Lawyers who represent more than 30,000 women who have filed lawsuits against Johnson & Johnson (NYSE:JNJ) in connection with its defective talc body powders, including the iconic Johnson’s Baby Powder, say they will resist J&J’s decision to use bankruptcy to avoid legal responsibility for the cancers tied to those products.
“It seems inconceivable that bankruptcy involving a highly profitable $500 billion company could be contemplated, let alone become reality,” says Andy Birchfield of the Beasley Allen law firm, which represents thousands of women and families alleging that use of the company’s Baby Powder led to ovarian cancer. “It seems hypocritical that such a company could defend a product it claims to be safe, while seeking bankruptcy protection for marketing that same product it knew to be dangerous.”
On Thursday, J&J announced that it had created a separate subsidiary, LTL Management LLC (LTL) to “hold and manage claims in the cosmetic talc litigation.” At the same time, J&J placed the subsidiary into bankruptcy, filing in the Western District of North Carolina, Charlotte Division. This venue is considered responsive to companies seeking to shield themselves from legal claims brought about by their defective products.
Mr. Birchfield says that recent abuses of the bankruptcy system mean that members of Congress including Sen. Elizabeth Warren (D-Mass) and Rep. Jerrold Nadler (D-NY) will join talc cancer victims in opposing J&J’s bankruptcy plan. An increasing number of bankruptcy experts have voiced concerns about similar previous ploys, as corporate bankruptcies are normally reserved for struggling businesses that need relief from creditors.
Right behind the Sacklers, the Boy Scouts and USA Gymnastics, here’s another example of the wealthy and powerful using bankruptcy as a hiding place to protect their profits and avoid responsibility.
– Andy Birchfield
According to the bankruptcy filing, Johnson & Johnson is proposing to create a $2 billion settlement fund. In the ongoing talc litigation, one single verdict for twenty women exceeded that amount and total talc-related liabilities are estimated at more than $25 billion. Ovarian cancer is a horrific and deadly disease that exacts both an emotional and financial toll on women and their families. On average, medical expenses related to ovarian cancer caused by talc often exceed $500,000 per victim.
Birchfield says the filing creates an uncertain future for pending trials, including thousands of talc cases filed in multidistrict litigation in New Jersey federal court.
“As a firm we are committed to challenging this petition at every level and fighting any attempt by J&J to further delay scheduled trials and prolong the suffering of thousands of ovarian cancer victims and their families,” says Birchfield. “We will fight – no matter how hard and how long it takes – until these women get justice.”