A U.S. bankruptcy judge has rejected Johnson & Johnson’s $10 billion proposal to settle lawsuits over its baby powder and other talc products. The decision marks the third time the company’s bankruptcy strategy has failed in court.
Johnson & Johnson had been trying to resolve the lawsuits through a subsidiary’s bankruptcy after two previous attempts failed. However, Judge Christopher Lopez in Houston ruled that the company does not belong in bankruptcy.
Lopez stated that the proposed settlement lacked sufficient support from women who claim J&J products caused their cancer. He also criticized the plan for releasing claims against entities that did not file for bankruptcy, such as retailers and Kenvue, a business J&J spun off in 2023.
J&J announced it will not appeal the decision and instead plans to litigate the claims in court, calling them “meritless.” The company argues that its products are safe and do not contain asbestos. Despite this, J&J stopped selling talc-based baby powder in the U.S. in 2020, switching to a cornstarch alternative.
The lawsuits involve over 60,000 claimants who allege that J&J’s talc products caused ovarian cancer due to asbestos contamination. Opponents of the settlement argued that J&J, being a wealthy company, should not use bankruptcy to avoid accountability. They believe cancer victims should have their day in court.
Attorney Andy Birchfield, representing plaintiffs opposed to the bankruptcy settlement, described J&J’s strategy as a “bad-faith maneuver.” He stated that they will now proceed to trial, where clients can present their cases to a jury.
Judge Lopez also questioned the validity of votes J&J collected from plaintiffs’ attorneys, citing serious flaws in the voting process. Some lawyers voted without clear authority, and others lacked proof of client consent. Lopez noted that J&J “unnecessarily rushed” the voting process, forcing lawyers to cast votes on behalf of their clients.
J&J had estimated that ovarian cancer patients would receive between $75,000 and $150,000 under the settlement, depending on the severity of their injuries and the number of claims covered. Despite this, the company maintains it will not settle and will fight the claims in court.
Related topics:
