U.S. bankruptcy judge halts 40,000 Johnson & Johnson talc and cancer lawsuits

Story by Annika Kim Constantino • Yesterday 

A federal bankruptcy judge halted roughly 40,000 of lawsuits alleging Johnson & Johnson's baby powder and other talc products caused cancer.

Judge Michael Kaplan put a temporary hold on the suits that will last through mid-June, The Wall Street Journal reported.

The decision is part of J&J subsidiary LTL Management's second attempt to settle talc cases in bankruptcy proceedings.


In this photo illustration, a container of Johnson and Johnson baby powder is displayed on April 05, 2023 in San Anselmo, California.© Provided by CNBC

A federal bankruptcy judge on Thursday halted roughly 40,000 lawsuits that allege Johnson & Johnson's baby powder and other talc products caused cancer.

The decision is part of J&J's second attempt to settle thousands of talc cases in bankruptcy proceedings.

J&J in 2021 spun off its subsidiary, LTL Management, to carry its talc-related liabilities and file for Chapter 11 bankruptcy protections.

Judge Michael Kaplan during a hearing Thursday in U.S. Bankruptcy Court in Trenton, New Jersey, put a temporary hold on the suits that will last through mid-June, The Wall Street Journal reported.

J&J won't have to go to trial over any other talc claims during the pause, but new lawsuits can still be filed against the company, The Journal reported.

Kaplan said during the hearing that J&J has an "uphill battle" ahead, according to the newspaper.

The pause will give J&J time to reach a permanent settlement with plaintiffs in the talc cases. The company recently proposed an $8.9 million settlement for current and future talc-related claims and said it expects to bring that plan to bankruptcy court in mid-May.

J&J in a statement called Kaplan' decision "a win for claimants" because it brings them "one step closer" to being able to vote on the proposed settlement.

The New Brunswick, New Jersey-based company also said it believes claimants will overwhelmingly support the proposal.

J&J previously said more than 60,000 claimants have already committed to voting in favor of the plan.

"When presented with a clear and complete explanation and the opportunity to make an informed choice, we firmly believe the claimants will approve the plan," said Erik Haas, J&J's worldwide vice president of litigation.

Kaplan's decision is narrower than the one he made after LTL Management first filed for Chapter 11 in 2021.

The judge ruled in February 2022 that J&J can use the bankruptcy system to resolve talc allegations, enabling the company to avoid fighting thousands of individual lawsuits.

Kaplan essentially affirmed J&J's use of a strategy known as the "Texas two-step," which allows companies to split valuable assets from liabilities through a so-called divisive merger.

But in January, the U.S. Court of Appeals for the 3rd Circuit overturned that ruling. The appeals court said that neither LTL nor J&J had a legitimate need for bankruptcy protection because they were not in "financial distress."

Amid the ongoing legal fights, J&J has continued to deny the allegations that its talc products caused cancer.

Chief Financial Officer Joseph Wolk said on an earnings call Tuesday that it was "unfortunate" that J&J has to "put dollars towards quite frankly baseless scientific claims."

The suits allege J&J's talc products were contaminated with the carcinogen asbestos, which caused ovarian cancer in thousands of individuals.

Some lawsuits link several deaths to J&J's talc products.

US judge halts most talc lawsuits against J&J, stops trials

Story by By Mike Spector • Yesterday 


FILE PHOTO: Bottles of Johnson & Johnson baby powder line a drugstore shelf in New York© Thomson Reuters

NEW YORK (Reuters) - A U.S. judge on Thursday halted most of the tens of thousands of lawsuits alleging Johnson & Johnson’s baby powder and other talc products caused cancer and stopped any trials as part of a company subsidiary’s second attempt to settle cases in bankruptcy proceedings.

U.S. Bankruptcy Judge Michael Kaplan put most of the litigation temporarily on hold during a hearing in Trenton, New Jersey. The decision, for the most part, granted a request from J&J to freeze cases while it attempts to reach a permanent settlement with current plaintiffs that would also set aside money for future lawsuits.

J&J says it has broad support for a proposed $8.9 billion settlement, a contention disputed by lawyers representing talc claimants who oppose it.

The J&J subsidiary, LTL Management, filed for bankruptcy a second time earlier this month to help finalize the latest deal, despite a federal appeals court’s decision in January that invalidated its first Chapter 11 filing, on the grounds the J&J unit was not in financial distress.

“I have more questions than answers,” Kaplan said during Thursday's court hearing, referring to arguments made to him about the second bankruptcy case earlier this week.

The judge halted roughly 38,000 talc lawsuits consolidated in a federal district court in New Jersey. He allowed other cases to proceed as long as no trials commence.

He said he would revisit the ruling in late May.

Erik Haas, J&J’s worldwide vice president of litigation, in a statement called the ruling “a win for claimants” and expressed confidence they would ultimately approve the proposed settlement.

LTL Management argued that allowing litigation against J&J to continue would imperil current settlement efforts. J&J previously used a complex legal maneuver, known as a Texas two-step, to shift responsibility for the lawsuits to LTL.

Leigh O’Dell, one of the lead lawyers for plaintiffs in cases consolidated in the New Jersey federal court, said prohibiting trials limits pressure on J&J.


Related video: J&J talc unit asks judge to halt cancer lawsuits as it pursues $8.9 bln settlement (WION)  Duration 1:12  View on Watch

“We continue to believe that this bankruptcy effort is illegitimate … and that stance will be affirmed through the appellate process,” she said in a statement.

The judge’s ruling kept in legal limbo consumers alleging J&J talc caused their ovarian cancer or mesothelioma. Some plaintiffs allege asbestos in the talc sickened them. For now, none can test their claims before juries.

J&J has said its talc is safe, asbestos-free and does not cause cancer.

The healthcare conglomerate has not filed for bankruptcy itself. In October 2021, J&J divided its consumer business in two and offloaded the talc lawsuits onto a newly created subsidiary, LTL, which then declared bankruptcy.

In January, the 3rd U.S. Circuit Court of Appeals in Philadelphia invalidated LTL's bankruptcy filing. Kaplan dismissed the bankruptcy earlier this month, only for LTL to file for Chapter 11 again in his court about two hours later.

'UPHILL BATTLE'

Talc plaintiffs opposing J&J's proposed settlement plan to file a motion to dismiss the second bankruptcy filing, one of their lawyers said in court on Tuesday.

They portray J&J’s actions as an abuse of the bankruptcy system by a multinational conglomerate valued at more than $400 billion and in little danger of running out of money to pay cancer victims.

A U.S. Department of Justice official charged with monitoring the case has also pushed back against the second bankruptcy.

“Undoubtedly, the debtor has an uphill battle,” Kaplan said, referring to LTL’s settlement and reorganization prospects.

J&J and its subsidiary have argued bankruptcy delivers settlement payouts more fairly, efficiently and equitably than a “lottery” offered by trial courts, where some litigants get large awards and others nothing.

Jim Murdica, a lawyer tasked with resolving talc cases for J&J, testified in a deposition last weekend that as many as 80,000 claimants support the company’s settlement offer - enough to meet a bankruptcy threshold requiring agreement from 75% of all claimants, he said.

Lawyers representing opposing talc plaintiffs contend those figures reflect mostly unfiled claims and that people behind them have not yet agreed to the settlement. J&J and LTL argue their settlement process is typical.

LTL terminated a funding agreement with its parent company that the appeals court found insulated it from the financial distress necessary to legitimately declare bankruptcy.

Its lawyers now argue that new financing agreements leave LTL Management in financial distress. At the same time, they contend the agreements provide enough funds to pay plaintiffs and avoid rendering LTL insolvent, countering arguments from plaintiffs' lawyers that the transactions were fraudulent.

