United States Bankruptcy Judge Christopher M. López of the Southern District of Texas has denied Johnson & Johnson’s $10 billion baby powder settlement proposal. This is the third time J&J’s bankruptcy strategy has failed in court.
If approved, J&J’s plan would have ended more than 60,000 ovarian cancer lawsuits. The company estimates each plaintiff with ovarian cancer linked to an asbestos-related disease would have received between $75,000 and $150,000 through the plan.
The deal would also have ended any similar lawsuits in the future but would not have affected any remaining mesothelioma lawsuits. J&J claims to have settled 95% of the mesothelioma lawsuits that have been filed.
Plaintiffs with mesothelioma have pursued their legal claims through the traditional court systems to seek compensation. With the failure of J&J’s settlement proposal, plaintiffs with ovarian cancer will also continue to pursue their cases in court.
Why Did Judge López Rule Against J&J?
According to Judge López’s ruling, the settlement was rejected for several reasons. These include unfair legal protections, voting issues and concerns about justice for all claimants. The ruling states: “this case distilled to fundamental bankruptcy principles.”
Claimant votes were determined to be unreliable because some law firms cast tens of thousands of votes without getting permission from their clients. Also, many claimants didn’t have enough time or information to vote properly. Some votes were switched at the last minute, violating the voting rules.
In his ruling, Judge López also noted the settlement plan attempted to shield J&J, retailers and others from future talc lawsuits — even from individuals who didn’t consent. In this context, this type of forced legal protection, known as nonconsensual third-party releases, isn’t permitted under bankruptcy law.
Court findings state regarding J&J’s subsidiary, Red River Talc LLC, “There is no real company or jobs to save here.” Jude López’s ruling notes, “In the end, based on the Court’s on-the-spot evaluation, the prepetition voting and solicitation issues, the denial of plan confirmation, and the unique nature of this divisional merger case, there is cause to dismiss this case. There is not any one individual factor that requires this result. It is all of them together that require the Court to dismiss this case.”
The ruling also indicates a consideration was the amount allocated to current claimants. which might not leave enough for all future claimants. Instead of appealing, J&J says it plans to fight the lawsuits individually in court.
What Does J&J Plan to Do Now?
J&J says it plans to fight the outstanding ovarian cancer talc lawsuits in court. In a corporate press release, the company announced, “Rather than pursue a protracted appeal, the Company will return to the tort system to litigate and defeat” the remaining cases.
Erik Haas, worldwide vice president of litigation for J&J, was quoted in the press release as well. He declared, “We prevailed in 16 of 17 ovarian cases tried in the last 11 years and will devote our efforts to defeating these fake claims.”
Haas further claimed, “The Company reiterates that none of the talc-related claims against it have merit and attempts to resolve this litigation were aimed at moving past this issue. The decision to litigate every filed case is based on the simple fact that this is a fake claim created by greedy plaintiff lawyers looking for another deep pocket to sue and fueled by litigation-financed attorney advertising.”
According to new research released in the Journal of Clinical Oncology, applying talcum powder to the genitals can cause ovarian cancer. The study also…
On behalf of the company, Haas argues people’s claims that asbestos-contaminated talc in J&J’s products caused their cancer are “false, based on bad science.” The company continues to maintain its products are asbestos-free and safe.
J&J has spent approximately $1 billion on legal defenses of talc claims. Court documents reveal J&J knew its talc contained asbestos as early as the 1950s. Lab tests show asbestos in J&J talc from 1971 to the early 2000s, but the company never reported those findings to the U.S. Food and Drug Administration.
In 2020, J&J stopped making talc-based baby powder and switched to cornstarch-based ingredients after public concerns over safety increased. Talc forms near asbestos deposits, making it challenging to keep these minerals apart.
Asbestos is a naturally occurring mineral that is resistant to corrosion and heat. It’s the primary cause of mesothelioma and other asbestos-related diseases.
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