[Plura-list] Johnson and Johnson's bankruptcy gambit fails

[Cory Doctorow]

Read today's issue online at: https://pluralistic.net/2023/02/01/j-and-j-jk/


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Correction: Yesterday's newsletter incorrectly identified Ontario Premier Mike Harris as the PM who brought in the disastrous Phoenix IT system. While Premier Harris presided over many disasters, he never served as PM and this particular disaster is on the shoulders of Stephen Harper, not Harris.

In my defense, they are both basically the same guy.

Neverthless, I regret the error.

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 From Feb 8-17, I'll be in Australia, touring my book *Chokepoint Capitalism* with my co-author, Rebecca Giblin. We'll be in Brisbane, Melbourne, Sydney and Canberra, and I hope to see you!

https://pluralistic.net/2023/01/30/i-come-to-a-land-downunder/#anti-podean-pro-artist

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Today's links

* Johnson and Johnson's bankruptcy gambit fails: A key defeat in J&J's War On Vulvas.

* Hey look at this: Delights to delectate.

* This day in history: 2003, 2008, 2013, 2018, 2022

* Colophon: Recent publications, upcoming/recent appearances, current writing projects, current reading

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🐛 Johnson and Johnson's bankruptcy gambit fails

The Third Circuit Court of Appeals has foiled Johnson & Johnson's plan to use a bankruptcy scam called the Texas Two-Step to escape paying 40,000 women who were injured when the pharma giant sold them asbestos-tainted talcum powder to dust over their vulvas, leading to gruesome cancers:

https://www.wxxinews.org/2023-01-30/appeals-court-clears-the-way-for-more-lawsuits-over-johnsons-baby-powder

If you'd like an essay-formatted version of this thread to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:

https://pluralistic.net/2023/02/01/j-and-j-jk/#risible-gambit

Back in 2018, a jury awarded $4.69 billion to 22 women whose ovarian cancer was caused by J&J's toxic product, $4.14b of which was punitive, awarded because J&J ignored the link between applying talcum powder to one's genitals and cancer, and continued to market its products as a "Shower to Shower" genital deodorant:

https://www.cnn.com/2018/07/13/health/4-69-billion-verdict-johnson--johnson-talcum-powder/index.html

With thousands more lawsuits in the pipeline, the company sprung into action, restructuring in Texas using a quirk of the state's merger laws that allows a single company to "merge" into two separate entities.

https://statutes.capitol.texas.gov/Docs/BO/htm/BO.10.htm

The Texas Two-Step is a corrupt gambit that uses this quirk to allow large companies to escape liability for their misdeeds, by creating one company that holds the assets and profitable businesses of the firm, and another company that holds the firm's toxic products and the liabilities they produced. The "bad" company then declares bankruptcy, leaving the "good" company to walk away with the billions it made by harming people, and leaving the victims to squabble over the meager assets from the bankruptcy.

To maintain the pretense that this maneuver isn't just a ruse to escape liability, companies undertaking the Texas Two-Step have the "good" company guarantee some of the liabilities of the "bad" company. That's what J&J did, and the women it injured sued over it:

https://www2.ca3.uscourts.gov/opinarch/222003p.pdf

The appeals court didn't find J&J's bankruptcy persuasive. They found that any bankruptcy for the "bad" company should come *after* it had exhausted all guarantees the "good" company had made.  Summarizing the court opinion *Bloomberg*'s Matt Levine writes, "You want to file for bankruptcy while you still have plenty of money to pay claims, but not too much money."

https://www.bloomberg.com/opinion/articles/2023-01-31/matt-levine-johnson-johnson-s-jnj-bankruptcy-didn-t-work

J&J has vowed to appeal. If their appeal succeeds, it will be another blow against corporate accountability and against the bankruptcy system, both of which have are at their lowest ebb in living memory. Just the fact that J&J is still in business is remarkable. Poison talcum powder is only the latest salvo in J&J's war on women's reproductive organs - just a year ago, the company was ordered to pay hundreds of millions for selling women vaginal meshes, aggressively marketed for incontinence and prolapse, long after it learned that these meshes could permanently fuse with patient's pelvic floors, leading to "severe pain, bleeding, infections, discomfort during intercourse."

https://www.theguardian.com/us-news/2022/apr/13/johnson-johnson-pelvic-mesh-implant-ads-case

