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January 24th, 2023A court recently struck down Johnson & Johnson’s attempt to avoid thousands of talcum powder lawsuits by filing for bankruptcy. This decision is good news for individuals who allege J&J’s talc-based products gave them cancer. J&J hoped to resolve talcum powder lawsuits in bankruptcy court, but a panel rejected the company’s tactic. The court’s ruling marks a crucial step in allowing talcum powder claims to resume.
If you were diagnosed with cancer after regularly using Johnson & Johnson’s baby powder or other talc-based products, The Lake Law Firm can help you. Our skilled talcum powder lawyers can support you in seeking the justice you deserve.
Lawsuits accuse J&J of failing to warn consumers about the presence of asbestos in its talcum powder products. Asbestos is a cancer-causing mineral that may contaminate talc during the mining process. Talcum powder lawyers argue J&J was aware that some of its talc-based products could have been tainted with asbestos but neglected to inform consumers. Individuals claim to have developed ovarian cancer and mesothelioma after using J&J talcum powder products. By October 2021, Johnson & Johnson faced over 38,000 talcum powder claims.
Talcum powder litigation rapidly grew in a short amount of time. After several trials, Johnson & Johnson had paid over $3.5 billion in talcum powder settlements and verdicts. With no signs of lawsuits slowing down, J&J resorted to a controversial bankruptcy tactic called the Texas two-step. In 2021, the company created a subsidiary LTL Management and saddled it with all talcum powder liabilities. Immediately afterward, LTL filed for bankruptcy, pausing all talcum powder lawsuits.
J&J stated this bankruptcy plan would efficiently resolve talc lawsuits. Yet, talcum powder lawyers and plaintiffs criticized J&J for trying to shield itself from fairly compensating victims.
On January 30, 2023, an appeals court finally rejected J&J’s bankruptcy strategy. The court ruled that J&J did not enter bankruptcy for financial distress. Instead, J&J only pursued the bankruptcy process to protect its brand and cap the amount it would have to pay toward talcum powder victims. Johnson & Johnson is valued at more than $400 billion. But, it initially offered only $2 billion for LTL to resolve talc claims.
The court noted that LTL Management did not need to enter bankruptcy as it had access to plenty of money through J&J. LTL Management is reportedly worth $61.5 billion, with many profitable products and brands. Therefore, the court determined that there was no valid purpose for the bankruptcy proceedings.
Johnson & Johnson continues to stand behind the safety of its talc-based products. The company said it filed for bankruptcy in “good faith” and will challenge the ruling. J&J may try to take the bankruptcy case to the Supreme Court, but the court may refuse to hear the case. If J&J fails to salvage its bankruptcy plan, hundreds of new talcum powder lawsuits will likely be filed and receive a schedule for upcoming trials.
In the meantime, this is a positive development for victims represented by talcum powder lawyers. Individuals with talcum powder lawsuits have waited over a year while J&J attempted to force bankruptcy proceedings. If you used Johnson & Johnson talc-based products and later developed cancer, The Lake Law Firm can help you. Speak with one of our talcum powder lawyers to begin your claim today.
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