Johnson & Johnson told a judge its $9 billion proposal to settle baby powder cancer claims in bankruptcy court is the only viable way to end more than 15 years of litigation, while opponents assailed the company’s efforts to line up support for its plan as deeply flawed.
“Time is off the essence,” J&J’s lawyer, Alli Brown, said Friday in her closing argument to win approval of the plan that would resolve tens of thousands of lawsuits alleging that asbestos-tainted talc in its iconic product has sickened users.
Women suffering from ovarian and other cancers are dying daily, Brown said. Conventional personal-injury mass litigation “has shown us it’s not a way to get a timely resolution.”
A lawyer for opponents of the plan said cancer victims “weren’t treated fairly and impartially” in a pre-bankruptcy vote held last year to gauge support for J&J’s settlement offer.
“There were serious lapses here that justify having a re-vote,” attorney Adam Silverstein told US Bankruptcy Judge Christopher Lopez at the close of a trial in Houston. “It was a chaotic process that should not be endorsed.”
Johnson & Johnson is trying to use the bankruptcy process to close out the vast baby powder litigation after two earlier efforts failed in other courts. Lopez is navigating the intricacies of the law to determine whether J&J’s efforts are proper.
Lopez heard about two weeks of testimony about whether J&J manipulated the pre-bankruptcy vote on the settlement and whether the company, which is profitable, is wrongly trying to benefit from Chapter 11 rules that should be reserved for financially distressed businesses.
Objectors contend J&J made false and misleading statements in disclosures of the bankruptcy plan about whether J&J’s talc-based baby powder was ever tainted with asbestos. Brown contested that during the trial, saying the company had “never wavered in the opinion that this product is safe and doesn’t contain asbestos.”
J&J says more than 80% of claimants voted to back the settlement and the company based its Red River Talc unit’s fast-track bankruptcy case on that support. The company’s lawyers said J&J clearly laid out the terms of its offers to current and future claimants and properly conducted the vote last summer.
The company’s bankruptcy plan would pay an average of $120,000 to ovarian cancer claimants. Supporters of the offer say that’s more than women have gotten through cases in the regular tort system.
Objectors’ complaints about the vote “simply aren’t credible” reasons to invalidate the balloting, Brown said. J&J maintains that it would take 6,000 years to try all pending baby powder cases. The company pulled the talc-based version of the product worldwide in 2023.
While most prominent mass-tort lawyers handling more than 60,000 baby powder suits filed so far favor the deal, a handful want Lopez to reject it. Opponents say J&J is improperly trying once again to use Chapter 11 to resolve the cases and improperly engineered the vote to push its settlement plan.
Silverstein told the judge J&J’s handling of the vote “wasn’t kosher.” Foes of the plan say there were a series of miscues by the company hired to handle the balloting, including switching votes opposing the plan to the supporting column.
For his part, Lopez – who has handled several cases involving pre-bankruptcy votes – said he’d “never seen a switch of votes” in pre-packaged bankruptcies, but wasn’t ready to sanction J&J over it.
The bankruptcy case is Red River Talc LLC, 24-90505, US Bankruptcy Court for the Southern District of Texas (Houston).
Photo: Photo by Justin Sullivan/Getty Images
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