Durbin Highlights Johnson & Johnson's Shameful "Texas Two-Step" Maneuver on Senate Floor

WASHINGTON – In a speech on the Senate floor, U.S. Senate Majority Whip Dick Durbin (D-IL), Chair of the Senate Judiciary Committee, called out Johnson & Johnson for using a corporate bankruptcy shell game known as the ‘Texas Two-Step’ to avoid facing claims from cancer-stricken customers.  The ‘Texas Two-Step’ is the name given to a highly controversial legal strategy that some of the biggest companies are now using to shield their assets from accountability. It allows massively wealthy corporations whose products caused harm to avoid paying damages to the victims of that harm and it denies the victims their right to make their case in court and be judged by a jury of their peers. During his speech, Durbin highlighted the story of Kimberly Naranjo, a mesothelioma victim who testified last week at a hearing of the Senate Judiciary Committee Subcommittee on Federal Courts, Oversight, Agency Action and Federal Rights about Johnson & Johnson’s actions. Ms. Naranjo has been denied her right to hold accountable in court the multi-billion-dollar corporation whose products she believes caused her fatal illness: Johnson & Johnson.

“There’s a justice system for rich people and powerful corporations – and there’s the system for everyone else,” said Durbin. “And many days, it seems that the gulf between those two systems of justice is getting wider and deeper. There’s something called the ‘Texas Two-Step’. It used to be a dance.  But in recent years, it has taken on a new meaning and it relates directly to Johnson & Johnson. It is a form of legal strategy that corporations are using to shield their assets from accountability. It allows wealthy corporations whose products caused harm to avoid paying damages to the victims. Not just that, the ‘Texas Two-Step’ denies the victims their right to make their case in court. And, it can stretch the process of seeking justice out for years while the victims get sicker and die. Does that sound like justice?”

Durbin continued, “For years, Johnson & Johnson denied claims that its products contained asbestos…But internal company documents obtained through the discovery process told a different story.  They showed that Johnson & Johnson knew about the asbestos in their products while they were actively advertising the use of this product by adults and to use it on our babies.”

Today, Johnson & Johnson faces around 38,000 claims from people with ovarian cancer or mesothelioma who allege that the company’s talc products caused their illness. But Johnson & Johnson’s use of the ‘Texas Two-Step’ means that those 38,000 cancer victims no longer are able to bring their claim against the company.

Durbin concluded, “I hope the courts reject Johnson & Johnson’s abuse of federal bankruptcy laws. But I also believe that Congress must act to close this loophole for good. I hope Democrats and Republicans can work together on a bipartisan basis to stop this bankruptcy abuse. Bankruptcy is supposed to be a good faith way to accept responsibility, pay one’s debts, and receive a second chance – not a ‘Texas Two-Step’, get-out-of-jail-free card for some of the wealthiest corporations on Earth.”

Video of Durbin’s floor speech is available here.

Audio of Durbin’s floor speech is available here.

Footage of Durbin’s floor speech is available here for TV Stations.

On December 17, Durbin led a bicameral letter to Johnson & Johnson’s incoming CEO objecting to the company’s efforts to manipulate bankruptcy laws to evade accountability for harm caused by its products.  This followed a prior Durbin-led letter in which the Senators and Representatives wrote to then-CEO Alex Gorsky requesting information to help explain why Johnson & Johnson is seeking to deny claimants the chance to have their cases fairly considered.  In July, the same group of signatories introduced the Nondebtor Release Prohibition Act of 2021, which would rein in various bankruptcy loopholes that corporations and bad actors such as the Sackler family and Johnson & Johnson exploit to dodge accountability, including the ‘Texas Two-Step’ maneuver.

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