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Bonta and 20 Other AGs Urge Supreme Court to Review CertainTeed "Texas Two-Step" Asbestos Case

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Why it matters

California Attorney General Rob Bonta joined a multistate amicus brief on October 23, 2026, urging the U.S. Supreme Court to take up Herlihy v. DBMP, LLC, an asbestos case out of the Fourth Circuit. Bonta's office says the coalition includes 21 attorneys general; Law360 reports 20 states plus D.C. The brief argues that the Fourth Circuit's ruling threatens states' ability to enforce their own laws. It targets the lower court's holding that CertainTeed's use of the Texas Two-Step was not a bad-faith use of the bankruptcy system to avoid responsibility for hundreds of thousands of asbestos claims. The strategy works through a Texas divisional merger. A solvent company splits in two, moves its mass tort liabilities into a new entity, and that entity files for bankruptcy while the productive assets and operating business stay with a healthy successor. In this case, CertainTeed split into New CertainTeed, which kept most assets and non-asbestos liabilities, and DBMP, which took all asbestos liabilities and certain assets. DBMP then filed for Chapter 11. The petitioners developed mesothelioma from CertainTeed asbestos products, and their claims have been pending for more than seven years.

The filing is one step in a longer fight. Bonta's office also joined a 2024 multistate brief in Bestwall, a related Georgia-Pacific spinoff case, opposing a bankruptcy court injunction that barred injury suits against a solvent entity. On June 1, 2026, the Supreme Court denied the asbestos committee's certiorari petition in Bestwall, leaving in place the Fourth Circuit's holding that federal courts have subject-matter jurisdiction and that the debtor's solvency is not a valid jurisdictional bar. Separately, a bipartisan group of lawmakers reintroduced legislation in April 2026 that would direct courts to find Texas Two-Step filings made in bad faith. Bonta's office says the amicus coalition is bipartisan. A separate coalition led by North Carolina is also reported. The Supreme Court has not yet decided whether to hear Herlihy.

For attorneys handling mass tort or bankruptcy matters, the cert decision is the immediate trigger to watch. A grant would put the Texas Two-Step squarely before the Court, and a denial would leave the Fourth Circuit's approach in place across the circuit. The stakes extend beyond asbestos to talc and other mass torts, and the outcome could also limit how states pursue consumer and tort enforcement against companies that restructure through bankruptcy. Track the Court's conference orders, the pending congressional bill, and any new state amicus filings.

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