Court Rejects J&J Bankruptcy Strategy for Tens of Thousands of Baby Powder Lawsuits
A U.S. court on Monday rejected pharmaceutical company Johnson & Johnson’s bankruptcy strategy to resolve billions of dollars in Suit cases that alleged the firm’s talc products cause cancer.
A decision handed down by the U.S. Third Circuit Court of Appeals in Philadelphia dismissed a Chapter 11 petition filed by a recently created J&J subsidiary LTL Management in October to address more than 38,000 lawsuits from plaintiffs alleging the company’s baby powder and other talc products caused cancer.
J&J, before bankruptcy filing, faced costs of $3.5 billion in verdicts, settlements, and one in which 22 women were ultimately awarded a judgment in excess of $2 billion.
“Applied here, while LTL faces substantial future talc liability, its funding backstop plainly mitigates any financial distress foreseen on its petition date,” A three-judge panel was formed on Monday. They observed that “good intentions” Protecting the environment is important. “J&J brand or comprehensively resolve litigation … do not suffice alone,” They wrote.
Tylenol is manufactured by the company. The company also makes a wide-used product, a spokesperson COVID-19 J&J said that vaccine will be appealed. The spokesperson maintained that the company’s talc products are safe and don’t cause cancer.
“As we have said from the beginning of this process, resolving this matter as quickly and efficiently as possible is in the best interests of claimants and all stakeholders,” J&J spokeswoman Allison Fennell Submitted news outlets in response to Monday’s ruling. “We continue to stand behind the safety of Johnson’s Baby Powder, which is safe, does not contain asbestos, and does not cause cancer.”
The decision throws into doubt J&J’s long-planned strategy for disposing of talc litigation after it lost a bid to reverse a watershed verdict that eventually awarded more than $2 billion to 22 women who blamed their ovarian cancer on baby powder and other talc products.
Attorneys for people who claim J&J’s products caused their cancers welcomed Monday’s ruling.
“The Third Circuit’s decision is a point-by-point rejection of J&J’s attempt to pervert the bankruptcy system and trample the constitutional right to a jury trial of all Americans harmed by deadly products,” Jon Ruckdeschel, an attorney representing victims of mesothelioma said in a Statement Subscribe to the Financial Times. “Bankruptcy courts are for honest companies in financial distress, not billionaire mega-corporations like J&J, 3M, and Koch Industries that seek to close courthouse doors to their victims.”
Last September, attorneys representing approximately 7,000 talc personal injury claimants wrote (pdf() “bankruptcy court relied on unsupported speculation and improper evidence” “used unfounded estimates.”
According to a University of Richmond legal scholar, J&J will now need to appeal to the U.S. Supreme Court. “The only prospect left for J&J is an appeal to the Supreme Court,” Carl Tobias said, “which grants review in a minuscule percentage of appeals.”
Missouri jury ordered New Jersey-based company to comply with its terms. Pay some $4.7 billion in damages to dozens of women who asserted their cancer was caused by the company’s talc products. The company appealed for a reduction in the payout, but it still paid more that $2 billion in damages.
More than 1,500 talc lawsuits have been dismissed without J&J having to pay anything, and the majority of cases that have gone to trial have resulted in defense verdicts, mistrials, or judgments for the company on appeal, according to the J&J subsidiary’s court filings.
J&J has stopped selling talc baby powder in Canada and the United States since the lawsuits won. It will end all sales of these products in the world by 2023.
As of Monday at midday, J&J’s stock price was down nearly 4 percent.
This report was compiled by Reuters
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