(Reporting by Mike Spector; Editing by Bill Berkrot)

J&J Offered Talc Victims $4 Billion to Settle Claims Months Before Unit’s Bankruptcy

Jef Feeley
Thu, October 21, 2021, 

In this article:

(Bloomberg) -- Months before putting one of its units into bankruptcy, Johnson & Johnson offered $4 billion to settle with victims of its talc-based powder -- twice the amount it’s now proposing to pay through a forced resolution, according to people familiar with the matter.

The $4 billion offer was aimed at ending more than seven years of litigation over claims its iconic baby powder caused different types of cancers. J&J faces nearly 40,000 suits targeting its talc-based products, and has agreed to about $3.5 billion in settlements so far, according to court filings.

The world’s largest maker of health-care products wanted to split the $4 billion between trusts established to settle current and future suits, said the people, who asked not to be identified because they weren’t authorized to speak publicly. The trusts would have been created as part of the 2019 bankruptcy case filed by Imerys Talc America Inc., J&J’s talc miner, the people said. Representatives for J&J and Imerys declined to comment.

Lawyers representing a substantial number of talc plaintiffs rejected the $4 billion settlement offer as part of the Imerys case as too low, the people said. Plaintiffs would have each received about $40,000 for their cases on average, the people added.J&J last made the proposal in March. After it was rebuffed, the company’s attorneys told their counterparts to prepare for a bankruptcy filing by a J&J unit later in the year, the people said.

Bankruptcy Filing

On Oct. 14, a newly created J&J subsidiary filed for bankruptcy protection after arguing it was struggling to contain more than 38,000 suits blaming its iconic baby powder and other talc-based products of causing cancer. It’s planning to put $2 billion into a trust as part of the unit’s bankruptcy to resolve all of its talc liability.

J&J Baby Powder Bankruptcy Brings 50 Angry Lawyers to CharlotteIn a hearing this week in Charlotte, North Carolina, J&J lawyer Greg Gordon told U.S. Bankruptcy Judge Craig Whitley that the $2 billion is the company’s opening bid in a new effort to settle the talc litigation. Gordon said the $2 billion is not intended to “set a ceiling” for any talc accord.J&J officials argue they had no choice but to turn to the bankruptcy process to corral the litigation, warning it could take decades to resolve all the cases. The company has said it’s already paid $1 billion in talc-related legal fees over the last five years. Last year, it pulled the talc version of its baby powder off the U.S. and Canadian markets.The New Brunswick, New Jersey-based company proposed using the Imerys case for the deal because it’s currently battling with the talc miner over its claims that indemnity agreements put the baby-powder maker on the hook for Imerys’ talc exposure. J&J offered to take over Imerys’ talc defenses and negotiated settlements of suits against both companies, according to court filings.

Trust Fund

J&J wants to use federal laws allowing companies to file for bankruptcy to deal with litigation that poses a threat. Once in Chapter 11, companies can set up trusts to pay current and future claims and plaintiffs’ are required to participate in the process.Such trusts were made popular during decades-long litigation over asbestos, a cancer-causing material used as insulation in construction and car brake pads. Some talc plaintiffs contend J&J’s baby powder was tainted with asbestos, which can cause a variety of cancers. Others say talc -- by itself -- can cause ovarian cancer.Elizabeth Burch, a University of Georgia law professor who follows talc litigation, said $4 billion wouldn’t provide proper payouts for women fighting an often-fatal disease such as ovarian cancer.

“That wouldn’t even cover most people’s economic damages,” such as health costs and lost wages, she said.J&J’s decision to turn to bankruptcy is also questionable, Burch added.

“J&J is trying to cram down a settlement that will give these folks pennies-on-the-dollar for their damages,” she added.

The case is LTL Management LLC, 21-30589, U.S. Bankruptcy Court for the Western District of North Carolina (Charlotte).

U.S. government experts, industry spar over asbestos testing in talc
SILVER SPRING, Md. (Reuters) - For the first time in nearly 50 years, the U.S. Food and Drug Administration examined asbestos testing for talc powders and cosmetics at a hearing on Tuesday, after traces of the known carcinogen were found in several such products, including Johnson & Johnson’s Baby Powder.

Citing those FDA findings, some U.S. lawmakers and consumer advocates have called for stricter safety regulations to protect public health.

J&J, the market leader in talc powders, has defended the safety of its talc. The company said tests by labs it hired found no asbestos in samples from the same bottle the FDA examined - except for some the company attributed to contamination from a laboratory air conditioner.

In a statement on Tuesday, the company said it looks forward to the FDA’s “thorough review of the most effective and reliable ways to test for asbestos in cosmetic talc.”

The hearing on asbestos testing in talc, the FDA’s first since 1971, focused on testing standards recommended by a panel of government experts. The recommendations, published last month, embrace positions held by public health authorities and experts for plaintiffs who in lawsuits allege that contaminated talc products caused their cancers.

An industry trade group criticized the recommendations, saying they would not improve product safety.

For decades, the cosmetic talc industry has largely been allowed to police itself with little FDA oversight. Although talc and asbestos are similar minerals often found together in the ground, the FDA has never required manufacturers to test for the carcinogen.

One of the most significant recommendations from the expert panel is that mineral particles found in talc products small enough to be drawn into the lungs, even those the industry would not technically categorize as asbestos, should be counted as potentially harmful.

In its report, the panel said both asbestos and look-alike minerals are suspected of causing “similar pathological outcomes,” so the “distinction is irrelevant.”

At Tuesday’s hearing, a government toxicologist said a wide range of spear-shaped mineral particles - including but not limited to asbestos - can trigger the development of cancer and should be part of any new testing regime.

‘THIS IS UNACCEPTABLE’

Christopher Weis, a senior advisor with the National Institute of Environmental Health Sciences, said research has shown that conventional testing methods have failed to detect the full range of hazardous fibers, known as elongated mineral particles, or EMPs.

The process of milling talc for powders and cosmetics is known to break down any contaminants into small EMPs.

“All EMPs have the ability to trigger” development of cancer and other diseases, Weis said at the FDA hearing. “Short EMPs are not conventionally counted or included in lab reports. As a toxicologist, this is unacceptable.”

Mark Pollak, chief operating officer for the Personal Care Products Council, said the recommendation for counting more mineral particles as potentially harmful is not supported by science. The cosmetics trade group represents about 600 companies.

“Counting all (elongated mineral particles) would provide misleading reports, suggesting the presence of asbestos when none exists,” Pollak said at the hearing. “The key to effective testing is identification of asbestos, not harmless minerals.”

Scott Faber, senior vice president for government affairs at the Environmental Working Group, urged the FDA to endorse the more rigorous testing methods and said the agency should add a warning label to talc products so consumers are aware they may contain asbestos.

“It’s time to end the honor system which has failed consumers for so long,” Faber said at the hearing. “Let’s not wait another 50 years to finally protect consumers.”



The U.S. Occupational Health and Safety Administration and the Environmental Protection Agency have limited exposure to asbestos on the job and in the air to reduce cancers since the 1970s, when the hazard was well established. A Reuters report in December (here) showed that, during the same period, the FDA downplayed health concerns, including possible asbestos contamination, in talc powders and cosmetics and repeatedly deferred manufacturers.

Dr. Linda Katz, director of FDA’s office of cosmetics and colors, said the panel of government experts from FDA and other agencies will continue studying these issues and plans to publish a white paper at some point. The FDA has not announced a timetable for deciding whether it will pursue new rules on testing.

The increased scrutiny on this issue follows a 2018 Reuters report (here) which showed that although J&J knew for decades its raw talc and powders sometimes tested positive for asbestos, the company did not report those findings to the FDA.

CRIMINAL CAPITALI$M
Factbox-J&J's legal strategy for Baby Powder, talc liability

Fri, November 12, 2021
By Mike Spector

NEW YORK (Reuters) - Johnson & Johnson on Friday said it would split into two companies, hiving off its consumer health division that sells Band-Aids and Baby Powder from its pharmaceuticals and medical devices business.

