Legislation & Litigation
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Johnson & Johnson may have used a controversial bankruptcy spin-off to avoid nearly 40,000 cosmetic talc lawsuits, but it now has to deal with plaintiffs harmed by industrial talcum powder decades ago.
US federal judge Michael Kaplan ruled earlier this month that the latest bankruptcy plan, which stopped the majority of cases, does not apply to this latest class action lawsuit.
The ruling by a New Jersey Supreme Court stems from a complaint first filed in 1986. A man claimed his lung disease was caused by asbestos exposure related to contaminated talc at his work at Windsor Minerals, a Vermont mine owned by Johnson & Johnson.
J&J sold the mine in 1989. The man died in 1994, but his family has resumed the case. They claim new evidence showed the company withheld test results and falsified records, leading to the case being dropped.
During the 1980s, more than a thousand other lawsuits were filed against J&J, achieving similar ends. The latest verdict is expected to rally many of them in a class action lawsuit.
Judgment reopens Talk claims
Kaplan, which approved J&J’s Chapter 11 bankruptcy filing in February, ruled that the proposed lawsuit was sufficiently distinct from the cosmetic talc cases that it could proceed.
J&J has long claimed that the talc in its products, both cosmetic and industrial, is free of asbestos, a toxic mineral that can cause serious illnesses including mesothelioma and ovarian cancer.
Almost everyone agrees that talc, one of the softest minerals on earth, is inherently safe but is often mined near asbestos and can become contaminated.
“We stand by the safety of the talc sold by Windsor Minerals, which was once a subsidiary of Johnson & Johnson,” the company said in an emailed statement. “Johnson & Johnson denies the claims made in this lawsuit and will defend the case if it proceeds.”
Product tests, which vary widely, have been inconclusive over the years. The US Food and Drug Administration conducted a 2020 review of cosmetic talc products and found traces of asbestos in nine out of 52 products.
Separation of cosmetic and industrial talc processes
In recent years, Johnson & Johnson, one of America’s wealthiest companies, has both won and lost lawsuits over asbestos-contaminated talc.
The majority of talc cases involve women and cosmetic powders, including the legendary Johnson’s baby powder. The use of talc in baby powder was phased out in the United States and Canada in 2020.
Settlements and judgments in Johnson & Johnson lawsuits have cost the company an estimated $4.5 billion in recent years. It first examined bankruptcy strategy after the US Supreme Court refused to review a $2.1 billion Missouri ruling against 20 women who claimed their ovarian cancer was caused by various talc products been.
Spurred on by tens of thousands of lawsuits, J&J formed a new entity called LTL Management LLC solely to take on its talc liabilities. The company immediately declared bankruptcy and dropped all lawsuits.
J&J saves big with Talc Bankruptcy spinoff
J&J is the world’s largest pharmaceutical company, sparking outrage among plaintiffs that it can file for bankruptcy under a Texas law designed to protect corporate interests.
LTL Management has listed its value at $10 billion, along with $10 billion in liabilities, according to recent court filings. Johnson & Johnson said the subsidiary will set aside $2 billion to pay off all talc claims.
The bankruptcy filing is designed to pressure applicants to accept lower settlements and avoid excessive payouts. It would also speed up the process of compensating the injured.
In recent lawsuits, J&J claimed that the allegations in the latest class-action lawsuit are very similar to those in the cosmetic-talk cases and should be included in the bankruptcy proceedings.
In contrast, the most recent lawsuit brings claims of fraudulent testimony on behalf of J&J and little mention of consumer talk, which was a key reason the cases went ahead.
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