Bankruptcy judge halts talc, cancer cases

A federal bankruptcy judge on Thursday halted roughly 40,000 lawsuits that allege Johnson & Johnson‘s baby powder and other talc products caused cancer.

The choice is an element of J&J’s second try and settle 1000’s of talc cases in bankruptcy proceedings.

J&J in 2021 spun off its subsidiary, LTL Management, to hold its talc-related liabilities and file for Chapter 11 bankruptcy protections. 

Judge Michael Kaplan during a hearing Thursday in U.S. Bankruptcy Court in Trenton, Latest Jersey, put a brief hold on the suits that may last through mid-June, The Wall Street Journal reported.

J&J won’t should go to trial over another talc claims in the course of the pause, but latest lawsuits can still be filed against the corporate, The Journal reported.

Kaplan said in the course of the hearing that J&J has an “uphill battle” ahead, in keeping with the newspaper.

The pause will give J&J time to achieve a everlasting settlement with plaintiffs within the talc cases. The corporate recently proposed an $8.9 million settlement for current and future talc-related claims and said it expects to bring that plan to bankruptcy court in mid-May.

J&J in an announcement called Kaplan’ decision “a win for claimants” since it brings them “one step closer” to having the ability to vote on the proposed settlement. 

The Latest Brunswick, Latest Jersey-based company also said it believes claimants will overwhelmingly support the proposal.

J&J previously said greater than 60,000 claimants have already committed to voting in favor of the plan.

“When presented with a transparent and complete explanation and the chance to make an informed alternative, we firmly imagine the claimants will approve the plan,” said Erik Haas, J&J’s worldwide vp of litigation.

Kaplan’s decision is narrower than the one he made after LTL Management first filed for Chapter 11 in 2021. 

The judge ruled in February 2022 that J&J can use the bankruptcy system to resolve talc allegations, enabling the corporate to avoid fighting 1000’s of individual lawsuits.

Kaplan essentially affirmed J&J’s use of a technique often called the “Texas two-step,” which allows corporations to separate invaluable assets from liabilities through a so-called divisive merger.

But in January, the U.S. Court of Appeals for the third Circuit overturned that ruling. The appeals court said that neither LTL nor J&J had a legitimate need for bankruptcy protection because they weren’t in “financial distress.”

Amid the continuing legal fights, J&J has continued to disclaim the allegations that its talc products caused cancer.

Chief Financial Officer Joseph Wolk said on an earnings call Tuesday that it was “unlucky” that J&J has to “put dollars towards quite frankly baseless scientific claims.”

The suits allege J&J’s talc products were contaminated with the carcinogen asbestos, which caused ovarian cancer in 1000’s of people.

Some lawsuits link several deaths to J&J’s talc products.