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

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 triggered most cancers.

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

The corporate created a subsidiary, LTL Administration, in 2021 as a maneuver to defend 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.

However on Friday, Choose Michael Kaplan of the U.S. Chapter Courtroom for the District of New Jersey, mentioned LTL’s chapter case should be dismissed as a result of the lawsuits didn’t put the corporate in “imminent or speedy monetary misery.” Earlier this 12 months, the U.S. Courtroom of Appeals for the Third Circuit in Philadelphia dismissed the first bankruptcy effort for a similar purpose.

“In sum, this Courtroom smells smoke, however doesn’t see the fireplace,” Choose Kaplan wrote in his opinion, referring to LTL’s monetary standing. “Subsequently, the emphasis on certainty and immediacy of economic misery closes the door of chapter 11 to LTL at this juncture.”

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

J&J mentioned its subsidiary deliberate to attraction Choose Kaplan’s ruling. In an announcement on Friday, Erik Haas, J&J’s worldwide vice chairman of litigation, mentioned, “We respectfully disagree with the chapter court docket’s conclusion that the ‘substantial legal responsibility’ that LTL faces from the huge quantity of talc claims asserted towards it doesn’t set up ‘speedy’ monetary misery underneath the usual imposed by the Third Circuit, which itself is discovered nowhere within the chapter code and is opposite to the persuasive authority from different Circuit Courts and directives of the Supreme Courtroom of the US.”

He added, “Because the chapter court docket urged in its choice, we’ll proceed to work with counsel representing about 60,000 claimants to pursue a decision of the talc claims.”

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