Citing what it calls an “unrelenting assault” by greedy lawyers, Johnson & Johnson is hoping to use the bankruptcy process to dispose of 40,000 lawsuits that claim its baby powder products caused cancer.
A J&J subsidiary created to hold the liabilities from the litigation announced last week it was filing for chapter 11 protection.
During Wednesday’s hearing, the first in the case, the judge is expected to hear from J&J why bankruptcy is the best method to resolve the lawsuits and from critics who called the move “an unconscionable abuse of the legal system.”
“There are countless Americans suffering from cancer, or mourning the death of a loved one, because of the toxic baby powder that Johnson & Johnson put on the market that has made it one of the most profitable pharmaceutical corporations in the world. Their conduct and now bankruptcy gimmick is as despicable as it is brazen,” Linda Lipsen, of the American Association for Justice, an advocacy group pushing for change in bankruptcy laws, said in a statement.
The company has denied its signature Johnson’s Baby Powder and other talc-based products contained asbestos and caused cancer, as alleged by tens of thousands of plaintiffs. J&J has spent nearly $1 billion defending itself, according to a court filing.
“Debtor continues to stand behind the safety of its cosmetic talc and does not believe the claims have merit,” J&J said in a court filing. “The unfortunate reality is that this filing is necessitated by an unrelenting assault by the plaintiff trial bar, premised on the false allegations that the Debtor's 100+ year old talc products contain asbestos and cause cancer.”
The company stopped selling Baby Powder in the United States and Canada in May 2020.
“Johnson's Baby Powder has been a staple for hundreds of millions of people for over 125 years. If claimants' allegations were correct that the product causes disease, there should have been long ago an epidemic clearly attributed to the use of the product. That is not the case,” the filing said.
Johnson & Johnson has put $2 billion into a settlement fund to pay the talc claims even though the company said “$2 billion is substantially in excess of any liability the Debtor should have.”