Judge Urged To Reject J&J’s 3rd Talcum Powder Lawsuit Bankruptcy Deal

A Texas bankruptcy judge heard oral arguments this week over whether to approve a controversial $8 billion settlement offer to resolve all talcum powder cancer lawsuits filed against Johnson & Johnson.

The cosmetics and medical manufacturer faces about 62,000 Baby Powder lawsuits and Shower-to-Shower lawsuits brought by women nationwide, who say they developed ovarian cancer and other injuries following years of using Johnson & Johnson’s talc-based products on their genitals.

The litigation began in 2016, after the publication of studies that linked genital talcum powder exposure to increased risks of ovarian cancer, and juries have ordered Johnson & Johnson to pay billions in damages for failing to provide adequate warnings to consumers.

Talcum Powder Cancer Lawsuit Bankruptcy Filings

Rather than attempting to negotiate individual talcum powder settlements with women diagnosed with ovarian cancer, Johnson & Johnson has repeatedly tried to force the litigation into the U.S. bankruptcy system, but transferring all the liability it faces for failing to warn consumers about the risks associated with talc products into a subsidiary, which then declares bankruptcy.

This maneuver, often referred to as the “Texas two-step”, has twice been rejected by federal judges, who found that the company did not face a level of financial distress that came anywhere near requiring a bankruptcy to address.

Last September, after proposing an $8 billion talcum powder settlement offer, which it claimed has the approval of more than 75% of claimants, Johnson & Johnson once again proposed resolving the claims through a bankruptcy filing, to prevent any further litigation being pursued in the future.

The manufacturer created a new subsidiary, known as Red River Talc LLC and transferred all liabilities it faced for failing to warn about the talcum powder cancer risks to this new entity, which then filed for Chapter 11 protection in U.S. Bankruptcy Court for the Southern District of Texas. Amid questions about the number of claimants that actually support the deal, the manufacturer has increased the total amount of the settlement offer to $9 billion, but continues to face sharp opposition from a number of plaintiffs’ lawyers and different U.S. agencies that have a stake in the litigation.

In October 2024, Kevin Epstein, the United States Department of Justice (DOJ) Trustee representing the Texas region, filed a motion to dismiss the latest talcum powder lawsuit bankruptcy filing, indicating it is clearly a “bad faith” use of the bankruptcy system.

On Monday, arguments against the bankruptcy settlement deal were heard by U.S. Bankruptcy Judge Christopher Lopez. During the hearing, Judge Lopez received objections from the Department of Health and Human Services, and the Department of Veterans Affairs.

Both agencies claim approval of the bankruptcy deal will mean they will not be reimbursed for healthcare provided to plaintiffs through programs such as Medicaid and Medicare. In addition, plaintiffs’ attorneys also called on Judge Lopez to reject the plan, so that they can pursue their own cases separately.

Johnson & Johnson is expected to respond to the objections next month. It is unclear when Judge Lopez will render a final decision.