J&J Can't Resolve Mass Talc Lawsuits Through Subsidiary's Bankruptcy, Judge Rules

Today, U.S. Chief Bankruptcy Judge Michael Kaplan dismissed Johnson & Johnson (J&J) subsidiary LTL Management LLC's second bankruptcy petition (Case No.: 23-12825). The ruling has thwarted J&J's plan to wield Chapter 11 as a means for resolving around 50,000 lawsuits alleging the company's talc products caused claimants to develop ovarian cancer. 

The judge's opinion stated:

"Simply put, the Debtor does not meet the more exacting gateway requirement implemented by the Circuit with respect to 'good faith' under 11 U.S.C. §1112(b), which would allow LTL to take advantage of the tools available under the Bankruptcy Code to resolve its present and future talc liabilities."

Plaintiffs' counsel reflected on the ruling as it pertains to current trends in corporate legal defense tactics.

“In the last few years, there has been an effort by Corporate America to hide from their responsibilities in bankruptcy court after doing untold damage to American consumers," said Mike Papantonio, senior attorney and shareholder at Levin Papantonio Rafferty law firm. "This decision is a major obstacle for corporate hustlers who want to again victimize consumers already injured through nothing short of callous indifference.”

LPR Attorney Chris Tisi, a member of the Plaintiffs’ Steering Committee in the national talc MDL (MDL 2738, In Re: Johnson & Johnson Talcum Powder Products Marketing, Sales Practices and Products Liability Litigation) and a committee representative of the Official Committee of Talc Claimants (TCC), spoke to the meaning the court's decision has for claimants. 

“We applaud the court’s decision to dismiss this bankruptcy and allow women and families who have ovarian cancer the right to present their case to a jury of their peers," Tisi said. "There’s nothing more American than a right to a jury trial."

LPR Attorney Cameron Stephenson, who is actively involved in the national talc litigation, commented on how the court's decision translates to corporate accountability. 

“This is the decision I expected because it is the right decision, plain and simple," Stephenson remarked. "Johnson & Johnson is a $500 Billion company. Neither they nor their fraudulent shell corporations should be able to hide in bankruptcy. Our legal system is designed to be a system of justice, not a system of corporate avoidance of liability. Johnson & Johnson hurt and killed women. They were finally forced to pull the product from the market. Now, they should be forced to be financially accountable for the lives they ruined.

The TCC issued a statement on Judge Kaplan's decision, which included the following:

"The Committee has consistently contended the tort system is the rightful place for these claims to be resolved. Today’s ruling validates the Committee’s belief that J&J manipulated the bankruptcy system by using the 'Texas Two-Step' legal maneuver and wrongfully sought to manufacture financial distress in its 'Legacy Talc Liabilities' (LTL) Management subsidiary, solely to carry out a bad faith bankruptcy case. The company will now face the full weight of its conduct in the appropriate judicial forums."

MDL 2738 comprises nearly 50,000 individual talcum powder lawsuits from individuals who allegedly developed ovarian cancer or mesothelioma after regular, prolonged use of Johnson’s Baby Powder and Shower to Shower body powder. The lawsuits claim that Johnson & Johnson deceptively marketed the talc-based products for feminine hygienic use without disclosing talc’s carcinogenic properties.  

The Levin Papantonio Rafferty law firm has been representing injured people across the globe since 1955. The firm has gained national recognition as one of the most successful personal injury firms in the world and has been featured on CNN, NBC, ABC, CBS, and Fox, as well as Wall Street Journal, New York Times, Time Magazine, Forbes, and National Law Journal.

Levin Papantonio Rafferty attorneys handle lawsuits throughout the country involving prescription drugs, medical devices, medical malpractice, car accidents, and business litigation. Levin Papantonio Rafferty has earned over $40 billion in jury verdicts and settlements, litigating against some of the largest corporations in the world.

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