become a byproduct of reassurances about making sure that victims are treated well. But it is the corporation and its leaders that benefit, not the people who they hurt. The chapter 11 case will end with a forever resolution of onslaught litigation claims against the corporation and third parties and with little public understanding of what the corporation sought to escape through bankruptcy. The corporation (and its owners) will continue to operate, effectively freed from its wrongdoing.¹⁵ 15.See infra Part II for an overview of chapter 11 as applied to onslaught litigation.Show More

This Article argues that it is time for this destructive, targeted use of bankruptcy to be reined in and proposes how to limit and control those chapter 11 cases filed with a primary purpose of resolving onslaught litigation. In the past decade, chapter 11 cases filed to deal with onslaught litigation have made headline news. Some of these filings are discussed in the media and literature as mass tort bankruptcy cases such as: Catholic dioceses,¹⁶ 16.Rebecca Klapper, 4 New York Dioceses File for Bankruptcy Due to Flood of Sexual Abuse Lawsuits, Newsweek (Aug. 13, 2021, 9:42 AM), https://www.newsweek.com/4-new-york-dioceses-file-bankruptcy-due-flood-sexual-abuse-lawsuits-1619136 [https://perma.cc/‌4G67-MLMT].Show More the Boy Scouts of America,¹⁷ 17.Cara Kelly, Nathan Bomey & Lindsay Schnell, Boy Scouts Files Chapter 11 Bankruptcy in the Face of Thousands of Child Abuse Allegations, USA Today (May 18, 2020, 4:51 PM), https://www.usatoday.com/in-depth/news/investigations/2020/02/18/boy-scouts-bsa-chapter-11-bankruptcy-sexual-abuse-cases/1301187001 [https://perma.cc/M9Q7-WMH5].Show More and Purdue Pharma.¹⁸ 18.Jan Hoffman & Mary Williams Walsh, Purdue Pharma, Maker of OxyContin, Files for Bankruptcy, N.Y. Times (Nov. 24, 2020), https://www.nytimes.com/2019/09/15/health/‌purdue-pharma-bankruptcy-opioids-settlement.html [https://perma.cc/7BMJ-S366].Show More Others involve onslaught litigation that may not be characterized as mass tort litigation: Bikram Yoga,¹⁹ 19.Tracy Rucinski, Bikram Yoga Guru Seeks Bankruptcy in Wake of Harassment Claims, Reuters (Nov. 10, 2017, 3:55 PM), https://www.reuters.com/article/us-bikram-choudhury-yoga-bankruptcy/bikram-yoga-guru-seeks-bankruptcy-in-wake-of-harassment-claims-idUSKBN1DA2SA [https://perma.cc/9U6P-5FP2].Show More the Weinstein Companies,²⁰ 20.Brooks Barnes, Weinstein Company Files for Bankruptcy and Revokes Nondisclosure Agreements, N.Y. Times (Mar. 19, 2018), https://www.nytimes.com/2018/03/19/business/‌weinstein-company-bankruptcy.html [https://perma.cc/TE8R-MMBV].Show More USA Gymnastics,²¹ 21.Rachel Axon, Nancy Armour & Tim Evans, USA Gymnastics Files for Bankruptcy, a Move Related to Larry Nassar’s Sexual Abuse Lawsuits, USA Today (Dec. 5, 2018, 5:40 PM), https://www.usatoday.com/story/sports/olympics/2018/12/05/usa-gymnastics-files-bankruptc‌y-nassar-lawsuits/2218546002 [https://perma.cc/3GEG-HBS3].Show More and Remington and Infowars after the Sandy Hook shooting.²² 22.Sarah Jorgensen, Jason Hanna & Erica Hill, Sandy Hook Families Reach $73 Million Settlement with Gun Manufacturer Remington, CNN (Feb. 16, 2022, 5:04 AM), https://www.cnn.com/2022/02/15/us/sandy-hook-shooting-settlement-with-remington/index.‌html [https://perma.cc/BPT4-NFVJ]; Derrick Bryson Taylor, Alex Jones’s Infowars Files for Bankruptcy, N.Y. Times (Apr. 18, 2022, 5:15 PM), https://www.nytimes.com/2022/04/18/us/‌alex-jones-infowars-bankruptcy.html [https://perma.cc/2KJR-TWD3].Show More More recently, Johnson & Johnson (“J&J”) and 3M strategically placed certain of their corporate entities into bankruptcy to deal with onslaught litigation about particular products—claims that talcum powder caused cancer in hundreds of thousands of women in J&J’s case and claims that military earplugs harmed United States servicemembers in 3M’s case.²³ 23.Johnny Magdaleno, Major Bankruptcy Case Hits Indianapolis as Veterans Claim Combat Earplugs Were Faulty, IndyStar (Aug. 17, 2022, 7:21 AM), https://www.indystar.com/story/‌news/2022/08/16/major-bankruptcy-case-hits-indianapolis-veterans-sue-3m-subsidiary/6540‌4066007 [https://perma.cc/8KP3-5TCH]; Brian Mann, Rich Companies Are Using a Quiet Tactic to Block Lawsuits: Bankruptcy, NPR (Apr. 2, 2022, 7:00 AM), https://www.npr.org/‌2022/04/02/1082871843/rich-companies-are-using-a-quiet-tactic-to-block-lawsuits-bankrup‌tcy [https://perma.cc/R5QT-JCG6]. The Third Circuit subsequently dismissed J&J’s corporate entity’s case as a bad-faith filing. See infra note 120 and accompanying text. On April 4, 2023, J&J filed the same corporate entity in chapter 11 for a second time and, in doing so, proposed a $8.9 billion settlement. Evan Ochsner, Cancer Victims’ Lawyers Vow to Fight J&J Proposed Settlement, Bloomberg L. (Apr. 6, 2023, 1:40 PM), https://news.bloomberglaw.com/bankrupt‌cy-law/cancer-victims-lawyers-vow-to-fight-j-j-proposed-settlement [https://perma.cc/5PV‌D-XTL6]. Ralph Brubaker characterized the filing as a “rather audacious ploy.” Steven Church & Jef Feeley, J&J Begins ‘Audacious’ Return to Failed Cancer Settlement Tactic, Bloomberg L. (Apr. 5, 2023, 12:28 PM), https://news.bloomberglaw.com/bankruptcy-law/j-j-begins-audacious-return-to-failed-cancer-settlement-tactic [https://perma.cc/THA9-L7VP].Show More

