Talcum Powder Lawsuits Update: Johnson & Johnson Attempts to Use Bankruptcy to Avoid Liability
In response to thousands of talcum powder lawsuits claiming that their popular talc-based baby powder may lead to certain cancers, Johnson & Johnson appears to be attempting to use a bankruptcy filing to avoid liability or paying value in these claims. Johnson & Johnson’s recent legal move suggests that time may be limited and the clock is ticking to file a lawsuit. Don’t wait – Call 1-800-525-7111 for a free, no-obligation consultation concerning a potential baby powder lawsuit today.
Johnson & Johnson has moved all $2 billion that has been set aside for settlement payments into a new subsidiary called LTL Management. Once the funds were transferred, LTL Management immediately filed for bankruptcy.
This appears to be Johnson & Johnson’s latest move to avoid assuming direct liability for the more than 25,000 claims that have been filed against them and their popular talc-based baby powder. According to a statement addressing the LTL bankruptcy filing released on Tuesday, October 14, 2021,“All cosmetic talc cases will be stayed pending the outcome of the [bankruptcy] proceedings.”
“We strongly oppose Johnson & Johnson’s subsidiary bankruptcy filing. To be clear, however, these developments should not discourage potential victims from filing a talcum powder lawsuit. We are ready to help however we can.”
–Gene Riddle, attorney and managing partner, Riddle & Brantley
How Will the Bankruptcy Filing Impact Johnson & Johnson’s Liability in Talcum Powder Lawsuits?
The tactic being deployed by Johnson & Johnson in this instance is commonly known as the “Texas Two-Step” among legal professionals.
The “Texas Two-Step” in Bankruptcy Law
There are special rules in place that allow companies who file for Chapter 11 bankruptcy to set up a trust fund for current and future claims against the company. As a result, claims are temporarily halted while the company works with victims’ lawyers to establish the terms of the trust, which ultimately saves the company money since these negotiations can take years.
Many claimants are frustrated by the move by Johnson & Johnson, as it not only represents yet another tactic to prevent the parent company from being held directly responsible, but they also fear the move will put a “cap” on the total payout of claims.
Plaintiff firms, including Riddle & Brantley, believe that Johnson & Johnson is abusing the bankruptcy system in order to avoid or limit significant costs associated with current and/or potential talcum powder lawsuit settlements and verdicts. Lawyers involved in the litigation — including those at Riddle & Brantley — have vowed to fight on and seek justice for potential victims.
Recently, U.S. legislators, including Senator Elizabeth Warren (D-MA) and Rep. Jerrold Nadler (D-NY), have also announced their opposition to Johnson & Johnson’s legal strategy and a congressional investigation seems increasingly likely.
Baby Powder Lawsuits Against Johnson & Johnson: a Brief History
For many decades, Johnson & Johnson’s talc-based baby powder was the number-one preferred brand among families across the world. However, as early as 1997, consumers and studies began to claim that regular use of the product may be linked to an increased risk of ovarian and endometrial ovarian cancers.
These risks are largely related to talc products that have been contaminated by asbestos. Asbestos is designated as a human carcinogen, which means that ongoing exposure is known to be linked to the development of cancer. Since talc and asbestos are often mined from the same locations, improper mining of talc can lead to asbestos contamination.
According to internal documents that were released following the initial wave of lawsuits against the company, since as early as 1971, Johnson & Johnson knew about the risk for asbestos contamination in the talc used in its popular baby powder and other talc-based products.
These documents were unearthed during a 1997 baby powder lawsuit by Darlene Coker. The lawsuit was dropped in 1999 following repeated denials by Johnson & Johnson that its product was in any way connected to the development of cancer.
Thousands of Claims
However, the release of these documents prompted further lawsuits against the company, with more and more consumers claiming that regular use of Johnson & Johnson baby powder was linked to their later development of dangerous cancers, including ovarian and endometrial ovarian cancers.
As of late 2021, over 35,000 lawsuits are still pending against the company. Johnson & Johnson has reportedly set aside almost $4 billion for the purpose of settling these claims, with $2 billion now currently being held by LTL Management in their bankruptcy claim.
Johnson & Johnson Denies Liability, Negligence, and/or Wrongdoing
Since the first claim brought against them, Johnson & Johnson has repeatedly denied any link between its talc-based products and any cancer risk.
However, a report published by the New York Times in 2018 reported that an executive at Johnson & Johnson “recommended to senior staff in 1971 that the company ‘upgrade’ its quality control of talc.” This falls in direct contrast to claims by the company that it had no knowledge of asbestos contamination in its products.
In the following years, more company memos mention concerns that the talc powder being mined could contain asbestos. However, Johnson & Johnson largely disregarded these warnings and has also blocked efforts by the FDA and other agencies to publish research tying their products to an increased risk of cancer due to asbestos contamination.
The company continues to strongly deny any liability, negligence, or wrongdoing in talcum powder lawsuits, but its recent decision to place LTL Management in bankruptcy suggests its concern over the litigation and potentially significant future talcum powder settlements.
Asbestos Contamination Confirmed by the FDA
However, after the FDA released a report in 2019 that confirmed a lot of Johnson & Johnson baby powder had tested positive for asbestos, the company decided to pull 33,000 bottles of talc-based baby powder from retail shelves in the U.S. and Canada. This was followed shortly thereafter by a decision to discontinue sales of the product in North American entirely.
Following this decision, the company denied allegations that the move was related to any risks associated with the use of the product and instead said the decision was based on a decrease in consumer demand.
It is Not Too Late to File a Talcum Powder Cancer Lawsuit
Johnson & Johnson’s recent legal maneuvering is frustrating. However, we remain committed to seeking justice for potential victims of asbestos-contaminated talc-based products.
If you or a loved one regularly used a talc-based Johnson & Johnson product and later developed ovarian cancer, endometrial ovarian cancer, or mesothelioma, you may qualify for a talcum powder lawsuit.
Call us at 1-800-525-7111 today for a free, no-obligation consultation with an experienced talcum powder lawsuit attorney at Riddle & Brantley. Since 2000 alone, we’ve recovered more than $600 million for victims of others’ negligence, and we would love to help you if we can (see disclaimer below).
Don’t wait — Johnson & Johnson’s recent legal moves suggest that time may be limited and the clock is ticking to file a lawsuit. Call 1-800-525-7111 today and let’s talk. We don’t get paid unless you do, and Justice Counts.
*** Disclaimer: The results mentioned are intended to illustrate the type of cases handled by the firm. These results do not guarantee a similar outcome, and they should not be construed to constitute a promise or guarantee of a particular result in any particular case. Every case is different, and the outcome of any case depends upon a variety of factors unique to that case.