On Tuesday, Johnson & Johnson (J&J) will face a pivotal moment in its ongoing legal battle as it seeks approval for a $10 billion settlement proposal aimed at resolving thousands of lawsuits involving its baby powder. These lawsuits allege that the company’s talc products, including baby powder, contained asbestos and caused ovarian and other cancers—a claim that J&J denies. U.S. Bankruptcy Judge Christopher Lopez, located in Houston, Texas, will decide whether the company’s third attempt to resolve the litigation through a subsidiary’s bankruptcy will proceed or be dismissed.
J&J’s proposed solution is to resolve the claims of over 62,000 plaintiffs through a bankruptcy proceeding involving its subsidiary, Red River Talc. The plaintiffs allege that the talc products were contaminated with asbestos, which they contend caused their cancers. While J&J continues to deny the allegations, the company has now turned to the bankruptcy court as a means to settle the cases and prevent further lawsuits. The move comes after two previous attempts to use a subsidiary’s bankruptcy to resolve the claims were rejected by courts.
This third attempt is being presented as a potentially more viable plan, as J&J asserts that its subsidiary, Red River Talc, has garnered broad support from the claimants for the settlement proposal. Allison Brown, an attorney for Red River Talc, expressed confidence in the proposal’s success, stating in court, “We have the vote,” and highlighting the “enormous support for a historic and unprecedented plan.”
However, critics of the plan argue that the voting process was manipulated to ensure J&J’s preferred outcome. Adam Silverstein, an attorney representing plaintiffs who oppose the bankruptcy deal, accused J&J of unfair practices, such as challenging every vote against the plan while allowing changes from “no” to “yes.” He further alleged that J&J violated its own rules by accepting votes from attorneys who lacked proper authority or could not provide necessary medical records.
The case centers on the validity of the voting process and whether J&J should be allowed to use bankruptcy law to protect itself from ongoing litigation. U.S. Bankruptcy Judge Christopher Lopez will consider these and other critical issues during the hearing, which is scheduled to continue through the end of February. The outcome will hinge on whether J&J’s use of bankruptcy to settle the claims is legally sound and fair to all involved parties.
Under U.S. bankruptcy law, settlements can bind claimants, even if they prefer to pursue litigation in court. J&J argues that this approach is faster and fairer for the plaintiffs, many of whom face lengthy legal battles and uncertain outcomes in traditional court proceedings. Erik Haas, J&J’s vice president for litigation, stated that the proposal offers “overwhelming support” from cancer victims and provides them with a “far better recovery” than they would likely receive from a trial.
However, opponents contend that the bankruptcy settlement process unfairly forces claimants into accepting lower settlement amounts than they might obtain in court. By resolving the claims through bankruptcy, J&J also aims to prevent future lawsuits over its talc products.
The outcome of this hearing will have significant implications for both the plaintiffs and Johnson & Johnson. If Judge Lopez approves the bankruptcy settlement, it could set a precedent for using bankruptcy proceedings to resolve mass tort claims. However, if the settlement is rejected, it may lead to a protracted legal battle in court. The legal community and plaintiffs’ attorneys are closely watching the case, as it could have far-reaching consequences for how mass litigation is handled in the future.
Judge Lopez is expected to issue a written opinion after the hearing concludes at the end of February, which will determine the next steps in this high-stakes legal battle.
Read more:
