J&J loses bid to use bankruptcy for talc claims

HOUSTON – In a significant development for ovarian cancer patients, U.S. Bankruptcy Court Judge Christopher Lopez has denied Johnson & Johnson’s (NYSE:JNJ) latest attempt to use bankruptcy to limit liability regarding its talcum powder products. This ruling allows claimants to proceed with jury trials in state courts and through multidistrict litigation (MDL).

The court’s decision marks the end of J&J’s third effort to invoke bankruptcy protections, a strategy that has been labeled by opponents as a bad-faith tactic to evade full accountability. The company, which has a market capitalization near $400 billion, had previously filed for bankruptcy under different subsidiary names, including LTL, LLT, and Red River, despite its financial solvency.

The legal battle now moves to trial courts and juries, with MDL in New Jersey federal court and New Jersey state courts set to handle bellwether trials. These trials will seek to establish J&J’s liability and determine fair compensation for the tens of thousands of women claiming that the company’s talc-based Baby Powder and Shower to Shower brands caused their ovarian cancer. Following consumer safety concerns, J&J discontinued sales of talc-based powders in North America in 2020 and globally in 2023.

Attorneys for the claimants have emphasized the importance of expedited proceedings, acknowledging the prolonged wait many women have faced and the financial hardships incurred due to medical expenses. They have expressed readiness to engage in fair settlement discussions once J&J shows willingness to responsibly compensate the affected women.

This court ruling has been hailed as a win for both the claimants and the integrity of the bankruptcy system, preventing what some feared could set a dangerous precedent for corporate abuse of legal protections. The decision was influenced by strong opposition from the U.S. Trustee’s Office, the Department of Justice lawyers, and attorneys representing Travelers Insurance, all of whom argued against J&J’s bankruptcy maneuvers.

As the cases move forward, the claimants’ legal representatives remain committed to ensuring that each woman impacted by J&J’s products will have the opportunity to seek justice in court. The information for this article is based on a press release statement.

In other recent news, Johnson & Johnson’s financial and legal landscape has been marked by significant developments. The company’s $10 billion bankruptcy proposal aimed at resolving numerous lawsuits related to its talc products was rejected by a U.S. bankruptcy judge. This marks the third unsuccessful attempt by Johnson & Johnson to settle these lawsuits through bankruptcy. Additionally, a federal judge has ordered a Johnson & Johnson unit to pay $1.64 billion for unlawfully promoting HIV drugs, citing violations of the federal False Claims Act. The pharmaceutical giant is appealing the decision, expressing confidence that the verdict will be overturned.

In the realm of medical advancements, Johnson & Johnson reported promising results from its Phase 3 MARIPOSA study, which showed that the combination of RYBREVANT® and LAZCLUZE™ extended survival in patients with advanced non-small cell lung cancer. Furthermore, the company shared encouraging data on nipocalimab’s efficacy in treating generalized myasthenia gravis, an autoimmune disorder, demonstrating significant improvements in muscle strength. On the investment front, Johnson & Johnson announced a plan to invest over $55 billion in the United States over the next four years, focusing on constructing new manufacturing facilities and expanding research infrastructure. This investment reflects a 25% increase from the previous four-year period, underscoring the company’s commitment to enhancing its production and research capabilities in the U.S.

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