Weekly Mass Torts Bulletin 2024-November-11

First Valsartan Bellwether Trial to Focus on Cancer Lawsuits

The U.S. District Judge overseeing all federal Valsartan lawsuits has delayed the initial bellwether trial that was scheduled to commence this month, announcing the postponement following a recent status conference.

This conference reviewed potential cases for the first jury trial, which now is expected to center on a plaintiff who developed cancer after exposure to Valsartan, a blood pressure medication subject to extensive recalls and litigation.

_{Understanding the Valsartan Recall and Its Impact}

Valsartan, the generic version of Diovan, was pulled from the market in late 2018 after contaminations of N-nitrosodimethylamine (NDMA), N-nitrosodiethylamine (NDEA), and other carcinogenic impurities were detected in some generic versions due to manufacturing changes. As a result, thousands of lawsuits have emerged in U.S. courts, ranging from class actions by third-party payers to personal injury claims from patients who allege they were diagnosed with cancers of the stomach, liver, esophagus, prostate, pancreas, and other organs due to contaminated Valsartan.

MDL Consolidation for Valsartan Cases: A Shift in Litigation Strategy

Since 2019, all federal Valsartan lawsuits have been consolidated under multidistrict litigation (MDL) in the U.S. District Court for the District of New Jersey to streamline discovery and pretrial activities. Initially, the litigation was overseen by a different judge who had planned for a third-party payor claim to be the first bellwether trial. However, following that judge's retirement, the MDL was reassigned, and the first bellwether trial was rescheduled for October 28. Yet, on October 10, the new presiding judge issued an order delaying that third-party claim and signaled a shift in focus, moving forward with selecting a Valsartan cancer lawsuit for the initial trial.

Reassignment and Rescheduling of the First Bellwether Trial

To refine this new direction, a Special Master Scheduling Order was issued last week, setting an October 22 case management conference to determine which specific personal injury case will be the first bellwether trial. The conference will address the criteria for selecting bellwether cases, trial order, the number of bellwether trials, and the remaining pretrial preparations, including any outstanding discovery.

Proposed Agendas

Both plaintiffs and defendants have submitted proposed agendas for the upcoming conference. Plaintiffs argue that the first trials should focus on Valsartan cancer cases involving liver and colorectal cancers, as these are the most frequently cited injuries in current lawsuits. They emphasize the lengthy five-year duration of the MDL and the health urgency for many plaintiffs, some of whom are terminally ill or deceased. Their filing further advocates for multi-plaintiff trials to allow juries to evaluate multiple cases in one proceeding, which could accelerate the litigation process for affected patients and their families.

Differing Approaches: Plaintiff vs. Defendant Agendas

Conversely, the defendants call for individual trials and propose selecting six bellwether cases from an existing pool of 28 lawsuits that were designated for discovery several years ago. They oppose multi-plaintiff trials, expressing concerns about trial complexity and the need for case-specific focus in this high-stakes litigation.

 Although these initial trials will not set binding precedents for the other Valsartan cases, they will serve as critical indicators for all parties involved. The outcomes could facilitate settlements in other cases, potentially leading to global settlement agreements, or, if the parties fail to negotiate, they could prompt the judge to begin remanding large groups of cases for individual jury trials nationwide. These early bellwether outcomes are expected to shape the MDL’s future trajectory and impact litigation strategy on both sides.

Valsartan is just one of the drugs facing mass torts litigations in court, but there are more, and you can stay updated about them through our newsletter. You can also avail of our medical and legal services for your law firm. 

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DOJ Opposes JnJ’s Texas Bankruptcy Move in Talc Lawsuit Cases

The U.S. Department of Justice (DOJ) recently opposed Johnson & Johnson’s latest attempt to use bankruptcy to resolve tens of thousands of talcum powder lawsuits from women diagnosed with ovarian cancer.

The History and Background of Talc Lawsuits Against JnJ

The company faces around 62,000 lawsuits alleging its Baby Powder and Shower-to-Shower products, long used by consumers on their genitals, caused cancer. This litigation, which began in 2016, follows research linking talc to ovarian cancer and the discovery of asbestos in these products.

JnJ’s Chapter 11 Bankruptcy and the Texas Two-Step Maneuver

While J&J has faced massive verdicts in early state trials, awarding billions to affected women, it has resisted direct settlement efforts. Instead, the company has made multiple attempts to consolidate and resolve claims through bankruptcy, a move that critics say unfairly limits the amount plaintiffs can recover. In its latest effort, J&J created a subsidiary, Red River Talc, LLC, which filed for Chapter 11 bankruptcy in Texas, transferring liability from the parent company to this entity in a maneuver known as the “Texas Two-Step.” This tactic allows J&J to cap the financial exposure of its core business by placing liability on the subsidiary with limited assets, which critics argue reduces compensation for plaintiffs to only a fraction of what they might be owed.

JnJ’s Continued Efforts to Leverage Bankruptcy for Talc Claims

This is J&J’s third attempt to use the Texas Two-Step in resolving talc-related lawsuits. The previous filings were dismissed by federal judges who ruled that J&J did not face financial distress, an essential condition for bankruptcy. However, this latest filing in Texas, rather than New Jersey (where J&J is based), continues the tactic, aiming to circumvent the earlier rulings.

Dismissal of Motion

On October 21, the DOJ Trustee for Texas filed a motion to dismiss the case, criticizing the company’s repeated bankruptcy filings as “bad faith” attempts to misuse the U.S. bankruptcy system. According to the DOJ, this approach continues to lack a “valid restructuring purpose” and instead serves as a strategy to avoid legal responsibility for J&J, the primary beneficiary, while limiting plaintiffs’ ability to secure full compensation. The DOJ also pointed out that Red River has even fewer liabilities than before, as most talcum powder asbestos-related claims have been settled.

DOJ's Response to JnJ’s Bankruptcy Strategy

The DOJ’s motion argued that J&J is repackaging its previous tactics by using a new entity and filing in a different jurisdiction in hopes of securing a favorable outcome. “This Court should not permit J&J and the Debtor to evade the rulings of another federal court in this manner,” the motion states.

Consolidation of Lawsuits

In federal court, talcum powder lawsuits have been consolidated in the District of New Jersey since 2016. Originally assigned to one federal judge, the litigation was transferred after her retirement. If the DOJ’s motion to dismiss is successful, the cases will return to New Jersey, where the court had scheduled the first federal bellwether trial for December 2024. This trial is expected to be closely watched to gauge jury response to evidence and may set the tone for further litigation if no settlement is reached.

Trial date pushed back

J&J’s ongoing use of bankruptcy has delayed litigation, potentially pushing back the trial date once again. The company has repeatedly sought to pause proceedings during bankruptcy reviews, a tactic that could indefinitely extend the delay. While state court trials have yielded significant verdicts, no federal trials have yet taken place. This repeated use of bankruptcy courts to stay litigation has drawn intense criticism from legal experts and plaintiff advocates who argue it undermines the legal system and denies plaintiffs timely access to justice.

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