The United States Court of Appeals for the Third Circuit rejected Johnson & Johnson‘s (NYSE: JNJ) attempt to avoid over 38,000 lawsuits filed by women who developed ovarian cancer after using J&J’s talc-based products.
The ruling means J&J could be held accountable in the future for its failure to warn consumers about potential cancer risks with its talc-based products, such as Johnson’s Baby Powder, according to Majed Nachawat, founder of the Dallas-based Nachawati Law Group.
“Our clients are grateful that the appellate court saw through this cynical attempt by J&J to avoid responsibility. We will press forward to ensure that jury trials resume, and these women can have the opportunity for justice they deserve,” said Nachawati.
Afflicted women get their day in court
The group represents multiple women diagnosed with ovarian cancer after years of using Johnson’s Baby Powder and other talc products. J&J moved the lawsuits and jury verdicts to a shell company called LTL Management in 2021. After which, LTL incorporated in Texas before filing for bankruptcy. If the move was successful, the corporation could have used bankruptcy law to duck accountability in the civil justice system.
“It’s plain and simple; Profitable corporations like Johnson & Johnson should not be allowed to use bankruptcy laws to avoid accountability,” said Nachawati.
The appellate ruling determined LTL is neither entitled nor eligible to file Chapter 11 bankruptcy because J&J had provided it a $60 billion funding safety net to handle its liabilities.
This is the latest in a series of court cases that have dogged the pharmaceutical giant beginning in the 1970’s. Johnson & Johnson introduced baby powder made of crushed talc, which is found with asbestos in the earth. Additionally the company has lost multimillion-dollar lawsuits related to mesothelioma and ovarian cancer caused by its baby powder.
Now with thousands of lawsuits pending, Nachawati stated that J&J’s liability could blow past the $60 billion set aside for the LTL bankruptcy.