Mesothelioma Victims Oppose Johnson & Johnson Bankruptcy Proposal

Update (07/31/2023): Johnson & Johnson’s bankruptcy case was dismissed by a federal judge in New Jersey. This is another setback to Johnson & Johnson and positive news for the thousands of people affected by talc and asbestos exposure from using Johnson & Johnson Baby Powder or other talc-based products from the company.

Victims of mesothelioma cancer and other asbestos-caused diseases have spoken out against the proposed bankruptcy settlement from Johnson & Johnson, which is in the public eye for allegedly exposing consumers to asbestos for years.

Johnson & Johnson proposed an $8.9 billion settlement in hopes of completing a bankruptcy filing for its subsidiary company, which is shouldering all legal liabilities from Johnson & Johnson’s talc products, including Johnson & Johnson Baby Powder. This product is a main character in many legal claims, which allege the product’s talc mixture was often contaminated with asbestos.

Asbestos is the only cause of mesothelioma cancer and can cause other diseases, including ovarian cancer and lung cancer.

Lawyers representing many of the tens of thousands of cancer victims with pending claims have filed a court order. They are asking the court to reject the proposed settlement.

According to Reuters, the lawyers state Johnson & Johnson is attempting “the largest intentional fraudulent transfer in United States history.” Reuters reports that Johnson & Johnson’s subsidiary company filed for bankruptcy just a couple of hours after a court rejected the company’s first bankruptcy pitch.

The argument is that $8.9 billion is not enough, as it limits the legal liabilities for Johnson & Johnson and, more importantly, limits how much cancer victims can receive in deserved compensation to pay for medical bills, travel costs, funeral arrangements, lost wages, and more.

Johnson & Johnson created a subsidiary company (LTL Management), which absorbed all of Johnson & Johnson’s legal liabilities related to its talc Baby Powder product. The subsidiary immediately filed for bankruptcy, which is called the “Texas Two-Step” maneuver used by asbestos companies for decades to avoid multi-million-dollar lawsuits.

Johnson & Johnson is the latest company to use this tactic, but it might be the most well-known company and the most public incident involving this tactic.

According to Reuters, the $8.9 billion settlement includes $6.5 billion for ovarian cancer claims, $2 billion for mesothelioma lawsuits, and $400 million to resolve false marketing and consumer protection claims made by state attorneys general.

 

Background of Johnson & Johnson Baby Powder Lawsuits

This attempted settlement is due to claims of Johnson & Johnson Baby Powder causing cancer for consumers. The Baby Powder was made for decades with talc, which is a naturally occurring mineral. Talc is found in many of the same geographical locations where asbestos, another naturally occurring mineral, exists. Asbestos can cause cancer, and it is believed to contaminate talc.

When talc is ground into talcum powder, which was a main ingredient in Johnson & Johnson Baby Powder, it can include sharp fragments of asbestos. Asbestos debris in talc can enter users of the Baby Powder and irritate cell linings, which can cause cancer.

In May of 2020, Johnson & Johnson announced it would no longer manufacture or sell its talcum powder Baby Powder in the U.S. and Canada. The company found an alternative to talc. The company announced on August of 2022 it would end the sale of talc Baby Powder worldwide.

 

History of Johnson & Johnson’s Attempt to Settle Cancer Lawsuits

Johnson & Johnson proposed the $8.9 billion settlement after its first settlement proposition was rejected in January by the 3rd U.S. Circuit Court of Appeals in Philadelphia. While many lawyers are in favor of the new settlement, a lot of mesothelioma and asbestos law firms and victims are opposed to it.

They feel the settlement, which becomes similar to an asbestos trust fund, offers Johnson & Johnson a way out of paying much more money to victims who deserve fair compensation. When the settlement was reached, there were around 38,000 pending lawsuits needing to be resolved.

In April, Johnson & Johnson asked a judge to halt those lawsuits while the proposed settlement could be considered. The company asked for the same “stay” of legal proceedings during the first settlement attempt. According to Reuters, two groups of cancer plaintiffs and the U.S. Department of Justice’s bankruptcy watchdog group have opposed the request for lawsuits to be paused.