Scholars have recently written about the problems inherent in using the chapter 11 process to deal with mass tort liabilities, including issues related to third-party releases, judge shopping, bypassing procedures, and the much-decried Texas Two-Step.²⁴ 24.See generally Melissa B. Jacoby, Sorting Bugs and Features of Mass Tort Bankruptcy, 101 Tex. L. Rev. (forthcoming 2023) (manuscript at 3) [hereinafter Jacoby, Sorting Bugs and Features], https://ssrn.com/abstract=4323151 [https://perma.cc/EG3B-7378] (detailing the extraordinary relief that corporations seek in bankruptcy, with a focus on mass tort bankruptcies); Jonathan C. Lipson, First in Time; First is Right: Comments on Levitin’s Poison Pill, 101 Tex. L. Rev. Online 33, 34 (2022) [hereinafter Lipson, First in Time] (discussing Adam Levitin’s article, Purdue’s Poison Pill, and third-party releases, appellate review, and venue); Ralph Brubaker, Mandatory Aggregation of Mass Tort Litigation in Bankruptcy, 131 Yale L.J.F. 960, 964–66 (2022) [hereinafter Brubaker, Mandatory Aggregation of Mass Tort Litigation in Bankruptcy] (advocating prohibiting nonconsensual third-party releases); Michael A. Francus, Texas Two-Stepping Out of Bankruptcy, 120 Mich. L. Rev. 38, 38–39 (2022) (discussing the Texas Two-Step, fraudulent transfer law, and good-faith challenges to chapter 11 filings); Adam J. Levitin, Purdue’s Poison Pill: The Breakdown of Chapter 11’s Checks and Balances, 100 Tex. L. Rev. 1079, 1083–84 (2022) [hereinafter Levitin, Purdue’s Poison Pill] (discussing coercive restructuring techniques, lack of appellate review, and forum shopping); Samir D. Parikh, The New Mass Torts Bargain, 91 Fordham L. Rev. 447, 455 (2022) [hereinafter Parikh, The New Mass Torts Bargain] (overviewing the intersection of mass torts and bankruptcy); Samir D. Parikh, Scarlet-Lettered Bankruptcy: A Public Benefit Proposal for Mass Tort Villains, 117 Nw. U. L. Rev. 425, 429–31 (2022) [hereinafter Parikh, Scarlet-Lettered Bankruptcy] (proposing that companies facing mass torts that file bankruptcy emerge as public benefit corporations); Lindsey D. Simon, Bankruptcy Grifters, 131 Yale L.J. 1154, 1159–61 (2022) [hereinafter Simon, Bankruptcy Grifters] (detailing how and when third-party releases should be granted); Melissa B. Jacoby, Shocking Business Bankruptcy Law, 131 Yale L.J.F. 409, 411–12 (2021) [hereinafter Jacoby, Shocking Business Bankruptcy Law] (pinpointing the harms of “off-label bankruptcy” and “bankruptcy à la carte,” including third-party releases); Adam J. Levitin, The Texas Two-Step: The New Fad in Fraudulent Transfers, Credit Slips (July 19, 2021, 10:50 AM) [hereinafter Levitin, The Texas Two-Step], https://www.creditslips.org/creditslips/2021/07/the-texas-two-step.html [https://perma.cc/MUQ2-AJDQ] (detailing the mechanics of the Texas Two-Step).Show More But the role of the bankruptcy system in people losing their ability to take part in litigation and the damage to procedural justice has been given short shrift—particularly in the wider context of onslaught litigation which may or may not be categorized as arising from a mass tort. Likewise absent from discussion in the literature is the way in which denying survivors a voice in onslaught litigation reorganization cases prevents light from being shed on problems such that the company (and its owners) can cabin how much public scrutiny they face.

