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Mon Jan 30, 2023, 06:02 PM

U.S. court rejects J&J bankruptcy strategy for tens of thousands of talc lawsuits

Last edited Mon Jan 30, 2023, 09:12 PM - Edit history (1)

Source: Reuters

Jan 30 (Reuters) - A U.S. appeals court on Monday shot down Johnson & Johnson's (JNJ.N) attempt to offload tens of thousands of lawsuits over its talc products into bankruptcy court. The ruling marked the first major repudiation of an emerging legal strategy with the potential to upend U.S. corporate liability law.

J&J is among four major companies that have filed so-called Texas two-step bankruptcies to avoid potentially massive lawsuit exposure. The tactic involves creating a subsidiary to absorb the liabilities and to immediately file for Chapter 11.

The court ruled the healthcare conglomerate improperly placed its subsidiary into bankruptcy even though it faced no financial distress. J&Jís two-step sought to halt more than 38,000 lawsuits from plaintiffs alleging the companyís baby powder and other talc products caused cancer. The appeals court ruling revives those lawsuits.

Reuters last year detailed the secret planning of Texas two-steps by Johnson & Johnson and other major firms in a series of reports exploring corporate attempts to evade lawsuits through bankruptcies. Monday's decision by the U.S. 3rd Circuit Court of Appeals in Philadelphia dismissed the bankruptcy filed by the J&J subsidiary in 2021. Before the filing, J&J had faced costs of $3.5 billion in verdicts and settlements.

Read more: https://www.reuters.com/legal/jjs-ltl-units-bankruptcy-dismissed-by-us-appeals-court-filing-2023-01-30/



Heard this on news radio this afternoon.

Article updated.

Original article -

Jan 30 (Reuters) - A U.S. appeals court upended Johnson & Johnson's (JNJ.N) attempt to offload into bankruptcy tens of thousands of lawsuits over its talc products, ruling the healthcare conglomerate improperly placed a subsidiary into Chapter 11 proceedings even though it did not face financial distress.

The decision by the U.S. 3rd Circuit Court of Appeals in Philadelphia on Monday dismissed a Chapter 11 petition filed by a recently created J&J subsidiary in October to address more than 38,000 lawsuits from plaintiffs alleging the companyís baby powder and other talc products caused cancer.

Before the bankruptcy, J&J faced costs from $3.5 billion in verdicts and settlements, including one in which 22 women were eventually awarded a judgment of more than $2 billion, according to bankruptcy-court records.

Several major companies, including J&J and 3M Co (MMM.N), have turned to bankruptcy court to manage their mass tort liabilities. Plaintiff attorneys have called the cases an improper manipulation of the bankruptcy system, while the companies say the Chapter 11 filings are aimed at compensating claimants fairly and equitably.

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Reply U.S. court rejects J&J bankruptcy strategy for tens of thousands of talc lawsuits (Original post)
BumRushDaShow Jan 30 OP
LiberalArkie Jan 30 #1
Evolve Dammit Jan 30 #2
NullTuples Jan 30 #3
dutch777 Jan 30 #4
Evolve Dammit Jan 30 #12
Bayard Jan 30 #5
BumRushDaShow Jan 30 #6
Bayard Jan 30 #8
BumRushDaShow Jan 30 #9
Evolve Dammit Jan 30 #13
BumRushDaShow Jan 30 #14
Evolve Dammit Jan 31 #18
BumRushDaShow Jan 31 #19
Evolve Dammit Jan 31 #22
BumRushDaShow Jan 31 #24
Evolve Dammit Jan 31 #25
BumRushDaShow Jan 31 #27
Evolve Dammit Feb 1 #28
BumRushDaShow Feb 1 #29
Evolve Dammit Feb 1 #30
Orrex Jan 30 #7
OldBaldy1701E Jan 30 #11
BumRushDaShow Jan 30 #15
Sgent Jan 30 #16
republianmushroom Jan 30 #10
LetMyPeopleVote Jan 31 #17
Bayard Jan 31 #20
womanofthehills Jan 31 #21
electric_blue68 Jan 31 #26
Joinfortmill Jan 31 #23

Response to BumRushDaShow (Original post)

Mon Jan 30, 2023, 06:14 PM

1. Did anyone hear the collective "AWW SHIT" coming from the J&J boardroom?

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Response to BumRushDaShow (Original post)

