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- Title
ENTERPRISE, LIABILITY, AND INSOLVENCY: AN ESSAY IN HONOR OF AARON TWERSKI.
- Authors
Janger, Edward J.
- Abstract
Modern tort law links concepts of duty, duty of care, causation, and compensatory damages in a manner that, it is hoped, simultaneously communicates moral suasion, redresses wrongs, and incentivizes "reasonable" socially appropriate behavior. Deterrence and corrective justice theorists of tort law differ fiercely about the scope of and rationale for liability, but both assume that tortfeasors are good for their debts. Sometimes, however, debtors are insolvent. Bankruptcy law provides individuals with a route to a fresh start, and this paper considers the relationship between modern tort law and the discharge of debt in bankruptcy. The concept of a bankruptcy discharge--the "fresh start"--has deep historical roots in the idea of the "honest but unfortunate debtor." However, recent high-profile bankruptcy cases involving mass torts have signaled to the world that something is amiss. A short list of liabilities discharged in bankruptcy includes harms from opioid addiction, allegedly carcinogenic baby powder, and sex abuse (in churches, gymnastics, and the Boy Scouts). Chapter H's goal of value maximization through continuation of the business enterprise is always in tension with tort law's goals of internalization and redress, but the scope of the harms and the level of culpability involved in some of these cases have drawn particular scrutiny. This Article first links the bankruptcy power to discharge mass tort liabilities to the existence of good faith financial distress. It then fleshes out the concept of "goodfaith" and what it means to "deserve" a bankruptcy discharge. The discussion proceeds in four steps. First, it explains the utility of and common justification for granting a mandatory discharge in mass tort cases in both bankruptcy and limited fund class actions under Rule 23 of the Federal Rules of Civil Procedure. Second, it evaluates the first and second J&J talc filings in light of that standard and finds that neither filing passes the straight-face test. Third, it takes a dystopic look beyond the bankruptcy law silo to consider the relationship between insolvency and recourse in tort law. Lastly, this Article seeks to posit the proper relationship between bankruptcy law and recourse in tort by describing what it means to be an "honest but unfortunate enterprise" entitled to "global peace.".
- Subjects
UNITED States. Supreme Court. Federal rules of civil procedure; TORT theory; REASONABLE care (Law); TORTS; COMPENSATORY damages; SEX crimes; CONTANGO &; backwardation; BANKRUPTCY
- Publication
Brooklyn Journal of Corporate, Financial & Commercial Law, 2023, Vol 18, Issue 1, p115
- ISSN
1934-2497
- Publication type
Article