Judge Rejects Johnson & Johnson’s Effort to Limit Talc-Related Suits

For the second time this 12 months, a court docket has dominated towards Johnson & Johnson’s effort to make use of a chapter case to restrict its publicity to tens of 1000’s of lawsuits that declare its talcum powder merchandise brought on most cancers.

The plaintiffs declare that the corporate knew for many years in regards to the dangers linked to its talc merchandise, together with its signature child powder.

The firm created a subsidiary, LTL Management, in 2021 as a maneuver to protect itself from the talc litigation. It proposed that the subsidiary, which had filed for chapter, pay $8.9 billion to resolve all of the claims towards it.

But on Friday, Judge Michael Kaplan of the U.S. Bankruptcy Court for the District of New Jersey, stated LTL’s chapter case should be dismissed as a result of the lawsuits didn’t put the corporate in “imminent or immediate financial distress.” Earlier this 12 months, the U.S. Court of Appeals for the Third Circuit in Philadelphia dismissed the primary chapter effort for a similar purpose.

“In sum, this Court smells smoke, but does not see the fire,” Judge Kaplan wrote in his opinion, referring to LTL’s monetary standing. “Therefore, the emphasis on certainty and immediacy of financial distress closes the door of chapter 11 to LTL at this juncture.”

The firm’s shares dropped near 2 p.c in after-hours buying and selling.

J&J stated its subsidiary deliberate to attraction Judge Kaplan’s ruling. In an announcement on Friday, Erik Haas, J&J’s worldwide vp of litigation, stated, “We respectfully disagree with the bankruptcy court’s conclusion that the ‘substantial liability’ that LTL faces from the massive volume of talc claims asserted against it does not establish ‘immediate’ financial distress under the standard imposed by the Third Circuit, which itself is found nowhere in the bankruptcy code and is contrary to the persuasive authority from other Circuit Courts and directives of the Supreme Court of the United States.”

He added, “As the bankruptcy court urged in its decision, we will continue to work with counsel representing about 60,000 claimants to pursue a resolution of the talc claims.”

Andy Birchfield, a lawyer representing among the most cancers victims, stated the ruling was a win for his purchasers. “J&J has spent two years trying to convince us that somehow a company worth a half-trillion dollars is bankrupt,” he stated. “It’s time for the nonsense to stop and for J&J to accept responsibility.”

Johnson & Johnson stopped promoting talc-based child powder globally this 12 months, after switching to cornstarch as the first ingredient of the product.