Feb 21, 2024

United States Court of Appeals for the Third Circuit Rejects Johnson & Johnson’s Attempt to Dodge Lawsuit

United States Court of Appeals for the Third Circuit Rejects Johnson & Johnson’s Attempt to Dodge Lawsuit

Johnson & Johnson is one of the largest corporations in the world. In fact, as of February 10, 2023, it was reported that their net worth was $423.94 billion. So, while this billion-dollar company is a Goliath when it comes to its diversified business model, why would it try to avoid paying billions of dollars in liability? While the company is nowhere near going bankrupt, in recent years, Johnson & Johnson has been battling in court to avoid the billions of dollars in liability for their talc-based products with an alleged connection to ovarian cancer and mesothelioma.

Thanks to the decision by the United States Court of Appeals for the Third Circuit, Johnson & Johnson are unable to claim financial distress to dodge liability for its talc products allegedly causing ovarian cancer and mesothelioma, and the attorneys fighting for justice hope that corporate America is starting to take note that more and more major corporations are beginning to be held accountable for their negligence. Per the court's opinion, "Good intentions—such as to protect the J&J brand or comprehensively resolve litigation—do not suffice alone. What counts to access the bankruptcy code's safe harbor is to meet its intended purposes. Only a putative debtor in financial distress can do so. LTL was not. Thus we dismiss its petition."

Johnson & Johnson Attempts a Bankruptcy Tactic

As mentioned, Johnson & Johnson has been attempting to avoid liability in claims that their talc-based powder was the alleged root cause of ovarian cancer and mesothelioma for many women all over the world. While the company's claims have been failing to hold up in court and causing them to pay massive settlements in an attempt to limit its billions of dollars of liability, Johnson & Johnson created a shell corporation called LTL Management. With LTL, Johnson & Johnson attempted to pawn all of its talc liability to the sham company through a series of contractual agreements. 

Once transferred, J&J immediately filed LTL Management for bankruptcy. Initially, the Official Committee of Talc Claimants filed a motion to have J&J's bankruptcy dismissed as a fraudulent filing for an improper purpose. However, that original motion was denied. Then at a later date, the United States Court of Appeals for the Third Circuit reposed the matter on an appeal and reversed the original decision, dismissing the bankruptcy claim by Johnson & Johnson. Since the ruling, Johnson & Johnson has continued to double down on their attempts to file for bankruptcy. In a statement, they said that they rejected the Third Court's contention that their company did not file the case in good faith and that they would appeal the ruling.

"As we have said from the beginning of this process, resolving this matter as quickly and efficiently as possible is in the best interests of claimants and all stakeholders...we continue to stand behind the safety of Johnson's Baby Powder, which is safe, does not contain asbestos, and does not cause cancer."

Whether or not the Supreme Court will accept the appeal has yet to be announced. If they decide to reject J&J, the baby powder company will then be forced to face its liabilities on a case-by-case basis. 

Johnson & Johnson's History With Ovarian Cancer Claims 

In 2018, Johnson & Johnson was sued by 22 women who claimed their talc-based baby powder caused their ovarian cancer when they used it as a part of their daily feminine hygiene routine. A St. Louis jury awarded the women $4.69 billion in compensation. Then again in 2020, Johnson & Johnson agreed to settle with over $100 million to more than 1,000 lawsuits that also claimed their baby powder was the cause of cancer for those who used it. After the onslaught of lawsuits, the company then pulled its talc-based powder from U.S. and Canadian markets in 2020. Then finally, in September of 2022, Johnson & Johnson announced its plans to completely abandon their talc-based product worldwide in 2023. 

Contact Morgan & Morgan

If you or someone you know has been affected by Johnson & Johnson's products or have been diagnosed with ovarian cancer or mesothelioma, you may be entitled to compensation. For more information regarding your case, contact a Morgan & Morgan attorney. When you hire one of our attorneys, they will work with you 24/7. Your attorney will partner with medical professionals and other industry-leading experts to gather irrefutable evidence to ensure that you put forth the strongest case possible. At our law firm, you never have to worry about whether you can afford legal representation. There is no charge for a consultation with us, and if we don't win your case, you won’t owe us anything for our services. To learn more information on how a Morgan & Morgan attorney can help you, please complete our free, no-obligation case evaluation form today.