The historic breakup comes as J&J faces nearly 40,000 lawsuits alleging its Baby Powder and other talc products contained asbestos and caused cancer, which the company denies. The plaintiffs include women suffering from ovarian cancer and others battling mesothelioma.

Chief Executive Alex Gorsky told The Wall Street Journal that the talc litigation did not play a role in the decision to break up J&J. The company is aiming to complete the separation in 18 to 24 months.

In October, J&J undertook a separate corporate reshuffling aimed squarely at tackling its talc liabilities. Here is what J&J did:

TEXAS TWO-STEP

Using Texas’s divisional merger law, the company's Johnson and Johnson Consumer Inc business split in two, offloading talc liabilities into a newly created subsidiary. The subsidiary, called LTL Management LLC, then moved to North Carolina.


Within days of those moves, LTL filed for bankruptcy protection in Charlotte. In legal circles, the series of transactions is known as a “Texas two-step.”

J&J has offered to contribute $2 billion toward resolving remaining talc litigation as part of the newly created subsidiary’s bankruptcy reorganization.

CONTROVERSIAL LEGAL MOVE

Earlier this week, a North Carolina bankruptcy judge overseeing the proceedings transferred the case to New Jersey, where J&J is headquartered. He also halted talc litigation against J&J for 60 days, extending to the healthcare conglomerate a legal shield already provided to LTL, the entity under bankruptcy protection.


Plaintiffs’ lawyers have decried J&J’s latest move to grapple with talc liabilities, accusing the financially healthy company of manipulating the bankruptcy system without filing for Chapter 11 protection itself.

In Washington, Congressional Democrats have introduced legislation that would ban the use of divisional mergers to offload liabilities as J&J did, and also limit the ability of companies that have not filed for bankruptcy from obtaining legal protections extended to those under Chapter 11 court protection.

J&J, a blue-chip company with a market value exceeding $400 billion, has spent close to $1 billion defending against the talc litigation. Settlements and verdicts have cost the New Brunswick, New Jersey-based company about $3.5 billion more, although it has prevailed in some cases.

REUTERS INVESTIGATION

A 2018 Reuters investigation found J&J knew for decades that asbestos, a known carcinogen, lurked in its Baby Powder and other cosmetic talc products. The company stopped selling Baby Powder in the U.S. and Canada in May 2020, in part due to what it called “misinformation” and “unfounded allegations” about the talc-based product. J&J maintains its consumer talc products are safe and confirmed through thousands of tests to be asbestos-free.

In June, the U.S. Supreme Court declined to hear J&J’s appeal of a Missouri court ruling that resulted in $2 billion of damages awarded to women alleging the company’s talc caused their ovarian cancer.


(Reporting by Mike Spector; additional reporting by Maria Chutchian; editing by Edward Tobin)

TALC poses Health risk in forms like baby powder, bath bombs: Health Canada

While some forms of talc do not pose a health risk, other popular uses like in bubble baths, baby powder and bath bombs carry a risk of causing ovarian cancer, a government assessment found.

© Provided by Global News FILE - In this April 19, 2010, file photo, baby powder is squeezed from its bottle in Philadelphia. In a study released on Tuesday, Jan. 7, 2020, U.S. government researchers found no evidence linking baby powder with ovarian cancer in the largest-ever analysis of an issue that has prompted thousands of lawsuits and a recent product recall. (AP Photo/Matt Rourke, File)

Amanda Connolly 

GLOBAL NEWS

4/23/2021

Researchers from Health Canada as well as from Environment and Climate Change Canada released on Thursday the final results of a screening assessment into the safety of talc products, launched in 2018.

The conclusion: avoid using products containing talc in loose powder form, and avoid using products containing talc in the female genital area.

READ MORE: Woman with cancer awarded $29M in Johnson and Johnson talcum powder suit

"The final screening assessment, based on the latest scientific evidence, concludes that certain uses of talc may be harmful to human health," reads a press release issued by health officials.

The screening flagged two areas of concern: the potential for inhaling talc particles when using products like baby powder, body powder and loose face powder, which carries a risk of lung damage; and potential risks when talc-containing products are used in certain self-care products for women.

These products include body powder, baby powder, diaper and rash creams, genital antiperspirants and deodorants, body wipes, bath bombs and bubble bath products.

There is no evidence suggesting talc poses a risk if ingested or used on top of the skin through products like pressed powder makeup, officials said.

Canadians are being advised to check the ingredient lists on products they are using, and to avoid using products containing loose talc that can be inhaled or that is intended for use around the female genitals.

Using the products around the female genitals is associated with a risk of ovarian cancer.

READ MORE: Can talcum powder cause ovarian cancer?

"Canadians concerned about current or previous use of products containing talc should also consult their health-care professional," the statement added.

Video: Health Canada finds talcum powder may cause cancer, lung damage

The safety of talc has been in the spotlight in recent years because of several lawsuits that linked use of baby powder with individuals who later developed ovarian cancer.

Johnson & Johnson has paid out roughly $5 billion in legal settlements since 2016 to individuals who say they developed cancer after using baby powder routinely for personal hygiene.

READ MORE: Johnson & Johnson to pay $417 million in lawsuit linking talcum powder to cancer

Health Canada's draft assessment issued in 2018 suggested a link was likely.

Officials are now looking to adjust some of the product monographs for products containing talc, and reduce exposure to those products.

Video: Health Matters: Johnson & Johnson being investigated for possible asbestos

U.S. court rejects J&J bankruptcy strategy for tens of thousands of talc lawsuits

Mon, January 30, 2023 

By Tom Hals, Mike Spector and Dan Levine

(Reuters) -A U.S. appeals court upended Johnson & Johnson's attempt to offload into bankruptcy tens of thousands of lawsuits over its talc products, ruling the healthcare conglomerate improperly placed a subsidiary into Chapter 11 proceedings even though it did not face financial distress.

The decision by the U.S. 3rd Circuit Court of Appeals in Philadelphia on Monday dismissed a Chapter 11 petition filed by a recently created J&J subsidiary in October to address more than 38,000 lawsuits from plaintiffs alleging the company’s baby powder and other talc products caused cancer.

Before the bankruptcy, J&J faced costs from $3.5 billion in verdicts and settlements, including one in which 22 women were eventually awarded a judgment of more than $2 billion, according to bankruptcy-court records.

Several major companies, including J&J and 3M Co, have turned to bankruptcy court to manage their mass tort liabilities. Plaintiff attorneys have called the cases an improper manipulation of the bankruptcy system, while the companies say the Chapter 11 filings are aimed at compensating claimants fairly and equitably.

J&J’s maneuver is known as a Texas two-step for a state law used to create a subsidiary that shoulders litigation and then declares bankruptcy. The Third Circuit’s opinion allows talc litigation to resume against the company.

J&J said it would challenge the ruling and that its talc products are safe.

Its shares fell more than 3% - the biggest one-day percentage decline in two years.

The New Jersey-based company, valued at more than $400 billion, said its subsidiary’s bankruptcy was initiated in good faith and designed to equitably resolve talc claims for the benefit of all plaintiffs. J&J initially pledged $2 billion to the subsidiary to resolve talc claims and entered into an agreement to fund an eventual settlement approved by a bankruptcy judge.

A three-judge panel on the appeals court rejected J&J’s argument, finding the company’s subsidiary, LTL Management, was created solely to access the bankruptcy system and not because it faced financial distress.

"Good intentions - such as to protect the J&J brand or comprehensively resolve litigation - do not suffice alone," the judges said in a 56-page opinion.

The decision throws into doubt J&J’s long-planned strategy for disposing of talc litigation after it lost a bid to reverse a watershed verdict that eventually awarded more than $2 billion to 22 women who blamed their ovarian cancer on baby powder and other talc products.

More than 1,500 talc lawsuits have been dismissed without J&J having to pay anything, and the majority of cases that have gone to trial have resulted in defense verdicts, mistrials or judgments for the company on appeal, according to the J&J subsidiary's court filings.

