Talcum Powder Litigation Update
Amidst a landscape of accusations of large-scale corporate wrongdoing, Johnson & Johnson, a globally recognized multinational billion dollar corporation, finds itself embroiled in a highly contentious legal dispute involving its talcum powder-based products. Scientific findings have revealed the presence of asbestos, a well-known carcinogen, in Johnson & Johnson’s Baby Powder and Shower to Shower products, raising grave concerns regarding public health. As a result, a significant number of individuals have filed lawsuits, asserting that the company neglected its responsibility to adequately warn consumers about the hazards associated with their talcum powder based products. Many of these victims, along with numerous others, have developed serious illnesses such as ovarian cancer, fallopian tube cancer, or mesothelioma. In this complex litigation, the implications of Johnson & Johnson’s actions, along with the subsequent bankruptcy filing of related entities, carry significant weight in the pursuit of justice for those impacted.
Recognizing the need for efficient handling of the multitude of cases, the U.S. Judicial Panel on Multidistrict Litigation (JPML) issued an order on October 4, 2016, to consolidate the talc-related lawsuits into a Multidistrict Litigation (MDL). This consolidation took place in the United States District Court for the District of New Jersey under case number 3:16-md-02738-FLW-LHG, aiming to streamline pretrial proceedings and enhance efficiency in managing the extensive litigation.
Five years later, In November 2021, Johnson & Johnson employed an obscure legal maneuver which allowed the company to restructure and declare bankruptcy as a means of shielding itself from the liability stemming from the tens of thousands of filed lawsuits. Through a Two-Step transaction known as the Texas Two Step, Johnson & Johnson conducted a divisional merger under Texas law, resulting in the creation of a separate entity called LTL Management. LTL assumed Johnson & Johnson’s tort liabilities but possessed limited assets. Shortly after its establishment, LTL filed for Chapter 11 bankruptcy relief in the Western District of North Carolina, seeking favorable legal protection in that jurisdiction.
In early 2022, the committee of talc claimants made efforts to dismiss the bankruptcy filing, arguing that it lacked good faith. However, the motions to dismiss were denied by Bankruptcy Judge Kaplan. Subsequently, the U.S. Court of Appeals for the Third Circuit reviewed the case and reversed the decision.
More than two years after the initial filing, the Third Circuit rendered a precedential opinion that effectively brought an end to Johnson & Johnson’s attempts to exploit bankruptcy law protections to delay the resolution of talc claims. The Third Circuit determined that LTL was not in financial distress and could not establish a valid bankruptcy purpose that supported good faith in filing for Chapter 11. Mere hours after the dismissal of LTL’s bankruptcy filing, LTL initiated a second bankruptcy filing under a new funding agreement, marking one of the largest fraudulent transfers in history. Shortly thereafter, Johnson & Johnson proposed an $8.9 billion payment over a 25-year period to settle all past, present, and future talc claims. However, this proposal has not received the support that the media would suggest. In fact, we, along with thousands of other talc claimants, do not believe this amount to be sufficient to address the extensive claims made by victims.
As of the present, the litigation remains in a state of pause, pending Judge Kaplan’s decision on the second bankruptcy filing. It is uncertain whether the litigation will remain within the purview of the Bankruptcy Court or revert to the civil court system. Should the litigation remain in the bankruptcy court, it is hoped that an estimation of claims will be conducted to accurately assess the value of and resolve all existing and future claims.
If you or someone you know has received a diagnosis of ovarian cancer, fallopian tube cancer, or mesothelioma after using a Johnson & Johnson talc-based product, it is crucial to seek legal representation. Our talcum powder attorneys have a successful track record in handling complex product liability cases and advocating for our clients’ rights. Contact us today for a consultation, and allow us to assist you in seeking justice and holding Johnson & Johnson accountable for the suffering you have endured.