Johnson & Johnson is seeking to use bankruptcy as a means to temporarily halt all lawsuits that allege plaintiffs developed cancer as a result of using the company’s baby powder products.
A subsidiary created by Johnson & Johnson called LTL Management LLC (LTL), responsible for holding claims related to talc-based powder, filed for bankruptcy last week, according to an October 14 statement from Johnson and Johnson.
“This filing is intended to resolve all claims related to cosmetic talc in a manner that is equitable to all parties, including any current and future claimants,” the statement reads. “Johnson & Johnson and its other affiliates did not file for bankruptcy protection and will continue to operate their businesses as usual.”
On October 18, Johnson & Johnson requested Judge Craig Whitley, a U.S. bankruptcy judge to block the 35,000 lawsuits while the subsidiary LTL Management can attempt to negotiate a deal with plaintiffs, Bloomberg reports.
The first hearing will take place on October 20 in federal court in Charlotte, North Carolina, according to Bloomberg.
Judge Whitley is expected to hear from Johnson & Johnson as to why bankruptcy would be the best avenue to settle the lawsuits, according to ABC. The judge is also expected to hear from those critical of the legal move, who have called it “an unconscionable abuse of the legal system” ABC reports.
“There are countless Americans suffering from cancer, or mourning the death of a loved one, because of the toxic baby powder that Johnson & Johnson put on the market that has made it one of the most profitable pharmaceutical corporations in the world. Their conduct and now bankruptcy gimmick is as despicable as it is brazen,” said Linda Lipsen, according to ABC. Lipsen works with the advocacy group the American Association for Justice which calls for a change in bankruptcy laws.
Johnson & Johnson has denied allegations from plaintiffs that talc-based products contained asbestos and cause cancer, according to ABC.
In May of 2020, the company stopped selling talc-based baby powder in the United States and Canada, according to the Associated Press.
“Debtor continues to stand behind the safety of its cosmetic talc and does not believe the claims have merit,” the company said in a court filing according to ABC. “The unfortunate reality is that this filing is necessitated by an unrelenting assault by the plaintiff trial bar, premised on the false allegations that the Debtor’s 100+-year-old talc products contain asbestos and cause cancer.”
“Johnson’s Baby Powder has been a staple for hundreds of millions of people for over 125 years. If claimants’ allegations were correct that the product causes disease, there should have been long ago an epidemic clearly attributed to the use of the product. That is not the case,” the company said in the filing according to ABC.
The case is LTL Management LLC No. 21-30589, in U.S. Bankruptcy Court for the Western District of North Carolina.