Healthcare giant Johnson and Johnson has sparked outrage by using a controversial law to block nearly 40,000 pending lawsuits claiming their beloved baby powder has caused cancer for decades. Furthermore, the company knew this and did not disclose it.
The archaic Texas corporation law, known colloquially as the “Texas Two-Step,” allowed J&J to establish a brand new subsidiary in Texas called LTL Management, move it to North Carolina (another state where this strategy is common practice) and then pass all of its mass-tort liability lawsuits to the new company. LTL then filed for bankruptcy, and bankruptcy protection temporarily halts any lawsuits against them.
Splitting Johnson and Johnson into two companies means that claimants are much less likely to win large settlements from the smaller “bankrupt” LTL Management. Yet, Johnson and Johnson provided LTL with $2 billion, especially for settlements.
The lawsuits are about talc, a key ingredient in Johnson’s baby powder and other products. Talc is often mined with asbestos, which has been proven to cause certain types of cancer, especially ovarian and lung cancer. Thousands of women and their families have suffered injury and death after years of using the powder, which was marketed as safe and even hygienic for everyday use.
Does Johnson’s Baby Powder Cause Cancer?
Although J&J has always denied claims that their baby powder contains asbestos, in-depth investigations in 2018 by the New York Times and Reuters found documents going back more than 30 years, proving that the company was very aware of the presence of the toxic chemical in its products. They were scrambling to figure out how to keep this information from federal regulators and the public. And last year, J&J permanently discontinued baby powder sales but blamed the decision on the pandemic and public misinformation.
In June, $2 billion in damages was awarded to 22 women when J&J failed to convince the U.S. Supreme Court to overturn the verdict against them. In 2019, the Food and Drug Administration (FDA) confirmed that J&J’s talc powder contained trace amounts of asbestos. Asbestos has been a known human carcinogen since the 1950s.
One 1982 study found a 92 percent increase in ovarian cancer in women who used talc powder in their genital area. More studies since then have held up those findings, and claimants in talc suits as far back as 2006 have won after it was proven that the baby powder caused their cancer.
Using talc powder anywhere releases fibers into the air, and asbestos is absorbed through breathing. Once inside the body, the fibers cannot be broken down.
Talc-related settlements have already cost J&J billions of dollars. The evidence that they knew perfectly well that their baby powder caused cancer – and purposely hid that knowledge – is overwhelming.
What’s Happening Now With Baby Powder Lawsuits?
While the transition of many of its talc suits to LTL Management buys Johnson and Johnson some time, it is not a complete solution for them.
They are still on the hook for plenty of litigation, much of it with sizable potential payouts for tens of thousands of women who have filed lawsuits.
Earlier this month, J&J was granted a temporary stay of 60 days for all lawsuits still under the umbrella of the flourishing parent company, which is anything but bankrupt.
However, presiding Bankruptcy Judge Craig Whitley also ruled to have the LTL bankruptcy moved to New Jersey. New Jersey is where J&J headquarters is located, but it’s also a state that hasn’t yet tested the Texas Two-Step in court. This leaves Johnson and Johnson much more vulnerable.
J&J said they would have preferred the suits to remain in North Carolina because the state has more experience with mass tort bankruptcies; they even referenced favorable precedents in similar corporate cases.
For now, we’ll have to wait and see what happens next after the 60-day stay comes to a close.
If you or a loved one has developed ovarian or lung cancer and you suspect it is related to the use of Johnson’s baby powder, please contact a personal injury lawyer with specific experience in mass tort cases. There are many firms already actively working on J&J talc cases. They can walk you through the process and fight for your right to receive the compensation you deserve.