J&J was also neck-deep in the opioid crisis, going to far as to commission a report from McKinsey entitled "Maximizing Value of the Narcotics Franchise," on how to use its dominance of poppy-extract to corner the market on opioids:

https://pluralistic.net/2022/06/30/mckinsey-mafia/#everybody-must-get-stoned

It was the opioid sector that brought popular attention - and well-earned disgust - to the US bankruptcy. The criminal Sackler family, owners of Purdue Pharma and proprietors of OxyContin, used a nakedly corrupt move to shift their bankruptcy proceeding to Judge Robert Drain of the Southern District of New York:

https://pluralistic.net/2021/08/07/hr-4193/#shoppers-choice

Drain is notoriously tolerant of corporate crime and is an enthusiastic booster for the principle of using bankruptcies to escape consequences for corporate mass-murder. Which is exactly what the Sacklers did, cramming through a bankruptcy deal that let them walk away with billions, stiffing the survivors of their opioid business:

https://pluralistic.net/2021/07/29/impunity-corrodes/#morally-bankrupt

J&J told women to put carcinogens down their underwear. For *decades*. It gave tens of thousands of women ovarian cancer. Then it tried to use Texas's courts to walk away with billions. But this time, a court stopped them. This time there's no separate system of justice, like the one that gave the Sacklers billions in dirty money. This time, the company might just have to pay for its crimes.

Image:
James Wagstaff (modified)
https://www.flickr.com/photos/jesse/2256760407/

Mike Mozart (modified)
https://www.flickr.com/photos/jeepersmedia/26191532093

CC BY 2.0
https://creativecommons.org/licenses/by/2.0/

(via Jesse Wagstaff, Mike Mozart; CC BY 2.0, modified
)

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🐛 Hey look at this

* Setting the Record Straight: EFF Statement in Support of FCC Nominee Gigi Sohn https://www.eff.org/deeplinks/2023/01/setting-record-straight-eff-statement-support-fcc-nominee-gigi-sohn

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🐛 This day in history

#20yrsago DVDs rot over time https://www.smh.com.au/national/a-bad-case-of-dvd-rot-eats-into-movie-collections-20030201-gdg75r.html

#20yrsago Record exec argues for file-sharing https://www.salon.com/2003/02/01/file_trading_manifesto/

#15yrsago Sony kills DRM stores — your DRM music will only last until your next upgrade https://memex.craphound.com/2008/02/01/sony-kills-drm-stores-your-drm-music-will-only-last-until-your-next-upgrade/

#15yrsago Amazon’s anti-DRM tee https://memex.craphound.com/2008/02/01/amazons-anti-drm-tee/

#15yrsago Chinese dissident’s “Rear Window” video of the cops keeping him under house arrest https://www.theguardian.com/news/video/2008/feb/01/hu.jia

#10yrsago Dial-up handshaking illustrated https://www.windytan.com/2012/11/the-sound-of-dialup-pictured.html

#10yrsago RIAA bigwig who architected anti-technology lawsuits is now #2 at the Copyright Office https://www.techdirt.com/2013/01/31/former-riaa-vp-named-2nd-command-copyright-office/

#10yrsago Magic, copyright, and internal enforcement mechanisms https://web.archive.org/web/20130207082939/http://www.law.villanova.edu/Academics/Journals/Jeffrey S Moorad Sports Law Journal/~/media/academics/journals/sportsandentertainmentlawjournal/docs/191/VLS_191_103.ashx

#10yrsago Why can’t Americans look up their own case-law for free? https://sunlightfoundation.com/2013/02/01/open-public-access-to-court-records-for-aaron-freepacer/

#5yrsago LA’s soaring homelessness is distorting the national statistics https://www.latimes.com/local/lanow/la-me-homeless-how-we-got-here-20180201-story.html

#5yrsago Teen Bo$$: a magazine advising tweens on how to get rich by being “social media brands” https://fashionista.com/2017/06/teen-boss-entrepreneurs-magazine

#5yrsago America’s school systems serve unencrypted web resources that are riddled with ad-tech trackers https://www.edtechstrategies.com/tracking-edu/

#5yrsago The latest IoT botnet displays evidence of a halfway clever botmaster https://www.technologyreview.com/2018/01/31/145919/a-fast-evolving-new-botnet-could-take-gadgets-in-your-home-to-the-dark-side/

#5yrsago The Germans have a word for all your hard-to-process Trump emotions https://web.archive.org/web/20180131091447/https://www.alternet.org/news-amp-politics/7-german-words-perfectly-capture-feeling-living-trumps-america

#5yrsago An incredibly important paper on whether data can ever be “anonymized” and how we should handle release of large data-sets https://www.cs.princeton.edu/~arvindn/publications/precautionary.pdf

#5yrsago GOP candidate Rick Saccone hates government waste, bills the public purse indiscriminately for his own personal expenses, which totalled $435,172 https://theintercept.com/2018/02/01/rick-saccone-congress-pennsylvania/

#5yrsago Australia put an algorithm in charge of its benefits fraud detection and plunged the nation into chaos https://logicmag.io/justice/austerity-is-an-algorithm/

#1yrago The Mafia hires good accountants https://pluralistic.net/2022/02/01/collaborators-not-fools/#triple-entry-bookkeeping

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🐛 Colophon

Today's top sources: Super Punch (https://www.superpunch.net/).