Mon Jan 30, 2023, 06:14 PM

2. Good. They knew and many died. Typical corporate denial instead of admitting the truth.

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Response to Evolve Dammit (Reply #2)

Mon Jan 30, 2023, 06:29 PM

3. They have nothing to lose by trying it, and that's part of the problem.

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Response to NullTuples (Reply #3)

Mon Jan 30, 2023, 06:36 PM

4. Yep and delaying justice even more

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Response to NullTuples (Reply #3)

Mon Jan 30, 2023, 09:00 PM

12. Big Tobacco dragged it out for a decade or more. Oxycontin. Asbestos. Agent Orange. Orange 45.

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Response to BumRushDaShow (Original post)

Mon Jan 30, 2023, 07:05 PM

5. What thing I don't get...

How do they know a person's cancer was caused by J&J's talc? There are hundreds of generic brands out there.

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Response to Bayard (Reply #5)

Mon Jan 30, 2023, 07:13 PM

6. Probably because it was the largest and most popular seller

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Response to BumRushDaShow (Reply #6)

Mon Jan 30, 2023, 07:29 PM

8. Of course, they have the deepest pockets

Like Monsanto/Bayer gets hit with all the glyphosate cancer lawsuits, when there are tons of other manufacturers.

Not that these name-brand companies don't deserve most of the blame. I'm just wondering how its assessed.

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Response to Bayard (Reply #8)

Mon Jan 30, 2023, 07:39 PM

9. Yup

I know many of the cases here were from survivors of individuals who died and then sued and others were done by states on behalf of their residents.

This site has a recent "summary" of some of the suits that were filed and current status - https://www.lawsuit-information-center.com/2-billion-verdict-in-missouri-motivates-jj-to-settle-talcum-powder-lawsuits.html

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Response to BumRushDaShow (Reply #6)

Mon Jan 30, 2023, 09:07 PM

13. Initially, they were the only "brand". It became as synonymous as "Kleenex" or "Xerox". The

talc is mined from veins that contain tremolite, an asbestos-containing mineral deposit. They knew it and continued production. Correct me if I'm wrong.
As the only brand for so many years, before "generic" or other competitors emerged they deserve the brunt of the scrutiny and litigation. Unfortunately for those who developed serious disease, they went into denial mode.

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Response to Evolve Dammit (Reply #13)

Mon Jan 30, 2023, 09:32 PM

14. There have always been other known "name brands" of talcum powder

for example one that might be very familiar -



(the "medicated" version contains the talc where other versions are primarily using corn starch)

But what J&J did - whether with that particular product by calling it "baby powder" or with the shampoo that they dubbed "baby shampoo" (including "No more tears" ) that had some ingredients that produced small amounts of formaldehyde as a byproduct of the manufacturing process, was to use it's juggernaut of promotion to establish itself as a "trusted and wholesome brand", so they had the biggest marketshare.

The issue they are arguing in court has been how much asbestos may have been in the product that was sold and whether it was even at a consistent level from batch to batch given it was a natural contaminant, and if it was enough to cause the cancer.

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Response to BumRushDaShow (Reply #14)

Tue Jan 31, 2023, 11:40 AM

18. Formaldehyde in baby shampoo. That's great. Was Gold Bond around before J&J? "Medicated" huh?

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Response to Evolve Dammit (Reply #18)

Tue Jan 31, 2023, 12:03 PM

19. Around the same time

Last edited Tue Jan 31, 2023, 03:23 PM - Edit history (1)

Johnson's "baby" products (1890s)

Gold Bond products (1880s) with the formula bought out in the early 1900s.

(edit to fix the 2nd link)

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Response to BumRushDaShow (Reply #19)

Tue Jan 31, 2023, 07:58 PM

22. You are without doubt, an amazing resource. Thank you.

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Response to Evolve Dammit (Reply #22)

Tue Jan 31, 2023, 08:23 PM

24. You are welcome

The late 1800s had an explosion of products like those (and lots of snake oil ones too). And that eventually lead to the passage of the good old "Food, Drug, and Cosmetic Act" (1938) where those products used "externally" (topical) are usually considered "cosmetics" (unless they have certain ingredients that might make them drugs like some ointments used for treatment of certain medical conditions).

