Johnson & Johnson bankruptcy plan won’t stop industrial talc lawsuits

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Legislation & Litigation

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Johnson & Johnson may have used a controversial bankruptcy to avoid nearly 40,000 cosmetic talc lawsuits, but it now faces plaintiffs harmed by industrial talc powder decades ago.

US federal judge Michael Kaplan ruled earlier this month that the recent bankruptcy plan ending the majority of cases would not apply to this latest class action lawsuit.

The decision by a New Jersey superior court stems from a lawsuit first filed in 1986. A man claimed his lung disease was caused by asbestos exposure linked to contaminated talc at his job at Windsor Minerals, a Vermont mine owned by Johnson & Johnson.

J&J sold the mine in 1989. The man died in 1994, but his family reopened the business. They claim new evidence showed the company was withholding test results and falsifying records, leading to the case being dropped.

During the 1980s, more than a thousand others filed lawsuits against J&J that achieved similar goals. The recent decision is expected to unite many of them in a class action lawsuit.

Ruling reopens Talc’s legal claims

Kaplan, which approved J&J’s Chapter 11 bankruptcy filing in February, ruled the proposed lawsuit was different enough from the cosmetic talc cases to move forward.

J&J has long maintained that the talc in its products, both cosmetic and industrial, is free of asbestos, a toxic mineral that can cause serious diseases, including mesothelioma and ovarian cancers.

Almost everyone agrees that talc, one of the world’s softest minerals, is harmless on its own, but it is often mined near asbestos and can be contaminated.

“We guarantee the safety of talc sold by Windsor Minerals, which was formerly a subsidiary of Johnson & Johnson,” the company said in an emailed statement. “Johnson & Johnson denies the allegations presented in this lawsuit and will defend the case if it proceeds.”

Product testing, which varies widely, has been inconclusive over the years. The United States Food and Drug Administration conducted a review of talc-based cosmetic products in 2020 and found traces of asbestos in nine of 52 products.

Separating lawsuits related to cosmetic and industrial talc

In recent years, Johnson & Johnson, which is one of America’s wealthiest companies, has won and lost lawsuits brought against it over asbestos-contaminated talc.

The majority of talc cases involve women and cosmetic powders, including the iconic Johnson’s Baby Powder. The use of talc in baby powder was discontinued in the United States and Canada in 2020.

Johnson & Johnson lawsuit settlements and verdicts have cost the company about $4.5 billion in recent years. He first explored bankruptcy strategy after the U.S. Supreme Court refused to review a $2.1 billion judgment in Missouri that was awarded to 20 women who claimed their breast cancer ovary had been caused by various talc products.

Prompted by the tens of thousands of lawsuits, J&J formed a new entity called LTL Management LLC, which was designed solely to absorb its talc liabilities. This company immediately filed for bankruptcy, putting an end to all lawsuits.

J&J saves big with Talc Bankruptcy Spinoff

J&J is the world’s largest pharmaceutical company, which has sparked outrage among plaintiffs over its ability to file for bankruptcy under a Texas law designed to protect corporate interests.

LTL Management listed its value at $10 billion, along with $10 billion in liabilities, according to recent court records. Johnson & Johnson said the subsidiary will have $2 billion to settle all talc-related claims.

The bankruptcy filing is designed to pressure plaintiffs into accepting lower settlements and avoiding overpayments. It would also speed up the process of compensating those injured.

In the most recent court proceedings, J&J argued that the allegations in the latest class action lawsuit closely resemble those in the cosmetic talc cases and should be consolidated into the bankruptcy proceeding.

In contrast, the recent lawsuit brings allegations of fraudulent legal testimony on behalf of J&J and few mentions of consumer talc, which was a key reason the cases will be allowed to proceed.

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