Bankruptcy judge to determine Johnson & Johnson’s protections in talc lawsuit

After Johnson & Johnson executed a divisional merger and filed for bankruptcy in October 2021, the company received protection from litigation related to its talcum powder lawsuits. Recently, the federal judge overseeing talcum litigation in New Jersey ruled that a bankruptcy judge must now determine how to proceed with the company’s current shield from lawsuits.

Talcum powder lawsuit proceedings remain paused, but the temporary bankruptcy protections expire on January 28, 2022. Plaintiffs are seeking compensation from Johnson & Johnson for health conditions that they claim resulted from carcinogenic asbestos contamination in the company’s baby powder products.

How the Johnson & Johnson bankruptcy filing affected talc lawsuits

Plaintiffs in the talcum powder lawsuits had questions when Johnson & Johnson filed for bankruptcy last year. J&J is one of the largest corporations in the world, yet the company executed a controversial maneuver that allowed it to seek protection from talcum powder litigation.

Before filing for bankruptcy, J&J split into two separate companies: Johnson & Johnson Consumer, Inc. (JJCI) and LTL Management, LLC. J&J’s assets and liabilities—such as the talcum powder lawsuit—were then spread between these two entities (per National Public Radio). As a result, the new company known as LTL inherited talc liability along with $350 million in assets and $2 billion in trust to pay lawsuit settlements (per Johnson & Johnson). Then, LTL filed for bankruptcy.

Critics of the maneuver called the move a bad faith bankruptcy. The pause on litigation in talc cases leaves thousands of plaintiffs on hold as they seek damages for ovarian cancer that they claim resulted from J&J’s talcum powder.

What’s next for litigation against Johnson & Johnson?

Representatives for plaintiffs in the lawsuits have sought action from U.S. District Judge Freda Wolfson, requesting that she determine whether J&J has a right to extended protection from the lawsuits. After all, Johnson & Johnson itself did not file for bankruptcy, and representatives for the plaintiffs are asking if J&J deserves the normal protections from litigation reserved for companies in Chapter 11 proceedings.

Judge Freda Wolfson’s recent ruling leaves that determination to the judge overseeing the LTL bankruptcy, U.S. Bankruptcy Judge Michael Kaplan. Arguments will be presented to Kaplan on January 21, 2022 (per Reuters).

Johnson & Johnson could be liable for thousands of talc lawsuits

If litigation proceeds, J&J will face around 38,000 lawsuits. Plaintiffs argue that J&J was aware of the dangers of the baby powder product for years, yet remained silent about the risks until 2019 when the U.S. Food & Drug Administration (FDA) discovered asbestos in a sample batch of J&J’s baby powder. According to the FDA, talc mining is susceptible to asbestos contamination when mining conditions are not carefully monitored.

Among other claims, victims argue that J&J failed to warn consumers of these dangers for decades. Plaintiffs are seeking compensation for the wrongful death of loved ones who passed away from talc-related cancer. Other plaintiffs include ovarian cancer survivors pursuing damages for their medical bills and other challenges.

Despite bankruptcy protections currently shielding J&J from litigation, people who were harmed by Johnson & Johnson’s baby powder can still file a lawsuit.