A Texas bankruptcy judge has rejected Johnson & Johnson’s (J&J) third attempt to use Chapter 11 bankruptcy to settle thousands of claims that its talc products caused cancer. This decision dismisses the Chapter 11 case of J&J’s unit, Red River Talc, and nullifies a proposed $9 billion settlement deal due to issues with the company’s voting procedures and third-party releases.
The Court’s Decision
U.S. Bankruptcy Judge Christopher M. Lopez ruled that voting irregularities before Red River’s bankruptcy filing justified dismissing the case. The ruling followed a two-week trial where parties argued that the “Texas two-step” bankruptcy was filed in bad faith. Judge Lopez found that Red River had rushed into bankruptcy and misapplied its vote-counting procedures, which ultimately jeopardized its Chapter 11 plan to address around 90,000 cancer claims against J&J.
Judge Lopez emphasized that the voting problems were too significant to overlook. He noted that some claimants were given an “unreasonably short time to vote,” and others had their votes switched from “no” to “yes” improperly. Judge Lopez also ruled that the Supreme Court’s decision in the Purdue case prevented J&J from obtaining third party releases in the bankruptcy for Kenvue and hundreds of retailers, which J&J has stated was essential to the plan.
What It Means For Claimants
The court’s decision means that J&J will return to the tort system to litigate the talc claims rather than pursue an appeal. This ruling is seen as a victory for the claimants, ensuring that their voices are heard and that justice is served. Adam Silverstein, one of the lead attorneys representing the Coalition of Counsel for Justice for Talc Claimants, stated that the ruling shuts down J&J’s attempts to wear down victims through delay tactics and legal loopholes.
At The Forefront
We represent thousands of plaintiffs nationwide who were diagnosed with ovarian cancer after using J&J’s talc-based products. Our relentless pursuit of justice has led to landmark verdicts, compelling J&J to face responsibility with jury-awarded damages totaling over $724 million.
J&J’s efforts to use bankruptcy to settle these claims have now been thwarted three times. The company initially filed for Chapter 11 in 2021, and after the Third Circuit dismissed it, J&J put the talc unit into bankruptcy again in New Jersey. Red River was created last year through a divisional merger that saddled it with liabilities tied to the talc litigation facing J&J.
While J&J maintains that its talc products are safe, the ongoing litigation and court rulings highlight the importance of holding corporations accountable for their actions. We will continue to fight for justice for all those affected.
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