Texas Judge Will Decide Whether Talcum Powder Lawsuit Bankruptcy Filing Can Move Forward After Hearing in January 2025

Federal government and some plaintiffs’ attorneys are objecting to the bankruptcy filing, accusing Johnson & Johnson of acting in bad faith.

A federal judge in Texas will make key decisions after a hearing in January 2025, about whether Johnson & Johnson’s latest attempt to use the bankruptcy system to resolve tens of thousands of talcum powder cancer lawsuits will be allowed to move forward.

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

The litigation has been ongoing since 2016, following the publication of studies linking ovarian cancer to talcum powder use by adult women, and juries have ordered Johnson & Johnson to pay billions in damages for failing to provide warnings for consumers.

However, rather than negotiating direct talcum powder settlements with women diagnosed with ovarian cancer, Johnson & Johnson has repeatedly tried to turn to the U.S. bankruptcy system to resolve all current and future lawsuits the company may face.

Johnson & Johnson’s Third Talc Bankruptcy Filing

In September, as part of an $8 billion talcum powder lawsuit settlement offer, Johnson & Johnson 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.

This tactic is known as the “Texas Two-Step”, which results in whatever assets the parent company assigns to the newly-created subsidiary being all that its debtors and litigation plaintiffs are able to recover. This artificially caps the financial damage to the parent company, and can result in plaintiffs recovering just pennies on the dollar of what they are truly owed in damages.

The bankruptcy maneuver has been heavily criticized by legal experts, judges, and now, the Justice Department, as an abuse of the protections that are intended for individuals or entities facing financial distress.

This is Johnson & Johnson’s third attempt at forcing the talcum powder cancer litigation through bankruptcy, with two prior filings rejected by the courts. However, those efforts did successfully delay additional cases from going to trial.

This time, Johnson & Johnson has filed the bankruptcy in Texas, the state for which this tactic gets its name, even though Johnson & Johnson is headquartered in New Jersey. In addition, the manufacturer now claims it has already gotten approval for the talcum powder settlement plan from more than 75% of claimants, an amount that is disputed by a number of plaintiffs’ attorneys.

The case has been assigned to U.S. Bankruptcy Judge Christopher Lopez in Texas. In a case management order (PDF) issued on October 30, Judge Lopez announced that he will hold a consolidated hearing on January 27, at which point he will hear objections to the plan.

Those objections include allegations that Johnson & Johnson’s purported support by 75% of claimants for the bankruptcy deal is not legitimate, as well as claims by the U.S. Department of Justice that this latest filing was made “in bad faith,” as part of an attempt to abuse the bankruptcy system.

The case management order also announced that discovery on those issues will be consolidated, and limited to requests for document production and oral examination depositions. Fact depositions will take place starting on November 11, and will be completed by November 27. Expert reports will be due by December 6.

The order also includes dates for expert discovery deadlines, motions to dismiss and deadlines for additional motions and objections leading up to the January 27 hearing.