
A group of cancer victims is seeking justice from Johnson & Johnson (J&J) for failing to adequately warn consumers and committing fraud by persistently attempting to utilize a shell company’s bankruptcy to address tens of thousands of lawsuits. These lawsuits claim that J&J’s talc products contained asbestos, which was responsible for causing cancer.
The five individuals, who claim to represent more than 50,000 plaintiffs who have sued J&J over its talc products, proposed the class action in a New Jersey court. They stated that J&J filed for bankruptcy to shield billions of dollars from the plaintiffs, thwarting and stymieing women, and preventing them from obtaining their day in court.
Mike Papantonio, the lead attorney for the cancer suits, summed up the perceived strategy of Johnson & Johnson: “This company is actually like playing some kind of sinister checkers with this country’s money and their courts.”
J&J’s global vice president of litigation, Erik Haas, stated that the lawsuit was a “Hail Mary pass” by plaintiffs’ lawyers who do not want their clients to vote for J&J’s most recent bankruptcy settlement proposal.
Talc legal cases were initiated by women with ovarian cancer, while others who filed litigations suffered from mesothelioma, an asbestos-related cancer. In its defense, J&J has maintained that its baby powder and other talc-based products are safe for use, free of asbestos, and not responsible for cancer.
J&J’s initial strategy was a business tool known as the “Texas two-step,” which moved its talc debts to a new company that declared bankruptcy in 2021. This maneuver froze the legal cases against J&J, even though J&J itself did not declare bankruptcy.
However, this strategy, as well as its subsequent attempt to address the litigation, failed after courts dismissed it, stating that J&J and its subsidiary were not financially insolvent to merit bankruptcy. Last week, the company announced that it intends to file a third bankruptcy once it gets enough votes regarding a $6.48 billion talc settlement.
The lawsuit also demands nullification of the Texas two-step transaction, which the court would determine to be fraudulent, given that it was made to protect J&J’s assets from the talc litigation.
Further transactions, such as Johnson & Johnson’s announcement to spin off its consumer health major Kenvue, were also alleged to be fraudulent. The plaintiffs’ legal team seeks compensatory and punitive damages, claiming these transactions were produced and sold to the public fraudulently.
J&J tries to convince the public that the third AAP (Asbestos and Talc Proposal) will be different, as it will be supported by more than 70% of the people who have claims related to talc, against a unit of the company.
The company claimed to have simplified the proposed third bankruptcy by reaching individual settlements with the law firms representing people with mesothelioma and the U.S. states that accused the company of not informing consumers of the potentially fatal risks associated with using the talc products.
After J&J’s second bankruptcy was dismissed, litigation was once again initiated. Recent trials revealed that J&J was held to compensate $45 million in a mesothelioma case while it triumphed in an ovarian cancer case.