Johnson & Johnson’s Talc Bankruptcy has been Appealed to the Third Circuit

Earlier last year, Johnson & Johnson (“J&J”) created a subsidiary, LTL Management (“LTL”), which now holds all talcum powder liabilities, while only holding $2 billion in assets. The assets allocated to LTL are miniscule in comparison to the estimated $450 billion in assets held by J&J before the creation of this subsidiary. This tactic is commonly known as the “Texas Two-Step,” which we discussed in a previous article. However, plaintiffs are appealing this opportunistic bankruptcy to the Third Circuit where the Court of Appeals will determine whether J&J’s forming of the LTL subsidiary and subsequent bankruptcy filing was in bad faith. Oral arguments were heard on the matter on September 19, 2022, but no ruling has been made by the 3-judge panel as of yet. Regardless of the ruling on this matter, victims will still receive compensation; however, if the bankruptcy is allowed, payment amounts will likely be lower.

There is a great deal at stake here, as there more than 38,000 talc powder victims with cancer lawsuits pending against J&J. While the Third Circuit Court deliberates the permissibility of J&J’s strategic approach in the on-going litigation, J&J has finally taken steps to prevent future harm caused by its talcum powder products. Last August, J&J announced that they will no longer sell talcum powder products, and that beginning in 2023, all talc-containing ingredients will be replaced with cornstarch — an adjustment that was long overdue.

Shelby Roden filed one of the first federal talcum powder lawsuits in the State of Alabama and will continue to monitor the ongoing litigation alleging claims related to ovarian cancer. If you or a family member have been diagnosed with ovarian cancer, please contact our office at 205-933-8383 for more information.