J&J's Second Talc-related Bankruptcy Attempt Denied

Aug 11th, 2023
J&J, in the meantime, is suing four doctors who published studies linking talc-based personal care and cancer based on 'junk science,' per Reuters.
J&J, in the meantime, is suing four doctors who published studies linking talc-based personal care and cancer based on "junk science," per Reuters.

Johnson & Johnson's (J&J's) second appeal to settle all talc lawsuits for $8.9 billion and file for bankruptcy under its subsidiary was rejected on July 30, 2023, according to the New York Times. Judge Michael Kaplan of the U.S. Bankruptcy Court for the district of New Jersey made the ruling, dismissing the case because the suits "did not put the company in imminent or immediate financial distress," per the Times. 

See related: $18.8M Payout in J&J Talc Lawsuit Could Upset Settlement Offer

Per Reuters, J&J will appeal Kaplan's decision to "vigorously defend itself against lawsuits that are 'specious and lack scientific merit.'"

As previous reported, in the face of tens of thousands of lawsuits claiming the company's talc-based baby powder contained cancer-causing asbestos, the company formed the subsidiary LTL Management in 2021. After its formation, LTL filed for Chapter 11 bankruptcy protection, which was rejected and appealed by the company.

The first appeal was denied in March 2023 since, as reported by AboutLawsuits.com, the company "had sufficient assets to cover the liability faced by its subsidiary." During this second appeal for bankruptcy, all suits were on hold; except one, due to the deteriorating health of plaintiff Anthony Hernandez Valadez.

On July 18, 2023, $18.8 million was awarded to Valadez, who claimed the company's talc-based baby powder exposed him to asbestos and caused his mesothelioma. Bloomberg reported this California verdict could influence votes against the proposed settlement due to its inadequacy because had Valadez settled, he would have been awarded $50,000.

See archived: Avon Takes a $40M Hit in Talc/Cancer Suit

According to Bloomberg, J&J would also appeal the Valadez verdict based on "erroneous" rulings by the judge. Per Erik Haas, J&J's worldwide VP of litigation, the company was not permitted to present that Valadez’s rare form of mesothelioma was not caused by the baby powder.

"Without that evidence, the verdict is irreconcilable with the decades of independent scientific evaluations confirming Johnson’s Baby Powder is safe, does not contain asbestos and does not cause cancer," he said, per Bloomberg. J&J, in the meantime, is suing four doctors who published studies linking talc-based personal care and cancer based on "junk science," per Reuters.

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