'PROJECT PLATO'

A December 2018 Reuters investigation revealed that the company knew for decades of tests showing its talc sometimes contained traces of carcinogenic asbestos but kept that information from regulators and the public.

“As we have said from the beginning of this process, resolving this matter as quickly and efficiently as possible is in the best interests of claimants and all stakeholders,” J&J said in a statement. “We continue to stand behind the safety of Johnson’s Baby Powder, which is safe, does not contain asbestos and does not cause cancer.”

Facing unrelenting litigation, J&J enlisted law firm Jones Day, which had helped other companies execute Texas two-step bankruptcies to address asbestos lawsuits.

J&J’s effort, which Reuters detailed last year, was internally dubbed “Project Plato”, and employees working on it signed confidentiality agreements warning them to tell no one, including their spouses, about the plan.

The Texas two-step strategy has garnered criticism from Democratic lawmakers, and inspired legislation that would severely restrict the practice.

Jones Day did not immediately respond to a request for comment.

Critics contend the strategy is an improper use of the bankruptcy system by solvent corporations wishing to escape jury trials in state courts. Bankruptcy filings typically pause litigation, forcing plaintiffs into often time consuming settlement negotiations while leaving them unable to pursue their cases in the courts where they originally sued.

“Bankruptcy courts are for honest companies in financial distress, not billionaire mega-corporations like J&J,” said Jon Ruckdeschel, a lawyer representing talc plaintiffs.

Plaintiffs and other legal experts urged U.S. Bankruptcy Judge Michael Kaplan last year to dismiss the J&J subsidiary’s bankruptcy, arguing it was filed in bad faith and risked becoming a blueprint for large corporations seeking to avoid undesirable litigation.

Kaplan, though, denied the request, finding the J&J unit did face financial distress and that a bankruptcy court was a better forum for resolving the litigation then America’s tort system.

(Reporting by Tom Hals in Wilmington, Delaware; Mike Spector in New York; and Dan Levine and San Francisco; Additional reporting by Dietrich Knauth and Chuck Mikolajczak in New York; Editing by Bill Berkrot)

J&J hit with new class action over talc seeking medical monitoring for cancer

Bottles of Johnson & Johnson baby powder line a drugstore shelf in New York

PUBLISHED ONJUNE 18, 2024 

Johnson & Johnson is facing a new proposed class action seeking damages and medical monitoring on behalf of women who have been diagnosed with cancer, or might develop it in the future, allegedly as a result of using the company's baby powder and other talc products.

The lawsuit, filed on Monday (June 17) in New Jersey federal court, is the first to seek medical monitoring, or regular testing meant to catch cancer early, on behalf of talc users. The proposed class could include thousands of women, but would not include the more than 61,000 people who have already filed personal injury lawsuits over J&J's talc, claiming it contains cancer-causing asbestos.

J&J maintains its talc is safe, asbestos-free and does not cause cancer.

The law firms behind the new case are opposed to J&J's proposal to settle nearly all talc claims against it for US$6.48 billion (S$8.74 billion) through a prepackaged bankruptcy. The same firms are also pursuing a separate class action seeking a court order blocking the bankruptcy.

The bankruptcy proposal needs support from 75 per cent of talc claimants, with a three-month voting period ending on July 26.

Erik Haas, J&J's worldwide vice president of litigation, said in a statement that plaintiffs' lawyers brought Monday's "meritless" lawsuit to thwart the bankruptcy plan because they can collect more fees outside of bankruptcy, putting their own interests ahead of their clients.

"The plaintiff firms should cease the obstructionist behaviour, and let their clients decide for themselves whether to accept the pending offer," he said.

Lawyers opposed to the deal have denied that they are motivated by higher fees and said the bankruptcy proposal would not adequately compensate their clients.


Chris Tisi, one of the lawyers bringing the new lawsuit, said in a statement that medical monitoring was necessary because the "inadequate funding" of the bankruptcy plan "doesn't realistically address the needs of women who could develop ovarian cancer in the future because of past baby powder use."

Both the proposed settlement and the new class action concern claims that talc caused ovarian and other gynaecological cancers, which make up the vast majority of cases. A smaller number of claims have been brought by people who developed mesothelioma, most of which have settled.

J&J has already tried and failed twice to resolve current and future talc claims through bankruptcy.

The legal strategy, known as a Texas two-step, involves creating a subsidiary to absorb the company's talc liability, which then declares bankruptcy to settle the cases. The previous efforts failed because courts found that the new subsidiary lacked the "financial distress" to justify bankruptcy.

ALSO READ: Cancer victims ask court to block J&J talc bankruptcy

J&J settles first talc cases to go to trial after failed bankruptcies

BRENDAN PIERSON
November 16, 2023 




(Reuters) - Johnson & Johnson on Thursday said it has settled two lawsuits claiming its talc products caused cancer, the first such cases to go to trial since a federal court rejected the company's plan to move its talc liabilities into bankruptcy court.

The settlements resolved lawsuits brought by two men, Rosalino Reyes and Marlin Eagles, who said they developed mesothelioma related to asbestos in J&J talc powder, and was part of a broader deal to settle all talc cases brought by the law firm representing them, Kazan, McClain, Satterley & Greenwood, the company said. Reyes' family continued his lawsuit after he died in 2020.

The company faces more than 50,000 lawsuits over talc, most by women with ovarian cancer. It has said that its talc products are safe and do not contain asbestos.

J&J and the plaintiffs' lawyers did not disclose any terms of the settlement, or how many cases it covered. Reyes' trial had begun last week, while Eagles' was about to begin, with a jury chosen.

"The Eagles and the Reyes families express thanks to the jurors and courtroom personnel who participated in the trial," Joseph Satterley and Denyse Clancy, attorneys for the plaintiffs, said in a joint statement.

"Our negotiations continue with the remaining firms who have a shared interest in achieving a fair and expedient resolution of their clients talc claims," J&J said in a statement.

"For those firms who elect not to pursue reasoned resolutions, we will continue to aggressively litigate their claims in the tort system, where we have prevailed in the overwhelming majority of the cases tried because the claims are meritless and are based upon junk science."

Trials in the cases have a mixed record, with major plaintiff wins including a $2.1 billion judgment awarded to 22 women with ovarian cancer. A New Jersey appeals court last month threw out a $223.7 million verdict against the company, finding the testimony of the plaintiffs' expert witnesses unsound.

The company stopped selling talc-based baby powder in favor of cornstarch-based products, citing an increase in lawsuits and "misinformation" about the talc product's safety.

The settlement comes after J&J failed for a second time in July to move tens of thousands of claims over talc into bankruptcy court, where it hoped to resolve them through a proposed $8.9 billion settlement. It is appealing that ruling.

Trials had mostly been on hold while J&J petitioned the bankruptcy court, but have now been able to resume.

(Reporting By Brendan Pierson in New York, Editing by Alexia Garamfalvi and Bill Berkrot)

US Supreme Court rejects Johnson & Johnson’s appeal of $2 billion penalty in baby powder cancer case

PUBLISHED TUE, JUN 1 2021
Tucker Higgins@IN/TUCKER-HIGGINS

KEY POINTS

The Supreme Court rejected an appeal from Johnson & Johnson seeking to undo a $2.1 billion damages award against it over allegations that asbestos in its talc powder products, including baby powder, caused women to develop ovarian cancer.

The top court announced in an order with no noted dissents that it will not hear the case.

Justices Samuel Alito and Brett Kavanaugh recused themselves from consideration of the case, according to the order.


In this photo illustration, a container of Johnson’s baby powder made by Johnson and Johnson sits on a table on July 13, 2018 in San Francisco, California.
Justin Sullivan | Getty Images

The Supreme Court on Tuesday rejected an appeal from Johnson & Johnson seeking to undo a $2.1 billion award against it over allegations that asbestos in its talc powder products, including baby powder, caused women to develop ovarian cancer.

