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J&J, Cancer Victims Ordered to Start Mediation in Bankruptcy

By | May 11, 2023

A federal judge ordered a new round of settlement talks between Johnson & Johnson and lawyers who spurned the company’s offer to pay $8.9 billion to end tens of thousands of cancer claims filed by people who used the company’s popular baby powder.

Holdouts want to take their claims to juries around the country instead of joining a proposal that would resolve all current and future lawsuits related to the health-care giant’s talc-based products. About 40,000 people have sued J&J claiming the company for decades sold products like baby powder that were so contaminated that they caused cancer.

J&J denies that the products were harmful and is trying for a second time to use a bankruptcy case filed in New Jersey by a small unit to force claimants to accept a deal. US Bankruptcy Judge Michael Kaplan overruled objections from some of the holdouts who had opposed one of two mediators that will oversee the confidential settlement discussions.

“I always think talking serves a purpose in trying to come to a consensus,” Kaplan said.

The $8.9 billion settlement proposal is backed by as many as 80,000 claimants, company lawyer Gregory Gordon told Kaplan in federal court last month. Opponents dispute that figure, noting that many new people who say they were hurt by J&J products have not had their allegations verified.

The proposal has split the law firms representing tens of thousands of women who say say the company’s baby powder gave them cancer. The holdouts have accused J&J of wrongly putting the unit, LTL Management, back into bankruptcy just hours after its first effort was dismissed on orders from a federal appeals court.

The two sides were in court Wednesday in Trenton, New Jersey, to talk about how the second bankruptcy case should proceed. The holdouts have asked Kaplan to dismiss LTL’s Chapter 11 case so the claimants can pursue their cases in courts around the country. Kaplan has halted all but a handful of the cancer cases while the bankruptcy continues. New cases can be filed, but not taken to trial.

Kaplan schedule a hearing for June to decide if the bankruptcy should be thrown out for a second time.

The new bankruptcy filing is LTL Management LLC, 23-12825, U.S. Bankruptcy Court for the District of New Jersey (Trenton).

Photo: Illustration by Justin Sullivan/Getty Images

Topics New Jersey

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