JnJ faces 18 talc cancer trials, prompting it again to consider bankruptcy

“With all those trials staring them in the face, of course they want their unit to run back into bankruptcy,” said Carl Tobias, a University of Richmond professor who teaches about mass torts and has followed the talc cases. “They are playing for time and to avoid shelling out the hundreds of millions of dollars on lawyers to defend all those trials.”

Another bankruptcy filing by J&J’s LTL Management subsidiary would give the company the opportunity to ask a judge to put a hold on all trials while the company once again negotiates with lawyers representing talc victims. Judges did that in the first two Chapter 11 filings by the LTL unit, but those cases were thrown out.

“We are prepared to vigorously litigate these meritless claims in the tort system, where we have prevailed in the overwhelming majority of cases tried,” J&J said in an emailed statement. “Over 40 years of studies by independent medical experts around the world support that cosmetic talc is safe, does not contain asbestos and does not cause cancer.”

Andy Birchfield, an Alabama-based lawyer representing thousands of talc victims, said the return to the regular court system will allow ex-baby powder users to exercise their constitutional rights to a fair trial. “Now, the poster child for corporate arrogance and misconduct will face real pressure of accountability in thousands of cases one trial at a time,” he said in an emailed statement.

Erik Haas, J&J’s in-house lawyer in charge of litigation, said on an earnings call earlier this month the world’s largest maker of health-care products is mulling another Chapter 11 filing by a unit in hopes of reviving its $8.9 billion settlement deal.

J&J says the only rational way to come up with a global talc resolution is to use the bankruptcy courts, so they can address future cancer claims tied to its baby powder. Chapter 11 rules allow corporations to fund trusts that decide how much claimants get, instead of allowing juries to decide damages. Many talc claimants oppose allowing a trustee to set awards and want to take their cases to court.

There’s been a recent wave of corporations turning to the bankruptcy courts in hopes of cramming down settlements on mass-tort claimants, said Melissa Jacoby, a University of North Carolina professor who specializes in Chapter 11 law. Some companies have turned bankruptcy into a way of “blocking trials and discovery” while victims “get sicker and some die,” Jacoby said in an email.

J&J now faces at least 51,000 lawsuits claiming talc used in baby power and similar products caused cancer, many of which have been consolidated before a federal judge in New Jersey for pre-trial information exchanges. Other cases are set for trial in state courts.

Consumers allege in those cases J&J executives knew since the early 1970s its talc-based powders contained trace amounts of asbestos, but failed to alert the public or regulators. J&J contends its talc-based products don’t cause cancer and the company has marketed baby powder appropriately for more than 100 years.

The company pulled its talc-based powders off the market in the US and Canada in 2020, citing slipping sales, and replaced talcum with a cornstarch-based version. J&J vowed to remove all its baby powders containing talcum powder worldwide by the end of this year.

In the meantime, J&J faces a trial next month over claims a baby powder user developed mesothelioma – a form of cancer specifically linked to asbestos exposure – in state court in Oakland, California. The last time J&J took a talc case to trial in that court, jurors ordered the company to pay a man $18.8 million in damages. J&J appealed the award.

In March, J&J faces a case combining claims from eight ex-talc users in its hometown state court in New Brunswick, New Jersey. Five months later, J&J is scheduled to face a case grouping claims by six former talc users in the same courthouse. In 2018, jurors in that same court ordered J&J to pay $117 million to Stephen Lanzo III who blamed tainted talc in its baby powder for causing his cancer, but that verdict later got thrown out.

The first talc cases against J&J to go to trial in state court in Philadelphia are expected to start in the fall of 2024, plaintiffs’ lawyers say. Past trials in state courthouse — such as in Oakland, New Brunswick and Philadelphia - have generated sizeable awards against the company, some of which were later reduced or thrown out.

In April, J&J faces a jury trial of Mississippi’s allegations the company violated the state’s consumer-protection laws by failing to put a cancer warning on its baby powder bottles. J&J unsuccessfully asked the US Supreme Court in 2021 to bar the state’s attorney general from using the law to sue the company.

The state is seeking to have J&J punished for selling more than 6 million bottles of baby powder in the state without a cancer warning over a 46-year period starting in 1974. That could result in $6 billion in damages if a judge hands down a $1,000-per bottle fine under Mississippi law.

The consolidated federal talc case is In Re Johnson & Johnson Talcum Powder Products Marketing, Sales Practices and Products Liability Litigation, 16-md-2738, US District Court for the District of New Jersey (Trenton)