The top court announced in an order with no noted dissents that it will not hear the case. Justices Samuel Alito and Brett Kavanaugh recused themselves from consideration of the case, according to the order.

Johnson & Johnson had asked the top court to review the penalty against it after the amount was upheld by the Missouri Supreme Court last year. A state appeals court earlier reduced the penalty against Johnson & Johnson from more than $4 billion.

The dispute featured fierce legal firepower on both sides, with former acting solicitor general Neal Katyal arguing on behalf of the New Brunswick, New Jersey-based pharmaceutical maker and Ken Starr, the former Whitewater prosecutor, representing women with ovarian cancer who sued the company.

Johnson & Johnson said it stopped selling its talc-based baby powder in the United States and Canada in May 2020, citing reduced demand “fueled by misinformation around the safety of the product and a constant barrage of litigation advertising.”

The company had said that it is facing more than 21,800 lawsuits against it over its talc products.

Starr wrote in his brief urging the justices not to review the case that Johnson & Johnson “knew for decades that their talc powders contained asbestos, a highly carcinogenic substance with no known safe exposure level.”

“They could have protected customers by switching from talc to cornstarch, as their own scientists proposed as early as 1973. But talc was cheaper and petitioners were unwilling to sacrifice profits for a safer product,” he wrote.

In contrast, Katyal argued that “federal regulators and respected health organizations have rejected calls for warnings on talc, and comprehensive epidemiological studies tracking tens of thousands of talc users have found no meaningful association between cosmetic talc use and ovarian cancer.”

Katyal said that attorneys for those who had sued Johnson & Johnson had searched the country “for women who were both diagnosed with ovarian cancer and among the millions who used Petitioners’ talc products.”

“They put dozens of plaintiffs on the stand to discuss their experiences with cancer, and the jury awards billions of dollars in punitive damages supposedly to punish Petitioners,” he wrote. “Lawyers can then follow this script and file the same claims with new plaintiffs and seek new outsized awards, over and over again.”

In a statement on Tuesday, Johnson & Johnson said that the Supreme Court’s decision left important legal questions unresolved.

“The matters that were before the court are related to legal procedure, and not safety,” the company said. “Decades of independent scientific evaluations confirm Johnson’s Baby Powder is safe, does not contain asbestos, and does not cause cancer.”

Starr did not immediately respond to a request for comment.

Johnson & Johnson shares were down more than 1% on Tuesday morning.

CRIMINAL CAPITALI$M THAT'S LEGAL
J&J mulls offloading lawsuits from Baby Powder to new company and bankrupting it: sources

By Mike Spector, Jessica DiNapoli and Dan Levine Reuters
Posted July 18, 2021 

WATCH ABOVE: Health Canada finds talcum powder may cause cancer, lung damage – Dec 5, 2018

Johnson & Johnson is exploring a plan to offload liabilities from widespread Baby Powder litigation into a newly created business that would then seek bankruptcy protection, according to seven people familiar with the matter.

During settlement discussions, one of the healthcare conglomerate’s attorneys has told plaintiffs’ lawyers that J&J could pursue the bankruptcy plan, which could result in lower payouts for cases that do not settle beforehand, some of the people said. Plaintiffs’ lawyers would initially be unable to stop J&J from taking such a step, though could pursue legal avenues to challenge it later.

J&J has not yet decided whether to pursue the bankruptcy plan and could ultimately abandon the idea, some of the people said. Reuters could not determine whether J&J has retained restructuring lawyers to help the company explore the bankruptcy plan.

J&J faces legal actions from tens of thousands of plaintiffs alleging its Baby Powder and other talc products contained asbestos and caused cancer. The plaintiffs include women suffering from ovarian cancer and others battling mesothelioma.

READ MORE: Johnson & Johnson asks U.S. Supreme Court to void $2B baby powder verdict

“Johnson & Johnson Consumer Inc. has not decided on any particular course of action in this litigation other than to continue to defend the safety of talc and litigate these cases in the tort system, as the pending trials demonstrate,” the J&J subsidiary housing the company’s talc products said in a statement provided to Reuters. J&J declined further comment.

Should J&J proceed, plaintiffs who have not settled could find themselves in protracted bankruptcy proceedings with a likely much smaller company. Future payouts to plaintiffs would be dependent on how J&J decides to fund the entity housing its talc liabilities.

J&J is now considering using Texas’s “divisive merger” law, which allows a company to split into at least two entities. For J&J, that could create a new entity housing talc liabilities that would then file for bankruptcy to halt litigation, some of the people said.

The maneuver is known among legal experts as a Texas two-step bankruptcy, a strategy other companies facing asbestos litigation have used in recent years.

0:53Johnson & Johnson to pay $72M in suit linking baby powder to ovarian cancerJohnson & Johnson to pay $72M in suit linking baby powder to ovarian cancer – Feb 24, 2016

J&J could also explore using another mechanism to effectuate the bankruptcy filing besides the Texas law, some of the people said.

A 2018 Reuters investigation https://www.reuters.com/investigates/special-report/johnsonandjohnson-cancer found J&J knew for decades that asbestos, a known carcinogen, lurked in its Baby Powder and other cosmetic talc products. The company stopped selling Baby Powder in the U.S. and Canada in May 2020, in part due to what it called “misinformation” and “unfounded allegations” about the talc-based product. J&J maintains its consumer talc products are safe and confirmed through thousands of tests to be asbestos-free.

The blue-chip company, which boasts a roughly $443 billion market value, faces legal actions from more than 30,000 plaintiffs alleging its talc products were unsafe. In June, the U.S. Supreme Court declined to hear J&J’s appeal of a Missouri court ruling that resulted in $2 billion of damages awarded to women alleging the company’s talc caused their ovarian cancer.

0:22Health Matters: Johnson & Johnson being investigated for possible asbestosHealth Matters: Johnson & Johnson being investigated for possible asbestos – Feb 21, 2019

Plaintiffs’ lawyers view the two-step bankruptcy strategy as one that skirts potentially expensive settlements or judgments. Companies view it as a way to corral numerous lawsuits in one court for efficient negotiations that bankruptcy law dictates for asbestos liabilities. The company outside bankruptcy can reach a funding agreement with the entity navigating a court restructuring to cover future settlement payments.

In 2017, Brawny paper towels manufacturer Georgia-Pacific used the Texas law to move asbestos liabilities to an entity that later filed for bankruptcy in North Carolina.

READ MORE: Talc poses health risk in forms like baby powder, bath bombs: Health Canada

Bankruptcy cases filed to resolve litigation, including those related to asbestos, often take years, and almost never fully repay creditors. OxyContin maker Purdue Pharma LP, for instance, is near resolving thousands of opioid lawsuits after two years of bankruptcy negotiations with a plan valued at more than $10 billion to address trillions of dollars in claims.

Another company, DBMP LLC, filed for bankruptcy last year to resolve asbestos liabilities and said the case could take up to eight years, according to a company press release.

J&J also faces litigation alleging it contributed to the U.S. opioid epidemic and recently recalled certain spray sunscreen products after discovering some of them contained low levels of benzene, another carcinogen.

The company in June agreed to pay $263 million to resolve opioid claims in New York. It has denied wrongdoing related to its opioids.

(Additional reporting by Nate Raymond; editing by Vanessa O’Connell and Edward Tobin)

Johnson & Johnson is pushing to settle baby powder cases linked to asbestos

Jef Feeley, Bloomberg News on Dec 4, 2023


Johnson & Johnson is making a push to resolve lawsuits claiming its talc-based Baby Powder causes cancer linked to asbestos exposure to avoid facing some jury trials next year, according to people familiar with the effort.

A trio of law firms have reached agreements for settlements covering about 100 cases, said the people, who declined to be identified because they weren’t authorized to speak publicly. The financial size of the accords are being kept private, the people added.