This Article brings those concerns to the forefront. It thereby advances the literature from a discussion of mass tort bankruptcies largely tied to bankruptcy law provisions, constitutional concerns, and a traditional view of reorganization as a monetary-value-preserving venture,²⁵ 25.A few scholars have called out and deviated from this more traditional focus. See Jacoby, Sorting Bugs and Features, supra note 24 (manuscript at 11) (emphasizing the non-economic constitutional rights of future claimants); Jonathan C. Lipson, “Special”: Remedial Schemes in Mass Tort Bankruptcies, 101 Tex. L. Rev. 1773, 1778 (2023) [hereinafter Lipson, Remedial Schemes], (assessing “what actually happened in Purdue Pharma along familiar dimensions of ‘exit,’ ‘voice,’ and ‘loyalty’” (citing John C. Coffee, Jr., Class Action Accountability: Reconciling Exit, Voice, and Loyalty in Representative Litigation, 100 Colum. L. Rev. 370, 376 (2000))); Lipson, Rule of the Deal, supranote 9, at 44 (interrogating questions of transparency and accountability in “social debt” bankruptcies); infra notes 299–302 and accompanying text.Show More to an examination of the direct harms to people and public trust in corporations. It also expands the discussion of chapter 11 cases filed in the wake of litigation from mass torts to the broader context of our concept of onslaught litigation. It thus links headliner chapter 11 filings from the past couple of decades with a full history of mass tort bankruptcies in a manner not yet explored, but which underscores and explicates an integral motivator of recent chapter 11 filings that have provoked outrage and calls for a reexamination of the business bankruptcy system.

To make these points—and to explain our solutions—the Article proceeds as follows. Part I overviews how a corporation would resolve onslaught litigation, with a focus on mass tort cases, outside of the bankruptcy system. Part II compares this to how corporations can manage onslaught litigation in the bankruptcy system, including tracing the evolution of chapter 11’s use to deal with mass torts from asbestos litigation through intrauterine device (“IUD”) and breast implant product liability litigation. Part III relies on three case studies—Catholic dioceses, Purdue Pharma, and Infowars and Alex Jones—to build on how the prior use of bankruptcy to deal with mass torts has created the necessary conditions to allow defendants to leverage chapter 11 to silence victims and facilitate cover-ups in a wider variety of onslaught litigation. Part IV turns to a detailed explanation of the problems—the denial of victims’ voices, the destruction of procedural justice, and the suppression of information. Part V offers solutions. Although solving bankruptcy’s silencing problem may, almost necessarily, require more costly and longer reorganization cases, we argue that such a cost is worth it for people to have a voice and for upholding the integrity of both the justice system and the corporate economy.

