Cancer victims file lawsuit against Johnson & Johnson: Here's why
A group of cancer victims has initiated a class action lawsuit against healthcare behemoth, Johnson & Johnson (J&J). The suit, filed in New Jersey federal court, accuses J&J of fraudulently using a shell company's bankruptcy to resolve numerous lawsuits. These lawsuits claim that J&J's talc products contain asbestos, a substance known to cause cancer. Five plaintiffs, who seek to represent over 50,000 people who sued J&J over its talc products, have filed this proposed class action suit.
Plaintiffs describe J&J's bankruptcy strategy as fraudulent
The majority of the talc lawsuits against J&J have been filed by women diagnosed with ovarian cancer. Other cases involve individuals suffering from mesothelioma, a deadly cancer linked to asbestos exposure. The plaintiffs argue that J&J's bankruptcy strategy has put billions of dollars beyond the reach of plaintiffs. They accuse the company of attempting to "hinder, delay, and defraud these women and prevent them from ever having their day in court."
J&J responds to lawsuit, describes it as 'Hail Mary pass'
Attorney Mike Papantonio, representing the cancer victims, accused J&J of "playing a dark game of chess with this country's financial and judicial systems." In response, Erik Haas, J&J's worldwide VP of litigation, described the legal action as a "Hail Mary pass" by plaintiffs' lawyers. Haas questioned their motives for trying to prevent their clients from voting on the company's latest proposed bankruptcy settlement. He emphasized that J&J's focus remains on reaching a "full, fair and final resolution" of the litigation.
J&J's bankruptcy strategy failed
In 2021, J&J employed a corporate strategy known as the "Texas two-step" to transfer its talc liabilities into a new subsidiary that subsequently filed for bankruptcy. This move effectively halted the lawsuits against J&J without requiring the parent company itself to file for bankruptcy. However, a second similar attempt to resolve the litigation failed as courts ruled that neither J&J nor its subsidiary were in financial distress and thus not eligible for bankruptcy.
Plans for the third attempt
Following the setbacks in the second attempt, J&J announced on May 1 that it plans to pursue a third bankruptcy, once it secures enough votes to support a $6.48 billion talc settlement. The latest lawsuit seeks a ruling that the Texas two-step transaction was fraudulent as it was undertaken solely to protect J&J's assets from the talc litigation.
J&J streamlines proposed settlement
Despite the allegations, J&J maintains that its planned third bankruptcy will be different, because it will have support from over 75% of people with talc-related claims. The company has streamlined the proposed third bankruptcy by reaching separate settlements with law firms representing mesothelioma victims and US states, alleging that the company failed to warn consumers about its talc products' dangers. Litigation against J&J resumed after its second bankruptcy was dismissed.
