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Johnson & Johnson (J&J) has stated that it will seek to revive its efforts to resolve tens of thousands of lawsuits over its talc products through the bankruptcy of its subsidiary, LTL Management, by asking the US Supreme Court to review the case. J&J has faced more than 38,000 lawsuits alleging that Baby Powder and other talc products are contaminated with asbestos, a claim the company has consistently denied.
J&J had hoped to use the bankruptcy of LTL Management to halt these lawsuits. However, in January, the 3rd US Circuit Court of Appeals ruled that the bankruptcy should be dismissed. Neither LTL nor J&J had a legitimate need for bankruptcy protection as they were not in “financial distress.” LTL Management requested the court to reconsider its decision, but the court rejected the request unanimously in a ruling on Wednesday.
J&J has maintained that its consumer talc products are safe and have been confirmed asbestos-free through thousands of tests. However, the bankruptcy strategy has hit a roadblock, and the latest ruling by the appeals court is seen as another blow to J&J’s attempts to use the bankruptcy system to address the lawsuits.
Leigh O’Dell, one of the lead attorneys representing plaintiffs in the lawsuits, hailed the 3rd Circuit’s ruling as another step towards ending J&J’s “attempted abuse of the bankruptcy system.” Meanwhile, J&J has stated that it will ask the 3rd Circuit to pause the ruling from taking effect to allow the company time to appeal to the Supreme Court.
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The judge overseeing LTL’s bankruptcy case, US Bankruptcy Judge Michael Kaplan in Trenton, New Jersey, has already indicated that he is prepared to end the bankruptcy and allow talc lawsuits to resume once the 3rd Circuit issues a formal mandate of its January decision. Before the bankruptcy filing, J&J faced costs from $3.5 billion in verdicts and settlements, including one in which 22 women were awarded a judgment of more than $2 billion, according to bankruptcy court records.
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In 2020, J&J announced that it would stop selling its talc Baby Powder in the US and Canada due to what it called “misinformation” about the product’s safety. The company later announced its intention to discontinue the product worldwide in 2023.
The latest move by J&J to appeal to the Supreme Court to revive its bankruptcy strategy indicates that the company is determined to fight the talc lawsuits. The outcome of this case will have significant implications for J&J, its subsidiary, and the thousands of plaintiffs involved in the lawsuits.
