The Decision Heard in Boardrooms across the U.S.: 3rd Circuit Court of Appeals Rejects J&J's Shady Bankruptcy Tactic in Talc Lawsuits
Johnson & Johnson, one of the world's largest corporations, will not be able to use Ch. 11 to avoid billions of dollars in liability for talc-based products, which lawsuits allege cause ovarian cancer and mesothelioma; attorneys fighting for victims hope Corporate America is taking note.
Johnson & Johnson cannot claim financial distress to dodge liability for its talc products allegedly causing ovarian cancer and mesothelioma, thanks to today's decision by the United States Court of Appeals for the Third Circuit. Per the court opinion:
"Good intentions— such as to protect the J&J brand or comprehensively resolve litigation—do not suffice alone. What counts to access the bankruptcy code's safe harbor is to meet its intended purposes. Only a putative debtor in financial distress can do so. LTL was not. Thus we dismiss its petition."
LPR Attorneys Chris Tisi and Cameron Stephenson represent hundreds of ovarian cancer victims who for decades used Johnson & Johnson’s Baby Powder with talc. Tisi is a member of the Plaintiffs’ Steering Committee in the national Multi-District Litigation (MDL) and a member representative of the Official Committee of Talc Claimants. The attorneys offered the following commentary in response to today's court decision:
"This decision should be heard in boardrooms throughout the country. Corporate America is now on notice it cannot use the Bankruptcy Code to escape responsibility for placing defective products on the market. CHRIS TISI, ATTORNEY, LEVIN PAPANTONIO RAFFERTY AND CHAIR OF THE PLAINTIFFS’ DISCOVERY FOR IN RE: JOHNSON & JOHNSON TALCUM POWDER PRODUCTS MARKETING, SALES PRACTICES AND PRODUCTS LIABILITY LITIGATION, MD 2738 (D.N.J.).
Johnson & Johnson is a $500 Billion company. There is no legitimate business purpose being sought with the fling of this sham, fraudulent bankruptcy. It was a litigation tactic, pure and simple, and ultimately it did not work. I am elated that the 3rd Circuit sided on behalf of the thousands of ovarian cancer victims, each of whom are entitled to their day in court by the United States Constitution. CAMERON STEPHENSON, ATTORNEY, LEVIN PAPANTONIO RAFFERTY
Tisi added: "J&J knew for decades that its Johnson’s Baby Powder contained asbestos that may cause deadly cancers like ovarian cancer and mesothelioma. Still, they sold the product and marketed it to trusting families. We are pleased that these families will now be able to present their cases to a jury of their peers."
More on the J&J Attempted Bankruptcy Tactic
In an attempt to limit its billions of dollars of liability to ovarian cancer and mesothelioma victims, Johnson & Johnson created a shell corporation, called LTL Management, and spun off all of its talc liability to the sham company through a series of contractual agreements. Johnson & Johnson then immediately filed LTL Management for bankruptcy.
The Official Committee of Talc Claimants filed a motion to have the bankruptcy dismissed as a fraudulent filing for an improper purpose. That motion was initially denied. However, the United States Court of Appeals for the Third Circuit took up the matter on appeal and reversed and dismissed the bankruptcy.
How Ovarian Cancer Claims Have Affected J&J
In September 2022, J&J announced plans to abandon its talc-based baby powder worldwide in 2023. The move came after years of doing battle with a team of law firms, including Levin Papantonio Rafferty (LPR), fighting on behalf of women who developed ovarian cancer from Johnson & Johnson’s Baby Powder with talc. The company pulled its talc-based powder from U.S. and Canadian markets in 2020 in sync with an onslaught of cancer-related lawsuits.
In 2018, a St. Louis jury awarded $4.69 billion to 22 women who sued Johnson & Johnson. The women claimed the company’s talc-based baby powder caused their ovarian cancer when they used it as a part of their daily feminine hygiene routine.
In 2020, Johnson & Johnson agreed to pay more than $100 million to resolve more than 1,000 lawsuits blaming its baby powder for causing cancer.
About Chris Tisi
Christopher V. Tisi is a shareholder with Levin Papantonio Rafferty. For over 30 years, Mr. Tisi has been a nationally recognized trial and appellate lawyer with extensive experience litigating mass tort, pharmaceutical, medical device, and major personal injury cases. In that time, Mr. Tisi has established himself as one of the country's top lawyers, selected by his peers, in The Best Lawyers in America, The National Trial Lawyers Top 100 Trial Lawyers as well as inclusion in the publication The Legal 500. He has been awarded an AV rating by Martindale-Hubbell legal directory, the highest rating for competence and ethics issued by that publication. In 2015 he was inducted as a fellow of the International Society of Barristers.
Currently, Mr. Tisi serves as co-chair of the Plaintiffs’ Discovery for In Re: Johnson & Johnson Talcum Powder Products Marketing, Sales Practices and Products Liability Litigation, MD 2738 (D.N.J.). In this capacity, he is litigating cases on behalf of over 38,000 women who developed ovarian cancer as a result of using talcum powder products.
About Cameron Stephenson
Cameron Stephenson is a shareholder with Levin Papantonio Rafferty. Mr. Stephenson’s current practice is primarily focused in Mass Tort pharmaceutical and medical device litigation. He is actively involved in several pending Multi-District Litigations (MDLs), including Johnson & Johnson Talcum Powder/Ovarian Cancer (MDL No. 2738) and Proton Pump Inhibitor/Kidney Disease (MDL No. 2789).
About Levin Papantonio Rafferty
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 The Wall Street Journal, The 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 more than $30 billion in jury verdicts and settlements, litigating against some of the largest corporations in the world.