The deals may be mentioned Tuesday as part of J&J’s investor presentation at the New York Stock Exchange if company officials update shareholders about the plan for corralling the decadelong talc litigation, the people said. The session’s main focus is the company’s long-term growth outlook and product pipeline.

The company is striving to find a way to resolve all current and future baby powder cases after a judge nixed its attempt to settle them for $9 billion as part of a unit’s bankruptcy filing. The deals are part of the manufacturer’s multipronged strategy to deal with the lawsuits, which have created a drag on its shares.

J&J declined to comment.

‘Hammered by Juries’

“It looks like they are finally stepping up to the plate and acknowledging they are going to have to settle cases to be done with this,” said Carl Tobias, a University of Richmond professor who teaches mass-tort law. “Ridding themselves of trial settings can only work in their favor since they’ve been getting hammered by juries.”

The New Brunswick, New Jersey-based company pulled its talc-based powders off the market in the United States and Canada in 2020, citing slipping sales. The world’s largest maker of health care products replaced talcum with a cornstarch-based version. J&J vowed to remove all its baby powders containing talcum powder worldwide by the end of this year.

J&J faces a spate of jury trials early next year over allegations that its executives knew since the early 1970s that talc contained trace amounts of asbestos, which can cause a cancer called mesothelioma, but failed to alert consumers or regulators. J&J contends that its talc-based products don’t cause cancer and it has marketed Baby Powder appropriately for more than 100 years.

The company faces more than 50,000 suits accusing it of concealing baby powder’s cancer risk to protect its iconic product. Most of those claims are from women with ovarian cancer. The majority of the cases are consolidated before a federal judge in New Jersey.

Inventory Settlements

J&J has reached agreements to do so-called inventory settlements with law firms such as Kazan, McClain Satterley & Greenwood, and Levy Konigsberg to resolve all their mesothelioma cases, the people said. The company has come to similar terms with the Motley Rice firm, the people added.

Joe Satterley, a Kazan lawyer who has won and settled multiple talc cases against J&J, declined to comment on whether he’s settled his inventory of mesothelioma cases. Joe Rice, Motley Rice’s co-founder, also declined to comment. Moshe Maimon, a Levy Konigsberg lawyer who has won talc cases at trial, didn’t immediately respond late Monday to phone and email messages seeking comment.

The settlements resolved a case that was already on trial in state court in Oakland, California, in November and will head off trials that were supposed to start in January and March in state court in New Jersey, the people said. J&J still faces a mesothelioma case in state court in Minnesota later this month, the people added.

Besides getting trials off the calendar, J&J is trying to clear the way for a third bankruptcy filing to resolve the talc litigation in its entirety. Erik Haas, J&J’s lawyer overseeing the talc litigation, said in an October earnings call that the company was “pursuing a consensual resolution of the talc claims through another bankruptcy.”

The consolidated case is In Re Johnson & Johnson Talcum Powder Products Marketing, Sales Practices and Products Liability Litigation, 16-md-2738, U.S. District Court for the District of New Jersey (Trenton).


©2023 Bloomberg L.P. Visit bloomberg.com. Distributed by Tribune Content Agency, LLC.

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Johnson & Johnson Puts Talc Injury Claims Into Bankruptcy

“Their decision to file this amounts to corporate fraud at its worst”

Jeremy Hill, Steven Church and Jef Feeley
Thu., October 14, 2021


(Bloomberg) -- Johnson & Johnson is turning to bankruptcy court in a controversial attempt to resolve billions of dollars in legal liabilities tied to its talc products, placing a new subsidiary holding the claims into Chapter 11 protection.

The unit, LTL Management LLC, filed for bankruptcy in Charlotte, North Carolina, on Thursday, listing as much as $10 billion of assets and up to $10 billion in liabilities, according to court documents. Johnson & Johnson itself did not file for bankruptcy.

“We are taking these actions to bring certainty to all parties involved in the cosmetic talc cases,” Michael Ullmann, executive vice president of Johnson & Johnson, said in a statement. “While we continue to stand firmly behind the safety of our cosmetic talc products, we believe resolving this matter as quickly and efficiently as possible is in the best interests of the Company and all stakeholders.”

J&J is the latest profitable company to try to use bankruptcy court to resolve asbestos-related claims instead of fighting lawsuits one case at a time in courts around the country. Lawyers who represent talc victims have been so concerned about J&J’s legal plans that they tried, unsuccessfully, to have a federal judge in Delaware block any future corporate restructuring.

‘It’s Laughable’

“Their decision to file this amounts to corporate fraud at its worst,” said Joseph Satterley, a California-based plaintiffs’ lawyer currently in the midst of a talc trial against J&J in Oakland. “This is a company that had a $472 billion market cap as of August of this year. There’s no way this litigation presents a material threat to this company. It’s laughable.”

Under federal law, a company filing for bankruptcy protection can have all litigation against it put on hold while officials come up with a plan to resolve the Chapter 11 case. In asbestos bankruptcies, the goal is to set up a trust fund big enough to pay off all current and future cases. The company then forces all asbestos victims to apply to the trust for compensation instead of fighting in court.

“This stinks,” Andy Birchfield, an Alabama-based plaintiffs’ lawyer representing women who blame J&J’s talc-based powders for their ovarian cancers, said in a statement. “They claim their product is safe and then attempt to hide behind bankruptcy. J&J can run but it can’t hide.”

Texas Two Step

The strategy J&J is using is known in legal circles as the Texas Two Step because under a business-friendly law in that state, a company can conduct a so-called divisive merger to break itself into two parts. One part has nearly all the operations and assets, while the other gets all of the asbestos liabilities. The asbestos company then files for bankruptcy and forces everyone suing to negotiate a settlement.

Lumber giant Georgia-Pacific was one of the first companies to use the strategy when it put its Bestwall unit into bankruptcy in 2017. The company is still fighting asbestos victims in that Chapter 11 case.

Johnson & Johnson is fighting nearly 35,000 suits blaming its iconic baby powder and other talc products for causing cancer, according to a July securities filing. The number of suits increased 28% from last year and the company said in the filing that new lawsuits continue to appear.

Earlier this year, J&J was forced to pay about $2.5 billion to 20 women after the Missouri Supreme Court and U.S. Supreme Court refused to throw out a St. Louis jury’s finding that J&J’s baby powder was contaminated with cancer-causing asbestos.

Nonetheless, J&J executives have said that the company had “strong legal grounds to contest” its losses.

J&J has settled some cases during the more than seven-year litigation over its baby powder, which the company withdrew from the U.S market last year.

To get a handle on the talc litigation, J&J will establish a $2 billion trust to pay amounts the bankruptcy court determines its talc-claim subsidiary owes, and will divert royalty payments worth $350 million to the unit.

The case is LTL Management LLC, 21-30589, U.S. Bankruptcy Court for the Western District of North Carolina (Charlotte).

Johnson & Johnson reaches $700 million talc settlement with US states

A Johnson & Johnson banner is displayed on the front of the NYSE in New York

Updated Tue, Jun 11, 2024
By Jonathan Stempel

NEW YORK (Reuters) - Johnson & Johnson has agreed to pay $700 million to settle an investigation by 42 U.S. states and Washington, D.C. into its marketing of baby powder and other talc-based products blamed for allegedly causing cancer.

The settlement resolves charges that Johnson & Johnson misled consumers into believing its talc products, which it sold for more than a century before stopping, were safe.

J&J did not admit wrongdoing in settling with the states, which were led by Florida, North Carolina and Texas, and has said its talc products are safe and do not cause cancer. The company announced a settlement in principle in January.

"This is a major advancement for consumer product safety," Florida Attorney General Ashley Moody said in a statement.

J&J still faces tens of thousands of talc lawsuits, and a class action accusing the New Brunswick, New Jersey-based company of fraudulently hiding their dangers from shareholders.

As of March 31, about 61,490 people were still suing J&J over talc. Most were women with ovarian cancer, while a smaller number had mesothelioma, a type of cancer linked to asbestos.

