A U.S. judge on Thursday temporarily halted most lawsuits against Johnson & Johnson over claims its baby powder and other talc products caused cancer, pausing trials as the company’s subsidiary seeks a bankruptcy resolution.
U.S. Bankruptcy Judge Michael Kaplan made the ruling in Trenton, New Jersey, largely siding with J&J’s request to freeze ongoing litigation as it works toward a settlement that includes current and future claims. The pharmaceutical giant is pursuing an $8.9 billion settlement, though some attorneys representing claimants dispute the level of support for the deal.
J&J Pursues $8.9 Billion Settlement Amid Bankruptcy Hurdles
The company’s subsidiary, LTL Management, filed for bankruptcy a second time this month in hopes of securing the settlement, despite a January ruling by a federal appeals court that overturned its initial Chapter 11 filing, finding LTL was not in financial distress. LTL claims this second attempt has stronger support, noting it has secured backing from more than 75% of plaintiffs—a threshold needed to move forward with the proposed settlement.
The settlement is structured to address thousands of ovarian cancer claims but does not cover cases of mesothelioma, a rare cancer tied to alleged asbestos in J&J’s talc. This exclusion has left some plaintiffs, particularly mesothelioma claimants, in legal limbo.
Legal Challenges and Opposition
Despite the settlement’s increased support, some cancer victims, their attorneys, and the U.S. Justice Department’s bankruptcy watchdog view LTL’s bankruptcy as a misuse of U.S. bankruptcy protections. They argue that J&J’s “Texas Two-Step” maneuver—using a subsidiary to assume liability and then filing for bankruptcy—effectively shields the company from jury trials in individual cases.
“I have more questions than answers,” Kaplan said at Thursday’s hearing, addressing arguments presented on the second bankruptcy attempt.
Kaplan’s decision temporarily pauses around 38,000 lawsuits centralized in a New Jersey federal court. While new cases can still be filed, he allowed other proceedings, like depositions, to continue as long as no trials commence. Kaplan plans to revisit the matter in late May.
J&J’s worldwide litigation chief Erik Haas called the ruling “a win for claimants,” expressing optimism that the settlement will gain approval. However, attorneys opposing the deal contend that J&J has created “an illusion of support” by engaging select plaintiff law firms to gather client signatures without filing lawsuits directly against J&J.
