fbpx

Johnson & Johnson Talc Bankruptcy Petition Dismissal is a Win for Mesothelioma and Ovarian Cancer Victims

mesothelioma attorney Dave Butler

By Dave Butler

In a significant victory for injured consumers, the Third Circuit Court of Appeals dismissed the bankruptcy petition of a Johnson & Johnson subsidiary that holds the company’s liabilities for claims brought by thousands of consumers injured by exposure to asbestos-contaminated talc in Johnson & Johnson products.  The dismissal, on January 30, 2023, ends for now J&J’s efforts to avoid full responsibility for the claims of those suffering from mesothelioma, ovarian, and other cancers caused by its asbestos-contaminated products.

Through a series of corporate transactions under a unique Texas law, Johnson & Johnson created two new entities with the intention to funnel its liabilities for claims brought by thousands of injured talc claimants into a new entity which it named LTL Management; while simultaneously funneling all of its profitable business into another entity.  Two days after its formation and freshly saddled with J&J’s talc liabilities, LTL Management filed a petition under Chapter 11 of the U.S. Bankruptcy Code claiming that its talc liabilities placed it in financial distress sufficient to allow it to seek the protections afforded by U.S. bankruptcy laws.

Injured talc victims sought dismissal of the bankruptcy petition, but were denied by a federal court in New Jersey.  Victims appealed that denial to the Third Circuit Court of Appeals, which ruled that the J&J subsidiary had not demonstrated that its petition was filed in good faith and should be dismissed.

In its opinion the court found that “At base level, LTL, whose employees are all J&J employees, is essentially a shell company “formed,” almost exclusively, “to manage and defend thousands of talc-related claims” while insulating at least the assets in a non-bankrupt entity.  The court went on to find that “Because LTL was not in financial distress, it cannot show its petition served a valid bankruptcy purpose and was filed in good faith under” the United States Bankruptcy Code.  In conclusion, the court held that:

Our decision dismisses the bankruptcy filing of a company created to file for bankruptcy. It restricts J&J’s ability to move thousands of claims out of trial courts and into bankruptcy court so they may be resolved, in J&J’s words, “equitably” and “efficiently.” But given Chapter 11’s ability to redefine fundamental rights of third parties, only those facing financial distress can call on bankruptcy’s tools to do so. Applied here, while LTL faces substantial future talc liability, its funding backstop plainly mitigates any financial distress foreseen on its petition date.

Read the court’s full opinion here.

RPWB continues to seek justice for victims of exposure to Johnson & Johnson talc products. If you or a loved one has been diagnosed with mesothelioma after exposure to Johnson & Johnson talc products, please call us at u 1-866-594-8765 or fill out the form on this page to begin your case review.

Dave Butler has 30 years of experience representing mesothelioma victims and their families in cases throughout the United States. He can be reached at 1-866-594-8765 or by emailing dbutler@rpwb.com.

Our Experienced Lawyers

How can we help? Fill out the form for a free case review.

    Contact Us

    Case Types

    Related Posts

    EPA Proposes Asbestos Ban

    Many people do not realize it, but asbestos is not banned in the United States despite the fact it kills thousands of Americans each year by causing mesothelioma cancer and other forms of lung disease.

    That might be about to change. The EPA has announced it intends to ban the known carcinogen using new authority granted to the agency by the 2016 Toxic Substances Control Act. On Tuesday, April 5, 2022, the EPA announced that it will move forward with an asbestos ban.

    The EPA last attempted to ban asbestos in 1989, but a federal court shot the effort down, an escapade that highlighted the toothlessness of the original 1976 Toxic Substances Control Act. Similar attempts in Congress also sputtered, most recently in 2020, when the bipartisan measure nearly made it to the House floor before falling apart with competing accusations about who was responsible for the failure.

    “EPA’s proposed rule is a strong step forward in eliminating exposure to a substance that is killing 40,000 Americans each year,” Linda Reinstein, president of the Asbestos Disease Awareness Organization, said in a statement.

    Under the proposed rule, the agency would ban uses for chrysotile, the one remaining type of asbestos fiber still in use in the United States. One of the major current uses for asbestos in America is the chlorine manufacturing process. In 2021, chemical companies imported 100 tons of chrysotile asbestos from Brazil. In prior years, they also imported from Russia. The 11 active chemical plants that utilize asbestos also used around 220 tons of asbestos they had previously stockpiled. Other chemical plants no longer use asbestos in the chlorine manufacturing process.

    Under EPA’s proposed rule, the remaining chlorine plants that still import raw asbestos would have two years to stop using asbestos filters.

    Sheet gaskets that contain asbestos would be banned after two years. Most remaining products that contain asbestos — oilfield brake blocks, aftermarket automotive brakes and linings, other “vehicle friction products,” and other types of commercial gaskets — would be banned after 180 days.

    The proposed asbestos ban is set to be published in the Federal Register, which kicks off a 60-day public comment period. The Biden administration hopes to have the ban finalized by November.

    The ban isn’t the end of the EPA’s review of asbestos, however. The agency says it intends to look at other asbestos fibers as well as examine asbestos present in talcum powder products, which has caused even those who never worked around asbestos to develop mesothelioma. Asbestos and talc often are located near one another in the natural environment, which can cause contamination in products like baby powder and cosmetics. These asbestos victims are often younger than the blue-collar workers exposed through the late 1970s at their job sites.

    RPWB lawyers have helped thousands of mesothelioma patients nationwide get financial compensation from asbestos manufacturers since 1976, when we worked on the first successful product liability case against the asbestos companies. We have seen first-hand the devastating health effects caused by asbestos, and applaud all efforts to eliminate asbestos from the United States.

    If you or a loved one has been diagnosed with mesothelioma or another form of asbestos-caused lung cancer, please give us a call anytime at 1-866-594-8765 or fill out the contact form on this page.

    For more information about mesothelioma, please visit our Mesothelioma Info Center.

    Our Experienced Lawyers