A committee composed of some of the 38,000 people who have filed lawsuits against Johnson & Johnson (J&J), claiming they developed cancer from using the company’s talc powder products, have rejected J&J’s attempt to resolve talc cancer claims with a settlement before the end of the year.
Up until recently, J&J fought talc lawsuits one at a time. Then last month, the company switched tactics by forming a sub-unit—LTL Management—with no operations that would hold all J&J’s talc liability and ultimately declare bankruptcy.
Talc cancer victims who filed claims are fighting J&J’s Chapter 11 plan, arguing that it violates the spirit of U.S. bankruptcy laws because the company is still immensely profitable but simultaneously is able to reap the benefits of bankruptcy protection, which includes a temporary halt to litigation while the plan is being reviewed by the courts.
The committee representing the plaintiffs are adamantly opposed to both J&J’s plan to shield its talc liabilities and mediation. As such, U.S. Federal Bankruptcy Judge Michael B. Kaplan expressed doubts about formal settlement talks being initiated.
Talc litigation—paused until at least January 14—also names retailers and insurance companies as defendants. Judge Kaplan scheduled a hearing shortly after the new year to decide whether to extend the stay on talc lawsuits.
The committee representing talc plaintiffs will ask Judge Kaplan to dismiss J&J’s bankruptcy plan and to end the pause on talc litigation. Judge Kaplan announced that a four-day hearing after Jan. 1 will take place to decide whether J&J’s bankruptcy plan was made in bad faith.
Committee attorney, David J. Molton told Judge Kaplan that until he rules on J&J’s bankruptcy plan, negotiating a broad settlement for the entire consolidated federal talc cases (multidistrict litigation) is not plausible.