Another Win for Cancer Victims: Johnson & Johnson’s Bankruptcy Rejected for Third Time

For the third time, Johnson & Johnson’s attempt to avoid facing tens of thousands of lawsuits from cancer victims was denied.

A bankruptcy court judge in Texas earlier this week rejected a proposed settlement of more than $8 billion to end approximately 60,000 lawsuits from past users of Johnson & Johnson Baby Powder, which has been connected with cancer.

Most of the lawsuits pending against Johnson & Johnson are from women with ovarian cancer, which can be caused by exposure to a mineral called asbestos. A few are lawsuits pending from people with mesothelioma, which is a rare type of cancer caused solely by asbestos. Tests have found traces of asbestos in Johnson & Johnson Baby Powder.

Johnson & Johnson attempted to resolve the lingering ovarian cancer lawsuits with a bankruptcy strategy that would settle the cases in one fell swoop and move any future claims to a trust fund payment process. The company has tried this tactic two other times to no avail.

The bankruptcy proposal did not include pending mesothelioma lawsuits against Johnson & Johnson.

 

Background of Johnson & Johnson Baby Powder and Cancer From Asbestos

Johnson & Johnson produces pharmaceuticals and consumer products. For decades, one of the flagship items was Johnson & Johnson Baby Powder.

This product was made with talc, which is a naturally occurring mineral found in the earth’s soil. Talc can absorb moisture, which keeps skin dry and healthy. Parents often used Johnson & Johnson Baby Powder on the skin of their newborns, infants and toddlers to prevent rashes and other skin issues.

Talc is the troublesome ingredient, but not necessarily because talc is dangerous. Talc can be found near asbestos. Mining for talc can inadvertently lead to collecting asbestos. Talc is ground into a powder substance for the baby powder, and this process can break asbestos apart and leave sharp fibers hidden in the product.

When users apply Johnson & Johnson Baby Powder to themselves or their children, the fibers are released into the air. They’re weightless and microscopic, so people will not notice the asbestos in the air, on their clothes, or on their skin. People can inhale or swallow the fibers, which then irritate tissue linings and cause cancer to form. This is the concern health experts have with talc and asbestos exposure.

Johnson & Johnson claims asbestos has never been in the baby powder. Yet, the company stopped manufacturing and selling Johnson & Johnson Baby Powder in 2020 in the United States and Canada. The product was shut down worldwide a year later.

In 2018, Reuters published an article claiming Johnson & Johnson has worried for decades about the potential of asbestos in the company’s talc products – yet kept these concerns internal rather than telling the public or recalling the powders.

In 2019, the U.S. Food and Drug Administration found traces of asbestos in samples of Johnson & Johnson Baby Powder. This led to a recall of approximately 33,000 bottles.

 

How the Johnson & Johnson Bankruptcy Plan Failed Again

This latest failed attempt at mass-settling lawsuits was thwarted by a federal bankruptcy judge in Houston, where Johnson & Johnson moved the bankruptcy filing in hopes of a more favorable ruling. The tactic is called the “Texas Two-Step” as it originated in Texas.

The maneuver involves filing for Chapter 11 bankruptcy, which is called a “reorganization bankruptcy.” Johnson & Johnson created a subsidiary company and pushed legal responsibility of all lawsuits related to Johnson & Johnson Baby Powder to the new subsidiary. Next, the subsidiary filed for bankruptcy.

As part of going bankrupt, the company would have settled all pending lawsuits. Bankrupt companies cannot be sued going forward, so any expected legal liabilities in the future would be addressed through a fund to pay victims.

This tactic has been used by asbestos manufacturing companies for decades to prevent victims of their unethical business practices from filing lawsuits – instead forcing victims to accept what’s often a lesser compensation amount from a bankruptcy asbestos trust fund. These companies often filed for bankruptcy in Texas, which led to the Texas Two-Step name.

Fortunately for victims of Johnson & Johnson’s negligence regarding alleged asbestos in Johnson & Johnson Baby Powder, the judge in Houston ruled against Johnson & Johnson because the agreement did not have approval from enough claimants. The judge also based his ruling on a faulty voter solicitation process.

 

Third Time Is Not the Charm With Johnson & Johnson Baby Powder Bankruptcy Plan

Johnson & Johnson first tried the Texas Two-Step bankruptcy in 2021 – and again in 2023. The subsidiary in both of those attempts was called LTL Management. The first attempt proposed a settlement of $2 billion. The second attempt proposed a settlement of nearly $8.9 billion.

The subsidiary in the third attempt was called Red River Talc LLC. Johnson & Johnson initially proposed $6.4 billion and added approximately $1.75 billion to sweeten the pot, eclipsing $8 billion. Johnson & Johnson claims the amount of cash paid out over 25 years will be nearly $10 billion.

Opponents of the bankruptcy settlement have criticized Johnson & Johnson since the first attempt, saying the company was not in financial distress and should not be filing for bankruptcy at all. A few weeks ago, the U.S. Department of Veterans Affairs and the U.S. Department of Health & Human Services opposed the settlement.

Legal experts, particularly those who represent people with mesothelioma, believe Johnson & Johnson is simply trying to avoid facing lawsuits and paying large sums of money to victims.

Mesothelioma Guide recommends anyone with cancer who has used Johnson & Johnson Baby Powder in the past to contact an expert. Our team can help put you in touch with a legal expert who understands these asbestos exposure cases and the proof needed to hold Johnson & Johnson accountable.

Email Carl Jewett at cjewett@mesotheliomaguide.com with any questions or information about your or a loved one’s use of Johnson & Johnson Baby Powder.