Voting on J&J Talcum Powder Settlement Plan in Bankruptcy Should Be Weighted and Ensure Eligibility: Plaintiffs Group

While a Johnson & Johnson subsidiary is continuing to push a controversial talcum powder settlement plan in bankruptcy proceedings, a group of plaintiffs are calling for measures to be taken to vet claims before any vote on the deal is allowed to move forward.

Over the last decade, Johnson & Johnson has faced tens of thousands of Johnson’s Baby Powder lawsuit and Shower-to-Shower lawsuit, each involving similar allegations that asbestos particles in the talcum powder products caused users to develop ovarian cancer, mesothelioma and other injuries. However, the number of new claims has spiked over the past few years.

Following a series of massive jury verdicts returned in early trials, the company attempted to pursue a controversial bankruptcy scheme last year, by transferring all liability it faced in the litigation to a newly created subsidiary, LTL Management, LLC, which then immediately filed for bankruptcy. However, the Third Circuit Court of Appeals rejected that bankruptcy filing in March 2023, finding that Johnson & Johnson has sufficient assets to cover the liability faced by its newly created subsidiary.

While this ruling was expected to allow jury trials to resume this year, the Johnson & Johnson subsidiary immediately filed a second bankruptcy in April 2023, and proposed an $8.9 billion talcum powder lawsuit settlement fund, which the company indicated was supposed by a majority of claimants. However, the proposed deal was widely criticized by plaintiffs who have been litigating their claims for year, and oppose any attempt to force the lawsuits through a bankruptcy process.

Plaintiffs Call for Talcum Powder Lawsuit Claim Validation Process

This month, a group known as the Official Committee of Talc Claimants, representing the bulk of long-established, outstanding talcum powder cancer lawsuits, called for a U.S. Bankruptcy Judge to put a vetting process in place for talcum powder claims before any vote on the proposed settlement is allowed to take place, questioning the validity of many of the newer claimants now purported to be in favor of the deal.

Johnson & Johnson’s proposal would involve an $8.9 billion settlement fund, which would be paid over 25 years, to resolve all current and future claims. However, opponents of the deal argue that it vastly under-values claims brought by former users diagnosed with ovarian cancer, mesothelioma and other serious injuries.

The plaintiffs’ committee indicates that each claimant should be required to provide proof of eligibility under penalty of perjury before any vote is cast, and that each vote should be “weighted,” so that plaintiffs with less valid claims are not allowed to dilute the vote of those with more established and verified claims.

If the proposed deal and second bankruptcy filing are rejected, then active litigation is expected to quickly get underway, allowing individual claims to go before juries to determine the amount of compensation that must be paid.

Johnson & Johnson has already spent $1 billion defending the litigation, on top of Baby Powder settlements and verdicts already paid, which have amounted to another $3.5 billion, according to the original bankruptcy filing.

Prior estimates had suggested Johnson & Johnson would need to pay more than $10 billion to resolve all lawsuits involving cancer caused by their products. However, that was before the company failed in its initial attempt to resolve the claims through bankruptcy, and legal experts have indicated that the total liability the company faces far exceeds the amount it is offering through the talcum powder settlement fund.