Attorney General joined a bipartisan coalition of 21 attorneys general in asking the U.S. Supreme Court to reverse a lower-court decision that the office says permits corporations to use the "Texas Two-Step" to evade mass-tort liability, the attorney general’s office said.

The brief, filed in Herlihy v. DBMP, LLC, says petitioners brought state-law claims after they developed mesothelioma from CertainTeed products; facing growing litigation, CertainTeed split into New CertainTeed and DBMP, assigned asbestos liabilities to DBMP, and DBMP filed for Chapter 11, the office said; the petitioners’ injury claims have been pending for more than seven years, the brief says.

"Bankruptcy should not be used as a loophole to allow healthy, multibillion-dollar corporations to avoid financial accountability for harm they inflict on people," Attorney General Bonta said.

The brief argues the Texas Two-Step lets solvent companies leave assets and profits untouched while placing liabilities in a bankruptcy-bound shell entity; the brief warns that if courts allow the tactic, judges could halt litigation against solvent affiliates for years and shield billions in assets from creditors.

The attorney general’s office said a Supreme Court reversal could end the Texas Two-Step and allow individual victims to pursue mass-tort claims through traditional jury trials in state court; the office said leaving the lower-court ruling in place would likely encourage wider use of the scheme and could restrict states’ ability to litigate against viable corporations.

The filing continues a pattern of related advocacy by the attorney general; the office said Bonta joined a multistate brief in Bestwall LLC v. Official Committee of Asbestos Claimants in 2024 and filed a letter in 2023 challenging aspects of Purdue Pharma’s proposed bankruptcy reorganization.

State

Rob Bonta

Attorney General · Democrat

Named 3 times in this story.

Everything the Journal has reported on RobOfficial site

Portrait: Official portrait

Sources & methodology

This report was written from the primary materials below. Links open at the original publisher.

California Attorney General

See something we should correct? Read our corrections policy.