1.  Jeremy Hill, ‘I Do Not Forgive You:’ Opioid Victims Address Sacklers Directly, Bloomberg (Mar. 10, 2022), https://www.bloomberg.com/news/articles/2022-03-10/sacklers-to-hear-from-opioid-victims-live-in-bankruptcy-court [https://perma.cc/2EHY-S4VW]. ↑

2.  Id.; see also Brian Mann, For the First Time, Victims of the Opioid Crisis Formally Confront the Sackler Family, NPR (Mar. 10, 2022, 4:51 PM), https://www.npr.org/2022/‌03/10/1085174528/sackler-opioid-victims [https://perma.cc/6X8K-MRVB] (detailing the testimonies). ↑

3.  Hill, supra note 1. ↑

4.  Id. ↑

5.  See Mann, supra note 2 (noting the Sacklers’ lack of an apology for years during the opioid crisis). ↑

6.  See Pamela Foohey, A New Deal for Debtors: Providing Procedural Justice in Consumer Bankruptcy, 60 B.C. L. Rev. 2297, 2313–16 (2019) (discussing procedural justice); David Resnick, Due Process and Procedural Justice, in 18 Nomos 206 (J. Roland Pennock & John W. Chapman eds., 1977) (linking due process and procedural justice); infra Section IV.A. ↑

7.  Victor D. Quintanilla & Michael A. Yontz, Human-Centered Civil Justice Design: Procedural Justice and Process Value Pluralism, 54 Tulsa L. Rev. 113, 115, 140–41 (2018) (quoting Frank I. Michelman, The Supreme Court and Litigation Access Fees: The Right to Protect One’s Rights—Part I, 1973 Duke L.J. 1153, 1172). ↑

8.  In this Article, we generally use the term “corporation” to refer to the for-profit and nonprofit business entities that file chapter 11. Although not all businesses that have filed chapter 11 are organized as corporations, such as some of the Catholic dioceses, the majority are. For simplicity, we refer to businesses as “corporations.” ↑

9.  This term is inspired by the U.S. Court of Appeals for the Second Circuit’s discussion of the trust established in Johns-Manville’s chapter 11 case, which it filed to deal with mass tort litigation. Kane v. Johns-Manville Corp. (In re Johns-Manville Corp.), 843 F.2d 636, 640 (2d Cir. 1988) (“[T]he Plan seeks to ensure that health claims can be asserted only against the Trust and that Manville’s operating entities will be protected from an onslaught of crippling lawsuits that could jeopardize the entire reorganization effort.” (emphasis added)). Jonathan Lipson recently similarly defined what he terms “social debt” bankruptcies: “Social debt is financial liability for serious (e.g., criminal) misconduct, often involving violations of health and safety laws, made unsustainable due to persistent governance failures of transparency and accountability.” Jonathan C. Lipson, The Rule of the Deal: Bankruptcy Bargains and Other Misnomers, 97 Am. Bankr. L.J. 41, 43 (2023) [hereinafter Lipson, The Rule of the Deal]. Our definition of “onslaught litigation” is broader. It focuses less on the normative qualities of the underlying harms and more on the operational and time resources, including public relations resources, that a corporation may project it will have to devote to the litigation. Onslaught litigation includes violations of health and safety laws, sexual harassment, and criminal misconduct, but also may include, for example, allegations of underpaying workers, of price fixing, or of deceptive trade practices. ↑

10.  Infra Sections II.C, III.B. ↑

11.  Mass tort litigation refers to the situation where many individuals have tort-based claims against a single or a handful or persons (or entities). See Douglas G. Smith, Resolution of Mass Tort Claims in the Bankruptcy System, 41 U.C. Davis L. Rev. 1613, 1616–26 (2008) (overviewing mass tort litigation); infra Section I.B. ↑

12.  See Amelia Schonbek, The Complete List of Allegations Against Harvey Weinstein, N.Y.: The Cut (Jan. 6, 2020), https://www.thecut.com/2020/01/harvey-weinstein-complete-list-allegations.html [https://perma.cc/KE2C-Z5KK] (listing allegations). ↑

13.  Alex Jones, Infowars, and the Sandy Hook Defamation Suits, First Amend. Watch (Dec. 2, 2022), https://firstamendmentwatch.org/deep-dive/alex-jones-infowars-and-the-sandy-hoo‌k-defamation-suits [https://perma.cc/YX2J-BTJN]. ↑

14.  A chapter 11 filing, initially, will require a corporation to disclose more information than it would be required to disclose in civil litigation, especially given the use of protective orders. This Article is concerned with the totality of information that may be exposed via news stories about litigation and through litigation filed over decades, which a chapter 11 filing will cut off. Stated differently, corporations are trading the possibility of alleged wrongdoings circulating in the public for decades (or longer) for chapter 11’s immediate, short-term, and predictable information disclosure. ↑

