Johnson & Johnson Will Be Held Responsible In Court For Allegedly Causing Ovarian Cancer And Mesothelioma

A panel has upheld the appeal of the use of a controversial bankruptcy scheme designed to shelter the parent company assets

Monday, January 30, 2023 - In October of 2021, Johnson & Johnson created a subsidiary called LTL Management as a place-holder to contain liabilities for the more than 38,000 baby powder lawsuits. The company placed around 38,000 talcum powder cancer liabilities, including $2 billion in cash in it. They then immediately petitioned the New Jersey Bankruptcy Court for bankruptcy protection, which was granted by Judge Michael Kaplan on the logic the bankruptcy court offered talcum powder cancer and mesothelioma plaintiffs the best chance of receiving a fair and timely settlement. Opponents of the company's bankruptcy strategy included baby powder cancer plaintiffs and their attorneys, legal scholars and experts, and many Democratic lawmakers who filed to appeal the bankruptcy court decision claiming that if allowed the legal maneuver would set precedent for other companies to avoid legal responsibility for their bad acts. Reuters reported on Monday that the U.S. 3rd Circuit Court of Appeals in Philadelphia reversed a New Jersey bankruptcy court decision protecting Jonson & Johnson from talcum powder cancer lawsuits. "A U.S. appeals court upended Johnsons & Johnson's (JNJ.N) attempt to offload into bankruptcy tens of thousands of lawsuits over its talc products, ruling the healthcare conglomerate improperly placed a subsidiary into Chapter 11 proceedings even though it did not face financial distress. A three-judge panel on the appeals court rejected J&J's argument, finding the company's subsidiary, LTL Management, was created solely to access the bankruptcy system and not because it faced financial distress." "Good intentions - such as to protect the J&J brand or comprehensively resolve litigation - do not suffice alone," the judges said in a 56-page opinion," Reuters reported.

The bankruptcy maneuver is called the Texas Two-Step designed to protect an asset-rich parent company like Johnson & Johnson from mass tort liabilities surrounding one of their lines of business, and allowing the parent company to function separately. Johnson & Johnson attempted to implement the strategy immediately after the US Supreme Court refused to hear their appeal of a $2 billion jury award to 22 talcum powder ovarian cancer plaintiffs. Additionally, Johnson & Johnson discontinued selling Johnson's Baby Powder made from talc worldwide, instead switching the iconic brand's main ingredient to cornstarch. That move follows the US Food and Drug Administration (FDA) testing Johnson's Baby Powder and finding it contained asbestos, a deadly carcinogen known to cause lung cancer when inhaled. More than 38,000 lawsuits had been put on hold during the spinoff and bankruptcy filing pending today's decision Women who used Johnson's Baby Powder contend that it cause them to develop ovarian cancer, a life-threatening disease. At least seven of the 22 women who were awarded the watershed $2 billion by a Missouri jury have died. Early diagnosis of ovarian cancer is difficult as its symptoms are masked by a woman's normal monthly menstruation discomfort, and because there is no specific test for the disease.

Information provided by TalcumPowderCancerLawsuit.com, a website devoted to providing news about talcum powder ovarian cancer lawsuits, as well as medical research and findings.