Judge Dismisses Lawsuit Challenging J&J Talc Bankruptcy

A federal judge has thrown out a lawsuit filed by cancer victims accusing Johnson & Johnson of using shell companies to claim bankruptcy, while it has billions in the bank, so it can avoid meeting the victims in court. 

The plaintiffs are some of the thousands of people who have been diagnosed with cancer after using J&J’s talc-based baby powder for years. They, and many others, accuse J&J of having asbestos in its talc-based baby powder, which they say caused multiple types of cancer predominantly in women. 

U.S. District Judge Michael Shipp said, however, he could grant the motion as any harm caused to the victims "strictly hypothetical," Reuters reports. Shipp said he didn’t have jurisdiction to resolve a dispute over "events that have not, and may never, occur."

Court Clears Path for $6.48 Billion Talc Settlement Despite Victims' Outcry

The cancer victims alleged in the proposed class action lawsuit filed in June that the company manipulated the bankruptcy system to dodge lawsuits. Filed by five plaintiffs representing over 50,000 individuals, the lawsuit accused J&J of fraudulent financial maneuvers and a "bait-and-switch" settlement tactic through a “Texas two-step” maneuver.

In it, the victims say Johnson & Johnson has undertaken a scheme whereby it has used shell companies in attempts to claim bankruptcy multiple times so it can resolve tens of thousands of lawsuits without meeting victims in court. As with the earlier attempts, the plaintiffs argue the plan is a way to keep billions of dollars out of their reach and prevent them from getting the money they deserve through the courts.

As part of the bankruptcy filing, J&J is offering a $6.48 billion settlement to victims of ovarian cancer, which would end the litigation in 99 percent of talc related lawsuits against the company. Victims have been given a three month voting period to decide whether the bankruptcy should be allowed to proceed. 

The company argues it is the more fair way to distribute settlement funds rather than in individual cases where someone might get a windfall and someone might get nothing.

J&J Talc Lawsuit Fight Far From Over

Now that this lawsuit has been tossed, voting will go ahead as planned for the bankruptcy plan with a July 26 deadline. J&J is aiming to get support from 75 percent of the more than 61,000 plaintiffs. 

Through the bankruptcy, J&J is focused on resolving claims from women with ovarian and other gynecological cancers that have been allegedly linked to talc. It is continuing to settle most of the mesothelioma cases outside of bankruptcy.

Recently, the company has reached settlements with mesothelioma patients and U.S. states accusing the company of failing to warn consumers about the dangers of talc, Reuters reported. In one case, the company was ordered to pay $45 million to a victim of mesothelioma.

Also last month, J&J was hit with a lawsuit where plaintiffs are seeking not only damages for those allegedly harmed by the talc-based baby powder, but also medical monitoring for long-term users who haven't been diagnosed with cancer.

While J&J has continually maintained its talc is asbestos-free and does not cause cancer, the company did change from using talc to using cornstarch in 2022.