J&J stopped selling talc-based baby powder globally last year, switching to corn starch as the main ingredient. It has maintained that its products do not contain asbestos.

The company has twice tried to resolve the litigation by placing into bankruptcy a subsidiary it created to contain its talc liabilities, but courts rebuffed both attempts.

On May 1, J&J proposed a $6.48 billion settlement to resolve most of the litigation through a third bankruptcy filing. It has set aside an $11 billion reserve to cover all talc liabilities.

"The company continues to pursue several paths to achieve a comprehensive and final resolution of the talc litigation," Erik Haas, J&J worldwide vice president of litigation, said in a statement on Tuesday.

"We will continue to address the claims of those who do not want to participate in our contemplated consensual bankruptcy resolution through litigation or settlement," he added.

(Reporting by Jonathan Stempel in New York; editing by Jonathan Oatis and Bill Berkrot)

J&J Must Pay $18.8 Million to California Cancer Patient in Baby Powder Suit

By Reuters
July 18, 2023

A bottle of Johnson and Johnson Baby Powder is seen in a photo illustration taken in New York

Mike Segar/Illustration

By Brendan Pierson

(Reuters) -Johnson & Johnson's must pay $18.8 million to a California man who said he developed cancer from exposure to its baby powder, a jury decided on Tuesday, a setback for the company as it seeks to settle thousands of similar cases over its talc-based products in U.S. bankruptcy court.

The jury ruled in favor of Emory Hernandez Valadez, who filed suit last year in California state court in Oakland against J&J, seeking monetary damages. Hernandez, 24, has said he developed mesothelioma, a deadly cancer, in the tissue around his heart as a result of heavy exposure to the company's talc since childhood. The six-week trial was the first over talc that New Brunswick, New Jersey-based J&J has faced in almost two years.

The jury found that Hernandez was entitled to damages to compensate him for his medical bills and pain and suffering, but declined to award punitive damages against the company. Hernandez will not be able to collect the judgment in the foreseeable future, thanks to a bankruptcy court order freezing most litigation over J&J's talc.

J&J vice president of litigation Erik Haas said in a statement that the company would appeal the verdict, calling it "irreconcilable with the decades of independent scientific evaluations confirming Johnson's Baby Powder is safe, does not contain asbestos and does not cause cancer."

A lawyer for Hernandez could not immediately be reached for comment.

Reuters watched the trial through Courtroom View Network.

In closing arguments to the jury on July 10, J&J's lawyers said there was no evidence either linking Hernandez's kind of mesolthelioma to asbestos or proving that Hernandez was ever exposed to tainted talc. Hernandez's lawyers during closing arguments accused J&J of a "despicable" decades-long coverup of asbestos contamination.

Hernandez testified in June, telling jurors that he would have avoided J&J's talc if he had been warned that it contained asbestos, as his lawsuit alleges. Jurors heard from Hernandez's mother, Anna Camacho, who said she used large amounts of J&J's baby powder on her son when he was a baby and through childhood. She cried as she described Hernandez's illness.

Tens of thousands of plaintiffs have sued, alleging that J&J's baby powder and other talc products sometimes contained asbestos and caused ovarian cancer and mesothelioma. J&J has said its talc products are safe and do not contain asbestos, which has been linked to mesothelioma.

J&J subsidiary LTL Management in April filed for bankruptcy in Trenton, New Jersey, proposing to pay $8.9 billion to settle more than 38,000 lawsuits and prevent new cases from coming forward. It was the company's second attempt to resolve talc claims in bankruptcy, after a federal appeals court rejected an earlier bid.

Most litigation has been halted during bankruptcy proceedings, but U.S. Chief Bankruptcy Judge Michael Kaplan, who is overseeing LTL's Chapter 11, let Hernandez's trial proceed because he is expected to live only a short time.

Hernandez's form of mesothelioma is extremely rare, making his case different from the vast majority pending against J&J.

Asbestos plaintiffs are seeking to have LTL's latest bankruptcy filing dismissed. They have argued the filing was brought in bad faith to insulate the company from litigation.

J&J and LTL have argued that bankruptcy delivers settlement payouts to plaintiffs more fairly, efficiently and equitably than trial courts, which they have likened to a "lottery" in which some litigants get large awards and others nothing.

J&J said in bankruptcy court filings that the costs of its talc-related verdicts, settlements and legal fees have reached about $4.5 billion.

(Reporting By Brendan Pierson in New York; Editing by Will Dunham and Sandra Maler)

Johnson & Johnson risks UK lawsuit over talc cancer claim


By AFP
November 20, 2024

Johnson & Johnson removed its talcum-based powder products from North American markets in 2020

 - Copyright GETTY IMAGES NORTH AMERICA/AFP JUSTIN SULLIVAN

UK claimants announced Wednesday legal action against US pharmaceutical and cosmetics giant Johnson & Johnson, alleging that women diagnosed with cancers were exposed to asbestos in the company’s talcum powder.

J&J risks UK court action for the first time over the allegations, having faced a series of similar lawsuits in North America.

KP Law, the firm representing about 2,000 claimants, said “women who have been diagnosed with life-changing and life-limiting cancers were exposed to asbestos contained within the company’s talcum powder”.

In response Erik Haas, J&J’s worldwide vice president of litigation, said “Johnson & Johnson takes the issue of talc safety incredibly seriously and always has”.

Haas added that J&J’s own analysis found an absence of asbestos contamination in its products and said “independent science makes clear that talc is not associated with the risk of ovarian cancer nor mesothelioma”.

J&J has until the end of the year to respond to a letter sent on behalf of KP Law’s clients, following which documents will be filed in the UK’s High Court.

The law firm is representing predominantly women regarding the case, and says it has been contacted by thousands more, adding that some have died of their cancers.

Lawyers claim that the US-based corporation knew “as early as the 1970s that asbestos in its talc products was dangerous but failed to warn consumers and carried on producing and selling the products in the UK until as recently as 2022”.

J&J said that Kenvue, its former consumer-health division that it separated out in 2023, is responsible for “any alleged talc liability that arises outside the US or Canada”.

“Decades of testing by experts… demonstrates that the product is safe, does not contain asbestos, and does not cause cancer,” Kenvue said in a statement.



– Settled claims –



However, in September, J&J increased its offer to settle talc claims relating to ovarian cancer in the United States to around $8 billion to be paid over 25 years.

Earlier this year, the company agreed to pay $700 million to settle allegations it misled customers about the safety of its talcum-based powder products in North America.

The company did not admit wrongdoing in its settlement but withdrew the product from the North American market in 2020.

The World Health Organization’s cancer agency in July classified talc as “probably carcinogenic” for humans.

A summary of studies published in 2020 covering 250,000 women in the United States did not find a statistical link between the use of talc on the genitals and the risk of ovarian cancer.

Judge certifies Johnson & Johnson shareholder class action over talc disclosures


Fri, December 29, 2023 

Bottles of Johnson & Johnson baby powder line a drugstore shelf in New York

 REUTERS/Lucas Jackson/


By Jonathan Stempel

NEW YORK (Reuters) -A federal judge said Johnson & Johnson shareholders may pursue as a class action their lawsuit accusing the company of fraudulently concealing how its talc products were contaminated by cancer-causing asbestos.

U.S. District Judge Zahid Quraishi in Trenton, New Jersey, on Friday allowed shareholders from Feb. 22, 2013, to Dec. 13, 2018, to pursue their securities fraud claims as a group.

He rejected J&J's argument that any class period be at least a year shorter because some events that allegedly caused its stock price to fall contained no "new" information.

J&J's talc products have included its signature baby powder. The company stopped selling talc-based baby powder globally this year, switching to corn starch as the main ingredient. It has said its talc products are safe and do not contain asbestos.

