A recent ruling in a series of lawsuits involving talc products is the latest challenge for those who have mesothelioma. Johnson & Johnson, maker of personal care products, including talc-based baby powder, was granted permission to pursue its bankruptcy filing by a New Jersey court. This may help the company avoid liability for thousands of lawsuits, dealing a serious blow to people who were diagnosed with mesothelioma after using their products.
Talc is a common additive in personal care products, including baby powder and cosmetics. Some talc products have been found to contain asbestos, a deadly carcinogen that occurs naturally near talc mines. People who use talc products as part of their daily care routine may have unknowingly exposed themselves to asbestos for years, and some users have been diagnosed with ovarian cancer or mesothelioma, a rare cancer infecting the lining of the lungs and chest cavity.
Johnson & Johnson continues to claim that its products are safe and free from asbestos, but it pulled many of the products in question off the shelves in the United States and Canada. So far, the company has been ordered to pay more than $3.5 billion in settlements.
Ruling Allows Divisive Merger, Halts Litigation
The federal bankruptcy court ruling, delivered on February 25, 2022, allows Johnson & Johnson to move forward with plans to declare bankruptcy for a newly formed subsidiary, LTL Management LLC. The company created the subsidiary on October of 2021 and then transferred all of its talc-related liabilities to the company’s ownership, after which it promptly filed for Chapter 11 bankruptcy. This division effectively shields Johnson & Johnson, which has one of the largest market shares in the country at over $450 billion, from expensive and ongoing personal injury and wrongful death litigation involving these claims. The ruling also halted ongoing asbestos liability claims against the company.
The strategy, known as a divisive merger or more colloquially as a Texas two-step, has been criticized by representatives for the plaintiffs and by U.S. lawmakers, calling it an abuse of bankruptcy statutes. However, the judge in the case ruled that the company was well within the bounds of the law and did not consider it a bad faith filing. Instead, the judge in the case claimed that this would allow the company to be held accountable without the administrative burden of long-running trials. The ruling could be an opportunity for other companies facing similar liabilities to employ the same strategy.
Johnson & Johnson is currently facing 38,000 lawsuits from those who developed mesothelioma and ovarian cancer after routine use of their products. While the ruling could make recovering compensation more difficult for cancer patients, it does not eliminate the possibility.
Johnson & Johnson claims that it still has $2 billion set aside to pay out additional talc-related injury claims, and they can devote more funds if necessary. A statement from LTL Management executives says that they are still committed to working with claimants to resolve claims fairly and satisfactorily.
Philadelphia Mesothelioma Lawyers at Shein Law Fight for the Rights of Those Who Have Been Exposed to Asbestos
If you have been diagnosed with mesothelioma, call our Philadelphia mesothelioma lawyers at Shein Law. We have a comprehensive understanding of the laws on asbestos exposure and decades of experience. Located in Philadelphia and Pennsauken, New Jersey, we serve clients throughout Pennsylvania and New Jersey. Call 877-743-4652 or contact us online to schedule an initial consultation.