Help

BI’s Article search uses Boolean search capabilities. If you are not familiar with these principles, here are some quick tips.

To search specifically for more than one word, put the search term in quotation marks. For example, “workers compensation”. This will limit your search to that combination of words.

To search for a combination of terms, use quotations and the & symbol. For example, “hurricane” & “loss”.

Login Register Subscribe

Cancer victims sue Johnson & Johnson over bankruptcies

Reprints
J&J

(Reuters) — A group of cancer victims sued Johnson & Johnson on Wednesday, accusing the health care company of committing fraud through repeated efforts to use a shell company’s bankruptcy to resolve tens of thousands of lawsuits alleging its talc products contained asbestos and caused cancer.

Five plaintiffs, who seek to represent over 50,000 people who have sued J&J over its talc products, filed the proposed class action in federal court in New Jersey. They allege that J&J's bankruptcy strategy put billions of dollars out of the reach of plaintiffs in an attempt to “hinder, delay, and defraud these women and prevent them from ever having their day in court.”

“Johnson & Johnson is playing a dark game of chess with this country's financial and judicial systems,” said Mike Papantonio, an attorney for the cancer plaintiffs.

J&J's worldwide vice president of litigation, Erik Haas, said the lawsuit was a “Hail Mary pass” by plaintiffs lawyers who don't want their clients to vote on the company's latest proposed bankruptcy settlement.

Most of the talc lawsuits have been brought by women with ovarian cancer, while other cases involve people with mesothelioma, a deadly cancer linked to asbestos exposure.

J&J has said that its baby powder and other talc products are safe, do not contain asbestos, and do not cause cancer.

J&J first used a corporate maneuver called the “Texas two-step” to place its talc liabilities into a new subsidiary that then filed for bankruptcy in 2021. The bankruptcy stopped the lawsuits from moving ahead against J&J, although it did not file for bankruptcy itself.

That and a second similar attempt to resolve the litigation failed as courts ruled that J&J and its subsidiary were not in financial distress so not eligible for bankruptcy. The company said May 1 that it plans to pursue a third bankruptcy once it gets enough votes to support a $6.48 billion talc settlement.

Wednesday's lawsuit seeks a ruling that the Texas two-step transaction was fraudulent, because it was undertaken solely to shelter J&J's assets from the talc litigation.

Subsequent transactions, including J&J's spinoff of its consumer health business Kenvue, were also fraudulent, according to the lawsuit, which also seeks compensatory and punitive damages.

J&J says the planned third bankruptcy for its unit will be different because it will have support from over 75% of the people with talc-related claims.