Johnson & Johnson Could Be Forced To Pay $61 Billion To Talcum Powder Ovarian Cancer And Mesothelioma Plaintiffs
61 billion dollars represents only a fraction of the $400 billion in cash and liquid assets the company admits to having on hand
Wednesday, January 18, 2023 - About 38,000 women with late-stage ovarian cancer, many of which have only months to live, have been left unable to exercise their constitutional right to a day in court. Last summer, Johnson & Johnson created a spin-off company called LTL management, placed their talcum powder lawsuits in it, along with a minimal sum of cash, and then declared bankruptcy. The maneuver is called the Texas Two-step and effectively shields a rich parent company like Johnson & Johnson from the claims of plaintiffs who allege using the company's flagship talcum powder caused them to develop ovarian cancer, a death sentence. Plaintiff lawyers are outraged that the company could get away without being held accountable for their reprehensible conduct as one Missouri Appeals Court judge categorized them. Insider memos revealed in court cases from 2016 to 2020 unveiled that Johnson & Johnson executives knew as early as 1971 that their talc supply contained asbestos, a deadly carcinogen, and did nothing to warn consumers. The company said that no mother would trust the brand for use on their infants if they knew that the product contained even a whiff of asbestos. With that in mind, Johnson & Johnson redirected their Baby Powder advertising toward Black women in the south, a demographic they said represented a less informed target market.
Talcum powder cancer lawyers told NPR that Johnson & Johnson's use of the Texas Two-Step was not undertaken with the spirit of the bankruptcy law in mind, but rather the maneuver attempted to circumvent the legal system denying women with cancer their constitutional rights. At a hearing held in September 2022, a lawyer testifying for LTL management was forced to give the company's rationale as to how the plaintiff's best interests were being met. According to NPR, "During the hearing, members of a three-judge panel of the United States Court of Appeals for the Third Circuit in Philadelphia asked whether J&J had used the legal strategy to gain "a litigation advantage" over roughly 40,000 cancer patients who have sued the company." "Attorney Neal Katyal, representing the company, responded by arguing that the bankruptcy maneuver -- known as the "Texas two-step" -- would benefit victims by producing a faster settlement, possibly worth as much as $61 billion, " NPR added.
Once again, lawyers argued that $61 billion was a mere drop in the bucket when compared to the hundreds of millions of dollars J & J have earned selling contaminated talcum powder for over a century. The $61 billion also represents a small fraction of the $400 billion in cash assets the company admits to having on hand. The lawyer insisted that bankruptcy offers plaintiffs a way to get paid rapidly rather than try each of the 40,000 cases one by one in state courts around the nation. They also argued that only a fraction of the 40,000 cases would go to trial since many are chasing what is being called lottery-like punitive damage awards.
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