Currently writing:

* Picks and Shovels, a Martin Hench noir thriller about the heroic era of the PC. Yesterday's progress: 526 words (100704 words total)

* The Bezzle, a Martin Hench noir thriller novel about the prison-tech industry. FIRST DRAFT COMPLETE, WAITING FOR EDITORIAL REVIEW

* A Little Brother short story about DIY insulin PLANNING

* Vigilant, Little Brother short story about remote invigilation. ON SUBMISSION

* Moral Hazard, a short story for MIT Tech Review's 12 Tomorrows. FIRST DRAFT COMPLETE, ACCEPTED FOR PUBLICATION

* Spill, a Little Brother short story about pipeline protests. ON SUBMISSION

* A post-GND utopian novel, "The Lost Cause."  FINISHED

* A cyberpunk noir thriller novel, "Red Team Blues."  FINISHED

Currently reading: Analogia by George Dyson.

Latest podcast: Social Quitting https://craphound.com/news/2023/01/22/social-quitting/

Upcoming appearances:

* Chokepoint Capitalism: Can It Be Defeated? (UCL Faculty of Laws), Feb 1
https://www.ucl.ac.uk/laws/events/2023/feb/online-chokepoint-capitalism-can-it-be-defeated

* Avid Reader (Brisbane), Feb 8
https://avidreader.com.au/pages/6834-ChokepointCapitalism-RebeccaGiblinandCoryDoctorow

* Future of Arts, Culture & Technology, ACMI, (Melbourne), Feb 14
https://www.acmi.net.au/whats-on/in-conversation-cory-doctorow-rebecca-giblin-esther-anatolitis/

* State Library of NSW (Sydney), Feb 15
https://www.sl.nsw.gov.au/events/chokepoint-capitalism-rebecca-giblin-and-cory-doctorow

* ANU/Canberra Times Meet The Author (Canberra), Feb 16
https://www.anu.edu.au/events/in-conversation-with-rebecca-giblin-and-cory-doctorow

* Australian Digital Alliance Copyright Forum (Canberra), Feb 17
https://digital.org.au/2022/11/08/doctorow-giblin-first-speaker-announcement-ada-forum-2023/

* Antitrust, Regulation and the Political Economy (Brussels), Mar 2
https://www.brusselsconference.com/registration

Recent appearances:

* David Pakman Show
https://youtu.be/8WuSbhGThoI

* TikTok Isn’t For Creators Anymore (Slate ICMY)
https://slate.com/podcasts/icymi/2023/01/cory-doctorow-how-online-platforms-die

* Lunch on Laotian food (Eating the Fantastic)
https://www.scottedelman.com/2023/01/27/cory-doctorow/

Latest books:

* "Chokepoint Capitalism: How to Beat Big Tech, Tame Big Content, and Get Artists Paid, with Rebecca Giblin", on how to unrig the markets for creative labor, Beacon Press/Scribe 2022 https://chokepointcapitalism.com

* "Attack Surface": The third Little Brother novel, a standalone technothriller for adults. The *Washington Post* called it "a political cyberthriller, vigorous, bold and savvy about the limits of revolution and resistance." Order signed, personalized copies from Dark Delicacies https://www.darkdel.com/store/p1840/Available_Now%3A_Attack_Surface.html

* "How to Destroy Surveillance Capitalism": an anti-monopoly pamphlet analyzing the true harms of surveillance capitalism and proposing a solution. https://onezero.medium.com/how-to-destroy-surveillance-capitalism-8135e6744d59 (print edition: https://bookshop.org/books/how-to-destroy-surveillance-capitalism/9781736205907) (signed copies: https://www.darkdel.com/store/p2024/Available_Now%3A__How_to_Destroy_Surveillance_Capitalism.html)

* "Little Brother/Homeland": A reissue omnibus edition with a new introduction by Edward Snowden: https://us.macmillan.com/books/9781250774583; personalized/signed copies here: https://www.darkdel.com/store/p1750/July%3A__Little_Brother_%26_Homeland.html

* "Poesy the Monster Slayer" a picture book about monsters, bedtime, gender, and kicking ass. Order here: https://us.macmillan.com/books/9781626723627. Get a personalized, signed copy here: https://www.darkdel.com/store/p2682/Corey_Doctorow%3A_Poesy_the_Monster_Slayer_HB.html#/.

Upcoming books:

* Red Team Blues: "A grabby, compulsive thriller that will leave you knowing more about how the world works than you did before." Tor Books, April 2023

* The Internet Con: A nonfiction book about interoperability and Big Tech, Verso, September 2023

* The Lost Cause: a post-Green New Deal eco-topian novel about truth and reconciliation with white nationalist militias, Tor Books, October 2023

This work licensed under a Creative Commons Attribution 4.0 license. That means you can use it any way you like, including commercially, provided that you attribute it to me, Cory Doctorow, and include a link to pluralistic.net.

https://creativecommons.org/licenses/by/4.0/

Quotations and images are not included in this license; they are included either under a limitation or exception to copyright, or on the basis of a separate license. Please exercise caution.

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