15.  See infra Part II for an overview of chapter 11 as applied to onslaught litigation. ↑

16.  Rebecca Klapper, 4 New York Dioceses File for Bankruptcy Due to Flood of Sexual Abuse Lawsuits, Newsweek (Aug. 13, 2021, 9:42 AM), https://www.newsweek.com/4-new-york-dioceses-file-bankruptcy-due-flood-sexual-abuse-lawsuits-1619136 [https://perma.cc/‌4G67-MLMT]. ↑

17.  Cara Kelly, Nathan Bomey & Lindsay Schnell, Boy Scouts Files Chapter 11 Bankruptcy in the Face of Thousands of Child Abuse Allegations, USA Today (May 18, 2020, 4:51 PM), https://www.usatoday.com/in-depth/news/investigations/2020/02/18/boy-scouts-bsa-chapter-11-bankruptcy-sexual-abuse-cases/1301187001 [https://perma.cc/M9Q7-WMH5]. ↑

18.  Jan Hoffman & Mary Williams Walsh, Purdue Pharma, Maker of OxyContin, Files for Bankruptcy, N.Y. Times (Nov. 24, 2020), https://www.nytimes.com/2019/09/15/health/‌purdue-pharma-bankruptcy-opioids-settlement.html [https://perma.cc/7BMJ-S366]. ↑

19.  Tracy Rucinski, Bikram Yoga Guru Seeks Bankruptcy in Wake of Harassment Claims, Reuters (Nov. 10, 2017, 3:55 PM), https://www.reuters.com/article/us-bikram-choudhury-yoga-bankruptcy/bikram-yoga-guru-seeks-bankruptcy-in-wake-of-harassment-claims-idUSKBN1DA2SA [https://perma.cc/9U6P-5FP2]. ↑

20.  Brooks Barnes, Weinstein Company Files for Bankruptcy and Revokes Nondisclosure Agreements, N.Y. Times (Mar. 19, 2018), https://www.nytimes.com/2018/03/19/business/‌weinstein-company-bankruptcy.html [https://perma.cc/TE8R-MMBV]. ↑

21.  Rachel Axon, Nancy Armour & Tim Evans, USA Gymnastics Files for Bankruptcy, a Move Related to Larry Nassar’s Sexual Abuse Lawsuits, USA Today (Dec. 5, 2018, 5:40 PM), https://www.usatoday.com/story/sports/olympics/2018/12/05/usa-gymnastics-files-bankruptc‌y-nassar-lawsuits/2218546002 [https://perma.cc/3GEG-HBS3]. ↑

22.  Sarah Jorgensen, Jason Hanna & Erica Hill, Sandy Hook Families Reach $73 Million Settlement with Gun Manufacturer Remington, CNN (Feb. 16, 2022, 5:04 AM), https://www.cnn.com/2022/02/15/us/sandy-hook-shooting-settlement-with-remington/index.‌html [https://perma.cc/BPT4-NFVJ]; Derrick Bryson Taylor, Alex Jones’s Infowars Files for Bankruptcy, N.Y. Times (Apr. 18, 2022, 5:15 PM), https://www.nytimes.com/2022/04/18/us/‌alex-jones-infowars-bankruptcy.html [https://perma.cc/2KJR-TWD3]. ↑

23.  Johnny Magdaleno, Major Bankruptcy Case Hits Indianapolis as Veterans Claim Combat Earplugs Were Faulty, IndyStar (Aug. 17, 2022, 7:21 AM), https://www.indystar.com/story/‌news/2022/08/16/major-bankruptcy-case-hits-indianapolis-veterans-sue-3m-subsidiary/6540‌4066007 [https://perma.cc/8KP3-5TCH]; Brian Mann, Rich Companies Are Using a Quiet Tactic to Block Lawsuits: Bankruptcy, NPR (Apr. 2, 2022, 7:00 AM), https://www.npr.org/‌2022/04/02/1082871843/rich-companies-are-using-a-quiet-tactic-to-block-lawsuits-bankrup‌tcy [https://perma.cc/R5QT-JCG6]. The Third Circuit subsequently dismissed J&J’s corporate entity’s case as a bad-faith filing. See infra note 120 and accompanying text. On April 4, 2023, J&J filed the same corporate entity in chapter 11 for a second time and, in doing so, proposed a $8.9 billion settlement. Evan Ochsner, Cancer Victims’ Lawyers Vow to Fight J&J Proposed Settlement, Bloomberg L. (Apr. 6, 2023, 1:40 PM), https://news.bloomberglaw.com/bankrupt‌cy-law/cancer-victims-lawyers-vow-to-fight-j-j-proposed-settlement [https://perma.cc/5PV‌D-XTL6]. Ralph Brubaker characterized the filing as a “rather audacious ploy.” Steven Church & Jef Feeley, J&J Begins ‘Audacious’ Return to Failed Cancer Settlement Tactic, Bloomberg L. (Apr. 5, 2023, 12:28 PM), https://news.bloomberglaw.com/bankruptcy-law/j-j-begins-audacious-return-to-failed-cancer-settlement-tactic [https://perma.cc/THA9-L7VP]. ↑