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Response to BumRushDaShow (Reply #24)

Tue Jan 31, 2023, 09:33 PM

25. Great info. The amounts of drugs like opium, heroin, cocaine, codeine were so widely used.

Many bottles of meds would have a line on the bottle to refill when you reached this point. So many were addicted by virtue of the drug and dosage advice. The article I read stated that chances were, your grandparents (great?) were addicts.
Sorry to digress, but interesting from a historical perspective.

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Response to Evolve Dammit (Reply #25)

Tue Jan 31, 2023, 09:54 PM

27. Oh yeah

the FDA has an interesting history because of what are now class as "narcotics" that were common at one time, but then later dealing with regulating stuff like this (although most of the below came out before the FD&C Act ) -

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Response to BumRushDaShow (Reply #27)

Wed Feb 1, 2023, 11:26 AM

28. It's a wonder we made it this far. I remember powdered opium (cough or diarrhea?), paragorik (sp?)

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Response to Evolve Dammit (Reply #28)

Wed Feb 1, 2023, 11:53 AM

29. They still have paregoric (tincture) on the market

but very restricted like other opiate drugs and by prescription only. I don't even know how much if any is prescribed of it much anymore (although I expect under certain circumstances - perhaps for those who are hospitalized - a few might be taking it).

What I do miss is the codeine cough medicine (OTC). That stuff works way better than guaifenesin but oh well.

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Response to BumRushDaShow (Reply #29)

Wed Feb 1, 2023, 08:10 PM

30. Yeah you gotta get your Doc to prescribe it. It is the most effective. "Liquid Gold;" never goes bad

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Response to BumRushDaShow (Original post)

Mon Jan 30, 2023, 07:23 PM

7. Why is bankruptcy even an option for corprations to avoid paying such damages?

When I looked into filing bankruptcy years ago, the lawyer made it very clear that doing so wouldn't get me out of any court-appointed fines.

But for corporations it's a different story?

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Response to Orrex (Reply #7)

Mon Jan 30, 2023, 08:06 PM

11. Yep. Two-tiered system. All the way down. (n/t)

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Response to Orrex (Reply #7)

Mon Jan 30, 2023, 09:46 PM

15. With the OP article update, it's apparently a "Texas" thing

J&J is among four major companies that have filed so-called Texas two-step bankruptcies to avoid potentially massive lawsuit exposure. The tactic involves creating a subsidiary to absorb the liabilities and to immediately file for Chapter 11.


That actually hints at some of what Alex Jones was doing with his bankruptcy in TX (given his InfoWars parent company was located there) and funneling assets into a shell company.

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Response to Orrex (Reply #7)

Mon Jan 30, 2023, 10:06 PM

16. No

BK won't discharge intentional conduct, which all fines are considered to be. General liability it will discharge. So a BK will discharge liability related to a car wreck, but possibly not if it was DUI related.

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Response to BumRushDaShow (Original post)

Mon Jan 30, 2023, 07:50 PM

10. should be a CEO going to jail

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Response to BumRushDaShow (Original post)

Tue Jan 31, 2023, 02:06 AM

17. My son and I have been following the use of divisive mergers for a while

These divisive mergers are a scam to cheat plaintiffs out of the right to recover. My son sent me the opinion that I will read tomorrow

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Response to BumRushDaShow (Original post)

Tue Jan 31, 2023, 01:27 PM

20. Another thought

What has happened to the babies that this baby powder was used on? I don't see anything on a quick Google.

I did find this:
"In 2014,New York Times reported, J&J's baby shampoo NO LONGER contained two potentially harmful chemicals, formaldehyde and 1,4-dioxane."
https://www.business-standard.com/article/economy-policy/j-j-s-no-more-tears-baby-shampoo-contains-cancer-causing-substance-119040100280_1.html

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Response to Bayard (Reply #20)

Tue Jan 31, 2023, 01:34 PM

21. Adult women - main purchasers

Though talcum powder has been promoted as soft and gentle enough for babies, and is sold with other infant products in stores, adult women have long been the main purchasers, using baby powder in pubic areas and to prevent chafing between the legs. Many women in hot climates use baby powder to stay dry. https://www.nytimes.com/2020/06/23/health/baby-powder-cancer.html

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Response to womanofthehills (Reply #21)

Tue Jan 31, 2023, 09:41 PM

26. When I first heard about it -way- back I switched to cornstarch.

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Response to BumRushDaShow (Original post)

Tue Jan 31, 2023, 08:18 PM

23. Despise this company.

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