Johnson & Johnson Again Looks To Settle Talcum Powder Cancer Claims In Bankruptcy Court
Bankruptcy court could expedite thousands of claims and compensate many for the expenses related to their illness
Tuesday, October 17, 2023 - Bloomberg is reporting that Johnson & Johnson (J&J) is considering a third attempt to use bankruptcy to resolve the lawsuits claiming that their talc-based baby powder caused ovarian cancer and mesothelioma, a type of cancer of the delicate lining of the lungs. The most recent legal maneuver follows two earlier unsuccessful efforts to establish a trust for claimants through bankruptcy. J & J's first attempt at bankruptcy was allowed by New Jersey Bankruptcy court judge Michael Kaplan who stated that he thought that a settlement was the quickest and most equitable way to compensate more than 50,000 talcum powder cancer claimants. He cited the fact that J & J successfully defended themselves in about half of the talcum powder cancer trials over the past half-decade and also that it would take many years to try all the cases. The cases have been consolidated into multidistrict litigation with the upshot being that it is likely that each case could involve multiple plaintiffs. In the past Johnson & Johnson has settled one case representing 1000 plaintiffs for $100 million. The talcum powder cancer lawsuits involve thousands of plaintiffs and could lead to significant financial losses for J&J if they proceed to trial since punitive damage awards have been so large as to draw the comparison to winning the lottery. In July, a judge in New Jersey rejected J&J's second bankruptcy attempt, arguing that the company didn't meet the financial distress criteria set by a federal appeals court. J&J has vowed to appeal this ruling to the US Supreme Court despite the conflict of interest with Supreme Justice Kavanaugh's father Edward serving as the head of the Cosmetics Safety Council for over a decade.
According to Bloomberg, J&J's lawyer overseeing the litigation, Erik Haas, revealed that they are working with law firms representing a majority of talc cancer victims to seek a monetary solution through bankruptcy. They also intend to continue defending themselves in cases that proceed to trial. Chapter 11 bankruptcy provisions allow corporations to create trusts that determine claimants' compensation, bypassing jury decisions on damages. As of now, J&J is confronting at least 51,000 lawsuits relating to talc and cancer, which have been consolidated before a federal judge in New Jersey for preliminary proceedings and will undoubtedly face thousands more talcum powder cancer claims in the future. Despite these past bankruptcy attempts, J&J is financially stable, however, in 2020, the company withdrew its talc-based powders from the US and Canada, citing a lack of demand caused by misinformation regarding the safety of Johnson's Baby Powder. Since then they have discontinued selling all baby powders containing talcum powder worldwide. To gauge potential support for a settlement, a poll of talc plaintiffs is planned in the coming months. Even if a third bankruptcy attempt succeeds, J&J would still need to secure the approval of at least 75% of claimants to establish a trust for resolving the cases. Legal representatives advocating for the victims opposing the proposed settlement have expressed confidence in their ability to thwart J&J's bankruptcy plan.