24.  See generally Melissa B. Jacoby, Sorting Bugs and Features of Mass Tort Bankruptcy, 101 Tex. L. Rev. (forthcoming 2023) (manuscript at 3) [hereinafter Jacoby, Sorting Bugs and Features], https://ssrn.com/abstract=4323151 [https://perma.cc/EG3B-7378] (detailing the extraordinary relief that corporations seek in bankruptcy, with a focus on mass tort bankruptcies); Jonathan C. Lipson, First in Time; First is Right: Comments on Levitin’s Poison Pill, 101 Tex. L. Rev. Online 33, 34 (2022) [hereinafter Lipson, First in Time] (discussing Adam Levitin’s article, Purdue’s Poison Pill, and third-party releases, appellate review, and venue); Ralph Brubaker, Mandatory Aggregation of Mass Tort Litigation in Bankruptcy, 131 Yale L.J.F. 960, 964–66 (2022) [hereinafter Brubaker, Mandatory Aggregation of Mass Tort Litigation in Bankruptcy] (advocating prohibiting nonconsensual third-party releases); Michael A. Francus, Texas Two-Stepping Out of Bankruptcy, 120 Mich. L. Rev. 38, 38–39 (2022) (discussing the Texas Two-Step, fraudulent transfer law, and good-faith challenges to chapter 11 filings); Adam J. Levitin, Purdue’s Poison Pill: The Breakdown of Chapter 11’s Checks and Balances, 100 Tex. L. Rev. 1079, 1083–84 (2022) [hereinafter Levitin, Purdue’s Poison Pill] (discussing coercive restructuring techniques, lack of appellate review, and forum shopping); Samir D. Parikh, The New Mass Torts Bargain, 91 Fordham L. Rev. 447, 455 (2022) [hereinafter Parikh, The New Mass Torts Bargain] (overviewing the intersection of mass torts and bankruptcy); Samir D. Parikh, Scarlet-Lettered Bankruptcy: A Public Benefit Proposal for Mass Tort Villains, 117 Nw. U. L. Rev. 425, 429–31 (2022) [hereinafter Parikh, Scarlet-Lettered Bankruptcy] (proposing that companies facing mass torts that file bankruptcy emerge as public benefit corporations); Lindsey D. Simon, Bankruptcy Grifters, 131 Yale L.J. 1154, 1159–61 (2022) [hereinafter Simon, Bankruptcy Grifters] (detailing how and when third-party releases should be granted); Melissa B. Jacoby, Shocking Business Bankruptcy Law, 131 Yale L.J.F. 409, 411–12 (2021) [hereinafter Jacoby, Shocking Business Bankruptcy Law] (pinpointing the harms of “off-label bankruptcy” and “bankruptcy à la carte,” including third-party releases); Adam J. Levitin, The Texas Two-Step: The New Fad in Fraudulent Transfers, Credit Slips (July 19, 2021, 10:50 AM) [hereinafter Levitin, The Texas Two-Step], https://www.creditslips.org/creditslips/2021/07/the-texas-two-step.html [https://perma.cc/MUQ2-AJDQ] (detailing the mechanics of the Texas Two-Step). ↑

25.  A few scholars have called out and deviated from this more traditional focus. See Jacoby, Sorting Bugs and Features, supra note 24 (manuscript at 11) (emphasizing the non-economic constitutional rights of future claimants); Jonathan C. Lipson, “Special”: Remedial Schemes in Mass Tort Bankruptcies, 101 Tex. L. Rev. 1773, 1778 (2023) [hereinafter Lipson, Remedial Schemes], (assessing “what actually happened in Purdue Pharma along familiar dimensions of ‘exit,’ ‘voice,’ and ‘loyalty’” (citing John C. Coffee, Jr., Class Action Accountability: Reconciling Exit, Voice, and Loyalty in Representative Litigation, 100 Colum. L. Rev. 370, 376 (2000))); Lipson, Rule of the Deal, supra note 9, at 44 (interrogating questions of transparency and accountability in “social debt” bankruptcies); infra notes 299–302 and accompanying text. ↑