Lawmaker Blasts Johnson & Johnson Talcum Powder Bankruptcy Plan on U.S. Senate Floor

Durbin said the Johnson & Johnson talcum powder bankruptcy plan should be rejected by the courts.

A prominent U.S. Senator lambasted Johnson & Johnson on the U.S. Senate floor this week, over a controversial bankruptcy maneuver the company is using to try to avoid massive liability it faces in talcum powder lawsuits filed by women diagnosed with ovarian cancer and other injuries.

U.S. Senator Dick Durbin, the Democratic Majority Whip and chair of the powerful Senate Judiciary Committee spoke on the Senate floor on Tuesday, describing Johnson & Johnson’s tactics as “shameful” and calling for the courts to reject the company’s so-called “Texas Two-Step” bankruptcy filing. He also called for Congress to close legal loopholes in U.S. bankruptcy laws, which allow these types of filings to occur.

Johnson & Johnson currently faces about 38,000 Baby Powder lawsuits and Shower-to-Shower lawsuits brought throughout the federal court system by women alleging that talc and asbestos particles in the products caused women to develop ovarian cancer, mesothelioma and other injuries.

In response to mounting litigation costs and a number of massive verdicts returned in early trial dates, Johnson & Johnson announced in October that it had spun off any liability exposure it faces from the litigation into a new company, LTL Management, LLC, which was formed for the express purpose of placing the new unit into bankruptcy. The move has been viewed as largely a negotiating attempt to force plaintiffs to accept less compensation than they seek, since Johnson & Johnson has sufficient assets to cover liability exposure it faces for failing to warn consumers about the risks associated with its talc products.

Learn More About

Talcum Powder Lawsuits

Talcum powder or talc powder may cause women to develop ovarian cancer.

Learn More About this Lawsuit See If You Qualify For Compensation

The Johnson & Johnson talcum powder bankruptcy plan has been widely criticized by plaintiffs lawyers, as well as bankruptcy experts, as an abuse of the legal process and effort to delay a series of trials that were expected to go before juries this year.

Durbin said, if approved, the filing would make disparities in the justice system, which he says favors the rich, as well as powerful corporations, worse than they already are, by allowing Johnson & Johnson to avoid accountability for products which harmed consumers.

The criticism comes as hearings began this week before U.S. Bankruptcy Judge Michael Kaplan, who must determine whether the bankruptcy filing by J&J spin-off, LTL Management, can move forward. He will oversee hearings throughout this week after plaintiffs moved to have the filing rejected.

Plaintiffs say Johnson & Johnson, which has massive cash reserves, has no financial distress which would merit a bankruptcy filing. However, if the bankruptcy is allowed to move forward, settlements for talcum powder cancer and asbestos lawsuits may be capped at $2 billion.

“I hope the courts reject Johnson & Johnson’s abuse of federal bankruptcy laws,” Durbin said. “But I also believe that Congress must act to close this loophole for good. I hope Democrats and Republicans can work together on a bipartisan basis to stop this bankruptcy abuse.”

Defending against the talcum powder litigation has already cost Johnson & Johnson $1 billion, on top of Baby Powder settlements and verdicts that have amounted to another $3.5 billion, according to the bankruptcy filing.

Most of the U.S. talc litigation is currently pending in the federal court system, where the cases are centralized before U.S. District Judge Freda L. Wolfson in the District of New Jersey, as part of an MDL or multidistrict litigation. Prior to the bankruptcy filing, the Court was planning to hold a series of talcum powder “bellwether” trials beginning in April 2022, which have now been delayed after a stay on all proceedings was issued by the U.S. Bankruptcy Court.


Share Your Comments

I authorize the above comments be posted on this page*

Want your comments reviewed by a lawyer?

To have an attorney review your comments and contact you about a potential case, provide your contact information below. This will not be published.

NOTE: Providing information for review by an attorney does not form an attorney-client relationship.

This field is for validation purposes and should be left unchanged.

More Top Stories

Uber Driver Sexual Assaults and Misconduct Reports Must Be Disclosed in Lawsuit Discovery
Uber Driver Sexual Assaults and Misconduct Reports Must Be Disclosed in Lawsuit Discovery (Posted today)

A federal magistrate judge is forcing Uber to hand over potentially hundreds of thousands of incident files involving reports of passengers who suffered sexual misconduct or sexual assault at the hands of the rideshare service's drivers.

Abbott May Remove Infant Formula for Preemies Off the Market Due to Similac NEC Lawsuits
Abbott May Remove Infant Formula for Preemies Off the Market Due to Similac NEC Lawsuits (Posted yesterday)

Abbott Laboratories is considering removing Similac infant formula products designed for preterm babies from the market, as it faces hundreds of lawsuits claiming the products increase the risk of necrotizing enterocolitis, which puts newborns at a high risk of permanent injuries and death.

Information About Suboxone Dental Claims To Be Exchanged By Parties in MDL
Information About Suboxone Dental Claims To Be Exchanged By Parties in MDL (Posted 2 days ago)

A federal judge has ordered parties involved in Suboxone dental decay lawsuits to submit proposals for exchanging information that will guide the selection of representative bellwether claims for early test trials.