J&J's Subsidiary Asks To Pause Talc Suits

J&J's Subsidiary Asks To Pause Talc Suits

Introduction

Johnson & Johnson's (J&J) subsidiary LTL Management LLC has asked to pause thousands of talc lawsuits against its parent company, considering Chapter 11 granted to it.

LTL Management stated in the motion that Chapter 11 gets automatically applied to Johnson & Johnson Consumer Inc. as both the entities face similar claims and are interlinked.

J&J filed chapter 11 by executing corporate plans to form LTL and assign all the talc liabilities to it. However, the thousands of plaintiffs across the country opposed the move to extend the bankruptcy plan to LTL's parent company, J&J.

The attorneys for the plaintiffs claim that extending the bankruptcy plan to J&J will result in prejudice towards the thousands of plaintiffs affected due to the company. It will prevent the plaintiffs from getting their share of the settlement and J&J will be free of liabilities, even though the company has billions in assets on hand.

Earlier, J&J promised to pay $2 billion that will settle  38,000 ovarian cancer and 430 mesothelioma claims due to talc exposure.

J&J and its subsidiary had been spending up to $20 million per month defending itself against the multiple lawsuits. Currently, tens of thousands of suits against J&J seek $30 billion in damages from the company.

Johnson & Johnson (J&J) has been cleared of liability in a lawsuit where a woman accused the company of failing to warn about the health risks associated with its talcum baby powder product.

The lawsuit made similar claims brought by women throughout the United States who accused the usage of J&J's talcum powder developed to cause ovarian cancer and other injuries to them.

The current verdict of Philadelphia results from last month's verdict in Illinois, where the cancer-diagnosed woman was awarded $26.5 million. The verdict was eventually overturned.

J&J is firm on defending its talcum products by stating that the evidence and studies reveal it is safe to use. However, in October 2019, 33,000 bottles of baby powder were recalled from the U.S. market after being tested positive for asbestos presence in it that causes cancer.

J&J faced numerous verdicts in talcum powder cancer trials in 2018 and 2019 that included a landmark trial, where 22 Missouri women diagnosed with ovarian cancer were awarded $3.9 billion in damages. The company faced punitive damages as well for withholding information about the presence of asbestos in Johnson’s Baby Powder and Shower-to-Shower Powder.

U.S. District Judge Freda L. Wolfson is overseeing all the talcum lawsuits centralized in the District Court of New Jersey. The judge has even established a "bellwether" program where a group of lawsuits will be considered for early trial dates in April 2022. It will help to prevent repetitive responses of certain evidence and testimony throughout the litigation.

Earlier, New Jersey state judge refused to block Johnson & Johnson's (J&J) so-called Texas Two-Step move that will prevent settlements for the plaintiffs diagnosed with cancer due to J&J's talcum powder products.

The plaintiffs allege that the company intends to conduct a fraudulent transaction. The judge overseeing the lawsuit said that the court cannot proceed before evaluating the fraudulent transaction claims made by the plaintiffs.

As per court documents, J&J would use the Lone Star State's "divisive merger" statute that will split the talc liabilities into a separate entity, helping the company to file for bankruptcy and keeping the productive assets in a different entity.

The plaintiffs even accused that the company would pay comparatively less amount if allowed with bankruptcy option. The brief even claimed that the thousands of women who used talc products would continue to suffer and die without getting justice because of the move.

The court's ruling stated that the narrative provided by the plaintiff's lawyers is baseless without any legal support, and it is a move to compel J&J to settle the plaintiffs' claims. J&J continues to defend its products by stating them as safe for use.