Johnson & Johnson Seeks Bankruptcy to Sidestep Talc Cancer Claims

Johnson & Johnson, the giant pharmaceutical company, is trying to sidestep over 38,000 cases from people who claim its talcum powder caused cancer. The company is seeking bankruptcy to circumvent numerous product liability claims.

In February, a judge ruled that Johnson & Johnson can use the bankruptcy route to resolve multibillion-dollar litigation over its Baby Powder product that the litigants claim caused ovarian cancer.

A report on Reuters noted the pharmaceutical company used a strategy known as the “Texas two-step,”

This permits companies to split assets from liabilities via a so-called divisive merger. Last October, J&J, which argues its talcum powder products are safe, put the claims into a newly created entity, LTL Management LLC, which filed for bankruptcy just days later. We are concerned about moves by big pharmaceutical companies to split into separate entities and declare bankruptcy to head off lawsuits. This appears to be misusing bankruptcy law.

Lawyers acting for thousands of plaintiffs argued the approach was an abuse of the Chapter 11 bankruptcy system.

U.S. Bankruptcy Judge Michael Kaplan rejected their argument saying J&J’s approach was “unquestionably” proper and bankruptcy offers a faster fairer alternative to decades of litigation in other courts.

The plaintiffs claim J&J’s talc-based products contain asbestos. They allege the talcum powder products they used caused ovarian cancer and mesothelioma, a form of cancer linked to asbestos exposure.J&J denies the plaintiff’s allegations, saying decades of scientific testing and regulatory approvals have shown its talc to be safe and asbestos-free.However, the scale of this lawsuit raises real concerns about the safety of a popular product used in millions of homes across the world for decades. A report in The Guardian in February noted J&J is facing an attempt to force a shareholder vote to halt global sales of talc-based baby powder. The company stopped selling the product in the USA and Canada in 2020. Sales plummeted after traces of asbestos were detected in a sample, the Guardian noted. However, J&J continues to sell the product in other parts of the world.

The shareholder vote was proposed by Tulipshare, a London-based investment platform that permits its customers to pool shares in order to meet the threshold to submit resolutions for shareholder votes. The Guardian reported that the proposal was submitted to the US Securities and Exchange Committee (SEC) to consider if it is eligible ahead of J&J’s annual meeting, expected in April.

Talc is mined in several countries. Its absorbent properties mean it is used to treat personal hygiene issues and nappy rash in babies. However, talc deposits may be contaminated with asbestos, a mineral that can cause cancer if fibers enter the body. 

J&J says the lawsuits have no scientific basis, claiming it has a rigorous testing regime in place to ensure talc is safe. It cites research by independent laboratories and global health authorities.

These claims have not stopped lawsuits and massive payouts to women who claim talc caused their ovarian cancers. Recently, a Missouri appeals court ruled in favor of 22 plaintiffs who suffered from ovarian cancer in a $2 billion judgment.

Sadly, this product is linked to numerous deaths, according to the plaintiffs. As Virginia defective products lawyers, we see many instances of giant pharmaceutical companies damaging the health of people who use their products. Pills, defective medical devices, and a range of products are linked to injuries, death, and misery.

If you or a family member have been harmed by a product, please contact a personal injury lawyer as soon as possible to join a mass tort action. Call Cooper Hurley Injury Lawyers at (757) 333-3333.