"Johnson & Johnson always strives to provide truthful and fulsome disclosures," Erik Haas, J&J's worldwide vice president of litigation, said in a statement. "We will continue to vigorously litigate cases that challenge the safety of our product or the accuracy of our public statements."

Lawyers for shareholders including the lead plaintiff San Diego County Employees Retirement Association did not immediately respond to requests for comment.

Class actions make it easier for shareholders to recover more money, at lower cost, than if they sued individually. A longer class period could increase the amount recovered.

Shareholders said J&J's stock price fell six times in late 2017 and 2018 following events that confirmed how the New Brunswick, New Jersey-based company and various executives hid the truth about asbestos in its talc products.

These events included a jury awarding $4.69 billion in July 2018 to 22 women who said asbestos caused them to develop ovarian cancer, and a Reuters report five months later that said J&J knew about the asbestos risks for decades.

J&J said the six events could not have hurt its stock price because none contained new information that "corrected" its earlier disclosures.

It said the only new information from the verdict was that jurors accepted the women's arguments, and that all 56 internal documents mentioned in the Reuters report were already public.

Quraishi was unpersuaded. Addressing the Reuters report, he said its "careful analysis" and providing of "necessary context" made it more than a rehash of "stale information."

The share price fell 10% the day the report was released.

J&J also faces mass tort litigation encompassing more than 50,000 lawsuits over its talc products.

Courts have rejected two efforts by the company to use the bankruptcy process to limit its exposure to talc litigation.

The case is Hall v Johnson & Johnson et al, U.S. District Court, District of New Jersey, No. 18-01833.

(Reporting by Jonathan Stempel in New York; Editing by Aurora Ellis and Daniel Wallis)

The 'Texas two-step' is back as J&J tries to shed talc lawsuits for a third time


Alexis Keenan · Senior Legal Reporter
Sun, October 20, 2024 at 9:00 AM MDT 6 min read

Johnson & Johnson (JNJ) is taking a controversial legal argument to court for a third time in hopes of containing a barrage of lawsuits alleging its baby powder caused cancer.

Judges have denied J&J’s previous attempts to resolve such claims using a maneuver known as the "Texas two-step," where a company tries to use the bankruptcy of an affiliate or subsidiary to settle mass liabilities.

J&J's third attempt at bankruptcy protection involves a subsidiary called Red River Talc that would cap settlement damages at $8 billion. The company maintains that none of the talc-related claims against it have merit.

J&J’s CFO Joseph Wolk told Yahoo Finance this time the bankruptcy court result should be different, in part because a large majority of talc claimants signed on to the company's settlement offer.

“The difference this time … I'd say, is 83% of the claimants actually support the current offer that's on the table,” Wolk said. “So we think that's something that was not present in the prior filings.”

The current proposal seeks to resolve all current and future claims related to ovarian cancer alleged to be caused by the company's cosmetic talc.

But a plaintiffs' lawyer who represents 11,434 of approximately J&J's roughly 100,000 talc claimants said the company's figure is inflated, and its latest bankruptcy petition is "fraught with problems."

The lawyer, Andy Birchfield of Beasley Allen, said J&J "stuffed the ballot box" in a tally held to determine the percentage of plaintiffs on board with J&J's latest settlement proposal.

A container of Johnson & Johnson baby powder is displayed in 2023 in San Anselmo, Calif. (Justin Sullivan/Getty Images) · Justin Sullivan via Getty Images

Birchfield said in addition to counting no votes as votes in support of the deal, J&J counted votes from claimants who should not have been included because they have not been diagnosed with disease and therefore have only non-compensable claims.

The lawyer said 69 of his clients voted in favor, and his firm has asked the court for a re-tabulation.

"We're confident that J&J’s 83% number that it floated … that that's wrong," Birchfield said. "Once those [inaccurate votes] are sifted out, I don't know where it will be, but it'll be significantly less than 70%."


The claims being made by both sides set up a new legal battle that will now unfold inside a Houston bankruptcy court.

J&J's worldwide vice president of litigation Erik Haas told Yahoo Finance that Beasley Allen "misstates the record in a failed attempt to explain away the blatantly false certification submitted by its partner Andy Birchfield."


Haas said Birchfield falsely certified under oath that he contacted and secured informed consent to oppose the plan from claimants who affirmatively voted in favor of the deal that was certified by an independent claims administrator.

"We look forward to the full discovery of this malfeasance before the Bankruptcy Court in Houston,” Hass said.

Earning the support of at least 75% of claimants may be an important threshold for J&J.

Bankruptcy courts have permitted companies to move forward with resolving large numbers of injury claims through bankruptcy when at least 75% of the outstanding creditors, including claimants, agree to the deal.
How it works

The "Texas two-step" strategy takes advantage of state laws that allow for the transfer of liabilities through a so-called divisive merger, which is a way to separate a company's operations into discreet business entities.

Texas was the first state to allow this, in 2006, which helps explain why the strategy came to be known as the "Texas two-step."

The first step is the division. The second is that the liability-retaining entity gets limited funding from its solvent parent, files for bankruptcy, and then manages mass tort litigation with the limited funds.


The benefits are that further litigation is paused, capping costs, and the assets of the solvent company are walled off from the reach of plaintiffs. The hope is that the solvent parent can also absolve itself of secondary liability for the claims.

But critics of the strategy see it as a subversion of the US Bankruptcy Code. Courts have become increasingly skeptical of attempts by companies to use bankruptcy court law to protect assets from plaintiffs.

Aden McCracken Tyrone of Pennsylvania holds a sign in honor of his parents outside of the Supreme Court in December as the Supreme Court heard arguments regarding a nationwide settlement with Purdue Pharma, the manufacturer of OxyContin. (Michael A. McCoy/For The Washington Post via Getty Images) · The Washington Post via Getty Images

In June, the US Supreme Court took a step that will make it more difficult for companies to do so in the future.

In a 5-4 decision, the court held that billionaire members of the Sackler family, longtime owners of the now-bankrupt opioid maker Purdue Pharma, could not shield their personal assets from opioid claims using the corporation's bankruptcy proceedings.

The Sacklers, the court said, engaged in a "milking program" by withdrawing from Purdue approximately $11 billion — roughly 75% of the firm’s total assets.


The court said that no provision within the US Bankruptcy Code permits the type of agreement that the Sacklers and the company tried to reach by limiting plaintiff recoveries to a $6 billion settlement fund.

Other attempts by companies like 3M, Avon, and Georgia Pacific to use the two-step strategy have had varying outcomes. Those inconsistent court decisions are leading some legal experts to predict that the US Supreme Court may review the tactic's legality.
'No financial distress'

In J&J's latest attempt at the two-step, it is asking for the latest vote from claimants to support a “channeling injunction.”

That would cap its liability for all existing and future talc claims at the $8 billion it agreed to place in a settlement trust. J&J agreed to fund the proposed settlement trust over 25 years.

Birchfield expects J&J's latest bankruptcy attempt could run into roadblocks no matter how many claimants vote in favor of a broad settlement because the two-step would strip especially future claimants from their constitutional rights to demand that J&J face jury trials.

"Our view is J&J isn’t entitled to bankruptcy relief because there is no financial distress,” he said. “They’re a $400 billion company."


“If they would pay reasonable compensation and do it on reasonable terms, they could put this behind them,” Birchfield added.

J&J's Wolk said its proposed bankruptcy would provide more recourse to claimants and more quickly resolve cases that would take years to be adjudicated.

Juries have handed down multimillion-dollar awards related to talc litigation risks.

On Tuesday, a Connecticut jury returned a $15 million verdict in favor of a man who said the company's talc-based powder caused him to develop mesothelioma, a cancer that impacts lung and other tissue.

The jury also held that J&J should pay punitive damages to punish it for including talc in its products.

Yahoo Finance Senior healthcare reporter Anjalee Khemlani contributed to this report.

Alexis Keenan is a legal reporter for Yahoo Finance. Follow Alexis on X @alexiskweed.